MINUTES SENATE FINANCE COMMITTEE May 3, 1999 9:10 AM TAPES SFC-99 # 117, Side A and Side B CALL TO ORDER Co-Chair Torgerson convened the meeting at approximately 9:10 AM. PRESENT Senator John Torgerson, Senator Sean Parnell, Senator Al Adams, Senator Dave Donley, Senator Lyda Green, Senator Pete Kelly, Senator Loren Leman, Senator Randy Phillips, Senator Gary Wilken. Also Attending: GABRIELLE LAROCHE, Acting Director, Division of Governmental Coordination, Office of Management and Budget, Office of the Governor; KERRY HOWARD, Project Review Coordinator, Division of Governmental Coordination, Office of Management and Budget, Office of the Governor; REX BLAZER, Division of Governmental Coordination, Office of Management and Budget, Office of the Governor; KEN TAYLOR, Director, Division of Habitat and Restoration, Department of Fish and Game; WILSON CONDON, Commissioner, Department of Revenue; DEBORAH VOGT, Deputy Commissioner, Department of Revenue; WENDY REDMOND, Vice President, University Relations, University of Alaska; MURRAY WALSH, Planning and Development Consultant; Attending via Teleconference: From Anchorage: JOHN BAKER, Assistant Attorney General, Natural Resources Section, Civil Division, Department of Law; JANE ANGVIK, Director, Division of Land, Department of Natural Resources; NANCY MICHAELSON; From Barrow: JOHN DUNHAM, Planning Department, North Slope Borough; From Dillingham: JOHN EASTON, Coastal Service Manager, Bristol Bay Coastal Resource Service Area; From Kodiak: LINDA FREED, Kodiak Island Borough; From Mat- Su: BILL EASTHAM; KATHY WELLS, Creator, Hatcher Pass Management Plan; KAROL KOLEHMAINEN, Program Coordinator, Aleutians West Coastal Resource Service Area; From Nome: ROBBIE FAGERSTROM, Co-Chair, Alaska Coastal Policy Council; SUMMARY INFORMATION SB 140-COASTAL ZONE MANAGEMENT TO DNR The committee heard from the sponsor, the Division of Governmental Coordination and the Department of Law. Public testimony was taken. A committee substitute, Version "N", was adopted as a Workdraft. The bill was held in committee. SB 67-GOVERNOR'S INC TAX:INDIVID/EST/TRUSTS The committee heard from the Department of Revenue. The bill was moved from committee. (Senator Dave Donley wanted to know if there was a proposed CS for the Power Cost Equalization bill. Co-Chair John Torgerson there was proposed but it needed funding sources.) CS FOR SENATE BILL NO. 140(RES) "An Act relating to the powers and duties of the Department of Natural Resources, modifying that department's power to control and manage land within the Hatcher Pass Public Use Area, and authorizing municipal selection of that land, and relating to the Alaska coastal management program; and providing for an effective date." BRUCE CAMPBELL, staff to Senator Randy Phillips, testified. SB 140 was a mission alignment bill. It also changed statutory adjustment needed to allow for the budget allocation to the Department of Natural Resources. The statutory adjustments for Department of Natural Resources would make the planning and classification process more flexible, optional or more permissive. "Shall" was replaced with "may" in many places in the first ten pages of the bill. This would allow flexibility in the classifications land planning process. The land planning process was not the only process the department engaged in. It was one of the steps prior to getting to a land sale. Land planning classification usually preceded a best interest finding, which also had a public review and public notice. It also preceded sales or leases, each of which had its own public notice, public hearings, findings and determinations that were generally preformed in a specific order. This change would perhaps lower litigation cost, according to Bruce Campbell. The second half of the bill, beginning on page eleven, would move the Division of Governmental Coordination and its associated coastal management program into the Department of Natural Resources. [Pause on the record to determine the location of the language in the bill.] Bruce Campbell explained where the language defining the Alaska Coastal Policy Council was located. The intent was to move the process with no major policy changes or alterations to the program that would disturb the on-going process. The individuals themselves would not physically move. The Division of Governmental Coordination currently did not have a director. Efficiencies would be realized by the savings of eliminating this position through merging the division with the Department of Natural Resources. Co-Chair John Torgerson wanted to know if the witness still anticipated a saving in the maintenance of efforts from combining the two agencies. Would more federal funding be captured? Bruce Campbell had spoken to the National Oceanographic and Atmospheric Administration and was told the funding would probably not change. The programs had reached a funding cap. US Representative Don Young was working on obtaining more funding, but Bruce Campbell did not anticipate an increase in federal funding. Current state funds allocated to the Division of Governmental Coordination were fairly low and functioned under the Office of Management and Budget, Office of the Governor. Senator Al Adams asked if the merger would create any potential conflict with the regulation of state land use or with activities on private or public lands. Bruce Campbell replied that he did not see any and detailed. Federal law expressly requested that the governing state agency have the power to direct state land and water use planning and regulations, which the Office of Management and Budget did not have but the Department of Natural Resources did have. Federal law required that the entity that operated the coastal zone program shall have the power to approve or disapprove, after public notice, specific permits or actions. The Division of Governmental Coordination assumed that through a peripheral relationship to Department of Natural Resources, Department of Environmental Conservation and Department of Fish and Game. The specific mission alignments affected both the structure in which federal code was built and in the agency's impact on that. Co-Chair John Torgerson wanted to know what the changes in the proposed committee substitute would do. Bruce Campbell replied that it added language to the provision of the merger. It also added language in the planning process portion to allow it to become optional. He showed where on page two line 28 "may" was inserted, and was "shall" deleted. This was repeated in other areas of the bill. This stipulated that the commissioner "may" engage in a planning process to determine among other things whether there were sufficient funds to do the project. Currently, statute stated that the planning process was required. Without the change the ability to sell and lease lands would be difficult for the department. Co-Chair John Torgerson asked what changes were made in Section 23. Bruce Campbell answered this was an add-on made by the Senate Resources Committee and included the shift on page ten lines 20, 24 and 25 that excluded specific tracts of land that were included in municipal lease. This amounted to 939 acres of land where there was overlap between the Legislatively created public use area and the contract happening in the Hatcher Pass area. This involved an agreement to construct a ski resort. Bruce Campbell continued with other changes made on page eight to allow the use of electronic technologies for public notices. This could result in savings and if successful, the department would be expected to build upon. The department had asked to remove a coordinating body from the public notice provision. They felt that was not a useful function. Senator Gary Wilken noted the multitude of fiscal notes and wanted to know which applied to the committee substitute. Co-Chair John Torgerson answered that probably none applied since the CS had not been adopted. Senator Gary Wilken noted a Coastal Policy Council Resolution. It was not included in the packet and he wanted it distributed for member's consideration. Senator Randy Phillips moved to adopt CS SB 140 Version "N" as a Workdraft. Without objection, it was adopted. GABRIELLE LAROCHE, Acting Director, Division of Governmental Coordination, Office of Management and Budget, Office of the Governor and Program Coordinator, Alaska Coastal Management Program, testified in opposition to the bill. The sixteen-member policy council, who had prepared the resolution opposing the legislation that Senator Gary Wilken spoke of, was comprised of nine locally elected governmental officials. Also, she noted that no one who had testified before the Senate Resources Committee was in favor of the bill. The sponsor staff stated that this was a mission alignment and efficiency bill. In response, she had three points that disproved that. First, the missions of the two agencies were different. Second, no savings to the state general fund could be identified with this legislation. Finally, previous legislative audits found the Division of Governmental Coordination was the most appropriate agency for administering the Alaska Coastal Management Program. She spoke to the conflict of interest in the missions and mandates of the Division of Governmental Coordination and the Department of Natural Resources. One of the main functions of the DGC was to make determinations and provide conflict resolutions between the Department of Natural Resources, Department of Environmental Conservation, Department of Fish and Game, developers and other interested parties. The bill could result in increased start-up costs when combining the agencies. Although there would be savings in the elimination of the director position, it would be offset by other costs such as position reclassifications and hiring procedures associated with the transfer. Short-term inefficiencies were also anticipated. A changeover of the lead agency would require an amendment to the federal program approval. She described the steps required in this process. Delays or decreases in federal funding would not only impact state agency functions, but also pass-through dollars provided to coastal districts and communities in the state. Gabrielle LaRoche told the committee that the director's position, which was proposed to be assigned to the Division of Land, would not qualify for full federal funding since the position would have other duties beside the coastal management program. The difference would have to be made up. She repeated her argument that the Office of the Governor was the best location for the Alaska Coastal Management Program. JANE ANGVIK, Director, Division of Lands, Department of Natural Resources, testified via teleconference from Anchorage. She opposed the bill and had two points to make. The first was that the Division of Governmental Coordination and the Department of Natural Resources were very different and performed different functions. The Division of Lands functioned as the owner of the state lands and made decisions on how to best use the state's resources. The Division of Governmental Coordination on the other hand was a permitting agency that attempted to resolve conflicts between parties whether they affected state, federal or private lands. Secondly, she believed the intention was to make the planning process optional for the Division of Lands. She disagreed that funding for the planning functions could be eliminated since the process would no longer be required. She also disagreed that with the elimination of the planning positions, the functions could be taken over by the personnel from the current Division of Governmental Coordination. Neither of those perceptions would be accurate because, she warned. She talked about the language addressing the planning requirements and explained that it still required the division to go through a reasoning process before making decisions. With no funding or staff to perform that function, that could not be done. She stressed that this legislation would not achieve the objectives of mission alignment stated by the sponsor. She detailed the different missions of the two agencies. JOHN BAKER, Assistant Attorney General, Natural Resources Section, Civil Division, Department of Law, testified via teleconference from Anchorage. He addressed the implications of Title 38. He characterized the Department of Law's concerns with the dispersion as constitutionally based. The department did not believe that these changes would make the bill, as written, unconstitutional. However, he did want to point out that there were constitutional implications in how the courts would likely construe the legislation. That would have a direct effect on whether the legislation would achieve its objective to produce cost and efficiency savings. Those comments were directed mainly at Sections 4, 10, 11, 13 and 14 of Version "N" that made the planning functions optional. The court under Alaska law would construe all legislation as avoiding a constitutional conflict whenever possible. To do that, it would interpret the legislation with its own view of what the constitution required. The department believed that the court would view the constitution as requiring some record of the decision making for all disposals of land and other state resources in order to make public participation in that process meaningful. The department anticipated that the court would require the Department of Natural Resources to continue to engage in a process described in Title 38. The legislation could change the name of the process. If the goal were to reduce the workload in the planning and classification functions, this bill would not accomplish that. He deferred to Gabrielle LaRoche's comments on the Coastal Management Program implications. Senator Al Adams had a question on the constitutionality of the bill. Was that because the constitution specifically stated that the government needed a reasonable approach to land management and that the public was entitled to a due process? John Baker replied that there were several sections of Article 8 of the constitution that required public notice and pointed out the linkage to the classification and planning process. In a nutshell, the linkage should be described as that which a record of decision making was produced. The court required not only public notice, but meaningful public notice that the public was able to participate in. JOHN DUNHAM, Planning Department, North Slope Borough. Testified via teleconference from Barrow to the items in the bill relating to the Coastal Management Program. He was concerned that the move was unneeded and that there would be no net savings. He was concerned how the Division of Governmental Coordination activity would integrate administratively into the Department of Natural Resources. He talked about the change in employment status from exempt positions and how that might affect the impartiality or the expertise of the decision-makers. He then referred to the land planning process. He detailed the unfulfilled municipal entitlement situation. He noted that the North Slope Borough was not the only municipality in this position and felt this bill would have a larger impact than the committee realized. The Division of Lands and the Division of Governmental Coordination were completely different agencies. He closed by saying there were no simple answers. JOHN EASTON, Program Director, Bristol Bay Coastal Resource Service Area, testified via teleconference from Dillingham testified against the bill. This would affect the Bristol Bay Area Plan that included state land classifications and designations. This plan and others had gone through a full public process to find the best use. The Division of Governmental Coordination served its mission. SB 140 would remove a network system that worked quite well. LINDA FREED, Community Development Director, Kodiak Island Borough testified via teleconference from Kodiak. She had serious concerns with the state land planning functions. She felt the bill was short sighted. The Kodiak Island Borough was opposed to the Coastal Management Program portions of the bill and did not see the savings in merging the office with the Department of Natural Resources. She did not feel that by eliminating the director's position was advantageous. The director position played an important part in the process, often as an arbitrator. BILL EASTHAM, President, Mat-Su Motor Mushers, testified via teleconference from Mat-Su in opposition to the Senate Resources Committee version of the bill. He felt the Hatcher Pass community would have no control over the area. KATHY WELLS, Creator, Hatcher Pass Management Plan, testified via teleconference from Mat-Su in opposition to the bill. She did not want the Mat-Su Borough to acquire the land arguing that it did not have the capacity to properly manage it. She was concerned with the poor public notice process with this bill. KAROL KOLEHMAINEN, Program Coordinator, Aleutians West Coastal Resource Service Area, testified via teleconference from Mat-Su. She spoke to the concerns of the CRSA with the bill. She did not support the merging of the two agencies or the elimination of the planning process requirement. She also had concerns about funding for the CRSA. ROBBIE FAGERSTROM, Co-Chair, Alaska Coastal Policy Council, testified via teleconference from Nome. He requested the committee members be provided with two letters to use when making their decisions regarding this bill. He referenced a Legislative Audit Report that found the Division of Governmental Coordination was the most appropriate location for the coastal policy functions. Tape # 117 Side B 9:57 AM Robbie Fagerstrom continued. NANCY MICHAELSON testified via teleconference from Anchorage regarding the Hatcher Pass Public Use Area. She told of the area and the many recreational activities her family and thousands of other South-central Alaskans enjoyed there. She pointed out that the borough was not bound by the limitation agreement and was more interested in developing the land. MURRAY WALSH, Planning and Development Consultant testified in Juneau. He felt the provisions in SB 140 would not accomplish the goals of the permitting process. The only defense his permit applicants had was the Division of Governmental Coordination, which served as a referee. Co-Chair John Torgerson ordered the bill held in committee. SENATE BILL NO. 67 "An Act relating to taxation, including taxation of income of individuals, estates, and trusts; and providing for an effective date." The Senate Rules Committee at the request of the Governor introduced the bill. WILSON CONDON, Commissioner, Department of Revenue testified. This bill was part of a package of bills that the Governor had requested with respect to his proposal to address the long-range financial plan the Legislature and Governor had been focused on this session. The Governor included a broad-based tax in his proposed financial plan because he believed it was needed to fulfill one of the five key principles that he urged should apply to any long-range financial plan. That principal was to maintain and protect a healthy permanent fund dividend. Both Alaska families and Alaska businesses were in some way, dependent on the continuation of a healthy permanent fund dividend program. Wilson Condon restated the four main elements of the Governor's plan. One was to transfer $4 billion from the permanent fund earnings account into the Constitutional Budget Reserve (CBR) and use earnings from the CBR to pay for public services. The second key was to invest the CBR more aggressively. Third was a broad-based tax that would raise approximately $300-350 million. Finally, for the plan to continue, another transfer to the CBR would be needed around 2010. In the plan presented following the State of the Budget address, the permanent fund dividend would average slightly under $1500 a year over the next fifteen years. The Governor had made it clear that he would be flexible on a financial plan with respect to the fund in which the money would be transferred. He was open to more aggressive investment of the earnings and he was flexible a different tax than what was proposed in SB 67. However, he believed that without any additional revenue, the maximum sustainable permanent fund dividend would be about $800-900 per year no matter how the plan was structured. To use of the permanent fund to pay for public services and to continue to pay dividends over $1000, there would need to be a broad-based tax. He did the addition to find that $60 million in additional revenue had the effect of raising the per capita by about $100 per person a year. With respect to a broad-based tax, there was one other general public policy reason that should be considered. The Commonwealth North committee that looked at the management of the state's financial resources, pointed out that there was an "Alaska disconnect". That was defined as economic development in areas other than the oil and gas industries; such as mining, timber or investments in transportation, were activities that made the private sector of the economy more prosperous, but did not bring more public revenues that paid for public services. People who moved to the state and participated in those public service activities required these. Wilson Condon repeated the comment that the Governor was willing to consider any form of broad-base tax. This could include an income tax, sales tax, motor fuel tax, etc. The reason Governor Knowles specifically proposed an income tax were that it would reach out-of-state workers. Also, state income tax was deductible on federal income tax where sales tax was not. Finally, the income tax was progressive. It required more from those who had the ability to pay more and as some believed, benefited more from the public services. The Alaska Credit featured in the tax added to the progressivity of the tax by making the tax rate a percentage of the federal tax. In terms of the public reaction to that, Wilson Condon thought it added to much progressivity. The public reaction had been that the way the tax was structured, too few people would pay the tax. Therefore, the Governor was open to proposals to change the structure of that tax so that it would address those perceived difficulties. A number of the people Wilson Condon talked to misunderstood the thirty-one percent rate. They thought it was a thirty-one percent tax rate, when it really was thirty-one percent of one's federal income tax. His own tax rate was twenty-eight percent on his taxable income. Thirty-one percent of that twenty-eight equaled a rate of taxation of 8.6 percent of his taxable income. If the Alaska Credit feature were removed, which removed the size of the tax base and introduced the elevated progressivity, the tax would be lowered to 5.9 percent. He returned to his main point that a broad-based tax of some type was necessary if a health dividend was to be preserved. It was a balance. It was possible to cover the budget deficit entirely from the permanent fund earnings. However, that would eliminate the dividend. On the other hand, it was probably not possible to cover the entire budget deficit with taxes. It was too large. It was a matter of fairness and was a political judgement that balanced the question of who paid to close the budget gap, according to Wilson Condon. The Governor believed the fairest way to do that was to preserve a dividend in the range that went with his proposal and to put in place a broad-based tax. This was a fair way of distributing the burden of balancing the budget. He again stressed that the Governor was flexible. Co-Chair John Torgerson asked how long this tax plan would protect the dividend and the state's savings account. Wilson Condon used the oil production figures set forth by the Department of Revenue's Spring forecast for the next five years and the Fall revenue forecast for the period thereafter. The projections for a flat-line budget over the next fifteen years, without taking some other action, showed the CBR depleted by 2014. Senator Loren Leman had questions on the Governor's tax proposal. He remembered the rate on the previous personal income tax was sixteen percent. Wilson Condon didn't believe that was correct. He thought it was fourteen percent. Senator Loren Leman said that he had paid the income tax and he certainly was not in the higher income categories at the time. DEBORAH VOGT, Deputy Commissioner, Department of Revenue said the rates had been graduated starting at three-percent and went up to 14.5 percent. The highest rate applied to a taxpayer who was single and with an income over $150,000 annually. She clarified that that was a percentage of the federal tax. Senator Loren Leman then voiced concern with the creation of another bureaucracy to collect and audit the tax. There was also a similar administration to distribute the permanent fund dividend. This did not make sense to him. He noted that some felt there was a social benefit of taking from producers of income and redistributing to those who did not produce incomes. One goal of the Legislature was to have as lean and efficient a government as possible. He asked for response to the dual mechanism. Wilson Condon said the answer was both very simple and very complex. It was a policy choice whether to have both programs. If there were both, there would need to be administration for both. It was a question of what people felt was fair. Senator Pete Kelly had a question on comments made about the fairness issue. The argument the witness gave was that a tax on higher income was justified because it was believed those people were the ones who most benefited from government services. Senator Pete Kelly didn't think those people were the ones who mostly used the programs of the Department of Health and Social Services, the Department of Public Safety or the Power Cost Equalization program. Wilson Condon said there was not a true answer to who benefited. He felt he had as much or more of a stake in government services. He did not pay as much for what he got from roads, airports, etc. He had a big stake in the economy having a well-educated workforce. It was important to have a state park system where he could go camping. He saw himself as having a tremendous stake in Alaska's future than people of lesser means. More possibilities were made available to him as a consequence of his having a higher income. Others would evaluate that differently and he didn't think there was a right answer. When talking about fairness in the tax system, there were four considerations. One was whether taxes should be collected on an ability to pay basis. There was the matter of collecting taxes on the use of services. He noted there were many services he received that he did not pay for. The third consideration was that of horizontal equality. This was the determination of whether individuals in the same situation paid comparable amounts. The final consideration addressed whether those who could pay more should pay more. There were no true answers to any of those debates but they were value choices that the Legislature had to make when deciding how to pay for public services. Senator Pete Kelly noted that most of the services the witness mentioned were paid by federal funds: roads, airports, public education and parks. When talking about fairness, it was a different debate in paying for use of services. He detailed his argument on fairness. He believed people should not be taxed for the reason that they benefited more from general fund dollars if in fact they didn't. Senator Gary Wilken asked if S-Corps were treated as individual incomes in this proposal. He wanted to know that if a S-Corp had before-tax earnings of $1 million and if thirty-one percent of the thirty-nine percent federal tax rate was taken the S-Corp would then pick up an $120,000 obligation. Wilson Condon said if it was a solely owned S-Corp, it would. Senator Gary Wilken was afraid that would be the answer. Wilson Condon qualified that the affect of the Alaska Credit feature would have the affect of raising the rate by about 40-50 percent on the remaining tax base. This was because the S-Corp itself would not be receiving a permanent fund dividend. Deborah Vogt clarified that the S-Corp would not pay this tax, the individual to whom the income was distributed would. That person would probably be eligible for the credit. Senator Gary Wilken noted discrepancies on the additional positions requested in the handouts. The Governor's Tax Plan on page 13 showed an increase of 56.7 positions while page 12 appeared to be 87 positions. Wilson Condon was unsure about that. Co-Chair John Torgerson asked for the correct information to be provided. Senator Sean Parnell wanted to know how many people would be paying the tax on an annual basis for the first five years. Deborah Vogt did not have the exact figures. She estimated it would not be less than 75,000. Senator Sean Parnell wanted to know how much of that revenue would come from out-of state workers. The department did not have that information prepared. Wilson Condon only had a table that broke down the tax revenue by income. Senator Sean Parnell asked what the department was attempting to estimate. Wilson Condon answered they wanted to determine both the number of taxpayers and the proportion of the tax that would be raised by the various brackets of federal taxable income. Senator Sean Parnell wanted to know how much of the $350 revenue would be paid by out-of-state residents. Wilson Condon said it would be between $35 and $50 million. Senator Sean Parnell calculated that Alaskan residents would then pay about $300 million. Senator Sean Parnell returned to the term "broad-based tax." No matter how he looked at it, less than one-sixth of the population and less than one-third of the wage earners would pay the tax. This estimation was based on all the information provided not just today's testimony. Wilson Condon answered that the Alaska Feature narrowed the base considerably. As he testified, if the Legislature were to impose a tax, it would need to have a broader base. Senator Sean Parnell wanted to know the economic impact. Wilson Condon said the tax imposed would have the effect of taking money out of the economy the same as reductions in PFD dividends. Senator Sean Parnell asked if it would result in higher paying jobs going elsewhere and a decrease in higher paying jobs. Wilson Condon did not know. Senator Sean Parnell asked if that was because research had not been done or the research was unable to determine. Wilson Condon said it was because it was not yet done. He did not know of a reason why there would be a greater loss of jobs at the high end of the income spectrum. Senator Sean Parnell thought there was intent to create higher income jobs. He wondered if this tax was counter to that goal. Senator Lyda Green said it appeared that this plan would allow broad-scale use of personal information from one agency to another. This would be intermingled with the permanent fund. She wanted to know if when the permanent fund was created, was there any implication that the information gathered would be protected. Deborah Vogt answered that there was a list of agencies that had access to PFC information to some extent. Some restrictions on the data were statutory and some were regulatory. Some came about only at the advice of the Attorney General. All the names and addresses were public information. Social security number and other information was fairly limited. The permanent fund program was in Title 43, the tax program, and was subject to the same confidentiality as the tax information. She therefore concluded that the two agencies were close enough that there could be a sharing of information. Senator Lyda Green asked if the same held true for child support programs. Deborah Vogt responded that the Child Support Enforcement Division had access to almost all of the information on the dividend application. Senator Lyda Green referred to cross-match employer quarterly report filings to the Department of Labor and wanted to know if that to obtain information of the number of people a corporation was hiring. Deborah Vogt answered that it was not. She explained that the employer withholding funds would go through the Department of Labor. The employee paycheck would have funds withheld for state tax just as it did for federal tax. Tape: SFC - 99 #118, Side A 10:44AM Co-Chair John Torgerson pointed out that the savings, except for the corpus of the permanent fund would run out in the year 2014. He wanted to know what was the plan for after the year 2014. Wilson Condon disagreed with the assumption. He predicted the CBR would be empty by 2014. However, if that were true, and there was no other additional revenue, other steps would be necessary. More transfers to the CBR would be required based on the projections the department was currently doing. Senator Sean Parnell offered a motion to move SB 67 from committee with individual recommendations. He noted this proposal reflected a very different view of financing government than he had. Senator Dave Donley commented he disagreed with the bill and did not think it should move from committee without a statement of "no recommendation." Senator Pete Kelly felt a statement in opposition should be made on the Senate floor. Senator Pete Kelly wanted to vote to move the bill from committee because he wanted to make a statement on the Senate floor in opposition to it. There were a lot of discussions across the state about different sources of revenue. The Governor had proposed an income tax and he was willing to let it go to the whole Senate to get the reaction of all the Senators. Senator Loren Leman had not heard a compelling argument for income tax. He would not oppose moving from committee but would cast a no vote on in Senate Chambers. Senator Al Adams would vote against moving the bill from committee. His reasons were because he believed the long- range plan was still being worked on and should be drafted before the income tax options were eliminated. AT EASE 10:48 AM / 10:50 AM Senator Sean Parnell amended the motion to move SB 67 from committee with a committee recommendation of "do not pass." Senator Al Adams noted this was the last committee of referral and the uniform rules requiring at least one "do pass" from a committee must be followed. Co-Chair John Torgerson suggested the uniform rules could be suspended on the Senate floor. There was no objection and the bill moved from committee with a "do not pass" recommendation. ADJOURNED Senator Torgerson adjourned the meeting at 10:52 AM. SFC-99 (1) 5/3/99