Legislature(2007 - 2008)BARNES 124
04/17/2007 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
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| Start | |
| HB222 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 222 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
April 17, 2007
8:05 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
Representative Kurt Olson
COMMITTEE CALENDAR
HOUSE BILL NO. 222
"An Act providing a credit for a municipal tax imposed on
certain passengers traveling on commercial passenger vessels
that provide overnight accommodations; and providing for an
effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 222
SHORT TITLE: PASSENGER VESSEL TAX CREDIT
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
03/26/07 (H) READ THE FIRST TIME - REFERRALS
03/26/07 (H) CRA, FIN
04/03/07 (H) CRA AT 8:00 AM BARNES 124
04/03/07 (H) Heard & Held
04/03/07 (H) MINUTE(CRA)
04/17/07 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
REPRESENTATIVE JAY RAMRAS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 222.
JOHANNA BALES, Excise Audit Manager
Tax Division
Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 222, answered
questions.
BRUCE BOTELHO, Mayor
City and Borough of Juneau
Juneau, Alaska
POSITION STATEMENT: Testified in support of CSHB 222, Version
E.
BOB WEINSTEIN, Mayor
City of Ketchikan
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of CSHB 222, Version
E.
GERSHON COHEN
Haines, Alaska
POSITION STATEMENT: Speaking as a co-sponsor of the 2006 ballot
measure on cruise ship taxation, regulation and disclosure,
testified in opposition to HB 222.
ACTION NARRATIVE
CO-CHAIR ANNA FAIRCLOUGH called the House Community and Regional
Affairs Standing Committee meeting to order at 8:05:30 AM.
Representatives Fairclough, LeDoux, Neuman, and Cissna were
present at the call to order. Representatives Dahlstrom and
Salmon arrived as the meeting was in progress.
HB 222-PASSENGER VESSEL TAX CREDIT
8:05:55 AM
CO-CHAIR FAIRCLOUGH announced that the only order of business
would be HOUSE BILL NO. 222, "An Act providing a credit for a
municipal tax imposed on certain passengers traveling on
commercial passenger vessels that provide overnight
accommodations; and providing for an effective date." Co-Chair
Fairclough further announced that upon the request of the
sponsor, the public testimony on HB 222 will be re-opened.
[Before the committee was CSHB 222, Version 25-LS0782\E,
Bullock, 3/28/07, which was adopted April 3, 2007.]
8:05:59 AM
REPRESENTATIVE JAY RAMRAS, Alaska State Legislature, sponsor,
explained that he has asked that Mayor Botelho, a former
attorney general for the State of Alaska, make a presentation on
this matter. He expressed concern with regard to the obligation
legislators have to pursue a responsible course of action. He
inquired as to the fiduciary obligation of this committee and
the legislature when contemplating the legal use of the cruise
ship head tax. Standing in the way of those tax dollars going
to the general fund are the Tonnage Clause and Commerce Clause
of the U.S. Constitution. Therefore, HB 222 offers a viable,
appropriate, and constitutionally legal way to spend the cruise
ship tax collected so that the state isn't entered into any
protracted litigation with the cruise ship industry.
Representative Ramras opined that if the funds from the cruise
ship tax are placed in the general fund to be used "willy-
nilly", it will invite a rough and difficult approach. However,
if these funds are used in an appropriate manner, as specified
in the Tonnage Clause and the Marine Security Transportation Act
of 2002, then [the legislature/state] can be responsible
stewards of the will of the people and allocate those funds
responsibly. Moreover, the result could be some magnificent
port communities with some extraordinary infrastructure
projects.
8:10:37 AM
CO-CHAIR LEDOUX recalled that the sponsor has said that one of
the purposes of HB 222 is to avoid litigation between the cruise
ship industry and the state. She asked if anyone from the
cruise ship industry is present who can guarantee that if HB 222
passes, there won't be any litigation.
REPRESENTATIVE RAMRAS replied no. He then related his conflict
of interest with his personal business, which involves
[tourism]. He further related that he has written a letter to
the Select Committee on Legislative Ethics requesting an
advisory opinion that his behavior meets the ethical standard it
should. Representative Ramras said that he hasn't spoken to the
cruise ship industry regarding testifying on this, which he
didn't believe to be germane to the issue [embodied in HB 222].
As a lay person, Representative Ramras said he has concluded
that the state is outside of its boundaries to contemplate
placing these funds in the general fund to be used as the
legislature sees fit. Therefore, he reiterated his concern that
such action would invite a class action lawsuit. He reminded
the committee that the cruise ship industry is merely collecting
the tax on behalf of the passengers, whose rights would be in
violation. He likened the situation to the bed tax and the
liquor tax that he collects for the local governing bodies.
Therefore, the legislature has an obligation to use the funds
appropriately. Representative Ramras opined, "No, I have not
considered it my obligation to ask the cruise ship industry to
come forward with some kind of quid pro quo promise on that, but
I think that if we behave legally and responsibly then we're not
going to see the industry file a suit against us. But, if we
trample over the U.S. Constitution and myriad of legal opinions
that I've seen going back to the year 2000, then we will invite
trouble."
8:15:28 AM
CO-CHAIR LEDOUX asked if the sponsor was aware that when asked,
legislative counsel [to the committee] said he wouldn't hazard a
guess as to who would prevail in litigation [over this matter].
Therefore, she opined that [who would prevail] doesn't seem to a
certainty.
8:16:05 AM
CO-CHAIR FAIRCLOUGH then re-opened public testimony.
8:16:20 AM
JOHANNA BALES, Excise Audit Manager, Tax Division, Department of
Revenue, pointed out that under HB 222, the cruise ship industry
would still have to collect the $46 passenger fee and would
receive a credit of up $10 per person per community visited if
that community has its own marine passenger fee or tax. The
credit doesn't go directly to the communities but rather to the
individual that paid the state the commercial passenger vessel
tax. She also pointed out that cruise ships have visited about
18 communities and each community would have to enact its own
marine passenger fee in order to get the credit back. Included
in those 18 communities are places such as Hoonah and Skagway,
which would need to enact and administer their own tax. The way
that the tax currently works, the smaller communities like
Hoonah and Skagway could receive a $5 per passenger fee and
basically have the state administer the tax. She opined that
the aforementioned was really the intent of the initiative. Ms.
Bales then pointed out that the passage of HB 222 passes could
result in the cruise ship industry potentially having to report
to 19 separate jurisdictions, including the state and all
communities with a marine passenger fee. Furthermore, it's
possible that some of the smaller communities wouldn't receive
any funds at all, if the community found that it wasn't feasible
for it to enforce and administer its own tax.
8:20:02 AM
REPRESENTATIVE CISSNA related her understanding that HB 222
doesn't allow the state to administer the local tax.
MS. BALES confirmed that all jurisdictions would have to enact
and administer their own separate tax [under HB 222].
8:20:40 AM
REPRESENTATIVE NEUMAN opined that HB 222 [in its current form]
isn't going to work. He then asked if the system would work if
one or two of the impacted communities didn't enact its own tax.
MS. BALES clarified that those communities that don't enact a
tax wouldn't receive anything or it would be significantly
reduced versus what those communities would have received under
the initiative. In further response to Representative Neuman,
Ms. Bales said that she couldn't offer any way in which to fix
[the legislation] within the existing language.
8:21:48 AM
CO-CHAIR LEDOUX posed a hypothetical situation in which two
communities have a $10 head tax, which would result in a $20
credit. After taking out the funds for the ocean rangers, $26
would be left. She asked if those other impacted communities
that didn't enact a head tax would be able to receive the $5
specified in the initiative. Co-Chair LeDoux related her
understanding that HB 222 isn't abolishing the initiative,
although it's changing it in an unacceptable way.
MS. BALES replied yes, explaining that under the current scheme
in which Juneau and Ketchikan are the only communities with a
head tax there would still be enough revenue to provide the
first five ports of call. However, the way in which HB 222 is
written there is a potential for the credit to fall below $26
as other communities increase or enact other taxes.
8:24:25 AM
BRUCE BOTELHO, Mayor, City and Borough of Juneau, paraphrased
from the following written remarks [original punctuation
provided]:
I testify today on behalf of the assembly of
the City and Borough of Juneau in support of Committee
Substitute for House Bill 222, legislation that would
provide a credit for certain municipal passenger fees
against the statewide excise passenger tax established
by 2006 Primary Election Ballot Measure No. 2.
I support the purpose that the sponsors
sought to achieve in promoting the passenger tax:
having users contribute to the infrastructure
necessary to serve them in communities they visit by
cruise ship. However, I believe that there is a
fundamental flaw in the initiative that frustrates
this purpose and that the Committee Substitute for
House Bill 222 corrects that flaw. That flaw is the
creation of a vast pool of money that can not be
expended constitutionally. Let me explain.
Let me begin by addressing how Measure No. 2
is designed to work.
First, it imposes a $46 tax on each
passenger traveling in Alaska on a large commercial
passenger vessel. The proceeds from the tax are
placed in a special account within the general fund of
the state. Each of the first five ports of call for
each vessel's voyage within Alaska is entitled to
receive $5 per passenger per port visit.
Second, the initiative also establishes a
"regional cruise ship impact fund" consisting of 25
percent of the total proceeds from the passenger tax.
Regional cruise ship impact funds may be appropriated
for distribution to local governments within regions
of the state "impacted by cruise ship related tourism
activities but not entitled to receive funds based on
port of call visitation."
Finally, the remainder of the funds may be
appropriated for "state-owned port and harbor
facilities" or certain other services.
There are specific restrictions on these
taxes.
· If a municipal port elects to receive its $5 per
passenger share of the state's passenger tax, it
may not impose its own local passenger tax.
· Conversely, a municipality that imposes its own
local passenger tax may not access either the $5
per passenger share nor regional impact funds.
· Expenditure of the monies is limited to "provide
services and infrastructure directly related to
passenger vessel or watercraft visits or to
enhance the safety and efficiency of interstate
and foreign commerce related to vessel or
watercraft activities."
This is the statutory scheme in place.
How does this relate to the "fundamental flaw" in it?
What's wrong with the scheme? The problems are of two
kinds: constitutional and practical.
What are the constitutional problems?
Federal law limits the kinds of taxes or fees that may
be imposed on vessels in interstate commerce. Let me
mention the laws I believe most directly apply:
The Tonnage Clause of the United States Constitution
(art. I, sec. 10) prohibits any taxes or fees on
vessels except those directly related to services
provided to those vessels.
8:29:57 AM
CO-CHAIR LEDOUX asked if the cruise ship industry lobbied for
the tax specified in the earlier mentioned U.S. statute.
MAYOR BOTELHO replied yes, adding that legislation was
introduced at the request of the cruise ship industry and
successfully marshaled by U.S. Representative Don Young. He
then continued paraphrasing from the following written
testimony:
33 USC Section 5 prohibits authorizes the levy of
"reasonable fees charged on a fair and equitable
basis" that (A) are used solely to pay the cost of a
service to the vessel; (B) enhance the safety and
efficiency of interstate and foreign commerce; and (C)
do not impose more than a small burden on interstate
or foreign commerce.
The sponsors of the initiative were aware of
these restrictions and have tried to meet the high
burden set by federal law. That's why the funds
generated by this tax must be used "in a manner
calculated to improve port and harbor facilities and
other services to properly provide for vessel or
watercraft visits and to enhance the safety and
efficiency of interstate and foreign commerce."
Yet this language is of little import when
applied to the regional impact fund. That's because
that fund is available only to those ports that are
not today "ports of call", that is ports that are not
visited by cruise ships at all. So, applying the
federal statute, what conceivable service to a vessel
should be recovered and on what basis? Similarly,
what state-owned port, harbor facilities or other
service is being directly rendered that would permit
these funds to be expended? I suggest that few
expenditures could meet the federal test.
8:32:30 AM
MAYOR BOTELHO continued:
What are the practical problems?
First, there is little incentive for major
ports of call to take part in the state program,
rather than maintain or establish their own passenger
fees. Why is this?
(1) Municipalities are able to set higher
or lower fees to meet local infrastructure needs
without reliance on the state program. Thus, Juneau
currently imposes two separate fees computed on the
number of a vessel's passengers per port visit. The
two fees now total $8.00. Ketchikan currently imposes
a $7.00 per passenger fee.
(2) Municipal ports electing to receive the
$5 per passenger tax would be required to come to the
legislature each year and seek an appropriation for
that purpose. It leaves municipalities dependent upon
the legislative process and having port monies traded
for other capital projects. In addition, reliance on
annual appropriations to bond for projects is
difficult because local government would have no
direct authority to impose and receive taxes related
to the port to repay the bonded indebtedness.
8:35:08 AM
MAYOR BOTELHO continued:
Let me apply all of this to the initiative. For
purposes of this exercise, I am assuming a year in
which 1 million passengers arrive by cruise ship
(slightly more than are actually projected for this
season):
$46,000,000 total amount to be remitted to
the State
The cruise ship industry estimates that
the average cruise ship vessel calls on 3.5 ports in
Alaska. I've rounded up to four ports. The two
largest ports of call, Juneau and Ketchikan do not
participate. I have also assumed that a million
passengers visited each of the next two ports of call.
That allows me to subtract - $10,000,000 as the total
amount remitted to municipalities.
That leaves a total of $36,000,000. Another
25% is to be allocated to the regional impact fund.
Again, it is doubtful whether much, if any, of that
amount can be expended, but that amount totals
$11,500,000. That leaves a total of $24,500,000 to be
expended on state harbors, ports and services to be
used solely in direct service to cruise ship vessels.
I submit that you cannot spend it. In the meantime,
of the $46,000,000 theoretically set aside for support
of local governments servicing cruise ship vessels, at
most $10,000,000 reaches them.
Thus we are left with a municipal port
revenue sharing program that will not work as
intended: as a way to assist port communities to cope
with cruise ship visits.
Fortunately, this problem can be fixed.
Proposed Committee Substitute for House Bill 222 is
one such way. The CS would allow municipal passenger
taxes or fees to be taken as a credit against the
State's $46 tax, up to a maximum credit of $10 per
passenger, per community.
Let there be no question. Under this bill,
the allowance of a tax credit will reduce the amount
of proceeds going into the State general fund. And
the cruise industry will end up remitting fewer total
dollars to government entities, local and state, as a
result.
But creating a credit is likely to achieve a
couple of other results that I believe are highly
desirable:
· Port cities that do not currently have a fee
structure will be encouraged to enact one and to
develop port projects that serve cruise ship
passengers in the manner most compatible with
their respective communities, without fear of
adverse political consequences;
· In so doing, general fund revenues are taken off
of the table-instead, the revenues go directly to
communities-competition within the legislature
for allocations is reduced.
To summarize: allowing the tax credit
clearly benefits the port communities for the reasons
I've outlined. At the same time, it will reduce the
total amount of passenger tax proceeds received by the
State. This reduction, however, should not raise
major policy objections because of the severe legal
restrictions on the ways that these tax proceeds may
be spent.
8:39:23 AM
REPRESENTATIVE NEUMAN inquired as to what fees, taxes, low
interest loans, and other grants are available to port of call
communities.
MAYOR BOTELHO related that Juneau imposes the passenger head tax
the funds from which are used for a variety of port-related
projects, most of which are capital projects. Juneau also has a
specifically approved program that allocates a portion of those
funds for general government costs to [those services] that are
impacted by visitors, such as ambulance service. The City and
Borough of Juneau also imposes fees, moorage fees, that deal
with direct operations and maintenance of the dock facilities.
He noted that in Juneau all passengers are subject to the local
sales tax.
REPRESENTATIVE NEUMAN opined that there are other low interest
grants available for improvements, such as from the fish tax.
He then opined that the Mat-Su Borough is impacted by cruise
ship visitors. Therefore, he questioned how it's decided which
communities are impacted.
MAYOR BOTELHO acknowledged that every community with visitors is
impacted. The issue is whether the impact meets the
constitutional screen as to the nexus of the impact and how
close it is to the vessel in port. He suggested that the
earlier mentioned federal clauses pose obstacles that restrict
the target solely to those communities directly serving the
vessels. The farther away from the dockside, the more tenuous
the nexus. With regard to potential lawsuits, the real test is
with regard to the degree with which the government tries to
comply with the law of the land, including the constitution.
Mayor Botelho noted that the Juneau Airport has sought the use
of passenger fees at the airport since many of the [cruise ship]
passengers make use of the airport. However, the relationship
[as determined by local officials] is too tenuous, he related.
8:45:53 AM
CO-CHAIR LEDOUX, assuming the initiative as written poses
insurmountable constitutional issues, asked if the
aforementioned could be remedied by simply shifting all of the
money received through the initiative process to the directly
impacted port communities rather than pass HB 222.
MAYOR BOTELHO replied yes, adding that the next test is to
ensure that the port communities use the funds in a way that's
consistent with the federal law. However, Mayor Botelho opined
that it isn't as desirable because [the funds received from the
passenger fee] would be subject to annual appropriation. The
advantage of Version E is that the funds [collected for the
passenger fee] aren't placed in the general fund and local
communities can determine how much the passenger fee will be and
how to use those funds without relying on the legislature.
CO-CHAIR LEDOUX surmised that if a local community doesn't enact
the credit and the [passenger fee] funds are simply shifted to
the directly impacted communities, local communities could still
enact their own taxes. For example, nothing prohibits Juneau
from opting-out of the state program and enacting or continuing
its own taxes. She recalled Mayor Botelho mentioning that the
passage of HB 222 would eliminate the fear of adverse political
consequences when a community enacts its own head taxes. She
then requested that Mayor Botelho elaborate on this fear
communities have for enacting their own head tax.
MAYOR BOTELHO related that Juneau and Ketchikan and a few others
are essential ports of call for the cruise ship industry. These
essential ports of call are somewhat immune from pressures from
the cruise ship industry and locals who rely on the industry.
Mayor Botelho recalled his experience as the mayor of Juneau in
the late 1980s when Juneau first considered a tax to which the
industry responded by threatening that cruise ships wouldn't
visit Juneau. In fact, such was the case in another small
Southeast community. He opined that this credit proposal is of
little consequence because the overall amount remitted to the
state by the cruise ship industry remains the same and thus the
pressure on local policy makers is reduced, if not eliminated.
The aforementioned is why, he said, that local communities would
opt for their own port fee to which the cruise ship industry
wouldn't object.
8:52:45 AM
REPRESENTATIVE CISSNA related her understanding from the
Department of Revenue testimony that there is a problem with HB
222 as written in that it requires all communities, beyond the
first five ports of call, to enact and administer their own
taxation.
MAYOR BOTELHO reiterated that the limitation is regarding the
nexus of the funds being used solely for the use of service to
the vessel. The aforementioned is a high burden and as a
consequence doesn't permit much, if any, expenditures from those
impact funds. Recalling testimony from the Department of
Revenue, Mayor Botelho pointed out that average individual
vessels calls on 3.5 communities. Under the current
legislation, only the first five ports of call have any "call"
on the funds received from the passenger fee. Mayor Botelho
again highlighted that there is already a limitation with regard
to who can access funds by virtue of being ports of call as well
as a constitutional and statutory restriction on where those
funds can be spent.
8:56:13 AM
BOB WEINSTEIN, Mayor, City of Ketchikan, informed the committee
that Ketchikan owns and operates substantial port facilities
that provide direct services to cruise ships. Mayor Weinstein
noted his agreement with Mayor Botelho's position as well as his
legal analysis, which coincides with the legal opinions
conducted on behalf of the City of Ketchikan regarding the
appropriate use of port fees. He then recalled that a number of
years ago the City of Ketchikan initiated a long-term port
facility program development plan. In fact, last summer the
voters in the City of Ketchikan approved a $38 million revenue
bond to pay for the port-related improvements. The
aforementioned debt service is being paid through the
implementation of a $7 passenger. He then informed the
committee that from conversations with the bond bank's financial
advisor and executive director he ascertained that financing
revenue bonds for a large project is more likely to occur when
there is a recurring guaranteed source of revenue rather than
appropriated funds that are subject to approval each year. As
mentioned earlier, the current $5 per port limit for up to five
ports will only direct $18 of the $50 fee to the communities
impacted by the cruise ships. The aforementioned occurs if
Ketchikan and Juneau receive their $5. However, if 2 of the 3.5
communities cruise ships visit on average were taken off, a very
small amount of the total collected would go to the first 5
ports. Again, the state is in a situation in which it will
collect a substantial amount of money and the federal government
has determined how it can be spent. This legislation maintains
the $50 passenger fee and those funds would be used for projects
consistent with federal law. In fact, HB 222 [provides
structure such that] it would be more likely that there will be
port improvements, he opined. In closing, Mayor Weinstein
related the City of Ketchikan's support for HB 222.
9:01:02 AM
REPRESENTATIVE NEUMAN highlighted the following proposed
language from the initiative:
Sec. 43.52.060. Local levies. Any municipality,
whether home rule or general law, that receives
passenger ship fee funds under this chapter may not
impose an additional form of tax on travel on
commercial passenger vessels engaged in activities
involving overnight accommodations for passengers in
state marine waters. Any form of tax on travel on
commercial passenger vessels engaged in activities
involving overnight accommodations for passengers in
state marine waters enacted by a municipality, whether
home rule or general law, prior to the effective date
of this legislation shall expire one year after
enactment of this law if that municipality elects to
receive funds under this chapter.
REPRESENTATIVE NEUMAN opined that the aforementioned language
seems to say that if a municipality decides to participate and
take the funds, then it can't impose or receive any other taxes.
He asked if that ties the hands of the community with regard to
determining its needs.
MAYOR WEINSTEIN opined that the aforementioned section [of the
initiative] is part of the problem that HB 222 would fix. He
reminded the committee that the City of Ketchikan has a nearly
$40 billion project that's under construction and is being
financed by revenue bonds to which the city has pledged $7 per
marine passenger fee in order to pay the debt service. The City
of Ketchikan intends to maintain this $7 fee and, in fact, the
bond covenants require that the City of Ketchikan keep it.
9:03:06 AM
CO-CHAIR LEDOUX questioned then why the City of Ketchikan cares
about this tax since it can continue to levy the $7 tax.
MAYOR WEINSTEIN said that the City of Ketchikan cares because
it's one of the major ports and it's impacted by the vessels,
passengers, and crews. Mayor Weinstein opined that the section
of the initiative referenced by Representative Neuman is unfair
because it penalizes communities such as Ketchikan and Juneau
that try to develop port infrastructure while not allowing them
access to a fee collected by the state from the passengers,
vessels, and crews that visit their communities. Furthermore,
Ketchikan has additional projects that it wishes to construct.
Mayor Weinstein further opined that it will be difficult for
Ketchikan to simply raise its local fee to pay for projects when
the state is already collecting substantial funds that the
federal law requires to be spent in ports of call.
CO-CHAIR LEDOUX asked whether an increase in Ketchikan's head
tax to $10 would cause the cruise ships to retaliate and not
stop in Ketchikan.
MAYOR WEINSTEIN mentioned that Ketchikan has a good relationship
with the cruise ship industry. Were Ketchikan to increase its
passenger fee, it would be for specific projects that directly
serve cruise ship passengers and crew. Mayor Weinstein said
that the state is collecting money in excess of what the framers
of the initiative intended. Clearly, the initiative does need
amendment in order that the fees collected are spent in a manner
that's consistent with federal law, which isn't currently the
case.
9:07:03 AM
GERSHON COHEN, speaking as a co-sponsor of the 2006 ballot
measure on cruise ship taxation, regulation and disclosure,
commented that he was puzzled that Juneau and Ketchikan are
interested in amending the rule given that they have said they
aren't going to opt-in to the program. He pointed out that the
initiative was specifically drafted so that communities couldn't
double dip. Furthermore, smaller communities contemplating a
cruise ship passenger head tax face tremendous political
pressure from the cruise ship industry. He recalled that Mayor
Botelho remarked that the nexus between the amount of services
provided to the vessel isn't black and white. Although no one
knows how it will all play out, he expected that a number of
communities will be able to clearly collect and spend the funds.
He noted that other communities and countries have been
collecting [passenger] fees and spending those without problems.
Mr. Cohen expressed concern that if Juneau or Ketchikan
increased their fees, their fees will come out of the cap and
thus the amount available to everyone else will decrease
significantly. Furthermore, the amount going to the state could
go away. In conclusion, he informed the committee that there is
a class action lawsuit regarding cruise ships collecting port
fees and keeping them because the cruise ships were receiving
rebates from the ports. He emphasized the need not to establish
a similar situation in Alaska. Mr. Cohen concluded by relating
his opposition to HB 222.
9:11:52 AM
CO-CHAIR FAIRCLOUGH, upon determining no one else wished to
testify, closed the public hearing.
9:12:04 AM
CO-CHAIR FAIRCLOUGH announced that HB 222 would be held over.
9:12:08 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:12:09 AM.
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