05/16/1995 02:10 PM Senate FIN

                                                                               
       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.