SCS CSHB 118(RES): "An Act relating to the reporting and analysis of certain information relating to tax credits, exclusions, exemptions, waivers, and other tax expenditures; relating to bills creating tax expenditures; relating to confidentiality and use of tax information; relating to a tax credit for qualified research and development expenditures; and providing for an effective date."
00 SENATE CS FOR CS FOR HOUSE BILL NO. 118(RES) 01 "An Act relating to the reporting and analysis of certain information relating to tax 02 credits, exclusions, exemptions, waivers, and other tax expenditures; relating to bills 03 creating tax expenditures; relating to confidentiality and use of tax information; relating 04 to a tax credit for qualified research and development expenditures; and providing for 05 an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 08 to read: 09 SHORT TITLE. Sections 1 - 9 of this Act may be known as the Alaska Tax Break 10 Transparency Act. 11 * Sec. 2. AS 24.08 is amended by adding a new section to read: 12 Sec. 24.08.038. Tax expenditure bills. The legislature shall include a 13 statement of the rationale and purpose of a tax expenditure in a bill creating a tax
01 expenditure. In this section, "tax expenditure" has the meaning given in AS 43.05.090. 02 * Sec. 3. AS 24.20 is amended by adding a new section to read: 03 Sec. 24.20.232. Analysis of tax expenditures. If the sum of tax expenditures 04 of a specific type exceeds $1,000,000 in fiscal year 2012 or a succeeding fiscal year, 05 the legislative finance division shall analyze the use of the tax expenditure on the 06 following schedule to determine whether the statute authorizing the tax expenditure 07 has achieved its purpose: 08 (1) tax expenditures existing on July 1, 2015, shall be analyzed once 09 between July 1, 2015, and June 30, 2020, and before a delayed repeal of a tax 10 expenditure; 11 (2) a tax expenditure created after July 1, 2015, shall be analyzed after 12 it has been in effect for seven years or, if the statute authorizing the expenditure has a 13 delayed repeal date, one year before the effective date of the delayed repeal of the tax 14 expenditure. 15 * Sec. 4. AS 37.07.020(a) is amended to read: 16 (a) After considering the revenue and tax expenditure report prepared by 17 the Department of Revenue under AS 43.05.090, the [THE] governor shall prepare 18 a budget for the succeeding fiscal year that must cover all estimated receipts, including 19 all grants, loans, and money received from the federal government and all proposed 20 expenditures of the state government. The budget shall be organized so that the 21 proposed expenditures for each agency are presented separately. The budget must be 22 accompanied by the information required under AS 37.07.050 and by the following 23 separate bills: (1) an appropriation bill authorizing the operating and capital 24 expenditures of the state's integrated comprehensive mental health program under 25 AS 37.14.003(a); (2) an appropriation bill authorizing state operating expenditures 26 other than those included in the state's integrated comprehensive mental health 27 program; (3) an appropriation bill authorizing capital expenditures other than those 28 included in the state's integrated comprehensive mental health program; and (4) a bill 29 or bills covering recommendations, if any, in the budget for new or additional revenue. 30 The budget for the succeeding fiscal year and each of the bills shall become public 31 information on December 15 at which time the governor shall submit copies to the
01 legislature and make copies available to the public. The bills, identical in content to 02 the copies released on December 15, shall be delivered to the rules committee of each 03 house before the fourth legislative day of the next regular session for introduction. 04 * Sec. 5. AS 37.07.020(b) is amended to read: 05 (b) In addition to the budget and bills submitted under (a) of this section, the 06 governor shall submit a capital improvements program covering the succeeding six 07 fiscal years. The governor shall also submit a fiscal plan with estimates of significant 08 sources and uses of funds for the succeeding 10 fiscal years. The fiscal plan 09 (1) must include sufficient details to identify 10 (A) significant sources of funds; 11 (B) significant uses of funds, including lump sum projections 12 of 13 (i) operating expenditures; 14 (ii) capital expenditures; 15 (iii) debt service expenditures; 16 (iv) fund capitalizations; 17 (v) appropriations of income of the Alaska permanent 18 fund (art. IX, sec. 15, Constitution of the State of Alaska), if any; 19 (2) must balance sources and uses of funds held while providing for 20 essential state services and protecting the economic stability of the state; 21 (3) must include projected balances of significant funds held in 22 separate accounts, including the budget reserve fund (art. IX, sec. 17, Constitution of 23 the State of Alaska), the public education fund (AS 14.17.300), and the Alaska capital 24 income fund (AS 37.05.565); 25 (4) must set out significant assumptions used in the projections with 26 sufficient detail to enable the legislature to rely on the fiscal plan in understanding, 27 evaluating, and resolving issues of state budgeting, including information that supports 28 major areas of operating increases, such as population demographics that affect the 29 need for particular government services; 30 (5) must consider issues raised by the revenue and tax expenditure 31 report prepared by the Department of Revenue under AS 43.05.090.
01 * Sec. 6. AS 40.25.100(a) is amended to read: 02 (a) Information in the possession of the Department of Revenue that discloses 03 the particulars of the business or affairs of a taxpayer or other person is not a matter of 04 public record, except as provided in AS 43.05.230(i) and 43.05.090(d) or for purposes 05 of investigation and law enforcement. The information shall be kept confidential 06 except when its production is required in an official investigation, administrative 07 adjudication under AS 43.05.405 - 43.05.499, or court proceeding. These restrictions 08 do not prohibit the publication of statistics presented in a manner that prevents the 09 identification of particular reports and items, prohibit the publication of tax lists 10 showing the names of taxpayers who are delinquent and relevant information that may 11 assist in the collection of delinquent taxes, or prohibit the publication of records, 12 proceedings, and decisions under AS 43.05.405 - 43.05.499. 13 * Sec. 7. AS 43.05.090 is amended to read: 14 Sec. 43.05.090. Preparation and publication of reports and statistics. The 15 department shall prepare and annually publish statistics of the revenues derived under 16 the tax laws administered by it, including an analysis of tax revenue losses due to 17 tax expenditures. 18 * Sec. 8. AS 43.05.090 is amended by adding new subsections to read: 19 (b) The revenue and tax expenditure report must include 20 (1) the statutory authority for each type of tax expenditure; 21 (2) the annual sum of tax expenditures for the prior fiscal year, 22 separately calculated for each type of expenditure, and the total number of taxpayers 23 who benefitted from each type of expenditure; 24 (3) an estimate of tax expenditures for the current fiscal year, 25 separately calculated for each type of expenditure; 26 (4) an estimate of the public costs of administering the tax 27 expenditures. 28 (c) The department shall annually transmit an electronic copy of the revenue 29 and tax expenditure report to each member of the legislature and make the report 30 available to the public on the department's Internet website. 31 (d) The department shall notify the legislative finance division when the sum
01 of tax expenditures of a specific type has exceeded $1,000,000 in fiscal year 2012 or a 02 succeeding fiscal year and provide the legislative finance division with the 03 nonconfidential or, subject to the division's execution of a confidentiality agreement, 04 confidential information necessary to complete the analysis under AS 24.20.232. 05 (e) In this section, "tax expenditure" means a tax credit, exclusion, exemption, 06 waiver, or other loss of state tax revenue due to an express provision of state tax law; 07 "tax expenditure" does not include federal tax expenditures under federal law adopted 08 by reference in AS 43.20.021 or tax deductions incurred in the ordinary course of 09 trade or business. 10 * Sec. 9. AS 43.05.230(a) is amended to read: 11 (a) It is unlawful for a current or former officer, employee, or agent of the 12 state to divulge the amount of income or the particulars set out or disclosed in a report 13 or return made under this title, except 14 (1) in connection with official investigations or proceedings of the 15 department, whether judicial or administrative, involving taxes due under this title; 16 (2) in connection with official investigations or proceedings of the 17 child support enforcement agency, whether judicial or administrative, involving child 18 support obligations imposed or imposable under AS 25 or AS 47; 19 (3) as provided in AS 38.05.036 pertaining to audit functions of the 20 Department of Natural Resources; 21 (4) as provided in AS 43.05.090(d); 22 (5) as provided in AS 43.05.405 - 43.05.499; and 23 (6) [(5)] as otherwise provided in this section or AS 43.55.890. 24 * Sec. 10. AS 43.20 is amended by adding a new section to article 1 to read: 25 Sec. 43.20.047. Qualified research and development tax credit. (a) Subject 26 to the terms and conditions of this section and in addition to any other credit 27 authorized to the taxpayer by this chapter, a taxpayer may apply 20 percent of the 28 taxpayer's expenditure for qualified research and development attributable to this state 29 for the taxable year that exceeds the base amount as a credit not to exceed $10,000,000 30 against the state tax liability imposed on the taxpayer under this chapter. 31 (b) Qualified research and development expenditures are attributable to this
01 state if the research and development is being conducted in this state or the payroll of 02 employees conducting the research and development is in this state. In this subsection, 03 payroll of an employee is in this state if compensation is paid to an employee in this 04 state and reported as paid in this state in the quarterly contribution report under 05 AS 23.20 to the Department of Labor and Workforce Development. 06 (c) If the tax credit under this section exceeds the taxpayer's tax liability after 07 other tax credits are taken under this chapter for the year in which the expenditure is 08 incurred, the excess of the tax credit over the liability may be carried forward for up to 09 seven years. If an unused credit is carried forward to a tax year from an earlier year, 10 the credit arising in the earliest year is applied first against the tax liability for the year. 11 (d) A person may not claim a credit under this section for qualified research 12 and development expenditures that were deducted in the calculation of tax liability 13 under AS 43.20.011(e) or for which any other credit, including any federal credit, has 14 been claimed under this title. 15 (e) Each year, if three or more taxpayers claim the credit authorized under this 16 section during the immediately preceding year, the department shall report to the 17 legislature the number of taxpayers who claimed credits under this section in the prior 18 year, the total cumulative amount of credits granted to all taxpayers under this section 19 for the prior tax year, a description of the research and development projects for which 20 the credit was granted, and the total cumulative number of employees conducting the 21 research and development for which all taxpayers claim the credit. 22 (f) In this section, 23 (1) "base amount" means the average of qualified research and 24 development expenditures attributable to this state for the three tax years immediately 25 preceding the taxable year for which the credit is being claimed; 26 (2) "qualified research and development" has the meaning given to 27 "qualified research" in 26 U.S.C. 41(d) (Internal Revenue Code), as amended, that is 28 attributable to this state. 29 * Sec. 11. Sections 3 - 9 of this Act take effect July 1, 2018. 30 * Sec. 12. Except as provided in sec. 11 of this Act, this Act takes effect immediately under 31 AS 01.10.070(c).