Legislature(2015 - 2016)BELTZ 105 (TSBldg)
01/28/2016 01:30 PM LABOR & COMMERCE
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HB 155-FEES; WAIVERS; CREDITS; DEDUCTIONS; TAXES 2:05:51 PM CHAIR COSTELLO announced the consideration of HB 155. [This is the first hearing and CSHB 155(FIN) is before the committee.] 2:06:05 PM REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, Juneau, Alaska, sponsor of HB 155, introduced the legislation stating the following: In the 28th Legislature, legislation was passed that defined indirect expenditures as foregone revenue. The legislation also set forth a requirement that certain reports identify potential loss of foregone revenue by the department. The Legislative Finance Indirect Expenditure Report reviewed the departments of Commerce, Community and Economic Development, Fish and Game, Health and Social Services and Revenue. The report identified certain credits, fees, discounts, and deductions that should be terminated. House Bill 155 repealed some of these expenditures with an estimated increase of revenue of approximately $450,000. He requested that his staff walk through the bill. 2:07:02 PM BRODIE ANDERSON, Staff, Representative Steve Thompson, Alaska State Legislature, sponsor of HB 155, stated that the bill is the next step in addressing the foregone revenue to the state identified in the 2015 Indirect Expenditure Report. HB 155 will repeal the following indirect expenditures: · Small Loan Company Business License Exemption · The Exploration Incentive Credit · Tobacco Product Tax Deduction for Timely Filing · Cigarette Tax Stamp Discount · Motor Fuel Tax Timely Filing · Large Passenger Vessel Gambling Tax Deduction MR. ANDERSON explained that the bill repeals the exemptions, credits, deductions and discounts in Section 10. The remainder of the sections provide cleanup language to the portions of statute that reference those statutory repeals. He provided the following sectional analysis: Sections 1-2 repeal references to the Exploration Incentive Credit from AS 41.09.010(a) and (b). Section 3 removes references from the Exploration Incentive Credit from AS 43.20.043(g). Section 4 amends AS 43.55.210 to disallow the deduction for federal taxes for the purposes of calculating the state tax on large passenger cruise ship gambling activity. Section 5 amends AS 43.40.010(c) by removing language that allowed motor fuel dealers to retain a portion of the motor fuel tax due to cover expenses for filing motor fuel tax return. Section 6 removes references to the Cigarette Tax Stamps from AS 43.50.590(a). Sections 7, 8 and 9 remove references from the Exploration Incentive Credit from AS 43.55.011(m), 43.55.020(a) and 43.55.023(l). Section 10 repeals AS 06.20.030(c) The Small Loan Company License; AS 38.05.180(i) The Exploration Incentive Credit; AS 41.09.030 The Exploration Incentive Credit; AS 43.50.330(b) The Excise Tax on Tobacco Products;, 43.50.540(c) The Cigarette Tax Stamps; and 43.50.540(h) the discount for the stamps. Section 11 provides transition language relating to the Exploration Incentive Credit. Section 12 contains the effective date of January 1, 2016 for the gambling tax activities. Section 13 provides an effective date of July 1, 2015 for the other sections in order to comply with the State of Alaska fiscal calendar year and all other related fees, discounts and deductions that are calculated monthly. 2:10:47 PM CHAIR COSTELLO questioned the reason for the indeterminate fiscal note when the anticipated additional revenue is approximately $450,000. MR. ANDERSON deferred the question to Brandon Spanos. 2:11:29 PM BRANDON SPANOS, Deputy Director, Tax Division, Department of Revenue (DOR), Anchorage, Alaska, explained that DOR doesn't collect information needed to estimate the impact of all the provisions of the bill. The estimated increased revenue of approximately $450,000 is based on the money forgone for affixing stamps to cigarette packs and other tobacco products, the motor fuel credit and large passenger gaming. "Those are numbers we can quantify and that's where that $450,000 comes from," he said. 2:12:59 PM DANIEL STICKEL, Assistant Chief Economist, Tax Division, Department of Revenue (DOR), Juneau, Alaska, added that DOR currently does not collect information about the deduction for federal taxes so there may be some revenue impact from the Large Passenger Vessel Gambling Tax but the amount of benefit is unclear. "The $450,000 is probably the floor. The actual revenue benefit might be higher than that but it is the lack of information on the gambling taxes is the reason we put an indeterminate on the revenue." CHAIR COSTELLO asked if this money would go into the general fund. MR. SPANOS indicated that was correct. CHAIR COSTELLO noted that the sponsor was nodding his head in the affirmative. REPRESENTATIVE THOMPSON offered that these credits are taken against corporate taxes so the business would pay more tax to the state, which he assumes would go to the general fund. CHAIR COSTELLO noted that the fiscal note says the regulations would go into effect the last day of 2016. She asked if that will cause a problem. MR. ANDERSON said he spoke with her staff about the need for a committee substitute to reflect new dates. "The 2016 date would be 2017 and the 2015 dates would turn into 16." CHAIR COSTELLO asked if there has been discussion about emergency regulations to maintain the current timeline. MR. ANDERSON answered no, but it is a conversation the sponsor could have with the department. 2:16:21 PM SENATOR MEYER expressed appreciation for the legislation. 2:16:33 PM CHAIR COSTELLO opened public testimony. Finding none, she closed public testimony and held HB 155 in committee.