Legislature(2009 - 2010)SENATE FINANCE 532
04/14/2010 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB312 | |
| HB114 | |
| HB186 | |
| HB319 | |
| HB315 | |
| SCR19 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 168 | TELECONFERENCED | |
| += | HB 306 | TELECONFERENCED | |
| += | HB 114 | TELECONFERENCED | |
| += | HB 186 | TELECONFERENCED | |
| += | HB 319 | TELECONFERENCED | |
| += | HB 315 | TELECONFERENCED | |
| += | SB 312 | TELECONFERENCED | |
| *+ | SCR 19 | TELECONFERENCED | |
| + | SB 309 | TELECONFERENCED | |
| + | HB 365 | TELECONFERENCED | |
| + | HB 424 | TELECONFERENCED | |
| + | HB 280 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 14, 2010
9:35 a.m.
9:35:25 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:35 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
ALSO PRESENT
Miles Baker, Staff, Co-Chair Stedman; Representative Jay
Ramras; Derik Miller, staff, Representative Mike Kelly;
Jennifer Senette, Staff, Representative Kurt Olson; Senator
Gary Stevens.
SUMMARY
SB 309 GAS EXPLORATION\DEVELOPMENT TAX CREDIT
SB 309 was SCHEDULED but not HEARD.
SCR 19 LEGIS. TASK FORCE: HIGHER ED SCHOLARSHIPS
SCR 19 was REPORTED out of Committee with a "do
pass" recommendation and with one new fiscal
impact note from the Legislative Affairs Agency.
HB 114 USE STATE TRANS FACILITY FOR DISASTER AID
SCS CS HB 114 was REPORTED out of Committee with
a "do pass" recommendation and with one new
fiscal note from the Department of Commerce,
Community and Economic Development and three
previously published zero fiscal notes:
HB 168 TRAUMA CARE CENTERS/FUND
HB 168 was SCHEDULED but not HEARD.
HB 186 AK FIREARMS EXEMPT FROM FED. REGULATION
CS HB 186 was REPORTED out of Committee with a
"do pass" recommendation and with one
indeterminate fiscal note from the Department of
Law.
HB 280 NATURAL GAS: STORAGE/ TAX CREDITS
HB 280 was SCHEDULED but not HEARD.
HB 312 ADVISORY VOTE ON IN-STATE GAS PIPELINE
HB 312 was REPORTED out of Committee with no
recommendation and with one new fiscal impact
note from the Department of Commerce, Community
and Economic Development and one new zero fiscal
note from the Department of Revenue.
HB 315 PUBLIC ACCOUNTING
HB 315 was REPORTED out of Committee with a "do
pass" recommendation and with one new fiscal
impact note from the Department of Commerce,
Community and Economic Development.
HB 319 FIREARMS
HB 319 was REPORTED out of Committee with a "do
pass" recommendation and with two previously
published zero notes: FN 1 (DPS), FN 3 (LAW).
HB 365 FISH PROCESSOR FEES, LICENSES, RECORDS
HB 365 was SCHEDULED but not HEARD.
HB 424 G.O. BONDS:EDUC./LIBRARY/RESEARCH FACIL.
HB 424 was SCHEDULED but not HEARD.
HOUSE BILL NO. 312
"An Act authorizing an advisory vote on use of Alaska
permanent fund earnings for an in-state natural gas
pipeline; and providing for an effective date."
9:37:44 AM
Co-Chair Hoffman proposed committee substitute, work draft
#26-LS1633\S, Bullock, 4/13/10. Co-Chair Stedman OBJECTED.
MILES BAKER, STAFF, CO-CHAIR STEDMAN discussed CS version
S. He noted title changes conforming to the CS. Section 1
and 2 remain unchanged. Section 3 was added to the bill.
The term "passenger" has changed. Section 4, 5, and 6
address the commercial passenger vessel head tax account
and its uses. The proceeds of the head tax route into the
commercial passenger vessel head tax account. He commented
that Page 3, Lines 3 and 4 state that the legislature may
appropriate from the account for two purposes. The first
purpose is listed in Section 5, Line 10, "first five port
of call payments." Section 6 addresses the second purpose
of the fund. The mechanism of the fund has not changed.
With the CS, the first five port of call payments once
allocated to the communities, must be used for port
facilities, harbor infrastructure, and other services
provided to the commercial passenger vessels and the
passengers on board.
Mr. Baker continued that Section D addresses any balance
remaining in the fund for appropriation by the legislature.
The language on Page 3 states that the legislature may
appropriate money from the commercial passenger tax account
to projects that improve port and harbor infrastructure,
provide services to commercial passenger vessels and the
passengers aboard the vessels, and improve the safety and
efficiency of the interstate and foreign commerce
activities in which the vessels and the passengers on board
those vessels are engaged. The language was changed to
clarify that the funding is intended for services provided
to those vessels and their passengers and the structure of
the statute has been changed to clarify.
9:45:13 AM
Mr. Baker continued with Section 7 and the Department of
Revenue's (DOR) responsibility in distributing the payments
subject to appropriation. Section 8 addresses the local
levees. The communities with the local head tax in place
prior to the passage of the original citizen's initiative
were grandfathered in. The original bill proposed that if a
vessel travels to one of the two ports, the local taxes are
credited out of the $34.50 tax paid per passenger. The
previous CS allowed the grandfathered communities to raise
the local taxes a combined total of $2.25 establishing a
grandfather floor of half of the $34.50. The current CS
instead allows the communities to be grandfathered in and
the local taxes to be credited against the state tax.
Communities will not be allowed to raise the local taxes
against the state tax. Section 12 changes the effective
date to October 31, 2010.
9:50:31 AM
Mr. Baker noted that the port of call payments are
addressed in Section 5. The first five ports of call are
eligible for the revenue sharing payments. Those revenue
sharing payments in the CS have been reduced from $5 to $4.
Because Juneau is a unified city with an existing head tax,
they do not receive the revenue sharing payments. Ketchikan
with two separate governments has not received payments,
but the borough receives $2.50.
9:52:56 AM
Senator Thomas noticed that language was altered to address
the reduced tax and the first five ports of call. He asked
about Section 6 and the detailed listing of potential uses
for the revenue. Mr. Baker responded that Section 5
provides direction to communities subject to annual
appropriation by the legislature. Upon appropriation, the
section clarifies the language on Page 3, Line 24, where
three types of expenses are eligible for funding. The funds
must be provided to the vessel and the passengers on board.
Changing the word "or" to "and" creates the stipulation
that the money be spent on port facilities, harbor
infrastructures, and other services. Section 6 states that
the legislature may appropriate for projects that improve
port and harbor infrastructure, provide services to
commercial passengers, or improve safety and efficiency of
interstate and foreign commerce activities on those vessels
and passengers.
Senator Thomas opined that the CS language lacks
flexibility.
9:57:48 AM
Senator Egan requested an explanation of the spreadsheet
"Port of Call Payment Scenarios" (copy on file). He asked
for a prediction of the port of call payment for Juneau.
Mr. Baker reviewed the mentioned spread sheet which lists
the communities and the passenger port of call numbers from
the revenue, ranked in total for the three year program.
Juneau is the number one port of call with 2.97 million
passengers in three years. He noted that the Municipality
of Anchorage may have 125 thousand visitors. He stated that
a projection for Anchorage could be obtained by multiplying
125,000 by $5 or $4 as it is in the current CS. The DOR's
forecasted passenger traffic in the 2010 column shows a 15
percent reduction from 2009. The bottom half of the
spreadsheet shows the passenger numbers and the community
sharing amounts to the ports of call. Juneau and the City
of Ketchikan have not received money from the $5 revenue
sharing program. The right side of the spreadsheet exhibits
the port of call payment amounts under the status quo using
the 15 percent traffic reductions estimated by DOR. He
noted that if the port of call payment remains at $5 and
the restriction on Juneau and Ketchikan is removed, the
difference is apparent.
10:05:59 AM
Mr. Baker reviewed spreadsheet "SB 312 Version A" (copy on
file) which addresses the cash flow into the state. The
current excise tax is $46. The two local taxes for Juneau
and Ketchikan are listed. Under the current bill, a visitor
to both towns allows for $19.50 per passenger to be
distributed in port of call payments. If the port of call
payments are reduced 25 percent, the new amount would be
$3.75. The proposed amount in the CS is $4 which is simpler
to divide.
10:08:44 AM
Mr. Baker continued to describe the graph. Using the DOR
passenger traffic forecast for 2010 of 850 thousand
passengers and a three port of call itinerary, a five
dollar port of call payment would allow sixty four percent
of the passengers paying an excise tax of $19.50 to equal
$10,500,000 in state revenue. The port of call payments for
the three ports of call equals $8 million and leaves a
balance of $2.4 million. He mentioned other itinerary
scenarios via the spreadsheet.
Senator Egan requested the amount received by the state
last year. Mr. Baker responded that the 2009 cruise season
amounted to approximately $41.2 million with $10.3 million
allocated to the regional cruise ship fund and $30.9
million to the commercial passenger vessel tax account. He
explained that $10 million were paid in port of call
payments. The legislature and the governor appropriated $54
million in last year's capital budget and $500 thousand
from the regional fund for the Whittier tunnel operation.
He mentioned that the balances have rolled forward with
more revenue than was appropriated. The legislature
appropriated $15 million in the 2009 capital budget cycle.
10:13:40 AM
Co-Chair Stedman offered an additional spreadsheet with
2009 project information.
Senator Egan asked if the CS precludes Sitka, Haines, and
Hoonah from instituting a fee. Mr. Baker understood that
nothing precludes establishment of a standard fee or
raising a current fee.
Senator Egan asked if industry will continue the lawsuit if
the CS is adopted. He mentioned the recent news release and
whether industry would accept the CS as a compromise.
Co-Chair Stedman responded that the legislation does not
alter the dollar amount of $34.50. He stated that he did
not expect opposition. Mr. Baker added that the CS does not
alter the $34.50; only the distribution by the state is
changed. He commented that the CS tightens up the language
in terms of allowable uses of the funds. He opined that the
industry would be amenable to the changes.
10:17:40 AM
Senator Thomas asked about an estimation of funds available
for Denali Park or the Interior where one third of
passengers arrive. Mr. Baker responded that the money
available based on the 2010 traffic projections is $4.3
million. He was unsure about the division of funds.
Senator Huggins commented that many of the visitors travel
through Wasilla and Palmer.
Co-Chair Stedman removed his OBJECTION. There being NO
OBJECTION, it was so ordered. Version S adopted.
Co-Chair Stedman mentioned one fiscal note from DOR
reflecting the annual loss of $22 million in cruise ship
passenger receipts and one fiscal note from the Department
of Commerce, Community and Economic Development (DCCED) for
$10 million to conduct periodic reviews.
Co-Chair Hoffman moved amendment one. Co-Chair Stedman
OBJECTED.
10:20:29 AM
Mr. Baker explained Amendment 1. He noted that the gambling
tax proceeds are general fund proceeds. The commercial
passenger vessel tax account is restricted on its use and
will become more restrictive under this bill. The money
remains in the account and has not been appropriated. He
believed that past gambling tax proceeds have lapsed to the
general fund or become part of a reverse sweep. He stated
that approximately $12 million of gambling tax money will
be available at the end of 2010 in the commercial passenger
vessel tax account. Amendment 1 simply deposits the
gambling tax funds into the general fund.
Co-Chair Stedman removed his OBJECTION. Amendment one was
adopted.
Co-Chair Stedman referenced the port of call spreadsheet
calculations. The CS shows a $4 port of call amount which
gives the communities less than expected. He asked
committee members' opinions regarding raising the port of
call number to $5.
10:24:24 AM
Mr. Baker commented that the difference between the four
and the five dollar head tax based on the 2010 traffic
projections leaves a balance of $7.1 million at the end of
the year leading to a $3 million difference from the $4
port of call payment. He pointed out the principal change
in the balance of the fund is not a product of the
adjustment to the port of call payments. He noted the
increased revenue due to the addition of Juneau and
Ketchikan.
10:26:43 AM
Senator Huggins advocated for the "path of least
resistance."
Senator Olson advocated for local control. He opined that
money at the local level allows for proper spending. He
stated that the $5 port of call tax would be best.
Senator Egan appreciated the lower $4 tax and the need to
work with the industry to implement the fee. He understood
that needs exist in all of the various ports in Southeast
Alaska. The cruise ships directly affect community
infrastructure. He preferred the $5 tax.
10:29:13 AM
Co-Chair Hoffman Moved Amendment 2. Co-Chair Stedman
OBJECTED.
Mr. Baker explained that Amendment 2 replaces the three
sections of the bill identifying the amount of the port of
call payments. The current CS states that the port of call
payments are $4 for each passenger. The amendment changes
the amount to $5. Line 19 and 20 of the same page splits
the $5 to $2.50 bringing the CS back to revenue amounts in
the current law.
Senator Egan supported the amendment as he felt it was
unfair for certain communities to be left out as the
infrastructure needs are universal among southeast
communities.
Co-Chair Stedman removed his objection. Amendment 2 was
adopted.
Co-Chair Hoffman MOVED Conceptual Amendment 3 with
corresponding numeric changes on Line 7 changing the "five"
ports of call to "seven." There being no OBJECTION
Amendment 3 was adopted.
Co-Chair Hoffman MOVED to report CS SB 312 out of Committee
with individual recommendations and the accompanying fiscal
notes.
Senator Egan OBJECTED for further information on Amendment
3. Mr. Baker suggested reviewing the spreadsheet and the
concern regarding the current law. The additions of longer
cruise routes necessitate the change from five to seven
ports of call. The effect of the amendment is to allow the
sixth and seventh port to receive a payment with an
incremental difference of $100 thousand. Senator Egan asked
if the current average was 3.4 ports of call visited by
cruise ship passengers. Mr. Baker concurred.
Senator Egan removed his OBJECTION. There being NO
OBJECTION, it was so ordered.
HB 312 was REPORTED out of Committee with no recommendation
and with one new fiscal impact note from the Department of
Commerce, Community and Economic Development and one new
zero fiscal note from the Department of Revenue.
CS FOR HOUSE BILL NO. 114(TRA) am
"An Act relating to availability of state
transportation facilities and state-owned or state-
operated transportation modes for delivering
compassionate aid."
10:41:46 AM
Co-Chair Hoffman introduced HB 114 noting its second
hearing in the Senate Finance Committee.
REPRESENTATIVE JAY RAMRAS offered to answer questions from
the committee.
Co-Chair Hoffman noted four zero fiscal notes from the
Department of Commerce, Community and Economic Development
(DCCED), the Department of Transportation and Public
Facilities (DOT/PF), the Department of Fish and Game (DFG),
and the Department of Military and Veterans Affairs (DMVA).
Senator Huggins MOVED to report SCS CS HB 114 out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SCS CS HB 114 was REPORTED out of Committee with a "do
pass" recommendation and with one new fiscal note from the
Department of Commerce, Community and Economic Development.
CS FOR HOUSE BILL NO. 186(FIN) am
"An Act declaring that certain firearms and
accessories are exempt from federal regulation."
10:43:36 AM
Co-Chair Hoffman noted that today's hearing was the second
for the bill.
DERIK MILLER, STAFF, REPRESENTATIVE MIKE KELLY stated that
he was available to answer questions.
Co-Chair Hoffman mentioned one indeterminate fiscal note
from Department of Law (DOL).
Senator Huggins MOVED to report CS HB 186 out of Committee
with individual recommendations and the accompanying fiscal
note.
CS HB 186 was REPORTED out of Committee with a "do pass"
recommendation and with one indeterminate fiscal note from
the Department of Law.
CS FOR HOUSE BILL NO. 319(FIN)
"An Act relating to firearms; and providing for an
effective date."
10:44:41 AM
Co-Chair Hoffman noted that the bill was first heard on
April 13, 2010. He requested further consideration from the
committee.
Senator Huggins MOVED to report CS HB 319 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
CS HB 319 was REPORTED out of Committee with a "do pass"
recommendation and with two previously published zero
notes: FN 1 (DPS), FN 3 (LAW).
HOUSE BILL NO. 315
"An Act relating to public accounting; and providing
for an effective date."
10:45:53 AM
Co-Chair Hoffman introduced the bill and asked for the will
of the committee.
Senator Egan MOVED TO ADOPT Amendment 1.
Page 9, line 29, following "renewal":
Insert ", except that the length of a renewal for
an out-of-state permit may not exceed four years"
Page 10, line 12, following "privilege":
Insert "shall"
Page 12, line 11:
Delete "the other [THIS]"
Insert "this or the other"
Co-Chair Hoffman OBJECTED.
Senator Egan explained the amendment and the changes to the
language. The first change limits renewals for out of state
permits. Current regulations allow two year renewals. The
second change inserts a missing "shall" correcting an
omission. The third change corrects an inadvertent error
thereby enforcing violations of Alaska law.
JENNIFER SINNET, STAFF, REPRESENTATIVE OLSON stated that
the sponsor agrees with the amendment.
Co-Chair Hoffman removed his OBJECTION. Amendment 1 was
adopted.
Co-Chair Hoffman noted the new fiscal note from DCCED
reflecting the cost of hiring an executive at $134.200 in
receipt supported services.
Senator Huggins MOVED to report HB 315 out of Committee
with individual recommendations and the accompanying fiscal
note.
HB 315 was REPORTED out of Committee with a "do pass"
recommendation and with one new fiscal impact note from the
Department of Commerce, Community and Economic Development.
SENATE CONCURRENT RESOLUTION NO. 19
Relating to a Joint Legislative Higher Education
Scholarship Funding Task Force.
10:49:06 AM
Co-Chair Stedman stated today was the resolution's first
hearing in the Senate Finance Committee.
SENATOR GARY STEVENS explained that full educational reform
is an important piece of legislation. He stated that fifty
percent of high school students require remedial education
upon college entry. Several other states are currently
working on reform. One major complication is financial aid.
Tuition costs increase steadily. The task force resulting
from this legislation is intended to complement existing
legislation regarding curriculum reform and postsecondary
financial aid. The job of the task force is to recommend
the best approach to improving our educational system with
financial assistance.
Co-Chair Stedman mentioned one fiscal note for $70 thousand
to cover travel costs for task force members.
Co-Chair Hoffman MOVED to report SCR 19 out of Committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SCR 19 was REPORTED out of Committee with a "do pass"
recommendation and with one new fiscal impact note from the
Legislative Affairs Agency.
CS FOR HOUSE BILL NO. 168(FIN)
"An Act relating to state certification and
designation of trauma centers; creating the trauma
care fund to offset trauma care provided at certified
and designated trauma centers; and providing for an
effective date."
CS HB 168 was SCHEDULED but not HEARD.
SENATE BILL NO. 309
"An Act amending and extending the exploration and
development incentive tax credit under the Alaska Net
Income Tax Act for operators and working interest
owners directly engaged in the exploration for and
development of gas from a lease or property in the
state; providing for an effective date by amending the
effective date for sec. 2, ch. 61, SLA 2003; and
providing for an effective date."
SB 309 was SCHEDULED but not HEARD.
CS FOR HOUSE BILL NO. 280(FIN) am
"An Act relating to a gas storage facility; relating
to the Regulatory Commission of Alaska; relating to
the participation by the attorney general in a matter
involving the approval of a rate or a gas supply
contract; relating to an income tax credit for a gas
storage facility; relating to oil and gas production
tax credits; relating to the powers and duties of the
Alaska Oil and Gas Conservation Commission; relating
to production tax credits for certain losses and
expenditures, including exploration expenditures;
relating to the powers and duties of the director of
the division of lands and to lease fees for a gas
storage facility on state land; and providing for an
effective date."
HB 280 was SCHEDULED but not HEARD.
HOUSE BILL NO. 365
"An Act relating to sharing records regarding fish
purchased by fish processors with certain federal
agencies, to requirements to obtain and maintain a
fisheries business license, and to payment of industry
fees required of fish processors; and providing for an
effective date."
HB 365 was SCHEDULED but not HEARD.
CS FOR HOUSE BILL NO. 424(FIN) am
"An Act providing for and relating to the issuance of
general obligation bonds for the purpose of paying the
cost of design and construction of library, education,
and educational research facilities; and providing for
an effective date."
HB 424 was SCHEDULED but not HEARD.
ADJOURNMENT
The meeting was adjourned at 10:52 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SCR19_SponsorStatement.pdf |
SFIN 4/14/2010 9:00:00 AM |
SCR 19 |
| SB 315 Amendment 1 SFIN R.1.pdf |
SFIN 4/14/2010 9:00:00 AM |
SB 315 |
| HB 168 Amendment 2 Ellis 041410.pdf |
SFIN 4/14/2010 9:00:00 AM |
HB 168 |
| 2010 04 12 SB312 Port of Call Payments.pdf |
HFIN 4/15/2010 8:30:00 AM SFIN 4/14/2010 9:00:00 AM |
SB 312 |
| SB 312 CS Proposed CS FIN Verion S 041410.pdf |
SFIN 4/14/2010 9:00:00 AM |
SB 312 |
| SB 312 Amendment 1 Stedman.pdf |
SFIN 4/14/2010 9:00:00 AM |
SB 312 |
| SB 312 Amendment 2 Stedman.pdf |
SFIN 4/14/2010 9:00:00 AM |
SB 312 |
| 2010 04 15 SB312 Cruise Cash Flow Revised.pdf |
SFIN 4/14/2010 9:00:00 AM |
SB 312 |