Legislature(1993 - 1994)

04/29/1993 09:02 AM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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          SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                        
                         April 29, 1993                                        
                            9:02 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Senator Randy Phillips, Chairman                                             
  Senator Loren Leman                                                          
  Senator Al Adams                                                             
  Senator Fred Zharoff                                                         
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Senator Robin Taylor, Vice Chairman                                          
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  HOUSE BILL NO. 253                                                           
  "An Act amending the basis  for determining refunds to local                 
  governments under the program of shared fisheries taxes; and                 
  providing for an effective date."                                            
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
  HB 253 -  See Community & Regional Affairs minutes dated                     
            4/28/93.                                                           
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Larry E. Meyers, Director                                                    
  Income & Excise Audit Division                                               
  Department of Revenue                                                        
  P.O. Box 110420                                                              
  Juneau, AK 99811-0420                                                        
  POSITION STATEMENT:  Testified in opposition to proposed                     
                       amendment                                               
                                                                               
  Paul Dick                                                                    
  Juneau Operations                                                            
  Income & Excise Audit Division                                               
  Department of Revenue                                                        
  P.O. Box 110420                                                              
  Juneau, AK 99811-0420                                                        
  POSITION STATEMENT:  Testified in opposition to proposed                     
                       amendment                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-27, SIDE A                                                           
  Number 001                                                                   
  The Senate Community & Regional Affairs Committee was called                 
  to order by Chairman Randy Phillips at 9:02 a.m.  He brought                 
                                                                               
                                                                               
  HB 253 (FISHERIES  BUSINESS TAXES)  before the committee  as                 
  the  only  order  of  business  and  invited  Larry  Meyers,                 
  Director of Income & Excise Audit, Department of Revenue and                 
  Paul Dick, Juneau  Operations, Division  of Income &  Excise                 
  Audit, Department  of Revenue  to join  the  members at  the                 
  table.                                                                       
                                                                               
  Number 030                                                                   
                                                                               
  LARRY  MEYERS  addressed  some concerns  the  Department  of                 
  Revenue has with a proposed amendment to HB 253, which would                 
  allow communities to collect the fisheries business tax.  He                 
  said their purpose in looking at the  bill was to try to see                 
  if it would fit in with the current existing operations that                 
  the department has.  They  believe those operations have run                 
  very  smoothly  to date;  they have  been very  efficient in                 
  collecting the tax.  Their concern is not only the potential                 
  loss  of revenue that  might come about  as a  result of the                 
  amendments,  but  the additional  work  loads that  might be                 
  placed on the department and the individual communities.                     
                                                                               
  Mr. Meyers  requested that  a memo  outlining the  following                 
  points of  concern be made  a part of  the record:   loss of                 
  revenues; additional burden on fisheries businesses; returns                 
  still be  required by the  department; administrative  costs                 
  higher; enforcement powers diminished; and confusion amongst                 
  taxpayers.                                                                   
                                                                               
  Mr.  Meyers  stated  that  based  on  information  that  the                 
  department has  received  from the  Governor's office,  they                 
  would like to  go on  record in opposition  to the  proposed                 
  amendment.                                                                   
                                                                               
                                                                               
  Number 075                                                                   
                                                                               
  SENATOR RANDY PHILLIPS asked Senator  Zharoff to explain the                 
  proposed amendment.                                                          
                                                                               
  SENATOR  ZHAROFF  said  the amendment  relates  to  the five                 
  percent  administrative costs.  Any negotiations between the                 
  commissioner's  office  and a  municipality  that  shows the                 
  willingness  and   has  the  capability  of  handling  these                 
  functions  could  share  in  either  that  whole  5  percent                 
  administrative cost or a portion of it.                                      
                                                                               
  Senator Zharoff said the Kodiak  Island Borough is concerned                 
  about further eroding the revenue  going to the municipality                 
  from the raw fish tax by another 2.5 percent.                                
                                                                               
  Number 125                                                                   
                                                                               
  SENATOR ADAMS  commented that he  has mixed feelings  on the                 
  amendment, but feels it is a fair amendment.                                 
                                                                               
                                                                               
  Number 150                                                                   
                                                                               
  PAUL DICK, Juneau  Operations Chief,  Income & Excise  Audit                 
  Division, Department of  Revenue, said  the actual costs  of                 
  accounting and collecting the monies  is substantial, and he                 
  believes the department  is doing  a very  efficient job  in                 
  collecting the taxes and having it as a centralized program.                 
                                                                               
                                                                               
  Mr. Dick expressed  concern with the concept  of communities                 
  collecting  fisheries business  taxes for the  state because                 
  the processors would be reporting  to certain municipalities                 
  and not other communities.  This would be very confusing for                 
  the processors, especially for the floating processors.                      
                                                                               
  Number 170                                                                   
                                                                               
  SENATOR  ZHAROFF  said  he thought  the  logistics  could be                 
  worked out over a period of time.                                            
                                                                               
  Number 200                                                                   
                                                                               
  SENATOR  ZHAROFF   moved  the  adoption   of  the  following                 
  amendment:                                                                   
                                                                               
  AMENDMENT #1                                                                 
                                                                               
  Page  l,  line 1,  after  "Act":   Insert  "relating  to the                 
  administration  of  fisheries  business   licenses  and  the                 
  fisheries business tax, and"                                                 
                                                                               
  Page  1, line 4, after "purpose of":    Insert  "secs. 2 - 4                 
  of"                                                                          
                                                                               
  Page 3, line 9:  Insert a new bill section to read:                          
     "*Sec. 5.  AS 43.75 is amended by adding a new section to                 
  article 4 to read:                                                           
            Sec. 43.75.280.   MUNICIPALITY  AS TAX  COLLECTION                 
  AGENT.  (a) If a municipality indicates a willingness to act                 
  as the department's  agent for purpose of  collection of the                 
  license  fee  and  tax  imposed  by  this  chapter  and  the                 
  commissioner believes the municipality is capable  of making                 
  and accounting for those collections, the commissioner shall                 
  appoint one or more employees of that municipality to assist                 
  in the collection of revenue owed  under the license fee and                 
  tax levied by this chapter.                                                  
            (b)  The commissioner may pay for the services  of                 
  the  municipal officials  appointed to  serve  as collection                 
  agents under (a) of this section by                                          
                 (1)  entering into  contingent fee agreements                 
  the commissioner considers reasonable; or                                    
                 (2)  the payment of amounts out of the proper                 
                                                                               
                                                                               
  appropriation for the department  the commissioner considers                 
  reasonable."                                                                 
                                                                               
  Page 3, line 10:  Delete "*Sec. 5." and insert "*Sec. 6."                    
                                                                               
  Hearing no objection to Amendment No. 1, the Chairman stated                 
  the  motion   had  passed   and  the   amendment  would   be                 
  incorporated into a Community & Regional Affairs SCS.                        
                                                                               
  Number 210                                                                   
                                                                               
  SENATOR ZHAROFF moved that HB 253 be passed out of committee                 
  with individual recommendations.   Hearing no  objection, it                 
  was so ordered.                                                              
                                                                               
  There  being  no   further  business  to  come   before  the                 
  committee, the meeting was adjourned at 9:18 a.m.                            

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