Legislature(2017 - 2018)ADAMS ROOM 519

02/21/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 96 TAXES;DEDUCTIONS;FEES;TAX STAMP DISCOUNT TELECONFERENCED
Heard & Held
-- Public Testimony --
+= SB 97 PENSION OBLIGATION BONDS TELECONFERENCED
<Bill Hearing Canceled>
+= HB 176 GROUND EMER. MEDICAL TRANSPORT PAYMENTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 321 APPROP: SUPPLEMENTAL OP.; FUND; AMENDING TELECONFERENCED
Heard & Held
HOUSE BILL NO. 96                                                                                                             
                                                                                                                                
     "An  Act amending  the  calculation  of adjusted  gross                                                                    
     income for  purposes of the tax  on gambling activities                                                                    
     aboard large  passenger vessels; repealing  a provision                                                                    
     allowing  an  investigation  expense under  the  Alaska                                                                    
     Small Loans Act to be in  place of a fee required under                                                                    
     the Alaska  Business License Act; repealing  the amount                                                                    
     that may  be deducted  from the  tobacco excise  tax to                                                                    
     cover  the expense  of accounting  and  filing for  the                                                                    
     monthly   tax  return;   repealing   the  discount   on                                                                    
     cigarette  tax  stamps  provided  as  compensation  for                                                                    
     affixing the  stamps to packages; and  providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
2:24:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STEVE   THOMPSON,  SPONSOR,   thanked   the                                                                    
committee  for  hearing  the  bill.   He  detailed  that  an                                                                    
indirect  expenditure was  a state  discount  or tax  credit                                                                    
that was  never tracked and did  not show up in  the budget.                                                                    
During a prior session the  legislature established a way to                                                                    
track  indirect  expenditures.  The  Department  of  Revenue                                                                    
(DOR)  must provide  a report  every  two years  on all  the                                                                    
state's foregone  revenue. The information  was subsequently                                                                    
turned over  to the  Legislative Finance Division  (LFD) who                                                                    
examined the data  and published a printed  report for every                                                                    
legislator. He noted that some  of the indirect expenditures                                                                    
had sunsets.  The items  in HB 96  did not  contain sunsets.                                                                    
He indicated  that there  were four  items that  amounted to                                                                    
over $350,000 in lost revenue to the state.                                                                                     
                                                                                                                                
FORREST   WOLFE,  STAFF,   REPRESENTATIVE  STEVE   THOMPSON,                                                                    
provided  further  detail  about  the  bill.  He  read  from                                                                    
prepared remarks as follows:                                                                                                    
                                                                                                                                
     House Bill  96 repeals  or removes four  minor indirect                                                                    
     expenditures  from  state  law,  all  of  which  should                                                                    
     provide more income for the  state of Alaska. First, HB
     96  removes   the  deduction  of  federal   taxes  from                                                                    
     adjusted gross  income when  calculating the  state tax                                                                    
     collected on gambling aboard large cruise ships.                                                                           
     Next,   HB  96   repeals   a   provision  allowing   an                                                                    
     investigation expense under the  Alaska Small Loans Act                                                                    
     to  replace a  fee required  under the  Alaska Business                                                                    
     License Act.                                                                                                               
                                                                                                                                
     Finally,   HB  96   repeals  allowing   the  costs   of                                                                    
     accounting  and  filing  monthly   tax  returns  to  be                                                                    
     deducted from  the tobacco excise  tax, as well  as the                                                                    
     $50  discount on  cigarette tax  stamps intended  to be                                                                    
     compensation for affixing the stamps to packages.                                                                          
                                                                                                                                
Mr.  Wolfe  reiterated  that  the   bill  was  estimated  to                                                                    
increase revenue in  FY 19 by at least  $339,500 thousand of                                                                    
which  $219.1  thousand  would   be  appropriated  into  the                                                                    
general fund.                                                                                                                   
                                                                                                                                
2:29:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton  pointed to a  handout that  contained three                                                                    
components  to  the bill  and  not  four as  stated  earlier                                                                    
[titled  "Bills  Related  to  Indirect  Expenditures"  dated                                                                    
February 3,  2017 (copy  on file)].  Mr. Wolfe  replied that                                                                    
the document had  been compiled the past  year that included                                                                    
three  of  the  four  items  in the  bill.  The  third  item                                                                    
contained two indirect expenditures.                                                                                            
                                                                                                                                
2:30:20 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
GHERT  ABBOTT,  SELF, KETCHIKAN,  spoke  in  support of  the                                                                    
tobacco tax  portions of the bill.  Eliminating the indirect                                                                    
expenditure  saved the  state a  small amount  of money  and                                                                    
slightly increased  the price of  a pack of  cigarettes. She                                                                    
pointed   out  that   foregone  revenue   only  provided   a                                                                    
"miniscule" amount of revenue  relative to the entire budget                                                                    
and was no  substitute for what she deemed  was necessary; a                                                                    
broad  based progressive  tax on  income and  capital gains.                                                                    
She  hoped  the  committee  would not  spend  much  time  on                                                                    
indirect expenditure legislation.                                                                                               
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster relayed the amendment deadline.                                                                                 
                                                                                                                                
HB  96  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster reviewed the agenda for the following day.                                                                      
                                                                                                                                
Representative  Wilson hoped  to  receive answers  regarding                                                                    
the  supplemental   bill  prior  to  reporting   it  out  of                                                                    
committee.                                                                                                                      
                                                                                                                                
Co-Chair Foster agreed.                                                                                                         
                                                                                                                                
Co-Chair Seaton  noted that some  of the questions  may have                                                                    
been more policy related than numerical.                                                                                        
                                                                                                                                

Document Name Date/Time Subjects
HB096 Supporting Documents Statutes Repealed by HB 96 2.20.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB096 Sponsor Statement ver A 2.12.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB096 Supporting Documents - Indirect Expenditure Report 2.22.17.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB096 Supporting Documents IE HFIN DOR Subcommitee Report 2.12.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 96
HB 321 2 19 18 FY18 Supplemental Summary and Detail with LFD Notes.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 CS Workdraft O version 2-20-18.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 Fast Track Agency Summary-Op & Cap.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 Fast Track Supp TransDetail.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 321 Fast Track StatewideTotals-Op & Cap.pdf HFIN 2/21/2018 1:30:00 PM
HB 321
HB 176 - Amendments 1 & 2.pdf HFIN 2/21/2018 1:30:00 PM
HB 176
HB 176 - Supporting Documents - IGT Flow Chart - 2.20.18 FINAL.pdf HFIN 2/21/2018 1:30:00 PM
HB 176
HB 176 aml comment hb 176 2.20.18.pdf HFIN 2/21/2018 1:30:00 PM
HB 176