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
MINUTES SENATE FINANCE COMMITTEE May 16, 1995 2:10 p.m. TAPES SFC-95, #75, Side 1 (000-300) CALL TO ORDER Senator Rick Halford, Co-chair, convened the meeting at approximately 2:10 p.m. PRESENT Co-chair Halford, along with Senators Phillips, Sharp, Rieger, and Zharoff were present. Co-chair Frank and Senator Donley joined shortly after the meeting began. Also Attending: Tom Dow, Vice President, Princess Tours; Dennis Poshard, Charitable Gaming; Tom Wright, Legislative Aide to Ivan Ivan; Bob Bartholomew, Deputy Director, Income & Excise Audit Division, Dept of Revenue; Susan Taylor, Fiscal Analyst, Legislative Finance Division; and Jetta Whittaker, Fiscal Analyst, Legislative Finance Division. SUMMARY INFORMATION HB 10 PAYMENT OF COSTS OF DWI ACCIDENTS Senator Rieger MOVED to adopt SCHB 10 (STA) am with a individual recommendations and accompanying fiscal notes. SCHB 10 (STA) am was REPORTED OUT of committee with a "do pass" recommendation and 3 zero fiscal notes from the Dept of Law; Dept Commerce & Economic Development; and Dept Public Safety. HB 269 TAX CREDIT: GIFTS TO PUBLIC BROADCASTING Tom Wright, Legislative aide to Ivan Ivan gave testimony in support of HB 269. Senator Phillips moved to adopt CS 1. It failed to pass. HB 269 is held for further discussion. HB 286 CRUISE SHIP GAMBLING & PROMOTIONS Tom Dow, Vice President, Princess Tours spoke in support of HB 286. Senator Sharp MOVED to adopt Amendment #1 and was REPORTED OUT of committee with individual recommendations and a zero fiscal note from the Dept of Revenue with a projected revenue of $500.0 HOUSE BILL NO. 10 "An Act relating to payment for emergency services responding to certain motor vehicle accidents." Senator Rieger MOVED to adopt CSHB 10 (STA) am with individual recommendations and accompanying fiscal notes. CSHB 10 (STA) am REPORTED OUT of committee with a "do pass" recommendation and 3 zero fiscal notes from the Dept of Law, Dept of Commerce and Economic Development, and Dept of Public Safety. 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. HOUSE BILL NO. 286 "An Act providing an exemption from gambling and certain alcoholic beverage laws for gambling conducted by cruise ships for their ticketed passengers in the offshore water of the state; relating to promotions on board cruise ships; defining 'cruise ship'; providing for exemption procedures for certain cruise ships before they can conduct gambling in the offshore water of the state; providing an exemption from the coin-operated device tax for cruise ships exempted from the gambling laws; and providing for an effective date." Tom Dow, Vice President, Princess Tours, representing Princess and Northwest Cruise Association, spoke in support of HB 286 as amended. Senator Sharp MOVED to adopt amendment #1, which limits the activities on cruise ships by eliminating slot machines or any mechanical devices. Senator Zharoff OBJECTED. He asked what the amendment disallows? Senator Sharp responded that this precludes the activities on slot machines or any other mechanical device, same as Monte Carlo games. Mr. Dow stated that the purpose of the amendment is to make the types of games available within the casinos on board the ships, the same as those that are available on Monte Carlo night, such as roulette wheels and crap tables, poker, and black jack. It does not include slot machines or video poker games, which are legally described as coin operated mechanical gaming devices. No objection being heard, amendment #1 was ADOPTED. Senator Sharp MOVED to adopt amendment #2, repealing the earlier effective date of 90 days after the governor's signature, or September 30, 1995. Mr. Dow stated that the reason for the amendment is to remove any possible chance that the passage of this bill would have any effect on expanding gaming beyond where it would be otherwise. It is under those circumstances that the industry has agreed to support this amendment. Dennis Poshard, Director, Division of Charitable Gaming, said that having read correspondence from the attorney general's office, he concurs with Mr. Dow's statement, that these amendments would make the bill so that it has no effect on furthering gaming in Alaska. Mr. Dow noted that if SB 172 never took effect, the last date this exemption would be available would be September 30, 1995, or sooner than September 30th. Without further objection, amendment #2 was ADOPTED. Senator Rieger MOVED to adopt CSHB 286 (FIN) am with individual recommendations and accompanying fiscal note. Senator Phillips objected. By a show of hands CSHB 286 (FIN) am was REPORTED OUT with a zero fiscal note from the Dept of Revenue, bringing in a projected revenue of $500.0. Senators Rieger and Zharoff recommended a "do pass". Senators Donley and Zharoff with Co-chair Halford signed "no recommendation", and Senator Phillips signed "do not pass". The meeting RECESSED at 2:30 p.m.