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CSSB 29(STA): "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; and providing for an effective date."

00                       CS FOR SENATE BILL NO. 29(STA)                                                                    
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; and providing for an effective date."                                                        
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
06 to read:                                                                                                                
07       SHORT TITLE. This Act may be known as the Alaska Tax Break Transparency Act.                                      
08    * Sec. 2. AS 24.08 is amended by adding a new section to read:                                                     
09            Sec. 24.08.038. Tax expenditure bills. The legislature shall include a                                     
10       statement of the rationale and purpose of a tax expenditure in a bill creating a tax                              
11       expenditure. In this section, "tax expenditure" has the meaning given in AS 43.05.090.                            
12    * Sec. 3. AS 24.20 is amended by adding a new section to read:                                                     
13            Sec. 24.20.232. Analysis of tax expenditures. If the sum of tax expenditures                               
14       of a specific type exceeds $1,000,000 in fiscal year 2012 or a succeeding fiscal year,                            
01       the legislative finance division shall analyze the use of the tax expenditure on the                              
02       following schedule to determine whether the statute authorizing the tax expenditure                               
03       has achieved its purpose:                                                                                         
04                 (1)  tax expenditures existing on July 1, 2015, shall be analyzed once                                  
05       between July 1, 2015, and June 30, 2020, and before a delayed repeal of a tax                                     
06       expenditure;                                                                                                      
07                 (2)  a tax expenditure created after July 1, 2015, shall be analyzed after                              
08       it has been in effect for seven years or, if the statute authorizing the expenditure has a                        
09       delayed repeal date, one year before the effective date of the delayed repeal of the tax                          
10       expenditure.                                                                                                      
11    * Sec. 4. AS 37.07.020(a) is amended to read:                                                                      
12            (a)  After considering the revenue and tax expenditure report prepared by                                
13       the Department of Revenue under AS 43.05.090, the [THE] governor shall prepare                                
14       a budget for the succeeding fiscal year that must cover all estimated receipts, including                         
15       all grants, loans, and money received from the federal government and all proposed                                
16       expenditures of the state government. The budget shall be organized so that the                                   
17       proposed expenditures for each agency are presented separately. The budget must be                                
18       accompanied by the information required under AS 37.07.050 and by the following                                   
19       separate bills: (1) an appropriation bill authorizing the operating and capital                                   
20       expenditures of the state's integrated comprehensive mental health program under AS                               
21       37.14.003(a); (2) an appropriation bill authorizing state operating expenditures other                            
22       than those included in the state's integrated comprehensive mental health program; (3)                            
23       an appropriation bill authorizing capital expenditures other than those included in the                           
24       state's integrated comprehensive mental health program; and (4) a bill or bills covering                          
25       recommendations, if any, in the budget for new or additional revenue. The budget for                              
26       the succeeding fiscal year and each of the bills shall become public information on                               
27       December 15 at which time the governor shall submit copies to the legislature and                                 
28       make copies available to the public. The bills, identical in content to the copies                                
29       released on December 15, shall be delivered to the rules committee of each house                                  
30       before the fourth legislative day of the next regular session for introduction.                                   
31    * Sec. 5. AS 37.07.020(b) is amended to read:                                                                      
01            (b)  In addition to the budget and bills submitted under (a) of this section, the                            
02       governor shall submit a capital improvements program covering the succeeding six                                  
03       fiscal years. The governor shall also submit a fiscal plan with estimates of significant                          
04       sources and uses of funds for the succeeding 10 fiscal years. The fiscal plan                                     
05                 (1)  must include sufficient details to identify                                                        
06                      (A)  significant sources of funds;                                                                 
07                      (B)  significant uses of funds, including lump sum projections                                     
08            of                                                                                                           
09                           (i)  operating expenditures;                                                                  
10                           (ii)  capital expenditures;                                                                   
11                           (iii)  debt service expenditures;                                                             
12                           (iv)  fund capitalizations;                                                                   
13                           (v)  appropriations of income of the Alaska permanent                                         
14                 fund (art. IX, sec. 15, Constitution of the State of Alaska), if any;                                   
15                 (2)  must balance sources and uses of funds held while providing for                                    
16       essential state services and protecting the economic stability of the state;                                      
17                 (3)  must include projected balances of significant funds held in                                       
18       separate accounts, including the budget reserve fund (art. IX, sec. 17, Constitution of                           
19       the State of Alaska), the public education fund (AS 14.17.300), and the Alaska capital                            
20       income fund (AS 37.05.565);                                                                                       
21                 (4)  must set out significant assumptions used in the projections with                                  
22       sufficient detail to enable the legislature to rely on the fiscal plan in understanding,                          
23       evaluating, and resolving issues of state budgeting, including information that supports                          
24       major areas of operating increases, such as population demographics that affect the                               
25       need for particular government services;                                                                      
26                 (5)  must consider issues raised by the revenue and tax expenditure                                 
27       report prepared by the Department of Revenue under AS 43.05.090.                                              
28    * Sec. 6. AS 43.05.090 is amended to read:                                                                         
29            Sec. 43.05.090. Preparation and publication of reports and statistics. The                               
30       department shall prepare and annually publish statistics of the revenues derived under                            
31       the tax laws administered by it, including an analysis of tax revenue losses due to                           
01       tax expenditures.                                                                                             
02    * Sec. 7. AS 43.05.090 is amended by adding new subsections to read:                                               
03            (b)  The revenue and tax expenditure report must include                                                     
04                 (1)  the statutory authority for each type of tax expenditure;                                          
05                 (2)  the annual sum of tax expenditures for the prior fiscal year,                                      
06       separately calculated for each type of expenditure, and the total number of taxpayers                             
07       who benefitted from each type of expenditure;                                                                     
08                 (3)  an estimate of tax expenditures for the current fiscal year,                                       
09       separately calculated for each type of expenditure;                                                               
10                 (4)  an estimate of the public costs of administering the tax                                           
11       expenditures.                                                                                                     
12            (c)  The department shall annually transmit an electronic copy of the revenue                                
13       and tax expenditure report to each member of the legislature and make the report                                  
14       available to the public on the department's Internet website.                                                     
15            (d)  The department shall notify the legislative finance division when the sum                               
16       of tax expenditures of a specific type has exceeded $1,000,000 in fiscal year 2012 or a                           
17       succeeding fiscal year and provide the legislative finance division with the                                      
18       nonconfidential or, subject to the division's execution of a confidentiality agreement,                           
19       confidential information necessary to complete the analysis under AS 24.20.232.                                   
20            (e)  In this section, "tax expenditure" means a tax credit, exclusion, exemption,                            
21       waiver, or other loss of state tax revenue due to an express provision of state tax law;                          
22       "tax expenditure" does not include federal tax expenditures under federal law adopted                             
23       by reference in AS 43.20.021 or tax deductions incurred in the ordinary course of                                 
24       trade or business.                                                                                                
25    * Sec. 8. Sections 1 and 2 of this Act take effect immediately under AS 01.10.070(c).                            
26    * Sec. 9. Sections 3 - 7 of this Act take effect July 1, 2015.