04/19/1996 01:30 PM Senate JUD

         HB 341 TAX APPEALS/ASSESSMENT/LEVY/COLLECTION                        
                                                                              
 CHAIRMAN TAYLOR announced a committee substitute has been prepared            
 that incorporates the amendments adopted at the last meeting,                 
 however the working group, consisting of representatives from the             
 Administration, industry, and Representative Green's staff, have              
 come up with further amendments to present.                                   
                                                                               
 DEBORAH VOGT, Deputy Commissioner of the Department of Revenue,               
 explained the proposed amendments.  The first amendment (work draft           
 D) would permit a very limited appeal directly to court, or                   
 situations in which a taxpayer is challenging the validity of a               
 statute for specific reasons.  An appeal would be prohibited if               
 there is a dispute of material fact that a factfinder would have to           
 develop if a factual record is necessary to decide the question of            
 law that is raised, if the development of a factual record will               
 render an appeal unnecessary to reach the question of law raised,             
 or if the taxpayer challenges the assessment of the tax on grounds            
 other than the validity of the statute.  This procedure would be              
 used by the court system anyway.                                              
                                                                               
 Number 574                                                                    
                                                                               
 SENATOR ADAMS questioned whether the time limit for payment made on           
 page 3 is 30 or 60 days.  MS. VOGT believed it should be 60 days              
 and is a drafting error.  In the original bill the requirement was            
 30 days, but Paul Frankel recommended lengthening the time limit to           
 60 days.                                                                      
                                                                               
 CHAIRMAN TAYLOR noted the transitional provision has also been                
 changed.  MS. VOGT agreed and explained amendment #2 provides that            
 if the taxpayer appeals after the effective date of the act, the              
 appeal goes to the new administrative law judge, rather then                  
 staying within the department.  Cases currently pending in the                
 department will remain so, until resolved, unless both parties                
 agree otherwise.                                                              
                                                                               
 CHAIRMAN TAYLOR asked whether the prepay requirement, adopted at              
 Monday's meeting, will no longer be part of the transition                    
 requirement.  MS. VOGT stated that is correct.                                
                                                                               
 CHAIRMAN TAYLOR questioned whether this transition amendment is               
 slightly different in that it no longer offers an opt-in, opt-out             
 provision.  MS. VOGT clarified the option is no longer unilateral:            
 A taxpayer cannot opt out without the state's permission.                     
                                                                               
 CHAIRMAN TAYLOR asked if the third and more significant change is             
 the change from a direct-to-court option to a more definitive                 
 discussion of the subject matter that would be allowed to be argued           
 in Superior Court.  That discussion has been narrowed to issues of            
 law, and not issues of fact or interpretation.  MS. VOGT explained            
 the discussion would have to focus on issues of law that would                
 invalidate a statute.  CHAIRMAN TAYLOR concluded the direct-to-               
 court option has been limited to summary judgment motions.                    
                                                                               
 MS. VOGT explained, for the record, the group discussed the                   
 prepayment provision which she was adamantly in favor of retaining,           
 but was later convinced that if a taxpayer is going to challenge              
 the validity of a statute, the fact that the taxpayer will have               
 already paid the undisputed amount of the tax is an appropriate               
 approach.                                                                     
                                                                               
 CHAIRMAN TAYLOR asked if the Administration supports the                      
 legislation if these amendments are adopted.  MS. VOGT replied                
 affirmatively.                                                                
                                                                               
 JEFF LOGAN, legislative aide to Representative Joe Green, sponsor             
 of the measure, stated he appreciated the additional time given to            
 the bill.  He informed committee members that Representative Green            
 spoke to Governor Knowles after Monday's meeting about the                    
 amendments discussed by Ms. Vogt.  He was disappointed that he                
 could not convince the Governor of his point of view, however he is           
 willing to accept the proposed changes which were the result of               
 another meeting with members of his administration and AOGA                   
 members.  Representative Green would have preferred an unlimited              
 option of going straight to court, or an option that requires                 
 prepayment, but is willing to see how this approach works for one             
 or two years.                                                                 
                                                                               
 TERRY CARNES, Alaska Judicial Council, commented that if the                  
 committee adopts the amendment regarding the appointment of                   
 administrative law judges requiring the participation of the                  
 Judicial Council, the Judicial Council concurs with that approach.            
 She submitted a $13,000 fiscal note which covers the expense of               
 appointing a single administrative judge.  The Judicial Council               
 does believe it would be appropriate to conduct an in-house Bar               
 survey on the position, so the associated costs would cover a                 
 meeting of the Judicial Council to interview the candidates and               
 make nominations, and to conduct a Bar survey.                                
                                                                               
 CHAIRMAN TAYLOR commented the bill has a referral to the Senate               
 Finance Committee where the fiscal impact will be discussed.  This            
 position will be weighing matters that are of greater significance            
 than normally seen in the Superior Courts.  MS. CARNES believed it            
 is appropriate to go through a very detailed, thorough selection              
 process.                                                                      
                                                                               
 SENATOR GREEN moved the adoption of the proposed amendments                   
 discussed by Ms. Vogt as one amendment to HB 341.  There being no             
 objection, the motion carried.                                                
                                                                               
 There being no further discussion on the bill, SENATOR MILLER moved           
 HB 341 as amended out of committee with individual recommendations            
 with any accompanying fiscal notes.  There being no objection, the            
 motion carried.                                                               
                                                                               
 SENATOR ADAMS thanked the Chairman for making a bad bill good.                
                                                                               
 CHAIRMAN TAYLOR thanked everyone who worked on the bill as this               
 version is a much preferred product.                                          
                                                                               
 MS. VOGT noted the Department has prepared a draft fiscal note to             
 address the amendments that were adopted.  CHAIRMAN TAYLOR asked              
 her to submit it to the committee so that it can travel with the              
 bill.