Legislature(1995 - 1996)
04/20/1995 08:45 AM House FIN
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* first hearing in first committee of referral
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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, STAFF, REPRESENTATIVE IVAN provided members with
Amendment 1 (Attachment 1). He explained that the amendment
added the Fisheries Resource Landing Tax at the request of
the Department of Revenue to the list of allowable tax
credits; limits the tax contribution at $400.0 thousand
dollars; and sunsets the credit for contributions to public
broadcasting after five years.
(Tape Change, HFC 95-87, Side 2)
Mr. Wright clarified that upon the sunset the contribution
ceiling will revert to the current level. He observed that
the sunset was included in response to concerns regarding
the Endowment Trust and contributions to individual
stations.
Representative Martin expressed concern with the inclusion
of the Fisheries Resource Landing Tax.
BOB BARTHOLOMEW, DEPUTY DIRECTOR, DIVISION OF INCOME AND
EXCISE AUDIT, DEPARTMENT OF REVENUE explained that the state
shares 50 percent of the collection of shared fish taxes.
The tax credit will reduced what is shared to the local
governments. The general fund contribution would not be
reduced.
Representative Therriault spoke in support of including the
Fisheries Resource Landing Tax in the contribution credit.
Mr. Bartholomew observed that the Department of Revenue felt
that the tax should be included so that all tax payers would
be afforded the same credit.
In response to a question by Representative Brown, Mr.
Bartholomew explained how the Fisheries Resource Landing Tax
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operates. It was instituted in FY 94. It is applied
against fish caught outside of the three mile state waters
limit and landed inside of Alaska to be transported to other
areas. The value of the fish is taxed by 3.3 percent. Fish
caught inside Alaskan waters are taxed at the same rate.
The tax is estimated to bring in $6.0 million dollars.
Fifty percent of the tax would be shared to the areas where
the fish tax was collected. The state would receive $3.0
million dollars. The tax program is currently under
litigation. The tax will not be shared until all legal
challenges have been resolved.
In response to a question by Representative Brown, Mr.
Bartholomew clarified that general fund revenue will not be
reduced by the addition of the Fisheries Resource Landing
Tax. The credit would be deducted from the municipal share
of the tax. He explained that all municipalities will share
in the loss of the credit. Any municipality subject to
sharing will be reduced a pro-rata share.
Representative Brown asked if the credit will reduce income
to communities that receive a portion of the shared taxes.
Mr. Bartholomew stated that the portion of the tax credits
that are claimed against the fisheries taxes would reduce
the municipal share. He stressed the inability to determine
the exact amount that would be potentially reduced.
Representative Martin expressed concern that the Department
of Revenue is being required to perform additional
administrative duties. Mr. Bartholomew noted that the
Department does not allocate the cost of administering the
tax programs.
In response to a question by Representative Martin, Mr.
Wright acknowledged that local governments had not had an
opportunity to respond to the amendment.
Representative Grussendorf suggested that including a credit
for the fisheries tax amounts to cost shifting. He spoke in
support of the five year sunset provision.
Mr. Bartholomew noted that the Fisheries Tax was already
included in HB 269. He emphasized that the new credit will
be treated the same as the current credit in statute. Co-
Chair Hanley observed that section 15 is current law. He
stated that the Fisheries Business Tax which applies to fish
caught in Alaskan waters was included in previous law. The
credit was taken out of the municipal portion. The
amendment adds fish that are caught outside of the three
mile limit.
Representative Brown asked the impact on local governments.
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Mr. Bartholomew stated that it is hard to estimate new tax
payers. He observed that the fiscal note was based on
current contributions. He noted that the fiscal impact to
municipalities would not change with the addition of public
broadcasting. He stated that there is no sharing on
contributions to public broadcasting or education on the
taxpayers part. He stressed that the impact is one hundred
percent on the state treasury.
Representative Mulder MOVED to adopt Amendment 1.
Representative Martin OBJECTED. He stressed that local
governments should have a chance to testify on the change.
Mr. Wright noted that some public radio stations are owned
by local governments. Representative Brown suggested that
the question be divided. Representative Mulder spoke
against dividing the question. He emphasized that rural
Alaska is the real beneficiary. A roll call vote was taken
on the main MOTION.
IN FAVOR: Kelly, Mulder, Therriault, Hanley
OPPOSED: Brown, Grussendorf, Martin
Representatives Kohring, Navarre, Parnell and Foster were
absent from the vote.
The MOTION FAILED (4-3).
Representative Mulder stressed that rural communities would
benefit from the amendment. Representative Grussendorf
emphasized the need for more discussion. Representative
Therriault suggested the bill be held.
Representative Brown provided members with Amendment 2
(Attachment 2). She explained that the amendment would
include contributions to public schools for education
technology, among organizations that are authorized to
receive the tax credit. She stressed the need for
educational technology.
Co-Chair Hanley expressed concern that the legislation not
become too inclusive. Representative Kelly asserted that
public radio and television are a low priority.
Representative Therriault suggested the amendment be
included in HB 106, Percent for Art.
Representative Grussendorf encouraged Representative Brown
to withdraw the amendment.
Representative Brown observed that new schools generally
allocate dollars for educational technology. She observed
that older schools are the most in need of educational
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technology.
Co-Chair Hanley noted that Amendment 2 had not been moved.
HB 269 was HELD in Committee for further discussion.
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