Legislature(2017 - 2018)ADAMS ROOM 519
04/09/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB129 | |
| HB233 | |
| HB399 | |
| SB165 | |
| HB306 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 233 | TELECONFERENCED | |
| + | SB 165 | TELECONFERENCED | |
| + | HB 306 | TELECONFERENCED | |
| += | HB 399 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 129 | TELECONFERENCED | |
HOUSE BILL NO. 233
"An Act relating to 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, and
the fisheries resource landing tax education credit;
providing for an effective date by repealing the
effective dates of secs. 3, 5, 7, 10, 14, 16, 18, 21,
23, 25, 28, 30, 32, 35, 37, 39, 42, 44, 46, 49, 51,
53, and 55, ch. 92, SLA 2010, sec. 14, ch. 7, FSSLA
2011, secs. 15, 17, 19, 21, 23, and 25, ch. 74, SLA
2012, sec. 49, ch. 14, SLA 2014, secs. 37, 40, 43, and
46, ch. 15, SLA 2014, and secs. 26 and 31, ch. 61, SLA
2014; providing for an effective date by amending the
effective date of secs. 1, 2, and 21, ch. 61, SLA
2014; and providing for an effective date."
Co-Chair Foster relayed that the committee had last heard
HB 233 on March 27, 2018. At the hearing the committee had
an introduction of the bill and closed public testimony.
The committee had 2 amendments for the bill. He called
Representative Tuck and his aide, Kendra Kloster, to the
table. He provided the opportunity for the bill sponsor to
make comments.
2:46:01 PM
REPRESENTATIVE CHRIS TUCK, SPONSOR, introduced himself. He
explained that originally, when he was looking at extending
education tax credits, he was aware there were several
statutes involved. He had thought about ways to make
improvements and to make things cleaner when considering
introducing the legislation. He continued that because of
the time restrictions and the expiration date approaching,
he decided to make it a clean bill only extending it. He
might try to work on other items at a future date.
Co-Chair Seaton MOVED to ADOPT Amendment 1 30-LS0152\O.1
(Nauman, 3/28/18) (copy on file).
Representative Wilson OBJECTED for discussion.
Co-Chair Seaton thought the amendment brought up an issue
that needed to be discussed in detail. There was a
situation where after the first $100,000 the state was
giving a 100 percent tax credit for the following $200,000.
It was essentially allowing someone that wanted to donate
not to donate at all. It would direct the taxes they would
pay to the state to one of the approved groups by doing it
without any additional money coming from an organization or
tax payer. The amendment was structured at the 50 percent
tax credit and would stay the same across the entire $5
million range. He was aware that a significant amount of
discussion would be necessary. He thought the topic was
very important, especially because of the state's current
fiscal situation. He wanted to encourage contribution to
educational institutions. The question was how much the
state wanted to put into the tax payer's hands without any
additional skin in the game. He thought the issue was
definitely something to look at and discuss. He did not
think it was currently the appropriate time. He thought the
issue should be dealt with in a separate bill.
Co-Chair Seaton WITHDREW Amendment 1.
Co-Chair Seaton MOVED to ADOPT Amendment 2 30-LS0152\O.5
(Nauman, 3/29/18) (copy on file).
Representative Wilson OBJECTED for discussion.
Co-Chair Seaton moved Conceptual Amendment 1 to Amendment
2:
In line 2 of the amendment insert the words "as they"
after "delete" and before "appear"
Representative Wilson OBJECTED for discussion.
Co-Chair Seaton explained that when Legislative Legal
Services drafted the amendment, they did not take out all
of the words that needed to be removed.
Representative Wilson WITHDREW her OBJECTION.
There being NO OBJECTION, it was so ordered. Conceptual
Amendment 1 to Amendment 2 was ADOPTED.
Co-Chair Seaton explained Amendment 2. The amendment was
eliminating one of the criteria for a tax credit for cash
contributions; an annual intercollegiate sports tournament.
The item occurs in several places with several different
taxes. The words being deleted would be "or an annual
intercollegiate sports tournament."
Representative Kawasaki commented on the way the amendment
read. He was wondering if the word "by" should be replaced
with "of" [Line 19 of the amendment].
2:52:11 PM
AT EASE
2:53:25 PM
RECONVENED
Co-Chair Foster invited Mr. Spanos to comment.
2:53:39 PM
BRANDON S. SPANOS, DEPUTY DIRECTOR, TAX DIVISION,
DEPARTMENT OF REVENUE, responded that the "by" was
referring back to subsection (a) where it read "for
contributions accepted." It would be "by the non-profit,
public or private, Alaska two-year or four-year college."
It was not referring back to the facility, but the funds
that were received by the organization.
Representative Grenn assumed that the item was in reference
to the Great Alaska Shootout which no longer existed. He
asked if there were other annual intercollegiate sports
tournaments that had received funds through this particular
tax credit. Mr. Spanos responded that he was not aware of
any. Representative Grenn relayed that he was looking for
any unintended consequences of the removal.
Representative Pruitt asked about other sports that might
potentially put on a tournament. With adopting this
amendment there would no longer be the ability for people
to utilize the tax credit to support other potential
tournaments. He noted a number of sports that might have a
tournament in the future. Mr. Spanos indicated, based on
the plain language, that was how he would interpret it.
Representative Pruitt suggested that if Alaska was to host
a regional final, donors would not be able to utilize the
education tax credit. Mr. Spanos replied that a corporation
would no longer be able to receive a tax credit.
Representative Pruitt did not see harm in leaving the
credit available. He did not believe getting rid of it was
needed.
Co-Chair Seaton clarified that the tax credit was meant for
an annual event rather than a onetime credit. He argued
that the tax credit should be concentrated on pre-K, K-12,
and University education. It was not a sports credit.
2:57:48 PM
Representative Pruitt MOVED Conceptual Amendment 2 to
Amendment 2.
Delete only the word "annual"
Representative Kawasaki OBJECTED.
Representative Pruitt explained his amendment to the
amendment. He believed that sports were a part of
education. He suggested that the National Collegiate
Athletic Association (NCAA) consistently promoted that
their athletes did very well in school and moved on to
become very successful. He spoke of Olympic athletes and
the discipline they learned and applied in many areas of
their lives. He felt that sports were important, and it
would be an opportunity for people to support an event
where they showcased student athletes.
Vice-Chair Gara spoke to his objection. He suggested that
with this tax credit the legislature did not get to direct
where the funds went. The state gave up $6.8 million in
revenue per year. He understood the benefits but did not
believe they had been sorted out. For example, if a person
donated to any collegiate sports event at the university,
they could donate through the non-profit which was tax
deductible at the federal level already. A person was
likely receiving a 25 percent tax deduction, which was
similar to a credit of their federal taxes. Certainly, the
university could go to Exxon or GCI and request a donation.
He was unsure if a state tax credit on top of a federal tax
credit made much of a difference. He agreed with Co-Chair
Seaton that the bill got amended when the state had a huge
amount of money. Currently, the state had a deficit of
roughly $2.5 billion. He would rather rely on a federal tax
bonus that a donor received by being able to deduct the
costs from their federal taxes. He noted the importance of
ranking things. He was not willing to forego state revenue.
Representative Guttenberg objected to the amendment. He
thought there were many bragging rights that accompanied
sponsorship. Corporations and individuals participated for
a variety of reasons. He thought the cream of having an
additional tax deduction was beyond the pale.
3:02:55 PM
Representative Thompson asked for Representative Pruitt to
repeat the conceptual amendment. Co-Chair Foster responded
that the amendment to the amendment removed the annual part
of the language.
Representative Pruitt explained that the conceptual
amendment would leave the language "or an intercollegiate
sports tournament" in the various places in the bill. The
only portion being removed was the word, "annual." He
thought the first two lines would have to be removed. It
would allow for donations to a collegiate tournament like
the Great Alaska Shootout.
Representative Thompson thought that even if the word
"annual" was left in, the bill was still being altered, He
spoke of several intercollegiate tournaments. He thought it
would be beneficial to the state if there could be more
intercollegiate tournaments and suggested the amendment
might clarify things. Representative Pruitt's intent was
that even something that was held annually but not in
Alaska would be able to participate in the tax credit.
Co-Chair Seaton indicated that the amendment was broadening
the tax deductions and making it so that more general fund
revenue could be diverted from being received in the
general fund. The donor could receive a 100 percent tax
credit with donations between $100,000 - $300,000. It would
be diverting money that otherwise would go into the general
fund. He did not believe the state was in a fiscal
situation to be broadening tax credits. He opposed the
conceptual amendment. It not only gutted the restrictions
but expanded where tax credits applied.
Representative Wilson suggested that by taking the word
"annual" out, it would mean that the committee would be
deleting "or an intercollegiate sports tournament". The
word annual would be left in the bill. She did not believe
that was the intent of the maker of the amendment.
3:07:36 PM
Representative Pruitt explained that in the conceptual
amendment the brackets were placed around the word
"annual", rather than where they were currently in the
amendment. Representative Wilson commented that the
amendment made more sense.
Representative Kawasaki cautioned that the conceptual
amendment would broaden the tax credit. He was unaware of
the fiscal impact but thought it could be high. He would be
opposing it.
Representative Kawasaki MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt, Thompson, Tilton, Grenn
OPPOSED: Wilson, Gara, Guttenberg, Kawasaki, Ortiz,
Foster, Seaton
The MOTION to adopt Conceptual Amendment 2 to Amendment 2
FAILED (4/7).
Representative Pruitt did not have a problem with an event
such as the Great Alaska Shootout or the Top of the World
Classic tournament returning. He did not see a problem with
leaving the language in the bill. He thought it would be
great to have the credit available. He continued to speak
in favor of leaving the language in statute.
3:11:17 PM
Representative Thompson commented that the Great Alaska
Shootout and the Top of the World Classic tournament had
millions of dollars' worth of impact on communities. He
thought the option should remain open for future
utilization.
Vice-Chair Gara was a big supporter of the Great Alaska
Shootout and the Top of the World Classic tournaments.
Businesses could still be approached with the incentive of
a 25 percent tax deduction off their federal corporate
taxes if they contributed. He posed the questions whether
the tax credit really did anything and whether the state
could afford it. He wondered about where the issue fell on
everyone's priority list. He did not believe it was a
priority. He appreciated the efforts of the American
Legion. They had been working diligently to bring
tournaments back.
Representative Wilson WITHDREW her OBJECTION.
Representative Pruitt OBJECTED.
Representative Pruitt reiterated that there was no harm in
leaving the language in place. He thought it was a means of
encouragement and celebration. He did not think the state
was losing anything, as there were currently no
tournaments.
A roll call vote was taken on the motion.
IN FAVOR: Wilson, Gara, Guttenberg, Kawasaki, Seaton,
Foster
OPPOSED: Pruitt, Thompson, Tilton, Grenn, Ortiz
The MOTION to adopt Amendment 2 as amended PASSED (6/5).
Vice-Chair Gara reported that the fiscal note continued the
estimated cost in lost revenue for the tax credits. He
relayed that for half of FY 19, by continuing, lost revenue
would be $3.42 million. In the out years it was estimated
to continue at its current level, $6.84 million per year,
of tax credits the state did not receive in revenue.
Co-Chair Foster asked if the bill sponsor had any closing
comments. Representative Tuck remarked that there had been
a good dialog and thanked the committee.
Co-Chair Seaton MOVED to report CSHB 233 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note.
Representative Wilson OBJECTED for discussion.
Representative Wilson asked whether there would be a
forthcoming fiscal note or a previously published fiscal
note. Co-Chair Seaton responded that it was a previously
published fiscal note.
Representative Wilson WITHDREW her OBJECTION.
There being NO OBJECTION, it was so ordered.
CSHB 233 (FIN) was REPORTED out of committee with four "do
pass" recommendations, three "no recommendation"
recommendations, and four "amend" recommendations, and with
one previously published fiscal impact note: FN1 (REV).
3:16:58 PM
AT EASE
3:18:24 PM
RECONVENED