Legislature(2003 - 2004)

05/16/2003 01:49 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 293                                                                                                            
                                                                                                                                
     An Act levying and collecting a state sales and use                                                                        
     tax; and providing for an effective date.                                                                                  
                                                                                                                                
Representative  Moses  MOVED   to  RESCIND  action  taken  on                                                                   
adopting Amendment  #5.  There  being NO OBJECTION,  previous                                                                   
action was rescinded.                                                                                                           
                                                                                                                                
Representative  Moses MOVED  to ADOPT  the revised  Amendment                                                                   
#5.  (Copy on File).                                                                                                            
                                                                                                                                
TIM BENINTENDI,  STAFF, REPRESENTATIVE MOSES,  explained that                                                                   
the  amendment had  been  revised to  include  unincorporated                                                                   
communities  within boroughs.   The language  in the  earlier                                                                   
amendment addressed  only those outside  the lines.   The new                                                                   
#5  would  add  language  to  Page  14,  Line  22,  following                                                                   
"municipality",  inserting  "an  unincorporated  community,".                                                                   
He added  that there are about  fifty of this  type community                                                                   
throughout the State.                                                                                                           
                                                                                                                                
Additionally, on  Page 30, Line 19, the revised  Amendment #5                                                                   
would  insert  that  same  definition.   He  noted  that  the                                                                   
reference to A.S. 39.52.960 does  not contain a definition of                                                                   
unincorporated communities, making the amendment important.                                                                     
                                                                                                                                
There being  NO OBJECTION, the  new revised Amendment  #5 was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Co-Chair  Harris  MOVED to  ADOPT  Amendment  #7.   (Copy  on                                                                   
File).    Co-Chair  Williams  OBJECTED  for  the  purpose  of                                                                   
discussion.                                                                                                                     
                                                                                                                                
Co-Chair Harris explained that  Amendment #7 would delete all                                                                   
the text on Page 15, Lines 4-5.   The amendment would provide                                                                   
an exemption for Union due payments.                                                                                            
                                                                                                                                
Representative   Whitaker  understood   that  the   need  was                                                                   
included in the "unreasonable" category.                                                                                        
                                                                                                                                
LARRY PERSILY,  DEPUTY COMMISSIONER,  DEPARTMENT OF  REVENUE,                                                                   
pointed out  that there had  been discussion during  drafting                                                                   
in regards  to Union  dues.  The  intent was  not to  tax the                                                                   
dues because "they are not a service, but a right".                                                                             
                                                                                                                                
Representative Whitaker reiterated  that he understood it was                                                                   
classified as  "intangible".  Co-Chair Harris  explained that                                                                   
the   action    was   necessary   to   guarantee    "absolute                                                                   
clarification".                                                                                                                 
                                                                                                                                
Representative Stoltze  asked if there were  any counter-band                                                                   
fees for  business management  that might  also be  exempted.                                                                   
Representative  Hawker  explained  that the  amendment  would                                                                   
make  the language  explicit  and  that during  the  drafting                                                                   
process it was  only "implicit" to the language  of the bill.                                                                   
In order to  itemize everything excluded from  the bill would                                                                   
take a  very long time.   He concluded  that the  State would                                                                   
need to rely on the intent behind the "words".                                                                                  
                                                                                                                                
Co-Chair  Williams WITHDREW  his OBJECTION.   There  being NO                                                                   
further OBJECTIONS, Amendment #7 was adopted.                                                                                   
                                                                                                                                
Representative  Moses introduced a  new amendment to  Page 3,                                                                   
Line  28,  deleting "except  as  specifically  prohibited  or                                                                   
limited" and  inserting "a" before "municipality".   Co-Chair                                                                   
Williams OBJECTED.                                                                                                              
                                                                                                                                
Mr.  Persily  stated  that  it  was not  the  intent  of  the                                                                   
legislation to limit or prohibit  a municipality from levying                                                                   
a specific excise  tax.  He acknowledged  that municipalities                                                                   
would be "more comfortable" if that language was removed.                                                                       
                                                                                                                                
Representative Whitaker  noted that he did not  object to the                                                                   
amendment.   There  being  NO  OBJECTION, the  amendment  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Vice-Chair  Meyer  noted  that  Representative  Chenault  had                                                                   
intended to offer an amendment,  however, he was not present.                                                                   
Co-Chair  Williams  acknowledged that  he  knew  of that  and                                                                   
recommended that the consideration be made in caucus.                                                                           
                                                                                                                                
Co-Chair  Harris MOVED  to  report  CS HB  293  (FIN) out  of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Kerttula OBJECTED.   She noted that Juneau has                                                                   
had  a sales  tax  for  a long  time  and that  the  proposed                                                                   
legislation would  be detrimental to not only  this community                                                                   
but also the entire State.                                                                                                      
                                                                                                                                
Vice-Chair Meyer  acknowledged that  the legislation  was not                                                                   
"perfect"  legislation  but  was  essential.   He  noted  his                                                                   
appreciation for all the hard  work done on the bill, voicing                                                                   
his support.                                                                                                                    
                                                                                                                                
Representative  Stoltze  echoed  the comments  made  by  Vice                                                                   
Chair Meyer.   He recommended that  the bill go to  the House                                                                   
floor for full debate.                                                                                                          
                                                                                                                                
Co-Chair  Harris noted  that  this was  the  first time  that                                                                   
Alaska has  seriously considered  a tax.   He noted  that the                                                                   
State is  headed into  some "rough  waters" and although  the                                                                   
legislation is  not the perfect form,  it is necessary.    He                                                                   
applauded the effort of the Ways  and Means Committee for the                                                                   
many hours  of work they  put in on  the legislation.   It is                                                                   
the responsibility  of elected  officials to determine  a way                                                                   
to  help  the   State  move  out  of  our   current  economic                                                                   
situation.                                                                                                                      
                                                                                                                                
Co-Chair Williams  noted his appreciation to  Mr. Persily and                                                                   
Ms.  Wilson   for  their   work  helping   to  clarify   this                                                                   
complicated  legislation and  added his  appreciation to  the                                                                   
Committee's members working on the bill.                                                                                        
                                                                                                                                
A roll  call vote was  taken on the  motion to move  the bill                                                                   
from Committee.                                                                                                                 
                                                                                                                                
IN FAVOR:      Meyer, Stoltze, Whitaker, Hawker, Harris,                                                                        
               Williams                                                                                                         
OPPOSED:       Kerttula, Moses, Berkowitz, Foster                                                                               
                                                                                                                                
Representative     Chenault,    Representative     Joule    &                                                                   
Representative Croft were not present for the vote.                                                                             
                                                                                                                                
The MOTION PASSED (6-4).                                                                                                        
                                                                                                                                
CS HB 293 (FIN) was reported out  of Committee with a "do not                                                                   
pass"  recommendation  and  with  new  fiscal  notes  by  the                                                                   
Department of Revenue and the Department of Law.                                                                                
                                                                                                                                

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