Legislature(1995 - 1996)
05/16/1995 02:10 PM 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 was invited to join the committee. Senator Phillips MOVED CS-1. Senator Sharp OBJECTED. Mr. Wright stated that the CS-1 makes changes in Section 14 and 16. These sections speak to the tax revenues collected, one-half against the state, and one-half collected against the municipalities, under the original bill. This would allow for a municipality to include the entire amount credited against taxes collected at the municipality. Senator Rieger asked who pays for title insurance? Bob Bartholomew, Deputy Director, Dept of Revenue, responded that it is not a tax administered by the Dept of Revenue, but it is his understanding that the insurance corporations that pay a percentage of their premiums sold to the state would be the entities applying for credit. Senator Sharp asked if the new CS would change the fiscal note? Mr. Bartholomew responded that the fiscal note would remain the same. Co-chair Halford asked if there were objections to the CS as a working draft before the committee. Senator Sharp OBJECTED. He stated that this bill broadens the extraordinary granting of special privileged industries and businesses in this state. They are allowed to divert their taxes to the areas they choose. No other tax payer has that right. Raising the amount that each qualifying business can donate from $150,000.0 per year to $350,000.0 maximum is going too far. This in effect diverts public funds, before it even gets to the treasury, at the desires of the business that owes the tax to their particular interest. He stated he did not support this action. He suggested legislatively choosing to appropriate the money, rather than participating in the deception of allowing tax payers to divert their payment from the treasury. Senator Donley stated that he does not support 100% tax credits. He would support some tax credit, but not 100%. Co-chair Frank stated his agreement, that there should be a leverage feature. Senator Zharoff supports the CS-1. He prefers the five-year sunset. He stated that this is an attempt to begin an endowment for funding public broadcasting. He shared his concern with Section 14 and the raw fish tax that was collected and reimbursed throughout municipalities in the original form. The municipalities did not have any say, whereas in this bill, they have an opportunity to contribute by resolution. Senator Donley asked the sponsor to review the difference between the original bill and the CS-1. Mr. Wright explained that there are two changes in the CS-1, in Section 14 and 16 which involves the municipality's share of the tax revenue collected. Essentially, the municipality share of revenue can be deducted if they pass a resolution or ordinance stating such. In other words, municipalities can opt out. Co-chair Halford stated that the CS-1 increases the potential credit by the municipality share. The original bill did not allow for the credit of the municipality share. Mr. Wright responded that the original bill was a mandate on the fisheries tax and the fisheries resource landing tax that one-half of the credit would be deducted against the state's share, and the other one-half would be deducted against the municipality's share. Mr. Donley asked if the municipality opts out, the taxpayer does not get the break? Mr. Wright responded that the taxpayer will still get the break. It is the revenues that the municipality would normally receive under the fisheries tax or fisheries resource landing tax. Mr. Bartholomew said that the intent is, without the amendment, the municipality would share in the credit. If a credit was taken by a taxpayer, one-half of it would be reduced in sharing to the municipality and the state would loose revenue due to the credit. This bill allows the municipality to say they do not want to have their share reduced by the credit, and the state would then absorb the credit. Co-chair Halford said that the question before the committee is the adoption of the CS-1. By a show of hands, CS-1 FAILS to be adopted. Those for the CS-1 were Senators Zharoff, Phillips and Rieger. Those opposed were Co-chair Halford, Sharp and Donley. Senator Sharp MOVED to adopt amendment #1, which would cap the total contribution of $150,000.0 and raise it from the current $100,000.0, and allow a 50/50 credit on the first $100,000.0 of public broadcasting. Co-chair Halford suggested further work on this bill and coming back to it later.