Committee passes $50 head tax on cruise passengers

Posted: Thursday, April 20, 2000

JUNEAU (AP) -- Cruise ships would pay a $50 tax on each tourist they bring into Alaska waters if a bill passed by a powerful Senate committee on Wednesday becomes law.

The Senate Finance Committee's action comes a day after Senate President Drue Pearce accused cruise industry lobbyists of killing her bill to bring cruise ships under the state's oil spill response laws.

Pearce said the two issues were unrelated, and noted that the Finance Committee had been looking at the cruise industry as a possible source of revenue for some time.

''Cruise ship passengers in the state don't pay,'' said Pearce, R-Anchorage. ''The process had already started before the machinations of the lobbying corps.''

No exact information on how much money the tax would generate was available, but cruise ships bring more than 600,000 passengers a year into Alaskan waters. At $50 a head, that's more than $30 million.

Although cruise industry lobbyists attended the brief, late-night hearing on the bill, they offered no testimony and left quickly without speaking to reporters.

The industry has strongly opposed smaller head taxes such as the $5 fee approved by Juneau voters last fall. Industry officials maintain that dockage fees and the sales taxes paid their passengers already cover the ships' impacts on Alaska communities.

The bill passed the committee 6-3 over the objections of Sen. Al Adams.

''I don't know the effect this bill will have on tourism,'' said Adams, D-Kotzebue.

The state tax would supersede local taxes like Juneau's, but $5 dollars would be kicked back to the local government of the first five Alaska ports each ship visits. That would funnel money to small ports that have hesitated to impose taxes out of fear that the ships would bypass them as punishment.

The bill drew an enthusiastic response from Robert Reges, a Juneau attorney who works with Cruise Control, a group formed in response to the rapid growth of tourism in Alaska's capital.

During the summer cruise ship season, tourists flood the city's downtown streets and sightseeing helicopters rattle the windows of locals' houses.

''I'm pleased to see that the state is stepping up to the plate to get for us, the people of Alaska, a fair market price for the experience of a lifetime,'' Reges said.

The tax would not apply to day boats and to small cruise ships with fewer than 50 berths.

The money the state gets from the tax would be earmarked for the operation of state-owned ports and harbors.

Attempts to tax the cruise ship industry have failed in the Legislature before, and lawmakers once repealed a law after the industry lost a court case over whether the state could impose an income tax on the ships. + But the industry has taken a series of publicity blows in the past year. Last summer, Royal Caribbean Cruise lines admitted dumping oil bilge water and other pollutants in several parts of the Inside Passage, including Juneau's harbor, in past years. The company agreed to pay $6.5 millions in fines.

In October, Juneau voters responded by passing the $5 head tax.

And the industry's opposition to Pearce's bill, Senate Bill 273, helped provoke a conflict in the Capitol this week pitting her against another powerful lawmaker, Rep. Ramona Barnes.

Barnes, R-Anchorage, is holding the bill in her Special Committee on World Trade and State-Federal Relations. Because it also covers freighters and large fishing vessels, Barnes contends it could hurt the competitiveness of Alaska fish, timber and coal in the world marketplace.

The tax proposal also gives new life to a bill thought to have little future in the Republican-controlled Legislature.

The head tax was grafted onto a Senate version of Rep. Beth Kerttula's bill to require regular disclosures from cruise ships about what they put over the side into Alaskan waters.

The Juneau Democrat's measure would require vessel owners or operators to give the state monthly reports on treatment, storage and release of air contaminants, sewage, solid waste and hazardous materials.

The bill will also provide a big shot of money for budget-conscious lawmakers who are trying to pay for key programs as the Legislature moves toward a planned adjournment early next week.

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