Legislature(2009 - 2010)
04/16/2010 10:47 AM House FIN
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 312(FIN)
"An Act relating to the deposit of the proceeds of the
tax on gambling operations aboard certain commercial
passenger vessels into the general fund; providing for
a reduction in the excise tax to $34.50 for a
passenger for each voyage on a commercial passenger
vessel; describing the passengers that are subject to
the excise tax and liable for the payment of the tax;
providing for a reduction in the state excise tax
imposed on a passenger traveling on a commercial
passenger vessel by the amount of tax on a passenger
traveling on a commercial passenger vessel imposed by
a municipality under a law enacted before December 17,
2007; authorizing appropriations from the commercial
vessel passenger tax account to the first seven ports
of call in the state and for costs associated with
commercial passenger vessels and the passengers on
board; limiting the use of funds appropriated from the
commercial passenger vessel tax account to
expenditures related to port facilities, harbor
infrastructure, other services provided to the
commercial passenger vessels and the passengers on
board those vessels and certain other purposes;
repealing the regional cruise ship impact fund;
relating to the administration of the excise tax by
the Department of Revenue and regulations required to
be adopted; requiring a report from the Department of
Commerce, Community, and Economic Development relating
to safely and efficiently hosting passengers; defining
'voyage' for purposes of the excise tax; relating to
municipal levies on a passenger on a commercial
passenger vessel; and providing for an effective
date."
12:51:52 AM
Co-Chair Stoltze announced the beginning of the committee's
amendment process to the legislation.
Vice-Chair Thomas MOVED to ADOPT Conceptual Amendment 1,
work draft 26-LS1633\W:
"An Act relating to the deposit of the proceeds of the tax
on gambling operations aboard certain commercial passenger
vessels into a special fund within the commercial vessel
passenger tax account in the general fund; providing for a
reduction in the excise tax to $40 for a passenger for each
voyage on a commercial passenger vessel; describing the
passengers that are subject to the excise tax and liable
for the payment of the tax; providing for a reduction in
the state excise tax imposed on a passenger traveling on a
commercial passenger vessel by the amount of tax on a
passenger traveling on a commercial passenger vessel
imposed by certain municipalities under laws enacted before
December 17, 2006; authorizing appropriations from the
commercial vessel passenger tax account to the first seven
ports of call in the state to certain other municipalities
and for costs associated with commercial passenger vessels
and the passengers on board; limiting the use of funds
appropriated from the commercial passenger vessel tax
account to expenditures related to port facilities, harbor
infrastructure, other services provided to the commercial
passenger vessels and the passengers on board those vessels
and certain other purposes; repealing the regional cruise
ship impact fund; relating to the administration of the
excise tax by the Department of Revenue and regulations
required to be adopted; requiring a report from the
Department of Commerce, Community, and Economic Development
relating to safely and efficiently hosting passengers;
defining 'voyage' for purposes of the excise tax; relating
to municipal levies on a passenger on a commercial
passenger vessel; and providing for an effective date."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
* Section 1. AS 43.35.220 is amended to read:
Sec. 43.35.220. Disposition of receipts. The
proceeds from the tax on gambling operations aboard
commercial passenger vessels in the state's marine
water shall be deposited in the commercial vessel
passenger gambling fund within the commercial vessel
passenger tax account (AS 43.52.230(a)) [A SPECIAL
"COMMERCIAL VESSEL PASSENGER TAX ACCOUNT" IN THE
GENERAL FUND].
* Sec. 2. AS 43.52.200 is amended to read:
Sec. 43.52.200. Levy of excise tax on overnight
accommodations on commercial passenger vessels. There
is imposed an excise tax on passengers traveling
[TRAVEL] on commercial passenger vessels providing
overnight accommodations that anchor or moor on [IN]
the state's marine water with the intent to allow
passengers to embark or disembark.
* Sec. 3. AS 43.52.210 is amended to read:
Sec. 43.52.210. Rate of tax. The tax imposed by
AS 43.52.200 - 43.52.295 is levied at a rate of $40
for [$46] a passenger for each [PER] voyage.
* Sec. 4. AS 43.52.220 is amended to read:
Sec. 43.52.220. Liability for payment of tax. A
passenger subject to[TRAVELING ON A COMMERCIAL
PASSENGER VESSEL PROVIDING OVERNIGHT ACCOMMODATIONS IN
STATE MARINE WATER IS LIABLE FOR] the excise tax
imposed by AS 43.52.200 - 43.52.295 is liable for the
payment of the tax. The tax shall be collected from
the passenger [AND IS DUE AND PAYABLE TO THE
DEPARTMENT
(1)] by the person who provides travel
aboard a commercial vessel and shall be paid to the
department [FOR WHICH THE TAX IS PAYABLE; AND
(2)] in the manner and at the times
required by the department by regulation.
* Sec. 5. AS 43.52.230(a) is amended to read:
(a) The proceeds from the tax imposed under
AS 43.52.200 - 43.52.295 [ON TRAVEL ON COMMERCIAL
PASSENGER VESSELS PROVIDING OVERNIGHT ACCOMMODATIONS
IN THE STATE'S MARINE WATER] shall be deposited in a
special "commercial vessel passenger tax account" in
the general fund. The legislature may appropriate
money from this account for the purposes described in
(b) and (d) [(c)] of this section and in AS 43.52.250
[, FOR STATE-OWNED PORT AND HARBOR FACILITIES, OTHER
SERVICES TO PROPERLY PROVIDE FOR VESSEL OR WATERCRAFT
VISITS, TO ENHANCE THE SAFETY AND EFFICIENCY OF
INTERSTATE AND FOREIGN COMMERCE, AND SUCH OTHER LAWFUL
PURPOSES AS DETERMINED BY THE LEGISLATURE].
* Sec. 6. AS 43.52.230(b) is amended to read:
(b) For each voyage of a commercial passenger
vessel [PROVIDING OVERNIGHT ACCOMMODATIONS], the
commissioner shall identify the first seven [FIVE]
ports of call in the state and the number of
passengers subject to the tax imposed under
AS 43.52.200 - 43.52.295 on board [THE VESSEL] at each
port of call. Subject to annual appropriation by the
legislature, the commissioner shall distribute to each
port of call $8 for each [$5 PER] passenger subject to
the tax imposed [OF THE TAX REVENUE COLLECTED FROM THE
TAX LEVIED] under AS 43.52.200 - 43.52.295. If the
port of call is a city located within a borough [NOT
OTHERWISE UNIFIED WITH THE BOROUGH], the commissioner
shall [, SUBJECT TO APPROPRIATION BY THE LEGISLATURE,]
distribute $4 for each [$2.50 PER] passenger to the
city and $4 [$2.50] to the borough. A city or borough
that receives a payment [EACH PORT OF CALL RECEIVING
FUNDS] under this subsection [SECTION] shall use the
funds for [IN A MANNER CALCULATED TO IMPROVE] port
[AND HARBOR] facilities, harbor infrastructure, and
other services provided to the commercial passenger
vessels and the passengers on board those vessels [TO
PROPERLY PROVIDE FOR VESSEL OR WATERCRAFT VISITS AND
TO ENHANCE THE SAFETY AND EFFICIENCY OF INTERSTATE AND
FOREIGN COMMERCE].
* Sec. 7. AS 43.52.230 is amended by adding a new
subsection to read:
(d) In addition to making an appropriation for
the payments described in (b) of this section, the
legislature may appropriate money from the commercial
vessel passenger tax account to projects that (1)
improve port and harbor infrastructure, (2) provide
services to commercial passenger vessels and the
passengers onboard those vessels, (3) improve the
safety and efficiency of the interstate and foreign
commerce activities in which the vessels and the
passengers onboard those vessels are engaged, or (4)
other lawful purposes.
* Sec. 8. AS 43.52.240 is amended to read:
Sec. 43.52.240. Administration. [(a)] The
department shall
(1) [ADMINISTER AS 43.52.200 - 43.52.295;
AND
(2)] collect [, SUPERVISE,] and enforce the
collection of taxes due under AS 43.52.200 - 43.52.295
and penalties as provided in AS 43.05;
(2) [.
(b) THE DEPARTMENT MAY] adopt regulations
necessary for the administration of AS 43.52.200 -
43.52.295; and
(3) subject to annual appropriation,
distribute the payments described in AS 43.52.230(b)
and in 43.52.250.
* Sec. 9. AS 43.52.250 is repealed and reenacted to
read:
Sec. 43.52.250. Local levies. (a) A municipality
that imposes and collects a tax, in any form, on a
passenger traveling on a commercial passenger vessel
under an ordinance enacted by the municipality before
December 17, 2006, may not receive a distribution
under AS 43.52.230(b).
(b) Subject to appropriation and to (c) of this
section, a municipality that imposes and collects a
tax of less than $8 on a passenger traveling on a
commercial passenger vessel under an ordinance enacted
before December 17, 2006, may receive a distribution
from the commissioner equal to the difference between
$8 for each passenger and the amount of the municipal
tax imposed and collected for each passenger. If the
municipal tax is reduced, the distribution from the
commissioner increases accordingly, so that the
combination of the state distribution and the
municipal tax equals $8 for each passenger. If the
municipal tax is increased to $8 for each passenger or
more, the municipality may not receive a distribution
under this subsection.
(c) If the municipality that imposes and
collects the tax of less than $8 on a passenger
traveling on a commercial passenger vessel under an
ordinance enacted before December 17, 2006, is a city
within a borough, the commissioner shall distribute to
the borough in which the city is located $1 and
distribute the balance of the amount calculated under
(b) of this section to the city.
(d) The state tax imposed on a passenger by
AS 43.52.220 - 43.52.295 shall be reduced by the total
amount of each tax on the passenger that was imposed
and collected by a municipality under an ordinance
adopted before December 17, 2006. The amount of the
reduction shall be based on the tax rate levied under
each ordinance when it was first adopted, except that,
if a municipality subsequently decreases its tax rate,
the amount of the reduction shall be based on the
decreased tax rate.
* Sec. 10. AS 43.52 is amended by adding a new section
to read:
Sec. 43.52.260. Periodic report. The Department
of Commerce, Community, and Economic Development
shall, every three years, prepare and submit to the
governor, the legislature, and the public a report
that addresses the projected needs of communities to
safely and efficiently host passengers that pay taxes
under AS 43.52.200 - 43.52.295.
* Sec. 11. AS 43.52.295(4) is amended to read:
(4) "voyage" means any trip or itinerary
lasting more than 72 hours in the state.
* Sec. 12. AS 43.52.230(c) is repealed.
* Sec. 13. The uncodified law of the State of Alaska is
amended by adding a new section to read:
CONTINGENT EFFECT OF SECS. 1 - 12 OF THIS ACT. (a)
Sections 1 - 12 of this Act take effect only if the state
and the Alaska Cruise Association reach a settlement in
Alaska Cruise Association v. Galvin, Case Number 3:09-cv-
00195-RRB (D. Alaska) before October 31, 2010, that
disposes of the case with prejudice.
(b) The attorney general shall notify the revisor of
statutes if a settlement is reached as described in (a) of
this section.
* Sec. 14. If, under sec. 13 of this Act, secs. 1 - 12
of this Act take effect, they take effect October 31, 2010.
* Sec. 15. Section 13 of this Act takes effect
immediately under AS 01.10.070(c).
Co-Chair Stoltze OBJECTED for the purpose of discussion.
Vice-Chair Thomas announced that he was the sole sponsor of
the amendment.
PETER ECKLAND, STAFF, REPRESENTATIVE BILL THOMAS, stated
that the amendment set the passenger head tax set at $40
per passenger with a local deduct of $15; $7 in Ketchikan
and $8 in Juneau. Ports that had a local tax were not
eligible to also receive state tax dollars. The amendment
created a gambling sub fund, and set a flat rate of $8 per
port, per passenger. Under the amendment, if a local tax
were to be lowered from $8 to $5, the amount deducted would
also be lowered by $3, in order to maintain the $8 tax
across the board. Finally the contingent effect in the bill
states that the Attorney General must notify the reviser of
statutes by October 31, 2010, that the Alaska Cruise
Association case had been dropped, with prejudice, in order
for the bill to go into effect.
Vice-Chair Thomas MOVED Conceptual Amendment 1 to
Conceptual Amendment 1 for CSSB 312:
Page 1, line 9
After: 17
Delete: 2006
Insert: 2007
Page 2, line 14-17
After: in
Delete all material
Insert: the general fund.
Page 2, line 26
After: of
Delete: $40
Insert: $34.50
Page 4, line 31
After: 17
Delete: 2006
Insert: 2007
Page 5, line 4
After: 17
Delete: 2006
Insert: 2007
Page 5, line 14
After: 17
Delete: 2006
Insert: 2007
Page 5, line 19
After: 17
Delete: 2006
Insert: 2007
*Legislative Legal will do any and all other conforming and
technical amendments.
KACI SCHROEDER-HOTCH, STAFF, REPRESENTATIVE BILL THOMAS,
discussed the changes made by the amendment.
Representative Doogan OBJECTED for the purpose of
discussion.
Representative Doogan asked about the effect of changing
the 2006 to 2007 throughout the bill. Ms. Schreoder-Hotch
stated 2007 was the most recent date that the tax was in
place for Juneau and Ketchikan.
Representative Doogan WITHDREW his OBJECTON.
There being no further OBJECTION, Conceptual Amendment 1
was ADOPTED.
Co-Chair Hawker noted for the record that a conforming
title amendment would be needed due to the passage of the
conceptual amendment to the conceptual amendment.
Representative Gara clarified that the head tax was being
reduced from $46.50 to 34.50, and that each of the first 4
parts of call would receive $8, or the difference between
the local tax and $8. Mr. Eckland responded that the state
tax would be set at $34.50; with a deduct of $7 when the
vessel stopped in Ketchikan, and $8 dollars when the vessel
stopped in Juneau. Representative Gara understood that in
the case of Juneau and Ketchikan, the state would collect
$19.50, but for the next 5 ports the state would remit $8
per passenger. Overall, all ports would receive a total of
$8 per passenger.
12:54:39 AM
Representative Gara reiterated that he did not support the
reduction of the head tax.
There being no further OBJECTION, Conceptual Amendment 1,
to Conceptual Amendment 1, was ADOPTED.
12:56:47 AM
Representative Austerman offered Conceptual Amendment 2, to
Conceptual Amendment 1, as amended:
Page 2, lines11 through 17:
Delete all material
Renumber the following sections accordingly
Make conforming title amendment as necessary
Co-Chair Stoltze OBJECTED for the purpose of discussion.
Representative Austerman explained that under the current
law, the funds from gambling money went into the cruise
passenger fund, he felt that the fund should continue to do
so in order to support development around the state. He
noted that the funds should be used particularly for the
development of ports.
Representative Fairclough asked if the current amount of
the cruise passenger fund was available. Mr. Eckland
believed it was between $5 and 6 million per year.
12:59:57 AM
Representative Doogan thought that the affect of Conceptual
Amendment 1, to Conceptual Amendment 1, changed the
language to state that the funds would go to the general
fund, and that Conceptual Amendment 2, would put the funds
into the commercial passenger vessel tax fund.
Representative Foster queried the need for a change in
which fund the money was distributed into.
1:01:11 AM
Mr. Eckland stated that the gambling funds were general
fund revenues and could be used for any lawful purpose
determined by the legislature. He believed the intent of
the amendment was to leave the current law in place.
Representative Austerman stated that the current law
dictated that the proceeds from the tax on the gambling
operations aboard commercial passenger vessels in the state
marine waters should be deposited in a special commercial
vessel passenger account in the general fund.
Representative Foster understood that the funds could not
be dedicated and that the law was a reminder that the funds
were to be used for infrastructure related to cruise ships.
Co-Chair Stoltze WITHDREW his OBJECTION.
There being no further OBJECTION, Conceptual Amendment 2
was ADOPTED.
1:03:54 AM
Vice-Chair Thomas stated that the impact of tourism was
equal for all communities and that parity should be the end
result for all ports throughout the state. He pointed out
to the committee that the effective date would not allow
for the funds to fulfill the capital budget needs for this
year. He urged the reexamination of the legislation in 2015
in order to distinguish its success. He said that the
regional impact fund was important for developing ports,
but that the fund was now empty.
1:07:07 AM
Co-Chair Hawker wanted to pass the legislation out with a
forthcoming fiscal note. He sensed that the loss of revenue
would be neutral. He declared that with the return of the
$34.50 tax, the revenue reduction illustrated on the first
fiscal note to accompany the original bill should be
honored. Mr. Eckland argued that more money would be
distributed, which changed the original fiscal note.
CHRIS POAG, ASSISTANT ATTORNEY GENERAL, COMMERCIAL/FAIR
BUSINESS SECTION, DEPARTMENT OF LAW, stated that the fiscal
note would remain the same with the total of $22 million.
1:08:39 AM AT EASE
1:23:05 AM RECONVENED
Representative Austerman MOVED to RESCIND the action on
Conceptual Amendment 2. There being no OBJECTION it was so
ordered.
Representative Austerman MOVED to ADOPT Conceptual
Amendment 3:
Page 2, line 14 following "in"
Delete all material
Insert "the large passenger vessel gaming and
gambling tax account", which is established as a sub
account of the fund established in AS 43.52.230(a)
Co-Chair Stoltze OBJECTED for the purpose of discussion.
Co-Chair Stoltze WITHDREW his OBJECTION.
Representative Doogan pointed out to the committee that the
word "the" needed to be added to the amendment to read:
"the large passenger vessel gaming and gambling tax
account", which is established as a sub account of the fund
established in AS 43.52.230(a).
Representative Fairclough asked if in the work draft
amendment offered by Representative Thomas, page 2, line
14, the word "commercial" should be maintained or should it
be changed to "large", which was reflected in the
Conceptual Amendment 3 offered by Representative Austerman.
Mr. Poag stated that the gambling tax proceeds specifically
used the term "large passenger vessel". In naming the sub
account the department used language that was similar to
language found in tax statute.
There being no further OBJECTION, Conceptual Amendment 3
was ADOPTED.
1:27:20 AM
Vice-Chair Thomas MOVED to REPORT CS SB 312(FIN), 26-
LS1633\P, as amended, out of committee with individual
recommendations and the accompanying fiscal notes.
Co-Chair Hawker OBJECTED for the purpose of discussion.
HCS CSSB 312(FIN) was REPORTED out of Committee with "no
recommendation" and attached new fiscal impact note by the
Department of Revenue and previously published fiscal note:
FN2 (CED).
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