Legislature(1995 - 1996)

05/16/1995 02:10 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                             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.                                            
                                                                               

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