Legislature(1995 - 1996)

04/20/1995 08:45 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  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                 
                                                                               
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  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.                 
                                                                               
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  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                 
                                                                               
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  technology.                                                                  
                                                                               
  Co-Chair Hanley noted that Amendment 2 had not been moved.                   
                                                                               
  HB 269 was HELD in Committee for further discussion.                         

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