SENATE BILL NO. 165 "An Act imposing a tax on employment; and providing for an effective date." SENATOR AUSTERMAN stated that SB 165 would impose a tax of $100 dollars a year on each employed individual ages 19 years and older, and would include self-employed persons. Under the bill, the employer would deduct $50 dollars from the employee's salary on each of their first two regular payrolls after January 1 of the calendar year. A provision would be added to prevent the tax from being taken out more than one time when the employee provides proof to their new employer that the tax has been satisfied. The tax would be deposited into the State's general fund, however, accounted for separately. The amounts would be appropriated for education only. Senator Austerman reiterated that education is under funded. Co-Chair Kelly responded that he liked the concept, as it had no provisions for income. Senator Austerman noted that there had been recommendations that the tax be taken from the Permanent Fund Dividend. He acknowledged that there are a number of ideas floating around as to when and how to tap that $100 dollars. Senator Hoffman opposed a check being taken from the Permanent Fund Dividend as there are many people working in the State that do not collect the dividend. Senator Leman commented that the Permanent Fund check off would work to help reduce the cost of an administration fee collection. He agreed that the law should extend beyond those that collect the dividend. Senator Ward asked if there had been consideration given to privatizing the action and perhaps using a head tax. Senator Austerman replied that had not been considered. Senator Ward supported the State placing a constitutional spending limit before the voters. He inquired how the amount had been determined. Senator Austerman replied that the number had been "picked out of the air" with consideration to Senator Wilkins's SB 1. Senator Wilken mentioned that each year his office undertakes a survey to 10,000 constituents. Five percent of the people, who responded, thought that a $200 school tax was favorable. He noted that he had an amendment, pending arrival, and asked that the bill be held until that time. He suggested that the bill might focus effort on equal treatment for education throughout the State. Co-Chair Kelly thought the bill would help to organize Alaska to pay part of the way for education. Senator Wilken interjected that perhaps the State should ask $100 dollars for organized Alaska and $400 dollars for unorganized Alaska. He pointed out that there is statutory ability to charge each area differently. Senator Hoffman claimed that would not be fair and that he assumed that the amendment would not achieve what Senator Wilken intended. Senator Wilken stated that he wanted to address those that are not paying for their share of the education costs. Senator Olson commented that he would not support the concept proposed by Senator Wilken. Co-Chair Kelly interjected that in his district, an education tax, is the only tax that is supported. Co-Chair Donley agreed, however, pointed out that a $100 dollar tax would only address five percent of the fiscal gap. Co-Chair Kelly agreed with Co-Chair Donley. Senator Austerman stated that the legislation was not introduced to solve the fiscal gap, but instead to create a discussion point regarding education funding. He added that the entire issue on the education gap would take much more than the proposed bill to address. Senator Wilken reiterated that a Permanent Fund check off in the Rural Education Attendance Areas (REAA) could work. Co-Chair Kelly noted that SB 165 would be HELD in Committee for further consideration. AT EASE 10:50 AM/10:55 AM