SJR 10-CONST AM: SUPERMAJORITY FOR TAX LEVIES MARK HODGINS presented SJR 10 for its sponsor, Chairman Ward. SJR 10 creates a constitutional amendment that requires a two-thirds majority vote of both the House and Senate to levy any new state taxes or increase the rate of any present state tax. If passed, the constitutional amendment will be placed before the voters at the next general election. Fourteen other states have passed similar legislation to enact or increase various state taxes. SJR 10 allows the citizens of Alaska to vote on taxation. CHAIRMAN WARD asked if "taxes" are defined in statute. MR. HODGINS did not have an exact definition. CHAIRMAN WARD noted he has requested a legal definition of "taxes" because it is not his intent to include fees. Number 531 SENATOR ELTON expressed concern about the Alaska Seafood Marketing Institute's (ASMI) processor assessment. He explained that assessment is levied by processors by a vote of 50 percent plus one. The assessment currently equals a fee of three percent of the value of the product. That money is deposited in the General Fund and appropriated for domestic marketing programs. He asked whether SJR 10 will limit the processors' ability to raise the fee. CHAIRMAN WARD said he has the same concern and has asked the same question. He clarified if the assessment is called a "fee," it is not considered a tax. SENATOR ELTON questioned whether an assessment would be considered a fee. CHAIRMAN WARD said all fees and other revenue-generating mechanisms that are not called a "tax" are not subject to the two- thirds majority vote. SENATOR GREEN asked if the ASMI assessment must be approved by the Legislature. SENATOR ELTON replied that statutory authority is granted by the Legislature which allows processors to self-assess. Number 558 SENATOR GREEN asked if the assessment can be increased without legislative approval. SENATOR ELTON replied the processors can increase or decrease the assessment amount under the statutory structure. SENATOR PHILLIPS noted the Legislature must approve General Funds for reappropriation for domestic marketing efforts. SENATOR ELTON said that is true, and the Legislature has always acted in good faith and reappropriated those funds. MR. HODGINS reviewed the tax levy requirements of the other 14 states. Delaware, Florida, Mississippi, and Oregon require a 3/5 vote of their legislatures to enact taxes; Florida also requires a 2/3 vote of the public to enact new taxes. Arizona, California, Louisiana, Nevada, South Dakota, and Washington require a 2/3 vote of their legislatures to enact taxes. Missouri requires a 2/3 vote of the public to enact or increase taxes. Arkansas, Colorado, and Oklahoma require a 3/4 vote of their legislatures to enact taxes. The vote requirement does not apply to all taxes: some apply to either income, sales, or property taxes. SENATOR WILKEN questioned whether any of those states have dedicated funds that the voting requirements do not apply to. MR. HODGINS assumed they do. SENATOR WILKEN noted the people may not have a say in how certain expenditures are made because their states have dedicated funds. TAPE 99-4, SIDE B SENATOR GREEN moved SJR 10 from committee with individual recommendations. SENATOR ELTON objected and commented he does not know how he would have voted in the early 1990's on the Constitutional Budget Reserve (CBR). He believes SJR 10 is the flip side of that issue. He could argue that the supermajority vote required to use CBR funds limits the Legislature's ability to accomplish the legislative agenda. He sees SJR 10 as creating an additional limit. The motion to pass SJR 10 from committee carried with Senators Phillips, Green, Wilken, and Ward voting "yea," and Senator Elton voting "nay."