Senate passes $50 head tax on cruise passengers

Posted: Friday, April 21, 2000

JUNEAU (AP) -- A $50 head tax on cruise ship passengers who enter Alaska waters passed the Senate on Thursday, less than a day after the proposal surfaced in a late-night committee hearing.

The tax was added to Senate Bill 308 late Wednesday after Senate President Drue Pearce accused cruise industry lobbyists of killing her bill to bring cruise ships and other large vessels under the state's oil spill response laws.

''This is all of Alaska for $50,'' said Sen. Rick Halford, R-Chugiak, arguing that the profitable and mostly foreign-owned ships pay little to operate in the state. ''They are selling Alaska and we are giving them Alaska to sell.''

The bill passed 14-6 over the objection of senators concerned about its fairness and the possible impact on tourism.

''When the tax-and-spenders put this together, why weren't the airline passengers, ferry passengers and recreation vehicle drivers considered?'' asked Senate Majority Leader Jerry Mackie, R-Craig.

The cruise ship industry has opposed smaller head taxes such as the $5 fee approved by Juneau voters last fall. Industry officials contend cruise ships already pay their way through the port fees and the sales taxes paid by passengers in various communities.

Telephone calls to John Hansen, the president of the North West CruiseShip Association, which represents the major cruise lines that operate in Alaska, were not returned Thursday.

However, the bill's future in the House is uncertain.

''It's her punitive action against the tourism companies,'' Rep. Ramona Barnes, R-Anchorage, said, who is holding Pearce's spill response bill in her Special Committee on World Trade and State-Federal Affairs. ''It's like using a sledgehammer on an egg.''

Attempts to tax the cruise ship industry have failed in the Legislature before, and several key lawmakers -- including Barnes -- will likely oppose the bill and try to kill it in committee.

The tax would bring in more than $30 million from the more than 600,000 cruise ship passengers who visit the state each year.

It would displace local taxes such as Juneau's, but $5 would be kicked back to the local government in each port town a passenger visited. 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 money the state gets from the tax would be earmarked for the operation of state-owned ports and harbors.

The bill also still contains the original subject of Senate Bill 308, a Senate companion to a bill sponsored by Rep. Beth Kerttula. 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.

Meanwhile, the conflict over Pearce's spill response bill continued on Thursday.

Because it also covers freighters and large fishing vessels, Barnes contends the measure could hurt the competitiveness of Alaska fish, timber and coal in the world marketplace.

By April 2002, the bill would require vessel owners and the Alaska Railroad to provide the Department of Environmental Quality with a contingency plan to clean up 15 percent of their oil-carrying capacity within 48 hours of a spill.

Owners also would have to prove they could take financial responsibility for cleaning up a spill.

Barnes has called for a task force to study the financial impacts of the bill, and the House passed a resolution Thursday establishing such a task force to study the issue and report back to the Legislature next year.

Pearce responded by offering a compromise -- put the spill response planning provisions for ships before a task force, but pass a bill that requires a plan from the railroad and proof of financial responsibility from ship owners.

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