Legislature(2011 - 2012)HOUSE FINANCE 519

03/13/2012 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ HB 9 IN-STATE GASLINE DEVELOPMENT CORP TELECONFERENCED
Heard & Held
+ HB 289 NATURAL GAS STORAGE TAX CREDIT/REGULATION TELECONFERENCED
Heard & Held
+= HB 170 MUNI TAX EXEMPTION FOR CERTAIN VOLUNTEERS TELECONFERENCED
Scheduled But Not Heard
+= HB 252 INCOME TAX EXEMPTION TELECONFERENCED
Moved CSHB 252(FIN) Out of Committee
+= HCR 24 STATE FOOD RESOURCE DEVELOPMENT GROUP TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 252                                                                                                            
                                                                                                                                
     "An Act exempting certain small businesses from the                                                                        
     corporate income tax; and providing for an effective                                                                       
     date."                                                                                                                     
                                                                                                                                
8:34:51 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MIA COSTELLO, SPONSOR, introduced the                                                                            
legislation.                                                                                                                    
                                                                                                                                
Representative Gara expressed  concern that small businesses                                                                    
could  retain the  exemption after  making large  amounts of                                                                    
money. He  proposed that only  the first $10  million remain                                                                    
tax  free on  profits, and  he queried  the duration  of the                                                                    
tax-free status.                                                                                                                
Representative  Costello  replied  that  the  tax  would  be                                                                    
applicable  until a  business reached  $50 million  in gross                                                                    
aggregate assets.                                                                                                               
                                                                                                                                
Representative Gara wondered whether a  tax break, but not a                                                                    
full tax  break should  be offered  as business  became more                                                                    
successful. He  wondered about limiting  the full  tax break                                                                    
to the first $10 million tax in profits.                                                                                        
                                                                                                                                
JOSH WALTON,  STAFF, REPRESENTATIVE MIA  COSTELLO, responded                                                                    
that the $50 million cap  was written into the federal code.                                                                    
He noted that other requirements  were written into the code                                                                    
as well, such  as how the assets would be  used in expansion                                                                    
into other businesses  or areas not included  in the federal                                                                    
definition. He  stated that  the change was  not out  of the                                                                    
question;  however, the  legislation  was  intended to  make                                                                    
Alaska as  competitive as possible for  small businesses. He                                                                    
thought that the idea could  be revisited in the future once                                                                    
the effect of the bill could be gauged.                                                                                         
                                                                                                                                
Representative Wilson  asked if the intention  was to remain                                                                    
consistent with the federal government.                                                                                         
                                                                                                                                
Representative Costello responded in the affirmative.                                                                           
                                                                                                                                
8:39:22 AM                                                                                                                    
                                                                                                                                
Representative  Doogan  pointed  to  page  2,  line  10.  He                                                                    
requested  an explanation  for the  words "authorized  to do                                                                    
business in  the state."  He wondered  how the  language was                                                                    
distinct from "incorporated in the state."                                                                                      
                                                                                                                                
Mr.  Walton  responded   that  there  was  not   much  of  a                                                                    
distinction. He elaborated that  originally the term "Alaska                                                                    
Corporation,"  had been  defined explicitly  because of  the                                                                    
requirement  that the  businesses  be  headquartered in  the                                                                    
state,  but that  The Department  of Law  had believed  that                                                                    
that  would  be a  violation  on  inter-state commerce.  The                                                                    
Alaska Corporation  was then defined  as a  corporation that                                                                    
was authorized to do business within the state.                                                                                 
                                                                                                                                
Representative Doogan  surmised that the  language indicated                                                                    
Alaska   Airlines  or   other   companies   that  were   not                                                                    
headquartered here, but that did business in the state                                                                          
                                                                                                                                
Mr.  Walton  replied that  that  was  generally correct.  He                                                                    
noted that Alaska Airlines was  a transportation company and                                                                    
would  not  qualify for  the  tax  breaks discussed  in  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Representative Neuman referred to  the sponsor statement. He                                                                    
read that  the types  of businesses  that would  be affected                                                                    
were  highly mobile  and had  many  options regarding  where                                                                    
they   could   locate   their   business.   Such   companies                                                                    
consequently tended  to locate elsewhere, even  when founded                                                                    
by  Alaskan's. He  asked if  the  bill contained  sideboards                                                                    
that stipulated that if the  companies were going to receive                                                                    
credits from  the state  that they must  also be  located in                                                                    
the state.                                                                                                                      
                                                                                                                                
8:42:16 AM                                                                                                                    
                                                                                                                                
Mr.  Walton explained  that the  bill provided  an exemption                                                                    
from state corporate income tax  and only incurred corporate                                                                    
income  tax liabilities  for the  activities carried  out in                                                                    
the state.  Out-of-state activities  would be  subject under                                                                    
the laws of the respective states.                                                                                              
                                                                                                                                
Representative Neuman  understood that  in order  to receive                                                                    
the credits the work had to be done in Alaska.                                                                                  
                                                                                                                                
Mr. Walton responded in the affirmative.                                                                                        
                                                                                                                                
Vice-chair  Fairclough discussed  the new  fiscal note  from                                                                    
the Department of Revenue.                                                                                                      
                                                                                                                                
Co-Chair Stoltze solicited amendments.                                                                                          
                                                                                                                                
Representative Doogan wondered whether  fiscal note number 1                                                                    
was still applicable.                                                                                                           
                                                                                                                                
Co-Chair  Stoltze  replied  that  fiscal  note  1  had  been                                                                    
attached to a previous version of the bill.                                                                                     
                                                                                                                                
Co-Chair  Thomas  MOVED to  report  CS  HB 252(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CS  HB 252(FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation and  with a  new indeterminate  fiscal                                                                    
note from the Department of Revenue.                                                                                            
                                                                                                                                
8:45:26 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
8:47:19 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
HB9 Taxable Property.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB9 Sponsor Statement-HRES.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB9 Sectional Analysis-HRES.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB9 Mat-Su Resolution.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB9 HB 369.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB 369
HB9 ARDOR Support.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB9 ANGDA Initiative.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB9 AGDC Legislative Recommendations.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
Supporting HB 289 storage tanks 030212.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
Small Scale LNG.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
Sectional Analysis for HB 289.D 2.29.12.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
Reso 4516 Support HB 289 SB 153 Extending Tax Credits for NG Storage.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
SB 153
HB289LNG Svgs UAF FMH 2011 3 2.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB289 Support Letter.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB289 - Fuel Price Comparison.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB 289 Sponsor Statement ver D.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB 170 Mil Rates for Municipalities.pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 AS 29.45.050. Optional exemptions and exclusions..pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 AS 29.45.030 Required exemptions..pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 AS 29.35.450 Service Areas.pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 AS 18.15.250 Vaccination program for volunteer emergency personnel..pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 CS WORKDRAFT 27-LS0562-T.pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 CS Ver 27-LS0562T Sectional with Changes .pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HCR 24 Sponsor Statement2pdf.pdf HFIN 3/13/2012 8:30:00 AM
HCR 24
Explanation of Changes HB289 Version A to Version X 3.12.12.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB 289 Sponsor Statement ver X 3.12.12.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB289 CS WORKDRAFT 27-LS1216-X.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
Sectional Analysis for HB 289.X 3.12.12.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HCR 24 CS WORKDRAFT-B version.pdf HFIN 3/13/2012 8:30:00 AM
HCR 24
HCR 24 Summary of changes.pdf HFIN 3/13/2012 8:30:00 AM
HCR 24
AHA HCR24.pdf HFIN 3/13/2012 8:30:00 AM
HCR 24
HB9 Leg Research Memo Neuman.pdf HFIN 3/13/2012 8:30:00 AM
HB 9
HB 170 Exemptions- Mandated and Optional- 2012.pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB 170 Exemptions- Mandated and Optional- 2012.pdf HFIN 3/13/2012 8:30:00 AM
HB 170
HB289 Answers to HFIN questions.docx HFIN 3/13/2012 8:30:00 AM
HB 289
SUPPORTLETTER AP&T HB289.pdf HFIN 3/13/2012 8:30:00 AM
HB 289
HB 289 CVEA Support ltr 3 27 2012.pdf HFIN 3/13/2012 8:30:00 AM
HB 289