Legislature(2013 - 2014)
2014-04-23 Senate Journal
Full Journal pdf2014-04-23 Senate Journal Page 2747 HB 306 CS FOR HOUSE BILL NO. 306(FIN) "An Act relating to the review and administration of tax credit programs; requiring the Department of Revenue to report indirect expenditures; relating to the duties of state agencies; requiring the legislative finance division to analyze certain 2014-04-23 Senate Journal Page 2748 indirect expenditures; relating to lapse dates for appropriations for capital projects; repealing the insurance tax education credit, the income tax education credit, the veteran employment tax credit, the oil or gas producer education credit, the property tax education credit, the mining business education credit, the fisheries business education credit, the fisheries business tax credit for scholarship contributions, the fisheries business salmon product development tax credit, the fisheries business salmon utilization tax credit, the fisheries business landing tax credit for scholarship contributions, the fisheries resource landing tax credit for the fisheries resource harvested under the community development quota, the fisheries resource landing tax education credit, and the film production tax credit; and providing for an effective date" was read the second time. Senator Fairclough, Vice Chair, moved and asked unanimous consent for the adoption of the Finance Senate Committee Substitute offered on page 2652. Without objection, SENATE CS FOR CS FOR HOUSE BILL NO. 306(FIN) "An Act relating to the review and administration of tax credit programs; requiring the Department of Revenue to report indirect expenditures; relating to the duties of state agencies; requiring the legislative finance division to analyze certain indirect expenditures; relating to lapse dates for appropriations for capital projects; relating to lapse dates for capital budget grants; relating to capital expenditures; relating to unexpended balances of capital projects; repealing the capital projects funds; repealing the insurance tax education credit, the income tax education credit, the veteran employment tax credit, the oil or gas producer education credit, the property tax education credit, the mining business education credit, the fisheries business education credit, the fisheries business tax credit for scholarship contributions, the fisheries business salmon product development tax credit, the fisheries business salmon utilization tax credit, the fisheries business landing tax credit for scholarship contributions, the fisheries resource landing tax credit for the fisheries resource harvested under the community development quota, the fisheries resource landing tax education credit, and the film production tax credit; providing for an effective date by repealing the effective dates in sec. 7, ch. 57, SLA 2003, the effective date in sec. 57, ch. 92, SLA 2010, and the effective dates in secs. 40 - 42, ch. 51, SLA 2012; and providing for an effective date" was adopted. 2014-04-23 Senate Journal Page 2749 Senators Olson, McGuire offered Amendment No. 1 : Page 8, line 18: Delete "OR AS 43.98.030]" Insert "] or AS 43.98.030" Page 8, following line 21: Insert a new bill section to read: "* Sec. 15. AS 43.75.130(f), as amended by sec. 14 of this Act, is amended to read: (f) For purposes of this section, tax revenue collected under AS 43.75.015 from a person entitled to a credit under [AS 43.75.035 OR] AS 43.98.030 shall be calculated as if the person's tax were collected without applying the credit [; TAX REVENUE COLLECTED DOES NOT INCLUDE THE AMOUNT OF A TAX CREDIT RECAPTURED UNDER AS 43.75.035(g)]." Renumber the following bill sections accordingly. Page 8, line 31, through page 9, line 1: Delete "OR AS 43.98.030]" Insert "] or AS 43.98.030" Page 9, following line 2: Insert a new bill section to read: "* Sec. 18. AS 43.77.060(e), as amended by sec. 17 of this Act, is amended to read: (e) For purposes of this section, tax revenue collected under AS 43.77.010 from a person entitled to a credit under [AS 43.77.045 OR] AS 43.98.030 shall be calculated as if the person's tax had been collected without applying the credits." Renumber the following bill sections accordingly. Page 9, line 4: Delete "AS 24.20.271(12);" 2014-04-23 Senate Journal Page 2750 Page 9, lines 5 - 7: Delete "AS 43.77.035; AS 43.98.030; AS 44.25.100, 44.25.105, 44.25.110, 44.25.115, 44.25.120, 44.25.125, 44.25.130, 44.25.135, 44.25.140, 44.25.145, 44.25.150, 44.25.190; and AS 44.33.231(c)" Insert "and AS 43.77.035" Page 9, following line 12: Insert a new bill section to read: "* Sec. 24. AS 24.20.271(12); AS 43.98.030; AS 44.25.100, 44.25.105, 44.25.110, 44.25.115, 44.25.120, 44.25.125, 44.25.130, 44.25.135, 44.25.140, 44.25.145, 44.25.150, 44.25.190; and AS 44.33.231(c) are repealed." Renumber the following bill sections accordingly. Page 9, line 21: Delete "secs. 17 - 21" Insert "secs. 19 - 23" Page 10, line 2: Delete "secs. 18 and 31" Insert "secs. 20 and 34" Page 10, line 7: Delete "sec. 18" Insert "sec. 20" Page 10, line 12: Delete "Sections 20, 21, and 27" Insert "Sections 22, 23, and 30" Page 10, following line 27: Insert a new bill section to read: "* Sec. 37. Sections 1, 2, 15, 18, 21, 24, 26, and 31 of this Act take effect December 31, 2018." Renumber the following bill section accordingly. Page 10, line 28: Delete "secs. 30 - 34" Insert "secs. 33 - 37" 2014-04-23 Senate Journal Page 2751 Senator Olson moved for the adoption of Amendment No. 1. Senator Fairclough objected. Senator Dunleavy moved and asked unanimous consent to abstain from voting on the amendment due to a conflict of interest. Senator Fairclough objected and Senator Dunleavy was required to vote. The question being: "Shall Amendment No. 1 be adopted?" The roll was taken with the following result: SCS CSHB 306(FIN) Second Reading Amendment No. 1 YEAS: 15 NAYS: 3 EXCUSED: 1 ABSENT: 1 Yeas: Bishop, Dunleavy, Egan, Ellis, French, Gardner, Giessel, Hoffman, Kelly, McGuire, Micciche, Olson, Stedman, Stevens, Wielechowski Nays: Dyson, Fairclough, Huggins Excused: Coghill Absent: Meyer and so, Amendment No. 1 was adopted. Senator Wielechowski offered Amendment No. 2 : Page 1, lines 7 - 8: Delete "the veteran employment tax credit," Page 9, line 4: Delete "AS 43.20.048;" Senator Wielechowski moved for the adoption of Amendment No. 2. Senator Fairclough objected. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: 2014-04-23 Senate Journal Page 2752 SCS CSHB 306(FIN) am S Second Reading Amendment No. 2 YEAS: 11 NAYS: 7 EXCUSED: 1 ABSENT: 1 Yeas: Bishop, Dunleavy, Egan, Ellis, French, Gardner, Giessel, Hoffman, Kelly, Olson, Wielechowski Nays: Dyson, Fairclough, Huggins, McGuire, Micciche, Stedman, Stevens Excused: Coghill Absent: Meyer and so, Amendment No. 2 was adopted. Amendment No. 3 was not offered. Senator Wielechowski offered Amendment No. 4 : Page 1, lines 2 - 3: Delete "relating to the duties of state agencies;" Page 1, line 4, through page 2, line 5: Delete "relating to lapse dates for appropriations for capital projects; relating to lapse dates for capital budget grants; relating to capital expenditures; relating to unexpended balances of capital projects; repealing the capital projects funds; repealing the insurance tax education credit, the income tax education credit, the veteran employment tax credit, the oil or gas producer education credit, the property tax education credit, the mining business education credit, the fisheries business education credit, the fisheries business tax credit for scholarship contributions, the fisheries business salmon product development tax credit, the fisheries business salmon utilization tax credit, the fisheries business landing tax credit for scholarship contributions, the fisheries resource landing tax credit for the fisheries resource harvested under the community development quota, the fisheries resource landing tax education credit, and the film production tax credit; providing for an effective date by repealing the effective dates in sec. 7, ch. 57, SLA 2003, the effective date in sec. 57, ch. 2014-04-23 Senate Journal Page 2753 92, SLA 2010, and the effective dates in secs. 40 - 42, ch. 51, SLA 2012;" Insert "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;" Page 2, line 8, through page 3, line 10: Delete all material. Page 3, line 11: Delete "Sec. 3" Insert "Section 1" Renumber the following bill sections accordingly. Page 3, line 31: Delete "a new section" Insert "new sections" Page 3, following line 31: Insert a new section to read: "Sec. 24.20.232. Analysis of tax expenditures. If the sum of tax expenditures of a specific type exceeds $1,000,000 in fiscal year 2012 or a succeeding fiscal year, the legislative finance division shall analyze the use of the tax expenditure on the following schedule to determine whether the statute authorizing the tax expenditure has achieved its purpose: (1) tax expenditures existing on July 1, 2015, shall be analyzed once between July 1, 2015, and June 30, 2020, and before a delayed repeal of a tax expenditure; (2) a tax expenditure created after July 1, 2015, shall be analyzed after it has been in effect for seven years or, if the statute authorizing the expenditure has a delayed repeal date, one year before the effective date of the delayed repeal of the tax expenditure." Page 5, line 2, through page 6, line 31: Delete all material and insert: "* Sec. 3. AS 37.07.020(a) is amended to read: 2014-04-23 Senate Journal Page 2754 (a) After considering the revenue and tax expenditure report prepared by the Department of Revenue under AS 43.05.090, the [THE] governor shall prepare a budget for the succeeding fiscal year that must cover all estimated receipts, including all grants, loans, and money received from the federal government and all proposed expenditures of the state government. The budget shall be organized so that the proposed expenditures for each agency are presented separately. The budget must be accompanied by the information required under AS 37.07.050 and by the following separate bills: (1) an appropriation bill authorizing the operating and capital expenditures of the state's integrated comprehensive mental health program under AS 37.14.003(a); (2) an appropriation bill authorizing state operating expenditures other than those included in the state's integrated comprehensive mental health program; (3) an appropriation bill authorizing capital expenditures other than those included in the state's integrated comprehensive mental health program; and (4) a bill or bills covering recommendations, if any, in the budget for new or additional revenue. The budget for the succeeding fiscal year and each of the bills shall become public information on December 15 at which time the governor shall submit copies to the legislature and make copies available to the public. The bills, identical in content to the copies released on December 15, shall be delivered to the rules committee of each house before the fourth legislative day of the next regular session for introduction. * Sec. 4. AS 37.07.020(b) is amended to read: (b) In addition to the budget and bills submitted under (a) of this section, the governor shall submit a capital improvements program covering the succeeding six fiscal years. The governor shall also submit a fiscal plan with estimates of significant sources and uses of funds for the succeeding 10 fiscal years. The fiscal plan (1) must include sufficient details to identify (A) significant sources of funds; (B) significant uses of funds, including lump sum projections of (i) operating expenditures; (ii) capital expenditures; (iii) debt service expenditures; 2014-04-23 Senate Journal Page 2755 (iv) fund capitalizations; (v) appropriations of income of the Alaska permanent fund (art. IX, sec. 15, Constitution of the State of Alaska), if any; (2) must balance sources and uses of funds held while providing for essential state services and protecting the economic stability of the state; (3) must include projected balances of significant funds held in separate accounts, including the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska), the public education fund (AS 14.17.300), and the Alaska capital income fund (AS 37.05.565); (4) must set out significant assumptions used in the projections with sufficient detail to enable the legislature to rely on the fiscal plan in understanding, evaluating, and resolving issues of state budgeting, including information that supports major areas of operating increases, such as population demographics that affect the need for particular government services; (5) must consider issues raised by the revenue and tax expenditure report prepared by the Department of Revenue under AS 43.05.090. * Sec. 5. AS 43.05.090 is amended to read: Sec. 43.05.090. Preparation and publication of reports and statistics. The department shall prepare and annually publish statistics of the revenues derived under the tax laws administered by it, including an analysis of tax revenue losses due to tax expenditures. * Sec. 6. AS 43.05.090is amended by adding new subsections to read: (b) The revenue and tax expenditure report must include (1) the statutory authority for each type of tax expenditure; (2) the annual sum of tax expenditures for the prior fiscal year, separately calculated for each type of expenditure, and the total number of taxpayers who benefitted from each type of expenditure; (3) an estimate of tax expenditures for the current fiscal year, separately calculated for each type of expenditure; 2014-04-23 Senate Journal Page 2756 (4) an estimate of the public costs of administering the tax expenditures. (c) The department shall annually transmit an electronic copy of the revenue and tax expenditure report to each member of the legislature and make the report available to the public on the department's Internet website. (d) The department shall notify the legislative finance division when the sum of tax expenditures of a specific type has exceeded $1,000,000 in fiscal year 2012 or a succeeding fiscal year and provide the legislative finance division with the nonconfidential or, subject to the division's execution of a confidentiality agreement, confidential information necessary to complete the analysis under AS 24.20.232. (e) In this section, "tax expenditure" means a tax credit, exclusion, exemption, waiver, or other loss of state tax revenue due to an express provision of state tax law; "tax expenditure" does not include federal tax expenditures under federal law adopted by reference in AS 43.20.021 or tax deductions incurred in the ordinary course of trade or business." Renumber the following bill sections accordingly. Page 8, line 6, through page 10, line 27: Delete all material. Renumber the following bill section accordingly. Page 10, line 28: Delete "Except as provided in secs. 30 - 34 of this Act, this" Insert "This" Senator Wielechowski moved for the adoption of Amendment No. 4. Senator Fairclough objected. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: SCS CSHB 306(FIN) am S Second Reading Amendment No. 4 YEAS: 4 NAYS: 14 EXCUSED: 1 ABSENT: 1 2014-04-23 Senate Journal Page 2757 Yeas: Ellis, French, Gardner, Wielechowski Nays: Bishop, Dunleavy, Dyson, Egan, Fairclough, Giessel, Hoffman, Huggins, Kelly, McGuire, Micciche, Olson, Stedman, Stevens Excused: Coghill Absent: Meyer and so, Amendment No. 4 failed. Senator Fairclough, Acting Majority Leader, moved and asked unanimous consent that the bill be considered engrossed, advanced to third reading and placed on final passage. Without objection, it was so ordered. SENATE CS FOR CS FOR HOUSE BILL NO. 306(FIN) am S was read the third time. Senators Micciche, Hoffman moved and asked unanimous consent to abstain from voting due to a conflict of interest. Senator Fairclough objected and Senators Micciche, Hoffman were required to vote. The question being: "Shall SENATE CS FOR CS FOR HOUSE BILL NO. 306(FIN) am S "An Act relating to the review and administration of tax credit programs; requiring the Department of Revenue to report indirect expenditures; relating to the duties of state agencies; requiring the legislative finance division to analyze certain indirect expenditures; relating to lapse dates for appropriations for capital projects; relating to lapse dates for capital budget grants; relating to capital expenditures; relating to unexpended balances of capital projects; repealing the capital projects funds; repealing the insurance tax education credit, the income tax education credit, the oil or gas producer education credit, the property tax education credit, the mining business education credit, the fisheries business education credit, the fisheries business tax credit for scholarship contributions, the fisheries business salmon product development tax credit, the fisheries business salmon utilization tax credit, the fisheries business landing tax credit for scholarship contributions, the fisheries resource landing tax credit for the fisheries resource harvested under the community development quota, the fisheries resource landing tax education credit, and the film production tax credit; providing for an 2014-04-23 Senate Journal Page 2758 effective date by repealing the effective dates in sec. 7, ch. 57, SLA 2003, the effective date in sec. 57, ch. 92, SLA 2010, and the effective dates in secs. 40 - 42, ch. 51, SLA 2012; and providing for an effective date" pass the Senate?" The roll was taken with the following result: SCS CSHB 306(FIN) am S Third Reading - Final Passage Effective Dates YEAS: 18 NAYS: 0 EXCUSED: 1 ABSENT: 1 Yeas: Bishop, Dunleavy, Dyson, Egan, Ellis, Fairclough, French, Gardner, Giessel, Hoffman, Huggins, Kelly, McGuire, Micciche, Olson, Stedman, Stevens, Wielechowski Excused: Coghill Absent: Meyer and so, SENATE CS FOR CS FOR HOUSE BILL NO. 306(FIN) am S passed the Senate. Senators Olson, Stevens, Dyson, Kelly, Fairclough, McGuire, Bishop, Egan, Giessel, Dunleavy, Micciche moved and asked unanimous consent to be shown as cross sponsors on the bill. Without objection, it was so ordered. Senator Fairclough, Acting Majority Leader, moved and asked unanimous consent that the vote on the passage of the bill be considered the vote on the effective date clauses. Without objection, it was so ordered and the bill was referred to the Secretary for engrossment.