Legislature(2017 - 2018)ADAMS ROOM 519

02/27/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 96 TAXES;DEDUCTIONS;FEES;TAX STAMP DISCOUNT TELECONFERENCED
Moved CSHB 96(FIN) Out of Committee
+= HB 273 EXTEND: MARIJUANA CONTROL BOARD TELECONFERENCED
Moved HB 273 Out of Committee
+= HB 299 EXTEND: ALCOHOLIC BEVERAGE CONTROL BOARD TELECONFERENCED
<Bill Hearing Canceled>
+ HB 267 RELEASE HUNTING/FISHING RECORDS TO MUNI TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 267                                                                                                            
                                                                                                                                
     "An  Act  requiring  the  release  of  certain  records                                                                    
     relating to big game  hunters, guided hunts, and guided                                                                    
     sport   fishing   activities  to   municipalities   for                                                                    
     verification  of taxes  payable; and  providing for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:39:43 AM                                                                                                                    
                                                                                                                                
TIMOTHY   CLARK,   STAFF,   REPRESENTATIVE   BRYCE   EDGMON,                                                                    
introduced the  legislation. He  expressed regrets  from the                                                                    
bill sponsor  for his absence.  He explained the  bill would                                                                    
give  municipalities that  levy taxes  or fees  on fish  and                                                                    
game guiding in their jurisdictions  access to hunt or sport                                                                    
fishing records  submitted by guides  to state  agencies. He                                                                    
elaborated  it would  provide  municipalities  with a  cross                                                                    
referencing  tool  in  order to  confirm  with  the  various                                                                    
guiding outfitters who may or  may not be in compliance with                                                                    
their  local tax  obligations. He  emphasized that  all such                                                                    
information  released by  state  agencies to  municipalities                                                                    
would remain  confidential under  law. He reported  that the                                                                    
bill   sponsor  believed   the   tool   was  important   for                                                                    
municipalities,  given that  the state  had pushed  costs to                                                                    
municipalities  in   recent  years.  The   sponsor  believed                                                                    
municipalities  should have  every resource  to ensure  they                                                                    
were receiving the  revenues due to them  according to their                                                                    
local ordinances.                                                                                                               
                                                                                                                                
9:41:40 AM                                                                                                                    
                                                                                                                                
Representative Wilson  asked about the current  process. She                                                                    
used  a hunt  as an  example. She  asked if  someone had  to                                                                    
register  with  the municipality.  She  asked  how the  bill                                                                    
would change behavior.                                                                                                          
                                                                                                                                
Mr.  Clark believed  the procedures  for guides  varied from                                                                    
municipality  to   municipality.  He   used  the   Lake  and                                                                    
Peninsula  Borough as  an example  and detailed  the borough                                                                    
levied a  modest $3 per  person, per day tax.  The borough's                                                                    
ordinances  (copy on  file)  had  varied stipulations  about                                                                    
reporting  to the  borough the  extent of  their hunting  or                                                                    
sport  fishing activities  within the  borough jurisdictions                                                                    
and  making  their  tax payments  according  to  the  backup                                                                    
reporting also provided to municipalities.                                                                                      
                                                                                                                                
Representative  Wilson   assumed  the  Lake   and  Peninsula                                                                    
Borough  believed people  were  hunting without  registering                                                                    
with  the  borough.  She  surmised  the  borough  hoped  the                                                                    
records  would  show  more  people   who  had  utilized  the                                                                    
borough's jurisdiction. She asked if  the intent was to then                                                                    
allow boroughs to bill guides who were identified.                                                                              
                                                                                                                                
Mr. Clark  replied there were around  130 guiding operations                                                                    
registered with  the borough, but  during any  given season,                                                                    
because  of  the borough's  large  size  and the  number  of                                                                    
outfitters coming and  going over a period  of months during                                                                    
a  summer season,  it was  impossible to  keep tabs  on each                                                                    
outfitter. He  furthered that  because the  reports provided                                                                    
to  the  state  stipulated  when and  where  an  outfitter's                                                                    
guiding activities  had taken  place, the  information could                                                                    
be  used as  a  cross  reference for  the  boroughs. If  the                                                                    
borough   noticed  an   outfitter  had   been  carrying   on                                                                    
activities in the borough's  jurisdiction, the borough could                                                                    
contact the  outfitter to ask  them to come  into compliance                                                                    
with its taxing requirements.                                                                                                   
                                                                                                                                
Representative Wilson  asked whether  there was  anything in                                                                    
the  bill specifying  what would  happen if  the information                                                                    
did not remain confidential.                                                                                                    
                                                                                                                                
Mr. Clark  answered that  the bill  required confidentiality                                                                    
to  be  maintained  by   the  municipalities.  Elsewhere  in                                                                    
statute  there were  criminal consequences  for a  breach in                                                                    
confidentiality.  He  believed the  offence  was  a Class  A                                                                    
misdemeanor in criminal code.                                                                                                   
                                                                                                                                
Representative  Kawasaki asked  why  hunt  and fish  records                                                                    
were currently confidential.                                                                                                    
                                                                                                                                
9:45:41 AM                                                                                                                    
                                                                                                                                
Mr.  Clark  answered  that  for   many  guides,  where  they                                                                    
operated and  even the time of  year they were in  a certain                                                                    
area  was almost  proprietary.  He  elaborated that  certain                                                                    
businesses may  categorize an area as  a hot spot -  a place                                                                    
where a  guide could be  more confident in  enjoying success                                                                    
on  behalf of  their  clients. Businesses  did  not like  to                                                                    
advertise successful locations to competitors.                                                                                  
                                                                                                                                
Representative  Kawasaki  understood.  He  asked  about  the                                                                    
penalty. He  asked if municipalities that  would receive the                                                                    
information would keep it confidential.                                                                                         
                                                                                                                                
Mr. Clark answered in the  affirmative. He used the Lake and                                                                    
Peninsula Borough as an example,  which had a "lock and key"                                                                    
chain  of  custody  procedure that  kept  the  borough  well                                                                    
within  the   confines  of   the  law   and  confidentiality                                                                    
requirements.                                                                                                                   
                                                                                                                                
Representative  Kawasaki  referenced   testimony  from  some                                                                    
guides  (copy on  file) that  the  bill would  allow for  an                                                                    
equal   playing  field   for  guides   who  were   operating                                                                    
responsibly  and paying  the fees  for  customers they  were                                                                    
taking out.  He did not  know whether the  bill specifically                                                                    
asserted there were  guides who were not acting  in the same                                                                    
way. He  asked if  there was any  other hammer  available to                                                                    
municipalities for individuals not operating under the law.                                                                     
                                                                                                                                
Mr. Clark  deferred the question  to municipal  officials as                                                                    
circumstances varied by borough. He  noted that the Lake and                                                                    
Peninsula  Borough  asked for  copies  of  the records  that                                                                    
guides supply to  the state, but they had no  way to enforce                                                                    
it.  He explained  the practice  was almost  on a  voluntary                                                                    
basis. Based  on the large  areas many  boroughs encompassed                                                                    
and  the large  number  of  businesses conducting  business,                                                                    
there was  no way they  could economically go after  a large                                                                    
number of delinquent taxpayers.                                                                                                 
                                                                                                                                
9:49:22 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara understood  the  information  needed to  be                                                                    
shared  in order  for municipalities  to obtain  the revenue                                                                    
due to  them. He did not  see any language about  sharing of                                                                    
hotspots. He was  concerned about the issue.  He shared that                                                                    
one  of his  favorite fishing  spots had  become overrun  by                                                                    
people. He asked  for verification there was  nothing in the                                                                    
bill specifying that a person  needed to release exact spots                                                                    
they fished.                                                                                                                    
                                                                                                                                
Mr. Clark  deferred the question  to the Department  of Fish                                                                    
and Game (DFG). He stated  that the specificity, in terms of                                                                    
locations  reported by  guides,  was greater  than naming  a                                                                    
single  river. He  expressed confidence  in the  ability for                                                                    
state  and borough  employees to  adhere to  confidentiality                                                                    
requirements.                                                                                                                   
                                                                                                                                
Representative  Tilton referred  to Mr.  Clark's mention  of                                                                    
DFG.  She mentioned  discussion about  the logbook  program,                                                                    
which  was  about  to  sunset.  She  noted  there  had  been                                                                    
difficulty reinstating the program  the last time because of                                                                    
some of the  information that had to be  provided. She asked                                                                    
about  the departments  concerns including  what information                                                                    
it was supposed to share.                                                                                                       
                                                                                                                                
Mr. Clark deferred the question  to the department. He noted                                                                    
that the logbook requirement was  in regulation. He believed                                                                    
the sunset  pertained to fees  and other  aspects associated                                                                    
with the log book program.                                                                                                      
                                                                                                                                
9:52:05 AM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS, DEPUTY  DIRECTOR, DIVISION  OF CORPORATIONS,                                                                    
BUSINESS   AND   PROFESSIONAL   LICENSING,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  relayed that                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development   (DCCED)  oversaw   the  Big   Game  Commercial                                                                    
Services Board, which spoke to  the hunting records side and                                                                    
contained  the  same  hotspot issue  as  fishing.  The  hunt                                                                    
records,  as defined  in  statute  and regulation,  required                                                                    
very specific  locations to be disclosed,  which in laymen's                                                                    
terms  may equate  to  a hotspot.  She  explained that  hunt                                                                    
records were designed  for a purpose other  than the purpose                                                                    
being discussed  in the bill. The  information was important                                                                    
to  troopers  and  wildlife  biologists.  As  the  bill  was                                                                    
written, everything  in the hunt record  could be disclosed,                                                                    
including contact  information for clients and  a great deal                                                                    
of specific information.                                                                                                        
                                                                                                                                
Ms.  Chambers  referenced  past   discussion  in  the  House                                                                    
Resources  Committee   and  the   DCCED  fiscal   note  that                                                                    
reflected the  development of a  report that would  take the                                                                    
information pertinent  to the municipal tax  requirement and                                                                    
work  with the  municipalities to  discern what  information                                                                    
was  wanted. The  department could  then  quickly provide  a                                                                    
report  on demand.  The capability  would  be efficient  and                                                                    
would  not burden  anyone with  concerns about  hotspots and                                                                    
client  information.  While  the   bill  would  reflect  the                                                                    
municipalities'  ability  to  request  hotspot  information,                                                                    
DCCED hoped  to establish  a compromise  that would  be less                                                                    
costly for municipalities.                                                                                                      
                                                                                                                                
Representative Tilton  hoped to hear  from DFG as  well. She                                                                    
had  worked on  legislation related  to the  saltwater guide                                                                    
logbook, which had been a contentious issue.                                                                                    
                                                                                                                                
Co-Chair Foster replied  he would request for  DFG to attend                                                                    
the next meeting.                                                                                                               
                                                                                                                                
Representative Pruitt recalled that  in 2014 the legislature                                                                    
had    passed   legislation    allowing   the    state   and                                                                    
municipalities  to  share  tax  records. Prior  to  the  law                                                                    
change, the entities could not  communicate. He remembered a                                                                    
situation where the state had  known a car rental agency was                                                                    
not  paying city  taxes, but  the state  was not  allowed to                                                                    
communicate  it to  the  city. Statute  had  been passed  to                                                                    
address the issue.  He asked if the current  bill was needed                                                                    
because they  were not  talking about a  tax from  the state                                                                    
level;  it  was a  tax  at  the  borough level.  He  thought                                                                    
perhaps  because  there  were  not two  sets  of  taxes  and                                                                    
municipalities  were just  seeking  records,  which was  not                                                                    
currently authorized under statute.                                                                                             
                                                                                                                                
Mr. Clark agreed.                                                                                                               
                                                                                                                                
Representative Pruitt  noted that operators had  to fill out                                                                    
separate sets of  information for the state  and borough. He                                                                    
asked if the bill would allow operators to file one report.                                                                     
                                                                                                                                
9:56:45 AM                                                                                                                    
                                                                                                                                
Mr. Clark replied his understanding  was that the bill would                                                                    
streamline the  paperwork for guides.  He used the  Lake and                                                                    
Peninsula Borough  as an example  and explained  the borough                                                                    
did  not   necessarily  require  guides  to   fill  out  the                                                                    
borough's  own hunting  report, but  it requested  copies of                                                                    
the report  submitted to the  state. He did not  believe the                                                                    
boroughs had  any actual  legal authority  to force  them to                                                                    
provide the copies. Guides who  had been in compliance would                                                                    
be saved  from duplicating and  copying of a  season's worth                                                                    
of  activities. He  believed the  paperwork for  the borough                                                                    
would  be reduced  to something  resembling  a one-page  tax                                                                    
filing document.                                                                                                                
                                                                                                                                
Representative  Pruitt asked  if  there was  an estimate  of                                                                    
revenues lost to the borough due  to bad actors who were not                                                                    
complying with requests.                                                                                                        
                                                                                                                                
Mr. Clark responded  that the one estimate he  had heard was                                                                    
from  the Lake  and  Peninsula Borough  finance officer  was                                                                    
approximately $50,000  to $100,000  in lost  annual revenue.                                                                    
The  amount  was significant  for  boroughs  with an  annual                                                                    
budget around $3 million.                                                                                                       
                                                                                                                                
Representative  Pruitt asked  there were  other boroughs  or                                                                    
municipalities that would be using  the tool provided by the                                                                    
bill.                                                                                                                           
                                                                                                                                
Mr. Clark  answered that  the City of  Yakutat, the  City of                                                                    
Sitka,  the Kodiak  Island Borough,  and the  Aleutians East                                                                    
Borough may  all benefit  from the  legislation. He  was not                                                                    
familiar  with the  local taxes  in  these locations.  Fully                                                                    
determining the beneficiaries was a work in progress.                                                                           
                                                                                                                                
10:00:12 AM                                                                                                                   
                                                                                                                                
Representative  Kawasaki  referenced  bad actors  known  [to                                                                    
municipalities] and no other way  to get the information. He                                                                    
pointed to  bill language  specifying that  the information,                                                                    
including hunt  records, could be  requested by  other state                                                                    
agencies; and  federal and  other law  enforcement agencies.                                                                    
He  asked if  it  did  not include  the  Lake and  Peninsula                                                                    
Borough's code compliance office  that could already ask for                                                                    
the information if they knew who they were looking for.                                                                         
                                                                                                                                
Mr. Clark  clarified he did  not want to  characterize every                                                                    
guide operation delinquent in local  taxes as bad actors. In                                                                    
some   cases,   operators   may  be   unaware   of   borough                                                                    
requirements  or  their season  could  be  busy, and  things                                                                    
could  get put  by  the wayside.  He  believed the  question                                                                    
would  best   be  addressed  by  a   borough  official.  His                                                                    
understanding was there was currently  no real practical way                                                                    
for  boroughs  to  chase  down  the  significant  number  of                                                                    
operations that may  be delinquent in their  local taxes. In                                                                    
some cases, boroughs simply heard  from someone in town that                                                                    
a guide  flew into  town that week  with six  clients, spent                                                                    
seven  days,  and flew  out  again.  Under the  scenario,  a                                                                    
borough  official may  realize the  borough had  never heard                                                                    
anything from the guide. Often,  in those circumstances, the                                                                    
borough made a  call to the guide and most  often the guides                                                                    
were happy to comply with tax requirements.                                                                                     
                                                                                                                                
10:02:33 AM                                                                                                                   
                                                                                                                                
Ms. Chambers replied that the  section of statute pertaining                                                                    
to hunt  records and transporter  activity reports  had been                                                                    
interpreted   to  mean   any  state   agency  and   any  law                                                                    
enforcement agency  as defined  in statute as  a police-type                                                                    
of law enforcement. Municipal code  enforcement had not been                                                                    
interpreted  to fall  underneath the  definition, which  she                                                                    
believed  was  the  reason  for  the  bill.  The  department                                                                    
published a list  (online) of the guides  who were qualified                                                                    
to operate in  every guide-use area, which  was available to                                                                    
any municipality  to help educate. Municipalities  were able                                                                    
to download the  information and reach out to  each guide to                                                                    
make sure  they know  about the municipal  requirements. She                                                                    
remarked that  the Lake  and Peninsula  Borough had  an IRS-                                                                    
style tax  form. The board's  understanding was  that guides                                                                    
would still  have to fill  out DCCED's hunt records  and the                                                                    
tax  form that  included the  number of  hunters and  nights                                                                    
stayed.  The  department  had  not   been  informed  by  any                                                                    
municipality  that   they  were   planning  on   filing  the                                                                    
information  on   the  guide's  behalf.  From   the  guides'                                                                    
perspective  the   paperwork  would  not  change   unless  a                                                                    
municipality  was anticipating  changing their  system as  a                                                                    
result of the bill.                                                                                                             
                                                                                                                                
10:04:28 AM                                                                                                                   
                                                                                                                                
Representative Wilson  there was a  way for a guide  to mark                                                                    
the municipality  when they filled  out a  hunt application.                                                                    
She  was  uncertain about  the  full  record going  [to  the                                                                    
municipality].   She    believed   the   only    thing   the                                                                    
municipalities needed  to know was that  someone was hunting                                                                    
in their jurisdiction who would  be required to fill out the                                                                    
paperwork. She asked if it  was something that could already                                                                    
be done when filing an application [to DCCED].                                                                                  
                                                                                                                                
Ms.  Chambers  answered  that the  forms  were  all  adopted                                                                    
through  regulation. She  affirmed it  was possible  for the                                                                    
board to amend  the forms. The department  already input the                                                                    
law information into a database  to make the work of federal                                                                    
and  state agencies  easier. The  department was  proposing,                                                                    
via its  fiscal note,  to work  on the  database more  to be                                                                    
able to  generate a report  along those lines. The  idea was                                                                    
to provide  information that  would help  municipalities and                                                                    
not provide information that was irrelevant.                                                                                    
                                                                                                                                
Representative Wilson surmised the  intent of the department                                                                    
would be to include some type  of associated fee to make the                                                                    
change cost neutral.                                                                                                            
                                                                                                                                
Ms. Chambers replied in the affirmative.                                                                                        
                                                                                                                                
10:06:22 AM                                                                                                                   
                                                                                                                                
KATHIE  WASSERMAN,  EXECUTIVE   DIRECTOR,  ALASKA  MUNICIPAL                                                                    
LEAGUE  (AML),  reported  that  AML  was  in  favor  of  the                                                                    
legislation. As more cuts to  municipalities and transfer of                                                                    
duties  resulted from  state  issues, municipalities  needed                                                                    
every  tool possible  in  order to  maintain  finances at  a                                                                    
sufficient level  in order  to operate  in an  effective and                                                                    
efficient way.  She stated the  bill was a tool  that helped                                                                    
minimalities. She knew there had  been numerous questions by                                                                    
legislative  committees  about  what happened  if  municipal                                                                    
employees  divulged confidential  information.  She did  not                                                                    
understand that concern. She did  not know what had happened                                                                    
to make so many  people distrustful of municipal government.                                                                    
Municipalities  all dealt  with taxation  and she  had never                                                                    
heard of things happening  where someone had inappropriately                                                                    
talked about those sorts of  things. She acknowledged it had                                                                    
probably  happened in  municipalities and  the state  alike.                                                                    
She   stressed  the   bill  provided   a   tool  to   enable                                                                    
municipalities  to  get  their   finances  back  to  a  more                                                                    
operable point. Currently, in large  boroughs such as Sitka,                                                                    
there  was  no  way  to  know who  flew  into  town  in  any                                                                    
particular year.  She elaborated  that new people  came from                                                                    
the Lower 48 to  hunt - there was no way  for the borough to                                                                    
know  the  information  without getting  some  records.  She                                                                    
believed the primary thing the  boroughs needed was what had                                                                    
been charged for a particular trip.  She noted it had been a                                                                    
problem for the City of Pelican  as well. She knew the issue                                                                    
was a problem throughout Alaska.  She asked the committee to                                                                    
pass the legislation.                                                                                                           
                                                                                                                                
Representative  Wilson  thought  the  bill  was  more  about                                                                    
fairness  than budget  cuts. She  reasoned that  some guides                                                                    
were  paying what  they should,  while others  may know  and                                                                    
decide  not  to  pay.  She   thought  the  bill  was  needed                                                                    
regardless  whether  the  budget  had been  cut  because  it                                                                    
pertained to revenue that could be utilized by boroughs.                                                                        
                                                                                                                                
Ms. Wasserman believed Representative  Wilson was right. She                                                                    
did not  know if the issue  was more about fairness,  but it                                                                    
was  certainly part  of the  issue. From  the standpoint  of                                                                    
municipalities, it was about the  lack of ability to receive                                                                    
tax  money  that   was  owed.  She  agreed   that  from  the                                                                    
perspective of  responsible taxpayers,  the issue  was about                                                                    
fairness.                                                                                                                       
                                                                                                                                
Representative Wilson spoke  to confidentiality and believed                                                                    
the  concern was  not only  about the  particular bill.  She                                                                    
expounded that  the state  took in  a substantial  amount of                                                                    
information   for  all   sorts  of   things.  She   believed                                                                    
confidentiality needed  to be considered with  each piece of                                                                    
legislation to  determine how  far the  information provided                                                                    
by the public would go.                                                                                                         
                                                                                                                                
Ms. Wasserman believed Representative  Wilson was right. She                                                                    
underscored  the  information needed  to  be  laid out  very                                                                    
clearly  in order  for everyone  to understand  upfront what                                                                    
they were providing and what would be used.                                                                                     
                                                                                                                                
10:10:32 AM                                                                                                                   
                                                                                                                                
SUSAN EDWARDS, FINANCE OFFICER,  LAKE AND PENINSULA BOROUGH,                                                                    
KING SALMON  (via teleconference),  spoke in support  of the                                                                    
bill. She  testified that the  need for the borough  to know                                                                    
location  came down  to guide-use  areas. She  detailed that                                                                    
some  guide-use areas  were split  between boroughs.  One of                                                                    
the  issues the  borough  dealt with  was determining  which                                                                    
borough the  guide was operating  in. Currently it  was easy                                                                    
for a guide  to say they were not operating  in a particular                                                                    
borough.  The  borough would  like  to  know with  certainty                                                                    
where the  guide was  operating. The borough  was in  a very                                                                    
large roadless area  and the finance department  had a staff                                                                    
of two. Therefore, having the  information to verify who was                                                                    
operating  in  the  borough  and   who  was  not,  was  very                                                                    
important.                                                                                                                      
                                                                                                                                
Representative Wilson asked about the  issue of being in two                                                                    
boroughs at  the same time.  She asked if the  borough's tax                                                                    
applied   to  a   person   hunting   within  the   borough's                                                                    
jurisdiction or  only when  a person  took an  animal within                                                                    
the borough's jurisdiction.                                                                                                     
                                                                                                                                
Ms. Edwards  answered that  the tax  applied when  an animal                                                                    
was taken. Guides  were required to register  in a guide-use                                                                    
area, which  was public  information. The  borough monitored                                                                    
the  information  and reached  out  to  guides who  had  not                                                                    
registered  with the  borough and  were hunting  in a  split                                                                    
game-use  area. Many  guides  were  forthcoming about  where                                                                    
they had  been hunting  in a  game-use area  and a  few were                                                                    
not.  Without any  way  of verifying  what  the borough  was                                                                    
being told  - it was put  in a situation of  not knowing the                                                                    
veracity  of the  information they  were told.  When someone                                                                    
told the borough,  they had been just across  the border, it                                                                    
could be true  that the individual may not  have known their                                                                    
precise  location;  it  may  be an  honest  mistake  on  the                                                                    
guide's  part. The  information provided  by the  bill would                                                                    
offer verification and clarity.                                                                                                 
                                                                                                                                
10:14:32 AM                                                                                                                   
                                                                                                                                
Representative Wilson  asked for  the mechanism  the borough                                                                    
would use to collect the  tax. She wondered if the mechanism                                                                    
was in  place or the  borough was  just hoping that  once it                                                                    
knew a  guide had  been operating in  the borough  that they                                                                    
would send the payment.                                                                                                         
                                                                                                                                
Ms. Edwards  replied that the  borough knew who  was hunting                                                                    
in the  game-use areas  that were  fully or  in part  in the                                                                    
borough's jurisdiction.  The borough  reached out to  all of                                                                    
the guides operating  in its jurisdiction and  asked them to                                                                    
register.  The borough  asked for  a  quarterly tax  filing,                                                                    
which  was a  single sheet  of paper.  Additionally, it  had                                                                    
created  a self-calculating  form, meaning  the guides  only                                                                    
had to  fill in  the number  of people and  the days  in the                                                                    
field. The borough  had worked to make filing  taxes as easy                                                                    
as possible  for guides. She  stated the issue came  down to                                                                    
being able  to verify the  information the borough  was told                                                                    
and to identify guides who  were unaware they were operating                                                                    
in the  borough, unaware  of the need  to register,  or were                                                                    
not reporting at all.                                                                                                           
                                                                                                                                
10:16:20 AM                                                                                                                   
                                                                                                                                
NATHAN  HILL,  MANAGER,  LAKE AND  PENINSULA  BOROUGH,  KING                                                                    
SALMON  (via teleconference),  testified in  support of  the                                                                    
legislation. He spoke to numerous  reasons for the borough's                                                                    
support.  The borough's  code required  professional hunting                                                                    
and fishing  guides to register  with the borough and  pay a                                                                    
$3  per  day, per  person  use  tax  when operating  in  the                                                                    
borough's boundaries.  The borough  imposed the tax  for the                                                                    
same  reason it  imposed  a severance  tax. Like  commercial                                                                    
fisheries  activities, the  borough  taxed other  commercial                                                                    
activities.  The taxes  applied  on all  borough lands.  The                                                                    
commercial fisheries  could access processor data  to verify                                                                    
fish  tax  revenue, unlike  the  current  status with  guide                                                                    
activity reporting.  Without access to state  guide activity                                                                    
report,  the  borough  had  no way  to  verify  whether  the                                                                    
activity  reported  (to  the   borough)  was  accurate.  The                                                                    
borough did not have a way  of knowing who was operating and                                                                    
whether or not  they were in the  borough's jurisdiction. He                                                                    
stated  situation was  inequitable for  guides operating  in                                                                    
compliance and  was unfair to  the residents of  the borough                                                                    
who  relied  on  the  resources   and  generated  taxes.  He                                                                    
referenced letters from other  operators that the bill would                                                                    
result  in  the  reduction  of  paperwork.  He  thanked  the                                                                    
committee for the  opportunity to testify in  support of the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
Co-Chair  Foster  asked  committee members  to  provide  any                                                                    
amendments by Friday, March 2.                                                                                                  
                                                                                                                                
Representative Wilson  wanted clarity on someone  hunting in                                                                    
two  different  areas.  She  used  the  Lake  and  Peninsula                                                                    
Borough as  an example  where a hunter  may be  operating in                                                                    
its   jurisdiction  or   under  Kenai's   jurisdiction.  She                                                                    
referenced  testimony that  the tax  was based  on where  an                                                                    
animal had been  taken. She provided a  scenario where Kenai                                                                    
had  the same  tax as  the Lake  and Peninsula  Borough. She                                                                    
asked  if a  person was  hunting in  both jurisdictions  for                                                                    
five days  whether the tax for  the full five days  would go                                                                    
to  Kenai  if  the  animal   was  killed  in  its  district.                                                                    
Alternatively,  she wondered  if part  of the  tax would  be                                                                    
paid  to the  Lake and  Peninsula Borough  if the  guide had                                                                    
been  operating  within its  jurisdiction  for  part of  the                                                                    
time.  She noted  it was  easy if  a person  was all  in one                                                                    
borough.                                                                                                                        
                                                                                                                                
Mr. Clark  responded that  he was  not familiar  enough with                                                                    
the borough's  finance officers on  the ground  practice. He                                                                    
deferred  to  Ms.  Edwards  from   the  Lake  and  Peninsula                                                                    
Borough.                                                                                                                        
                                                                                                                                
Ms.  Edwards  answered that  the  hunt  reports specify  the                                                                    
location where  an animal was  taken. Part of  the rationale                                                                    
behind the tax was a severance  tax. The basis was to tax at                                                                    
the point where the animal was harvested.                                                                                       
                                                                                                                                
Representative  Wilson asked  for verification  that if  she                                                                    
was on a five-day hunt it  would not matter that a guide had                                                                    
traveled  back  and  forth between  two  jurisdictions.  She                                                                    
surmised  the person  would be  charged based  on where  the                                                                    
animal was taken.                                                                                                               
                                                                                                                                
Ms. Edwards answered in the affirmative.                                                                                        
                                                                                                                                
Representative Ortiz  thought the situation  was unworkable.                                                                    
He thought  the revenue should  go to wherever  the business                                                                    
was located. He  did not know how it would  work if a hunter                                                                    
took   an  animal   right  on   the   border  [between   two                                                                    
jurisdictions].  He reasoned  the  hunter may  not know  the                                                                    
location.  He thought  a workable  policy  would be  revenue                                                                    
collected wherever the person had their business.                                                                               
                                                                                                                                
Ms. Edwards  answered that the majority  of guides operating                                                                    
in  the borough  were not  borough residents.  There were  a                                                                    
significant number of guides that  were not state residents.                                                                    
She  considered  the  severance  aspect  and  explained  the                                                                    
borough viewed the  issue as people coming  from outside and                                                                    
taking  borough resources.  For  the small  amount of  taxes                                                                    
they had, it  was more than reasonable to  have money coming                                                                    
in  from the  outside whether  taking fish  from the  water,                                                                    
minerals from land, or hunting animals.                                                                                         
                                                                                                                                
10:24:14 AM                                                                                                                   
                                                                                                                                
Representative Ortiz asked if  the businesses themselves did                                                                    
not have a local entity.                                                                                                        
                                                                                                                                
Ms.  Edwards answered  that the  businesses were  not local.                                                                    
She  elaborated that  the  businesses  ranged from  Montana,                                                                    
Texas, West  Virginia, Tennessee, Anchorage and  Mat-Su. The                                                                    
businesses had no presence within the borough.                                                                                  
                                                                                                                                
Co-Chair Seaton  asked if a  hunt that was  unsuccessful did                                                                    
not have  to pay anything. He  thought the tax was  based on                                                                    
participation per day  as well as a severance  tax. He hoped                                                                    
that if  people were using  the borough to  conduct business                                                                    
that the borough could collect the daily fee.                                                                                   
                                                                                                                                
Ms.  Edwards  answered  that  hunt  reports  were  submitted                                                                    
whether the hunt was successful  or not and were specific as                                                                    
to  the  location  the  guide had  been  operating  in.  She                                                                    
assumed  the  report  was submitted  for  purposes  of  game                                                                    
management and  biological data. While the  tax pertained to                                                                    
area the  animal was taken, it  was also about the  area the                                                                    
operator  had  been  hunting.  In  talking  to  guides,  the                                                                    
borough tended to  err on the side of the  guide. There were                                                                    
fairly  detailed maps  and there  was  very little  crossing                                                                    
back and  forth of  boundaries. Given  that the  borough was                                                                    
the size of  West Virginia, places where most  of the guides                                                                    
hunt (that were  known to the borough) were  well within the                                                                    
borough.                                                                                                                        
                                                                                                                                
Mr. Clark clarified that Ms.  Edwards had been providing the                                                                    
answers.                                                                                                                        
                                                                                                                                
10:27:41 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Gara did  not have  a concern  over his  earlier                                                                    
question related to enforcement.  He stated that absent some                                                                    
major  expense on  enforcement,  guides  would report  their                                                                    
activity within  the proper borough.  He knew for a  fact on                                                                    
one state  record animal that  guides would  not necessarily                                                                    
report  the  exact  location  an   animal  had  been  taken,                                                                    
although it  would be  within the  appropriate jurisdiction.                                                                    
He reasoned  if the  state had a  real concern  about making                                                                    
sure reporting  was 100 percent  accurate in every  case, it                                                                    
would have to spend more  money on enforcement than it would                                                                    
ever recoup.                                                                                                                    
                                                                                                                                
Representative  Wilson  was  concerned about  the  amendment                                                                    
deadline.  She  noted  that  she  and  Co-Chair  Seaton  had                                                                    
received different  answers to  the same question  about how                                                                    
the tax  was determined.  She wondered  if hearing  from DFG                                                                    
would help. She  thought that a person was  required to take                                                                    
a GPS  moose hunting to  record where the animal  was taken,                                                                    
which was a  way for DFG to know where  resources were being                                                                    
taken. She mentioned  the guide area and asked  how much the                                                                    
state was asking for guides  to report. She agreed there may                                                                    
not be many areas where  guides crossed over between borough                                                                    
boundaries, but  she did  not know how  many times  it could                                                                    
happen.  She   wondered  if  the   state  would   need  more                                                                    
information  than  where  the animal  had  been  taken.  She                                                                    
thought   it  could   end  up   being  much   costlier  than                                                                    
anticipated.  She   requested  to   hear  from   DFG  before                                                                    
amendments were due.                                                                                                            
                                                                                                                                
Co-Chair Foster asked Mr. Clark  to get something in writing                                                                    
from DFG  prior to the  next committee hearing on  the bill.                                                                    
He held off on the amendment deadline.                                                                                          
                                                                                                                                
Representative  Guttenberg noted  that the  bill provided  a                                                                    
tool to track what was taken  and who was in the borough. He                                                                    
stated that the process was already in place.                                                                                   
                                                                                                                                
Co-Chair Seaton  clarified that the  state was  not charging                                                                    
any  fees. The  bill  would merely  allow municipalities  to                                                                    
access existing  state records for their  own enforcement of                                                                    
their  own  tax  system;  the   information  would  be  kept                                                                    
confidential. The  bill would not implement  any regulations                                                                    
or impose any  new conditions on where an  animal was taken.                                                                    
He provided  a scenario  where a guide  told the  borough it                                                                    
had only  had three people  hunting for a week,  the borough                                                                    
could verify the  guide had reported [to the  state] that it                                                                    
had five  to seven  clients in the  area on  seven different                                                                    
occasions.  The  bill would  allow  the  boroughs to  verify                                                                    
reports being made  for tax purposes. He  was less concerned                                                                    
than  if the  state was  imposing some  new requirements  on                                                                    
guides or hunters.                                                                                                              
                                                                                                                                
10:32:26 AM                                                                                                                   
                                                                                                                                
Co-Chair  Foster believed  the  bill was  simply seeking  to                                                                    
access records by  municipalities. He tentatively maintained                                                                    
the amendment deadline of Friday, March 2.                                                                                      
                                                                                                                                
Representative Wilson  added that DCCED staff  had testified                                                                    
the  department   was  considering   a  different   type  of                                                                    
application where  an applicant  would mark  their location.                                                                    
The department  was not necessarily looking  to disclose the                                                                    
entire  report  to  municipalities.   There  could  be  some                                                                    
changes or  possible regulations.  She requested  to receive                                                                    
the information [from DFG] prior to Thursday.                                                                                   
                                                                                                                                
Mr. Clark  added that it  was not the sponsor's  intent that                                                                    
the  information released  to municipalities  be limited  in                                                                    
any way.  The sponsor  was confident in  the professionalism                                                                    
of   the   municipalities   and  their   ability   to   keep                                                                    
confidential  information  confidential. He  believed  DCCED                                                                    
should share the confidence.                                                                                                    
                                                                                                                                
HB  267  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster  reviewed  the  agenda  for  the  following                                                                    
meeting.