SENATOR RANDY PHILLIPS brought SB 176 (MUNICIPAL INVENTORY TAX EXEMPTION:EXPORTS) before the committee. SCOTT HAWKINS, President of the Anchorage Economic Development Corporation, said there is some urgency to getting SB 176 passed, because without it, municipalities are forced to levy property taxes even on goods held for shipment outside of the state. That hasn't been an issue in the past because of the lack of an international distribution industry in Anchorage. SB 176 will give localities the option of classifying that kind of an inventory and setting it outside of the inventory tax. He added that if on the following Tuesday the Municipality of Anchorage votes in a sales tax, the way it is structured it actually eliminates the inventory tax. However, Mr. Hawkins still urged going forward with the bill because there are other communities in the state that will benefit from the bill, and the chances of the ballot proposition passing in Anchorage are not real high. Mr. Hawkins pointed out that there is no inventory that is currently being taxed because they have yet to attract the international distribution industry, so there would not be any fiscal impact that they are aware of. This will allow the municipality to attract this industry, and the actual long-term fiscal impact would be positive because it would be necessary to build warehouses, etc. Number 408 SENATOR ZHAROFF asked if the Department of Community & Regional Affairs has a position was on SB 176. SHIRLEY ARMSTRONG, staff to the committee, responded that their position paper is neutral and that they have provided a zero fiscal note. Number 417 SENATOR RANDY PHILLIPS said he was concerned because the legislation was taking out the language that an ordinance like this may not be repealed by the voters through a referendum, and he thinks that language should stay in. SCOTT HAWKINS answered that it was cleanup of the language and was considered superfluous. Any ordinance can be repealed by the voters by referendum. He also clarified that this legislation would have no direct affect on the public school foundation formula or the dollars that the district would receive from the state through the foundation program. He said if anything, it will actually help the Municipality of Anchorage raise tax revenue and help fund the school district budget. Number 485 DUANE GUILEY, Director of School Finance, Department of Education, also clarified that in that this section is included under optional exemptions for local tax in state statute (AS 29.45.050), it has absolutely no affect on local contribution rates in public school districts in the state. Only mandated exemptions are excluded from the value of full and true determination for real and personal property. Number 500 SENATOR RANDY PHILLIPS asked for the pleasure of the committee. SENATOR LEMAN moved that SB 176 be moved out of committee with individual recommendations. Hearing no objection, it was so ordered.