Sponsor Statement for SB 5

Excise Fee on Passenger Ship Travelers

Senator Bert Sharp

SB 5 would levy a $25 per passenger fee for each port of call within Alaska.

It is the intent of this legislation that the fee revenue collected be distributed to municipalities through the existing program of state revenue sharing to municipalities. The municipalities shall use the shared revenue to provide, operate, and maintain emergency response capabilities as well as public safety and security services.

It is recognized that the large number of cruise visitors arriving in our state impact not only on the port cities but many continue their travels throughout Alaska, thereby impacting public service facilities in many areas. Several of the major cruise companies offer cruise and land tour packages as a majority of their options and to this end they own hotel/motel facilities throughout the state served by transportation equipment they own.

Section 1 outlines the intent and purpose of this bill.

Section 3 establishes the exclusiveness of the state to levy or collect a passenger tax or fee except for those already in existence and pledged by covenant to the retirement of port facility bonds. This will preclude a hodgepodge of varying levels of port fees causing friction among port cities.

Section 4 adds a new chapter to AS 43 which sets the responsibility and procedures for collection of the fees, disposition of said revenues, subject to appropriation through the existing municipal revenue sharing statutes, establishes the fee and it's applicability and defines certain terms used to assure clarity and understanding.

Finally, a "non-severability" clause is stated in Section 5 and Section 6 sets an effective date that is practical to the seasonal nature of this activity. The primary benefits of this proposed legislation are:

1. Provides a method for a large portion of the visitors to our state to share in the cost of providing critical public services that they demand and utilize.
2. Provides a low cost system of levy collection and administration of this fee system.
3. Provides a fair and effective method of distribution of these revenues throughout the impacted areas via an already existing state municipal revenue sharing mechanism.
4. There is no question about our visitors needing and utilizing emergency and other public safety services; you read about them practically everyday. Throughout the world, with the exception of Alaska, fees are levied at each port-of-call and they range from $25 to $75 per call. These fees are added to the published fares in all instances; thereby, they do not affect the cruise operators bottom line profit.

I urge each committee member to carefully scrutinize the contents of this proposed legislation, ask questions, and ask yourself ... Does this offer an acceptable, reasonable avenue to achieve a portion of the $66 million in new revenue called for in this second year of our long-range financial plan? Does this offer a new revenue stream that would be more acceptable to your constituents than other options? Is maintaining a viable state municipal revenue sharing funding level important?

If we are to be successful in achieving this year's financial plan goals, this may well be a very essential part of our plan.

Thank you.

Mr. Jack Chenoweth is in attendance to help answer technical or structural questions.