Legislature(1995 - 1996)
04/20/1995 08:45 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 269 "An Act relating to credits against certain taxes for contributions to certain public educational radio and television networks and stations and to endowments for public educational radio and television networks; and providing for an effective date." TOM WRIGHT, STAFF, REPRESENTATIVE IVAN provided members with Amendment 1 (Attachment 1). He explained that the amendment added the Fisheries Resource Landing Tax at the request of the Department of Revenue to the list of allowable tax credits; limits the tax contribution at $400.0 thousand dollars; and sunsets the credit for contributions to public broadcasting after five years. (Tape Change, HFC 95-87, Side 2) Mr. Wright clarified that upon the sunset the contribution ceiling will revert to the current level. He observed that the sunset was included in response to concerns regarding the Endowment Trust and contributions to individual stations. Representative Martin expressed concern with the inclusion of the Fisheries Resource Landing Tax. BOB BARTHOLOMEW, DEPUTY DIRECTOR, DIVISION OF INCOME AND EXCISE AUDIT, DEPARTMENT OF REVENUE explained that the state shares 50 percent of the collection of shared fish taxes. The tax credit will reduced what is shared to the local governments. The general fund contribution would not be reduced. Representative Therriault spoke in support of including the Fisheries Resource Landing Tax in the contribution credit. Mr. Bartholomew observed that the Department of Revenue felt that the tax should be included so that all tax payers would be afforded the same credit. In response to a question by Representative Brown, Mr. Bartholomew explained how the Fisheries Resource Landing Tax 7 operates. It was instituted in FY 94. It is applied against fish caught outside of the three mile state waters limit and landed inside of Alaska to be transported to other areas. The value of the fish is taxed by 3.3 percent. Fish caught inside Alaskan waters are taxed at the same rate. The tax is estimated to bring in $6.0 million dollars. Fifty percent of the tax would be shared to the areas where the fish tax was collected. The state would receive $3.0 million dollars. The tax program is currently under litigation. The tax will not be shared until all legal challenges have been resolved. In response to a question by Representative Brown, Mr. Bartholomew clarified that general fund revenue will not be reduced by the addition of the Fisheries Resource Landing Tax. The credit would be deducted from the municipal share of the tax. He explained that all municipalities will share in the loss of the credit. Any municipality subject to sharing will be reduced a pro-rata share. Representative Brown asked if the credit will reduce income to communities that receive a portion of the shared taxes. Mr. Bartholomew stated that the portion of the tax credits that are claimed against the fisheries taxes would reduce the municipal share. He stressed the inability to determine the exact amount that would be potentially reduced. Representative Martin expressed concern that the Department of Revenue is being required to perform additional administrative duties. Mr. Bartholomew noted that the Department does not allocate the cost of administering the tax programs. In response to a question by Representative Martin, Mr. Wright acknowledged that local governments had not had an opportunity to respond to the amendment. Representative Grussendorf suggested that including a credit for the fisheries tax amounts to cost shifting. He spoke in support of the five year sunset provision. Mr. Bartholomew noted that the Fisheries Tax was already included in HB 269. He emphasized that the new credit will be treated the same as the current credit in statute. Co- Chair Hanley observed that section 15 is current law. He stated that the Fisheries Business Tax which applies to fish caught in Alaskan waters was included in previous law. The credit was taken out of the municipal portion. The amendment adds fish that are caught outside of the three mile limit. Representative Brown asked the impact on local governments. 8 Mr. Bartholomew stated that it is hard to estimate new tax payers. He observed that the fiscal note was based on current contributions. He noted that the fiscal impact to municipalities would not change with the addition of public broadcasting. He stated that there is no sharing on contributions to public broadcasting or education on the taxpayers part. He stressed that the impact is one hundred percent on the state treasury. Representative Mulder MOVED to adopt Amendment 1. Representative Martin OBJECTED. He stressed that local governments should have a chance to testify on the change. Mr. Wright noted that some public radio stations are owned by local governments. Representative Brown suggested that the question be divided. Representative Mulder spoke against dividing the question. He emphasized that rural Alaska is the real beneficiary. A roll call vote was taken on the main MOTION. IN FAVOR: Kelly, Mulder, Therriault, Hanley OPPOSED: Brown, Grussendorf, Martin Representatives Kohring, Navarre, Parnell and Foster were absent from the vote. The MOTION FAILED (4-3). Representative Mulder stressed that rural communities would benefit from the amendment. Representative Grussendorf emphasized the need for more discussion. Representative Therriault suggested the bill be held. Representative Brown provided members with Amendment 2 (Attachment 2). She explained that the amendment would include contributions to public schools for education technology, among organizations that are authorized to receive the tax credit. She stressed the need for educational technology. Co-Chair Hanley expressed concern that the legislation not become too inclusive. Representative Kelly asserted that public radio and television are a low priority. Representative Therriault suggested the amendment be included in HB 106, Percent for Art. Representative Grussendorf encouraged Representative Brown to withdraw the amendment. Representative Brown observed that new schools generally allocate dollars for educational technology. She observed that older schools are the most in need of educational 9 technology. Co-Chair Hanley noted that Amendment 2 had not been moved. HB 269 was HELD in Committee for further discussion.