Legislature(2009 - 2010)SENATE FINANCE 532
04/05/2010 10:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB235 | |
| SB236 | |
| SB312 | |
| SB301 | |
| SB287 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 312 | TELECONFERENCED | |
| + | SB 301 | TELECONFERENCED | |
| += | SB 220 | TELECONFERENCED | |
| + | SB 287 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 235 | ||
| = | SB 236 | ||
SENATE BILL NO. 312
"An Act providing for a reduction in the excise tax to
$34.50 for a passenger for each voyage on a commercial
passenger vessel; providing for a reduction in the
state excise tax imposed on a passenger on a
commercial passenger vessel by the amount of tax on a
passenger traveling on a commercial passenger vessel
imposed by a municipality that does not elect to
receive an appropriation of a portion of the proceeds
from the state tax; authorizing an appropriation from
the proceeds from the excise tax imposed on a
passenger on a commercial passenger vessel for state-
owned infrastructure to properly provide for
commercial vessel or passenger visits; requiring a
municipality receiving funds appropriated from the
excise tax imposed on a passenger on a commercial
passenger vessel to use the funds to improve port and
harbor facilities and other services and
infrastructure to properly provide for commercial
passenger vessel or passenger visits; limiting the
reduction for the excise tax imposed by a municipality
on a passenger on a commercial passenger vessel to
$17.25 a passenger for each voyage; requiring the
Department of Commerce, Community, and Economic
Development to prepare and submit a report on the
needs of communities to safely and efficiently host
passengers subject to the state tax imposed on a
passenger on a commercial passenger vessel, and to
summarize the extent to which appropriations from the
state tax have been used to defray the costs of
meeting those needs; eliminating the authority to
appropriate funds received from the excise tax imposed
on a passenger on a commercial passenger vessel to an
area of the state that is not one of the first five
ports of call in the state for a commercial passenger
vessel carrying a passenger subject to the state
excise tax imposed on a passenger of that vessel; and
providing for an effective date."
10:10:17 AM
DARWIN PETERSON, STAFF, CO-CHAIR STEDMAN, discussed the
legislation.
SB 312 proposes to reduce the commercial passenger
vessel (CPV) excise tax from $46 per passenger to
$34.50 per passenger traveling on a commercial
passenger vessel in state marine waters. The bill
will also allow a reduction in the amount of the tax
for taxes paid to a municipality that levies its own
passenger fee. The reduction could not exceed 50% of
$34.50 regardless of the amount of passenger fees
charged by other communities.
In addition, SB 312 repeals the regional cruise ship
impact fund. As a result, all revenues collected from
the CPV tax would be deposited in the CPV tax account
in the general fund. SB 312 will not affect community
revenue sharing.
Finally, SB 312 will require the Department of
Commerce, Community and Economic Development to create
a report every three years that addresses the
projected needs of the communities that host cruise
ship passengers and the extent to which the tax
proceeds have been utilized for projects in areas that
are directly impacted by cruise passengers.
10:11:38 AM
CURTIS THAYER, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, discussed tourism and
the vessel passenger tax. He informed that the department
is supportive of the actions outlined in the bill and he
underscored the urgency to take action this session. The
governor proposed legislation that included the exact
provisions included in this bill. He believed that both
elements were needed to make Alaska a destination by
increasing the Alaska tourism marketing program. The
department published a study showing that tourism impacts
Alaska's economy. Following many decades of growth in the
tourism sector, a decline is now faced. Travel to Alaska
was off by more than seven percent. He noted that visitor
spending decreased by $270 million. The cruise industry has
already signaled a willingness to be a partner in the
solution by agreeing to drop the lawsuit against the state
if the head tax is reduced. The state is likely facing a
two year delay until cruise ship passenger volumes
increase. Cruise lines indicate that they can refrain from
making final decisions in 2012 following decisions by the
legislature.
10:17:15 AM
Senator Thomas asked about the regional fund. He asked if
money from the regional fund is designated to the
commercial vessel tax account, could the funds then be
appropriated to areas other than those directly related to
the five ports of call.
10:17:55 AM
CHRISTOPHER POAG, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW reported that all tax proceeds go into the general fund
and can be appropriated for any public purpose. The
guidelines in the bill are for the legislature regarding
the spending of the proceeds. He noted that the legislature
has the authority to appropriate the proceeds for any
public purpose.
Senator Thomas clarified that the language in the initial
bill led to difficulty, so removing the wording alleviates
the potential problem and eliminates the lawsuit.
Mr. Poag added that one argument made by the industry is
that spending the proceeds in non ports of call was
unconstitutional and in violation of federal law.
Senator Thomas asked if the agreement was written. Mr. Poag
responded that the written agreement has been modified with
alterations in the format and signature block. He opined
that the progress was good. He anticipated that an
agreement would be executed by the end of the week.
Senator Olson opined that the governor was predicating the
passage of this legislation on a promise to increase the
number of cruise ships visiting Alaska without reference to
the number of passengers on the ships. He asked if the
department was in favor of establishing a trial period to
determine that the legislature will deliver an effective
and a sunset date to test the promises made by the cruise
ship industry.
Mr. Thayer responded that a sunset clause for the provision
has not been discussed. He supposed that two to three years
is required to determine the ship deployment schedule. He
pointed out that Europe is growing and building additional
cruise ships that are not coming to Alaska.
10:21:53 AM
Co-Chair Stedman asked about the statute change for head
tax and the money for the general fund. Mr. Poag noted that
litigation is in progress. He stated that the position of
the industry is that federal law places strong restrictions
on how the proceeds can be spent. The issue is litigated
until the court issues an order. Proceeds are spent on
direct attributable benefits to passengers, the places they
go, the services they require, and the infrastructure
utilized. The proceeds ought to be spent on those types of
projects.
10:23:57 AM
Senator Olson wondered if the legislature was willing to
allocate the funds to areas other than the five ports of
call, is that a violation of the agreement to drop the
lawsuit. Mr. Poag responded that the key terms of the
agreement are for the reduction of the tax rate. If the
reduction and the offset come in this bill or another bill
and are signed into law, the terms of the agreement state
that they will dismiss the pending law suit. The periodic
review process is geared toward looking at the methods used
by the state to utilize the proceeds. A sunset clause is an
option for the committee to consider, but it might disrupt
the stability of the tax proceeds coming in on a yearly
basis.
10:25:22 AM
Senator Thomas asked if the case is dismissed would be
dismissed with or without prejudice. Mr. Poag responded
"with prejudice."
10:25:59 AM
MR. JOHN BINKLEY, ALASKA CRUISE ASSOCIATION, FAIRBANKS,
testified in support of the legislation. He informed that
the goal of the legislation is to reach out to the cruise
ship industry and make changes that encourage the industry
to invest in Alaska. He stated that the administration
framed the issue correctly. He noted that key elements
include the agreement that the litigation would end. He
noted that the latest version of the agreement arrived at
six o'clock this morning and is vetted through the legal
departments of the companies involved.
10:29:05 AM
KARL AMYLON, CITY MANAGER, KETCHIKAN (via teleconference),
testified in favor of SB 312. He stressed that the loss of
cruise ship passengers is having a negative effect in
Ketchikan. The city is anticipating a revenue loss of $2
million in 2010.
DAN BOCKHORST, CITY MANAGER, KETCHIKAN (via
teleconference), testified in favor of SB 312. He echoed
the comments of Mr. Amylon. He stressed the urgency of the
matter.
10:31:38 AM
TOM SMITH, CITY MANAGER, MUNICIPALITY OF SKAGWAY (via
teleconference) testified in support of the legislation. He
expressed concern with Section 5. He advised the committee
to scrutinize the bill.
10:32:47 AM
TIM CERNY, FAIRBANKS ALASKA, ALIANCE FOR CRUISE TRAVEL
(ACT) (via teleconference) testified in support of the
legislation. He explained that ACT has over 200 members in
the Fairbanks area who would unanimously support SB 312. He
stated that the bill would benefit the Fairbanks economy
and the tourism industry.
DEB HICKOK, FAIRBANKS CONVENTION AND VISITORS BUREAU (via
teleconference), testified in support of the legislation.
10:35:31 AM
RICK ERICKSON, ALASKA ACT, KETCHIKAN (via teleconference),
testified in support of the legislation. He represented 20
members of Alaska ACT. He noted that this bill proves that
Alaska is open for cruise ship business.
PATTI MACKEY, EXECUTIVE DIRECTOR, KETCHIKAN VISITORS BUREAU
(via teleconference), testified in support of the
legislation. She spoke in favor of the reduction of the
head tax. She stated that tourism supports approximately
1500 citizens. She stressed the need for marketing that
will bring tourists to Alaska. Businesses report a 20
percent loss in income for the last tour season. She sought
a long term solution for marketing Alaska tour options.
10:39:00 AM
JOSEPH LONHAM, ALASKA ACT, KETCHIKAN (via teleconference)
testified in support of the legislation. He informed that
vacation is the number one use of funds for those seeking
information about financial planning with Wells Fargo.
Small business expansion drops without the cruise ship
industry.
10:41:38 AM
DICK COOSE, SELF, KETCHIKAN (via teleconference) testified
in support of the legislation. He advocated for the
reduction in the cruise ship industry head tax.
REX WESTERGARD, ALASKA ACT (via teleconference) testified
in support of SB 312.
10:42:52 AM
FRED REEDER, ALASKA ACT, SURVEY POINT HOLDING COMPANY,
SITKA (via teleconference), testified in support of the
legislation. He noted that the economy in Sitka is
profound. He believed that the legislation allows those
communities that have a head tax to be discounted from the
state head tax. Revenue losses for Sitka are estimated to
be over $1.5 million in comparison to 2008. He opined that
the city of Sitka will lobby the legislature for an
increase in municipal revenue sharing to help offset this
decline in their sales tax receipts.
10:45:00 AM
BONNIE QUILL, EXECUTIVE DIRECTOR, MATSU CONVENTION AND
VISITORS BUREAU (via teleconference), testified in support
of SB 312.
10:46:45 AM
PAUL LANDIS, CHIEF OPERATING OFFICER CIRI TOURISM
CORPORATION, ALASKA ACT (via teleconference), testified in
support of the legislation. He stated that businesses rely
on the cruise ship industry. He stressed that the
operations and jobs depend on cruise ships returning to
Alaska. He opined that the head tax is driving ships away.
10:49:18 AM
TAMMY GRIFFIN, ALASKA HOTEL LODGING (via teleconference),
testified in support of the legislation. She thanked the
co-chairs of the committee for introducing the legislation.
She stated that her company does not have a contract with a
specific cruise ship company, however, she benefits from
cruise ship visitors.
SUSAN GILPATRICK, GILPATRICK'S HOTEL CHITNA AND GREENHOUSE
(via teleconference) testified in support of the
legislation. She stated that Valdez is a tourist
destination and the trickledown effect of the tourism
benefits her local business. She spoke about the importance
of marketing efforts.
10:53:24 AM
DEAUTUA CROCKETT, RESOURCE DEVELOPMENT COUNCIL, ANCHORAGE
(via teleconference), testified in support of the
legislation. She noted that the head tax compromises the
economy in Alaska.
COLLEEN STEPHENS, STAN STEPHENS CRUISES (via
teleconference), testified in support of the legislation.
She acknowledged the economic downfall and its effect on
her business.
10:55:53 AM
CHIP THOMA, PRESIDENT, RESPONSIBLE CRUISING IN ALASKA,
testified about the use of the collected head tax over the
last ten years. He pointed out that Juneau collected over
$50 million in ten years and the funds were used for dock
improvements for the cruise industry. The purpose of the
head tax initiative was to provide important services that
benefit the cruise ship industry. He supported the
legislation, but supposed that it could be improved. He
proposed a decrease of 15 percent of the head tax. He
disagreed with Section 5. He noted that the fund is shared
by all 12 ports of call. All 12 ports can apply for
projects from the fund. He opined that the head tax money
has been spent in admirable ways that benefit the
passengers and the cruise ship industry.
JOE GLEDHOF, LAW OFFICE OF J.N. GELDHOF, urged removal of
the regional account. He stated that there will be a time
to lower the excise tax. He stressed that the needs for
infrastructure and the benefit of the tax. He opined that
allowing the further deduction from a reduced excise tax
was premature. He stated that Juneau and Ketchikan require
completion of the new wharfs. He explained that he was not
opposed to a reduction or partial elimination of the excise
tax, but he opined that now was not the time. He stressed
that work on the effective dates would prove helpful.
11:02:51 AM
MIKE STEDMAN, VICE PRESIDENT, WINGS AIRLINES, MEMBER,
ALASKA ACT, testified in support of the legislation. He
stated that twenty percent of the aircraft fleet will be
laid off this summer as a result of the head tax.
11:03:59 AM
JEREMY GIESER, GASTINEAU GUIDING, testified in support of
the legislation.
BOB JANES, PRESIDENT, GASTINEAU GUIDING, testified in
support of the legislation. He stressed that the
conservative route is to lower the tax and continue to
encourage the industry to expand.
ROARK BROWN, HOMER OCEAN CHARTERS, testified in support of
the legislation. He spoke of his group which supports the
governor's initiative to restore the health of Alaska's
travel industry. He stressed that the legislation must be
passed to bring cruise passengers back to Alaska.
11:08:00 AM
SANDRA LOOMIS, TALKEETNA AIR TAXI testified in support of
the legislation. She stated that her business does not have
direct contracts with the cruise ship industry, yet her
business reflects the industry's decline.
11:10:41 AM
TANJA CADIGAN, OWNER, CARIBOU CROSSINGS, testified in
support of the legislation. She stated that she owns a
small business in Juneau that struggled last summer due to
the economic downturn.
BRET CARLSON, CHEF, COLDFOOT/DEADHORSE testified in support
of the legislation. He mentioned various methods of income
generation that are affected by the drop in tourism. The
head tax reduction addresses the creation of wealth.
11:15:22 AM
JACK POLSTER, SELF, HOMER (via teleconference) testified in
opposition to the legislation. He requested that the bill
be given more attention.
11:18:49 AM
Co-Chair Stedman mentioned the fiscal note from the
Department of Revenue reflecting an annual loss of $22
million in cruise passenger vessel receipts.
SB 312 was HEARD and HELD in Committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Sectional Analysis for HB 411 and SB 301.pdf |
SFIN 4/5/2010 10:00:00 AM |
HB 411 SB 301 |
| SB 301 Hearing Request Sen. Hoffman and Sen. Stedman.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 301 |
| 2-17-2010_MOU_AIDEA_AEA.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 301 |
| Sponsor Statement SB 287.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| SEP OCT 09.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| JUNE 09.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| JULY 09.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| In-State Letter.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| Hearing Request for SB 287.docx |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| Governor Parnell Letter.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| Feb 10.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| DEC 09.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 287 |
| SB 312 Head Tax reduction_Support.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 312 |
| SB 312 Sponsor Statement.docx |
HFIN 4/15/2010 8:30:00 AM SFIN 4/5/2010 10:00:00 AM |
SB 312 |
| SB 312 Visitor Industry Impact.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 312 |
| SB 235 - Sponsor Statement[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - Sectional Analysis[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - PowerPoint[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - National Ranking[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - National Charter Alliance CSP Fact Sheet[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - Mat-Su Support Resolution[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - Letters of Support[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - Kern - Fed Dept Ed - Letter[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - DED Charter Grant Program[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - DED Charter Grant Program - Funding[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - Comeau Article[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 235 - Alaska Charter Law Fact Sheet[1].pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 235 |
| SB 236 2010 SEDA ltter of support.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 236 |
| SB 312 Sectional Analysis.docx |
HFIN 4/15/2010 8:30:00 AM SFIN 4/5/2010 10:00:00 AM |
SB 312 |
| SB 312 Thoma Testimony SFIN 040510.pdf |
SFIN 4/5/2010 10:00:00 AM |
SB 312 |