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 There being NO OBJECTION, previous action was rescinded.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.