03/25/2002 09:27 AM House FIN

HOUSE BILL NO. 229                                                                                                            
                                                                                                                                
     An Act imposing a tax on employment; and providing for                                                                     
     an effective date.                                                                                                         
                                                                                                                                
Co-Chair  Mulder MOVED  to  ADOPT work  draft,  #22-LS0842\O,                                                                   
Kurtz,  3/23/02,  as  the  version of  the  bill  before  the                                                                   
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Williams  stated that the  cruise ship head  tax had                                                                   
been removed  from the  proposed version.   He insisted  that                                                                   
was the only change made to the draft.                                                                                          
                                                                                                                                
CS  HB   229  (FIN)  was   HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
                                                                                                                                
RECESS:        10:17 A.M.                                                                                                       
RECONVENED:    10:23 A.M.                                                                                                       
                                                                                                                                
HOUSE BILL NO. 229                                                                                                            
                                                                                                                                
     An Act imposing a tax on employment; and providing for                                                                     
     an effective date.                                                                                                         
                                                                                                                                
Representative Croft noted the  three amendments contained in                                                                   
the member's  packets.   He thought that  it would  make more                                                                   
sense to  move amendment  labeled #3  first, as Amendments  1                                                                   
and  2  make  technical  changes  to  the  income  tax.    If                                                                   
Amendment 3  passes, it  would not make  sense to  submit the                                                                   
other two amendments.                                                                                                           
                                                                                                                                
Co-Chair Williams  indicated that  all the amendments  should                                                                   
be  discussed.    He  welcomed  the  amendments  proposed  by                                                                   
Representative Croft.                                                                                                           
                                                                                                                                
Representative  Croft MOVED and  spoke to Amendment  #1, S22-                                                                   
LS0842\O.1,  Kurtz,  3/25/02.  He noted  that  his  amendment                                                                   
would make  technical changes  to the  income tax.   Co-Chair                                                                   
Williams OBJECTED for the purpose of discussion.                                                                                
                                                                                                                                
Representative  Croft  explained  that  the  amendment  would                                                                   
provide the necessary  technical changes.  He  indicated that                                                                   
he  had worked  with  Larry Persily  from  the Department  of                                                                   
Revenue to help address those technical concerns.                                                                               
                                                                                                                                
Co-Chair  Williams WITHDREW  his OBJECTION.   There  being NO                                                                   
OBJECTION, Amendment 1 was adopted.                                                                                             
                                                                                                                                
Representative  Croft  MOVED   to  ADOPT  Amendment  2,  #22-                                                                   
LS0842\O.2, Kurtz, 3/25/02.  Co-Chair Williams OBJECTED.                                                                        
                                                                                                                                
Representative  Croft  explained  that  the  amendment  would                                                                   
remove the "trigger"  provision.  He stated  that the clearer                                                                   
the language, the better it will be.                                                                                            
                                                                                                                                
Co-Chair  Mulder voiced  his OBJECTION.   He  stated that  he                                                                   
liked  the  trigger  mechanism  and  that  it  would  provide                                                                   
Alaskans some level  of assurance that if the  State does not                                                                   
need the  money, and if there  is more revenue from  a higher                                                                   
price  of oil  or more  production, then  Alaskans would  not                                                                   
need to be taxed.                                                                                                               
                                                                                                                                
Representative Lancaster asked if item #3 had been removed.                                                                     
                                                                                                                                
Co-Chair Mulder  responded that the  1% had been left  in the                                                                   
bill.                                                                                                                           
                                                                                                                                
Co-Chair Mulder spoke against  removing the trigger mechanism                                                                   
in the bill.   He believed  that the State should  have never                                                                   
gotten  rid of  the tax  so that  the mechanics  would be  in                                                                   
place.  He claimed that was what  the trigger mechanism would                                                                   
do.   He assumed that  Alaskans would  be frustrated  if that                                                                   
did not occur.  Co-Chair Mulder  believed that there would be                                                                   
a move to repeal any income tax.                                                                                                
                                                                                                                                
Representative Croft WITHDREW Amendment 2.                                                                                      
                                                                                                                                
Representative Whitaker WITHDREW Amendment 3.                                                                                   
                                                                                                                                
Representative Hudson MOVED to  report CS HB 229 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal note.   Co-Chair Williams OBJECTED.                                                                         
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:      Hudson, Lancaster, Moses, Croft, Davies                                                                          
OPPOSED:       Whitaker, Bunde, Foster, Harris, Mulder,                                                                         
               Williams                                                                                                         
                                                                                                                                
The MOTION FAILED (5-6).                                                                                                        
                                                                                                                                
CS HB 229 (FIN) FAILED to move out of Committee.