Citizens initiative expected on cruise ship taxes

Posted: Wednesday, April 30, 2003

JUNEAU (AP) A citizens' initiative to tax cruise ships and require them to get environmental permits was filed Tuesday with the lieutenant governor's office.

Joe Geldhof, a Juneau attorney who is a sponsor of the measure, said the initiative would impose a $46 tax on each cruise ship passenger. It also would subject the industry to the state corporate income tax and impose a 33 percent tax on shipboard gambling income.

The initiative would also require the ships to get permits before they can discharge waste in Alaska waters. It would require independent observers on board the ships to monitor pollution control, sanitation practices and heating and ventilation systems.

And, it would require cruise ships to divulge to customers their profits from sales of shore excursions.

Yes, this is a fairly complicated initiative, and it's complicated because the foreign-flagged cruise ship industry has engaged in all kinds of awful activity over the years,'' Geldhof said. We want to address the major concerns at one time.''

John Hansen, president of the North West CruiseShip Association, said the industry group will oppose the initiative.

It would deter people from coming to Alaska,'' Hansen said. Also, he said, federal law and interstate commerce provisions of the U.S. Constitution may prohibit a head tax on cruise ship passengers.

Hansen also disputed the need for additional environmental rules.

I think we've got a good system in place in Alaska for high standards for environmental performance,'' Hansen said.

The initiative must meet Division of Elections and Department of Law requirements before sponsors can begin collecting signatures to get the measure on the ballot.

They would need signatures from 23,285 voters to get the proposal before voters in November 2004.

The head tax would raise about $32.2 million, based on an anticipated 700,000 passengers.

A federal law passed last year limits states' ability to collect taxes on cruise ship passengers, but Geldhof said the measure is crafted to comply with that law.

The law allows taxes if they're reasonable, if they're used to pay for a service to the vessel, if they enhance the safety and efficiency of interstate or foreign commerce and don't impose more than a small burden on that commerce.

The initiative calls for 25 percent of the head tax to go to a regional fund to deal with impacts from the ships on places they don't dock. For instance, the fund could build a train platform in an inland community if it receives cruise passengers, Geldhof said.

The measure also calls for the state to send $5 of the tax to each of the first five ports where the ships dock.

The remainder of the head tax would go into the state general fund, with the intent that it be used for port, harbor, dock and other maritime facilities, Geldhof said.

The initiative would impose the state corporate income tax on the industry by repealing a law passed several years ago that exempted the ships from the tax. That would raise $8 million-$15 million a year, Geldhof said.

He did not know what the tax on gambling would raise.

A 2001 state law requires the ships to report on their wastewater discharges and comply with state standards while in state waters.

The initiative would require that they also obtain permits to dump wastewater as other industries are required to do, Geldhof said.

The independent, on-board monitors would check compliance with environmental rules and ensure the ships are doing what is needed to prevent the spread of diseases like severe acute respiratory syndrome, Geldhof said. A $4 per passenger fee would pay for the monitors.

Geldhof said he wanted to disclose that the monitor provision might provide jobs for members of the Marine Engineers Beneficial Association. He is an attorney for that maritime union.

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