HOUSE BILL NO. 229 An Act imposing a tax on employment; and providing for an effective date. Co-Chair Mulder MOVED to ADOPT work draft, #22-LS0842\O, Kurtz, 3/23/02, as the version of the bill before the Committee. Co-Chair Williams stated that the cruise ship head tax had been removed from the proposed version. He insisted that was the only change made to the draft. CS HB 229 (FIN) was HELD in Committee for further consideration. RECESS: 10:17 A.M. RECONVENED: 10:23 A.M. HOUSE BILL NO. 229 An Act imposing a tax on employment; and providing for an effective date. Representative Croft noted the three amendments contained in the member's packets. He thought that it would make more sense to move amendment labeled #3 first, as Amendments 1 and 2 make technical changes to the income tax. If Amendment 3 passes, it would not make sense to submit the other two amendments. Co-Chair Williams indicated that all the amendments should be discussed. He welcomed the amendments proposed by Representative Croft. Representative Croft MOVED and spoke to Amendment #1, S22- LS0842\O.1, Kurtz, 3/25/02. He noted that his amendment would make technical changes to the income tax. Co-Chair Williams OBJECTED for the purpose of discussion. Representative Croft explained that the amendment would provide the necessary technical changes. He indicated that he had worked with Larry Persily from the Department of Revenue to help address those technical concerns. Co-Chair Williams WITHDREW his OBJECTION. There being NO OBJECTION, Amendment 1 was adopted. Representative Croft MOVED to ADOPT Amendment 2, #22- LS0842\O.2, Kurtz, 3/25/02. Co-Chair Williams OBJECTED. Representative Croft explained that the amendment would remove the "trigger" provision. He stated that the clearer the language, the better it will be. Co-Chair Mulder voiced his OBJECTION. He stated that he liked the trigger mechanism and that it would provide Alaskans some level of assurance that if the State does not need the money, and if there is more revenue from a higher price of oil or more production, then Alaskans would not need to be taxed. Representative Lancaster asked if item #3 had been removed. Co-Chair Mulder responded that the 1% had been left in the bill. Co-Chair Mulder spoke against removing the trigger mechanism in the bill. He believed that the State should have never gotten rid of the tax so that the mechanics would be in place. He claimed that was what the trigger mechanism would do. He assumed that Alaskans would be frustrated if that did not occur. Co-Chair Mulder believed that there would be a move to repeal any income tax. Representative Croft WITHDREW Amendment 2. Representative Whitaker WITHDREW Amendment 3. Representative Hudson MOVED to report CS HB 229 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Co-Chair Williams OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Hudson, Lancaster, Moses, Croft, Davies OPPOSED: Whitaker, Bunde, Foster, Harris, Mulder, Williams The MOTION FAILED (5-6). CS HB 229 (FIN) FAILED to move out of Committee.