Legislature(2011 - 2012)BUTROVICH 205

04/10/2012 03:30 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HCR 24 STATE FOOD RESOURCE DEVELOPMENT GROUP TELECONFERENCED
Moved CSHCR 24(FIN) Out of Committee
Bills Previously Heard/Scheduled
= HB 118 RESEARCH AND DEVELOPMENT TAX CREDIT
Heard & Held
<Bill Hearing to Continue on 4/11/12>
           HB 118-RESEARCH AND DEVELOPMENT TAX CREDIT                                                                       
                                                                                                                                
3:47:50 PM                                                                                                                    
CO-CHAIR WAGONER announced the consideration of HB 118 [CSHB
118(FIN) was before the committee]. He asked for a motion to                                                                    
bring the bill before the committee.                                                                                            
                                                                                                                                
SENATOR WIELECHOWSKI moved to bring HB 118 before the committee.                                                                
                                                                                                                                
CO-CHAIR WAGONER objected for discussion purposes. Finding no                                                                   
public testimony, it was closed. He asked the pleasure of the                                                                   
committee.                                                                                                                      
                                                                                                                                
3:49:14 PM                                                                                                                    
CO-CHAIR PASKVAN joined the committee.                                                                                          
                                                                                                                                
3:49:22 PM                                                                                                                    
SENATOR WIELECHOWSKI moved Amendment 1, labeled 27-GH1951\I.15.                                                                 
                                                                                                                                
                                                27-GH1951\I.15                                                                  
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
     OFFERED IN THE SENATE          BY SENATOR WIELECHOWSKI                                                                     
     TO:  CSHB 118(FIN)                                                                                                         
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
          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;  relating to  confidentiality  and use  of                                                                 
     tax information;"                                                                                                        
                                                                                                                                
     Page 1, following line 3:                                                                                                  
          Insert new bill sections to read:                                                                                     
        "* Section 1. The uncodified law of the State of                                                                      
     Alaska is amended by adding a new section to read:                                                                         
          SHORT TITLE. Sections 1 - 9 of this Act may be                                                                        
     known as the Alaska Tax Break Transparency Act.                                                                            
        *  Sec.  2.  AS 24.08  is amended  by  adding  a  new                                                                 
     section to read:                                                                                                           
          Sec. 24.08.038. Tax expenditure bills. The                                                                          
     legislature shall  include a statement of  the rationale                                                                   
     and purpose  of a tax expenditure  in a bill  creating a                                                                   
     tax  expenditure.  In this  section,  "tax  expenditure"                                                                   
     has the meaning given in AS 43.05.090.                                                                                     
        *  Sec.  3.  AS 24.20  is amended  by  adding  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.                                                                                                               
        * Sec. 4. AS 37.07.020(a) is amended to read:                                                                         
          (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. 5. 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;                                                                                
               (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. 6. AS 40.25.100(a) is amended to read:                                                                         
          (a)  Information in the possession of the                                                                             
     Department  of Revenue  that  discloses the  particulars                                                                   
     of  the  business or  affairs  of  a taxpayer  or  other                                                                   
     person  is not  a  matter of  public  record, except  as                                                                   
     provided  in  AS 43.05.230(i)  and 43.05.090(d)  or  for                                                               
     purposes  of  investigation  and  law  enforcement.  The                                                                   
     information shall  be kept confidential except  when its                                                                   
     production  is required  in  an official  investigation,                                                                   
     administrative   adjudication   under   AS 43.05.405   -                                                                   
     43.05.499,  or court proceeding.  These restrictions  do                                                                   
     not  prohibit the  publication  of statistics  presented                                                                   
     in  a  manner   that  prevents  the   identification  of                                                                   
     particular reports  and items, prohibit  the publication                                                                   
     of  tax lists  showing the  names of  taxpayers who  are                                                                   
     delinquent and  relevant information that may  assist in                                                                   
     the  collection of  delinquent  taxes,  or prohibit  the                                                                   
     publication  of  records,   proceedings,  and  decisions                                                                   
     under AS 43.05.405 - 43.05.499.                                                                                            
        * Sec. 7. 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. 8.  AS 43.05.090  is  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;                                                                                                       
               (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.                                                                               
        * Sec. 9. AS 43.05.230(a) is amended to read:                                                                         
          (a)  It is unlawful for a current or former                                                                           
     officer,  employee, or  agent  of the  state to  divulge                                                                   
     the  amount of  income  or the  particulars  set out  or                                                                   
     disclosed in  a report or return made under  this title,                                                                   
     except                                                                                                                     
               (1)        in   connection    with    official                                                                   
     investigations   or  proceedings   of  the   department,                                                                   
     whether  judicial  or  administrative,  involving  taxes                                                                   
     due under this title;                                                                                                      
               (2)        in   connection    with    official                                                                   
     investigations  or  proceedings  of  the  child  support                                                                   
     enforcement     agency,      whether     judicial     or                                                                   
     administrative,  involving   child  support  obligations                                                                   
     imposed or imposable under AS 25 or AS 47;                                                                                 
               (3)  as provided in AS 38.05.036 pertaining                                                                      
     to  audit   functions  of  the  Department   of  Natural                                                                   
     Resources;                                                                                                                 
              (4)  as provided in AS 43.05.090(d);                                                                          
               (5)  as provided in AS 43.05.405 -                                                                           
     43.05.499; and                                                                                                             
               (6) [(5)]  as otherwise provided in this                                                                     
     section or AS 43.55.890."                                                                                                  
                                                                                                                                
     Page 1, line 4:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 10"                                                                                                    
                                                                                                                                
     Page 2, line 26:                                                                                                           
          Delete all material and insert:                                                                                       
      "* Sec. 11.  Sections 3 - 9 of this Act take effect                                                                     
     July 1, 2015.                                                                                                              
        * Sec. 12. Except as provided in sec. 11 of this                                                                      
          Act, this Act takes effect immediately under                                                                          
     AS 01.10.070(c)."                                                                                                          
                                                                                                                                
CO-CHAIR WAGONER objected for discussion purposes.                                                                              
                                                                                                                                
SENATOR  WIELECHOWSKI explained  that  the  amendment attempts  to                                                              
address  how  the  state's  tax   credits,  exemptions  and  other                                                              
indirect  expenditures are  being  spent. This  bill requires  the                                                              
Department  of Revenue  (DOR) to  publish  information about  each                                                              
tax  expenditure in  its  annual Revenue  Sources  Book; it  would                                                              
include  the sum of  tax expenditures  for the  prior fiscal  year                                                              
and an estimate  of the current fiscal year. It  also requires the                                                              
Legislative  Finance Division  to conduct  a one-time analysis  of                                                              
tax expenditures  over $1 million seven years  after their passage                                                              
to  determine  whether  the  tax   expenditure  is  achieving  its                                                              
intended purpose.  He said  that 45  other states publish  similar                                                              
types  of information;  Alaska is  one  of only  five others  that                                                              
don't. He  said several people testified  in strong support  of it                                                              
in the State Affairs Committee.                                                                                                 
                                                                                                                                
3:50:53 PM                                                                                                                    
MICHELLE SYDEMAN,  staff to  Senator Wielechowski, explained  that                                                              
the  amendment would  provide  Alaskans  and state  policy  makers                                                              
with summary  information about how  much Alaska spends  each year                                                              
on each  type of tax  credit, tax deferral,  tax waiver  and other                                                              
indirect tax  expenditures authorized  by statute. These  indirect                                                              
forms of  spending amount to about  $1 billion per year,  yet they                                                              
are not reviewed  annually as are other normal  budget items; they                                                              
just get paid  automatically once enacted. She said  more money is                                                              
spent  on them  than  the  Department  of Revenue,  Department  of                                                              
Natural  Resources,  Department   of  Environmental  Conservation,                                                              
Department of Law,  the Court System and the  Legislature combined                                                              
and yet there is no regular review of them.                                                                                     
                                                                                                                                
She said  that 45  other states  publish annual information  about                                                              
their tax  expenditures; Alaska  is one of  only five  states that                                                              
doesn't.                                                                                                                        
                                                                                                                                
MS.  SYDEMAN  said the  amendment  does  three things.  First,  it                                                              
requires the  legislature to adopt  intent language  when enacting                                                              
new  tax credits,  deferrals and  waivers.  This would  facilitate                                                              
later evaluation  about their  effectiveness. Second,  it requires                                                              
DOR  to  publish  summary  information  annually  about  each  tax                                                              
credit   in  the   Revenue  Source   Book.   Third,  it   requires                                                              
Legislative  Finance  to  conduct   a  one-time  analysis  of  tax                                                              
expenditures  with a  price tag  over $1 million  after they  have                                                              
been  in effect  for seven  years  to determine  whether they  are                                                              
achieving their intended purpose.                                                                                               
                                                                                                                                
She   said  the   Finance  Committees   have   long  sought   this                                                              
information  from  the  Department  of Revenue,  but  because  the                                                              
department is  just in  the process of  getting its  new automated                                                              
tax  system,  it  hasn't  been possible  in  the  past  to  easily                                                              
provide this  information.  This amendment  has an effective  date                                                              
of 2015  so part  of the information  can be  provided at  a lower                                                              
cost to the state.                                                                                                              
                                                                                                                                
3:54:15 PM                                                                                                                    
DAVID TEAL,  Director, Legislative  Finance Division,  Legislative                                                              
Affairs  Agency, said  he could  give  them his  opinion, but  the                                                              
division didn't  take positions on  bills. He said they  share the                                                              
concern about  the lack of information  and it has  been requested                                                              
in the  past. He is glad  to see that it  is being asked for  in a                                                              
more formal  way. He  is also  glad to  see that  the DOR  has the                                                              
capital  appropriation to  put  a tax  system  together that  will                                                              
allow them to compile this type of information.                                                                                 
                                                                                                                                
MR. TEAL  said his role  will be to  review tax credits  and other                                                              
waivers  and determine  whether  the statute  authorizing the  tax                                                              
credit  achieves  the  intended  purpose.  He  noted  the  $50,000                                                              
fiscal note for  additional staff, but added that  it is "strictly                                                              
a guess."  He  didn't know how much this would  involve. He opined                                                              
that he  would do  a brief  analysis of  where things  stand today                                                              
and what has been  achieved to see if they should  be investigated                                                              
further.  It couldn't  be done with  current  staff and he  didn't                                                              
know how much  work it would involve.  It depends on what  kind of                                                              
information the department's system can deliver.                                                                                
                                                                                                                                
3:57:01 PM                                                                                                                    
JOHANNA  BALES,  Deputy  Director,  Tax  Division,  Department  of                                                              
Revenue, introduced herself.                                                                                                    
                                                                                                                                
WANETTA  AYERS,   Director,  Division  of   Economic  Development,                                                              
Department  of   Commerce,  Community  and   Economic  Development                                                              
(DCCED), introduced herself.                                                                                                    
                                                                                                                                
CO-CHAIR WAGONER asked them to speak to the amendment.                                                                          
                                                                                                                                
MS.  BALES stated  opposition  to  Amendment 1,  particularly  the                                                              
ambiguous language  that does not  provide guidance for  what type                                                              
of analysis would  be expected from either the  DOR or Legislative                                                              
Finance.  For example,  page 3,  line 21, talks  about the  report                                                              
they prepare and  what the governor must consider  in constructing                                                              
his  budget each  year  and it  says  the governor  must  consider                                                              
issues  raised by  the  Revenue and  Tax  Expenditure Report,  but                                                              
nowhere does the amendment talk about what the issues would be.                                                                 
                                                                                                                                
She  knew  Legislative  Finance  mentioned  their  expectation  of                                                              
looking  at all  the different  tax credits  and tax  expenditures                                                              
within  the  tax  codes  and  that  it  would  perform  what,  she                                                              
believed,  is  a  relatively  in-depth analysis  for  a  total  of                                                              
$50,000, which she  thought was unrealistic. However,  she thought                                                              
their estimate was  based on the ambiguous language.  For example,                                                              
she identified 21  different tax credit programs  throughout their                                                              
22  tax  programs  and  at  least   24  other  specific  types  of                                                              
exemptions  or  deferrals,   one  of  those  being   the  6,600  S                                                              
corporations (as of  2011) that are not taxed  because they aren't                                                              
subject   to  corporate   income  tax.  Without   a  tax   revenue                                                              
management system,  the department is  unable to easily  pull that                                                              
information together  to tell  them what the  total tax  effect is                                                              
of not taxing  them. Just even the underlying  information at this                                                              
point in time is difficult for them to pull together.                                                                           
                                                                                                                                
4:00:42 PM                                                                                                                    
CO-CHAIR WAGONER asked for a definition of an S corporation.                                                                    
                                                                                                                                
MS.  BALES  explained  the Internal  Revenue  Code  and  Corporate                                                              
Income  Tax  have basically  two  types  of corporations,  one  is                                                              
called  sub-chapter  C and  the  other is  sub-chapter  S. A  sub-                                                              
chapter S corporation  is for small businesses  where the earnings                                                              
get  flowed through  to  the shareholders  and  reported on  their                                                              
individual  income tax  returns. These  profits are  not taxed  by                                                              
the state because  it doesn't have an individual  income tax. That                                                              
would be  identified as  one of  the tax  expenditure items  to be                                                              
analyzed. She  said she was  willing to  work with the  sponsor to                                                              
refine the language,  maybe put on some sidebars  and standards of                                                              
review and  mentioned that  seven auditors were  assigned to  do a                                                              
performance audit on the film credits for at least six months.                                                                  
                                                                                                                                
4:02:36 PM                                                                                                                    
CO-CHAIR  PASKVAN  said  he appreciated  her  comments,  but  it's                                                              
amazing to  think of  22 credits and  an additional  24 deductions                                                              
or  deferrals,   but  nothing  comes   back  to   the  Legislature                                                              
indicating  that they are  working. The  purpose of the  amendment                                                              
is  to  get  feedback  to the  people  who  put  the  credits  and                                                              
deferrals  out  there  in  the  first  place.  He  asked  why  the                                                              
department  hadn't affirmatively  done  this  before and  remarked                                                              
that the Legislature  can't do anything else other  than impose it                                                              
on the department.                                                                                                              
                                                                                                                                
MS. BALES  responded they are  not opposed  to the concept  of it,                                                              
but when the  analysis is undertaken there should  be some general                                                              
standards for it.  This language provides that intent  needs to be                                                              
put  on every  bill, which  is important  going  forward, but  for                                                              
existing   tax  credits   it  isn't   that   simple  to   identify                                                              
legislative intent  and whether or not an expenditure  has met its                                                              
intended  purposed  without  having  guidelines on  what  it  was.                                                              
This doesn't  provide sufficient guidance  on what would  raise an                                                              
issue.  She  asked  for additional  guidance  as  to  meeting  the                                                              
intended purpose.                                                                                                               
                                                                                                                                
4:04:59 PM                                                                                                                    
CO-CHAIR PASKVAN  said he understood  what she was saying,  but it                                                              
would be  better received by  him if DOR  had been  preparing some                                                              
type of  report for  the last  five years  on whether  the credits                                                              
appear to be working  or not. Also, he would be  more receptive to                                                              
DOR's argument if  they had brought forward a  standard today that                                                              
she believed  would be an appropriate  one for the  sideboards she                                                              
addressed. At this point it is a one-way conversation.                                                                          
                                                                                                                                
MS.  BALES  said,  for  instance,   her  understanding  of  why  S                                                              
corporations  aren't  taxed  is  because there  is  no  individual                                                              
state income tax. Do they need to analyze that now?                                                                             
                                                                                                                                
4:06:51 PM                                                                                                                    
SENATOR WIELECHOWSKI  said he appreciated her comments,  but added                                                              
that Mr.  Teal testified  that Legislative  Finance is  capable of                                                              
doing the  analysis and she  is testifying about  what Legislative                                                              
Finance  is going  to do and  their ability  to do  it. They  said                                                              
they  could do  the analysis  and  all DOR  has to  do under  this                                                              
amendment  is tell  them  how much  is being  spent.  He said  the                                                              
legislature  had worked  with the  department;  they original  had                                                              
the department doing  the analysis and they said  they didn't want                                                              
to do  it. So, they  gave it to  Legislative Finance and  Mr. Teal                                                              
said he can do it.                                                                                                              
                                                                                                                                
MS. BALES  said the  last time  the issue  was addressed  Mr. Teal                                                              
said he  wasn't sure  how much it  would cost to  do this  type of                                                              
analysis. For  DOR, the  ambiguity lies in  the concept  that they                                                              
are supposed  to identify issues,  but they need guidance  on what                                                              
they would be.                                                                                                                  
                                                                                                                                
4:09:07 PM                                                                                                                    
SENATOR WIELECHOWSKI  said DOR is supposed to  address issues that                                                              
are  raised by  the  report they  prepared,  not identify  issues.                                                              
Section 7  says the  department shall prepare  an analysis  of tax                                                              
revenue  losses;  Legislative Finance  is  the one  that  actually                                                              
does the  analysis. He said his  office has been working  with her                                                              
for months  on this  bill and  if it  needs tweaking  he would  be                                                              
happy  to do  that.  This is  something  this  committee has  long                                                              
sought.                                                                                                                         
                                                                                                                                
CO-CHAIR  WAGONER asked  if this  could  be done  by meeting  time                                                              
tomorrow.                                                                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI answered yes.                                                                                              
                                                                                                                                
MS.  BALES expressed  reservations  about fixing  the problems  in                                                              
that  time.  Most  of the  information  is  gathered  already  but                                                              
getting the  deferrals is  a little  more difficult. And  everyone                                                              
is aware  they don't  have a  revenue management  system in  place                                                              
and the figures would have to be pulled by hand.                                                                                
                                                                                                                                
CO-CHAIR  WAGONER noted  that the  effective date  is three  years                                                              
from now  and expressed  hope that  there could  be resolution  in                                                              
that time.                                                                                                                      
                                                                                                                                
MS. BALES  responded that  an implementation  RFP for  the revenue                                                              
management  system hadn't  even been  put out  yet. It  is a  very                                                              
large  RFP to  draft and  they don't  expect implementation  until                                                              
the  beginning of  next  year, January  1,  and  it's a  five-year                                                              
implementation schedule.                                                                                                        
                                                                                                                                
CO-CHAIR WAGONER  commented that  it seems if  the state  wants to                                                              
do something  in nine months that it  always finds a way  to do it                                                              
and spend  hundreds of millions of  dollars doing it, but  now her                                                              
system  is taking  five  years.  "I think  our  state  is in  real                                                              
trouble in  some ways," he  said.  If  it took a  private business                                                              
that  long to  do  a plan,  it  would be  out  of business  before                                                              
getting in.                                                                                                                     
                                                                                                                                
4:13:39 PM                                                                                                                    
CO-CHAIR PASKVAN emphasized the need to get real numbers.                                                                       
                                                                                                                                
CO-CHAIR WAGONER  said he  agreed in concept,  but his  problem is                                                              
forcing  something like  this onto  DOR  if they  say they  aren't                                                              
ready for it.                                                                                                                   
                                                                                                                                
SENATOR  FRENCH  described it  as  encouragement  to try  to  work                                                              
together.                                                                                                                       
                                                                                                                                
4:14:27 PM                                                                                                                    
CO-CHAIR WAGONER  said he would  like to hold the  amendment until                                                              
tomorrow.                                                                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI  said  that  would  be  okay  and  he  would                                                              
continue  to  work  with  the department.  This  is  an  important                                                              
concept.  He  agreed that  spending  billions  of dollars  on  tax                                                              
credits and having  no idea where they are going  or how effective                                                              
they  are  - there  isn't  a  business  in  the world  that  would                                                              
operate that way.                                                                                                               
                                                                                                                                
CO-CHAIR WAGONER  said maybe  they want to  extend it out  to five                                                              
years, but they need to get it in statute.                                                                                      
                                                                                                                                
CO-CHAIR PASKVAN  asked of  the 22 credit  types and  24 deduction                                                              
and deferrals  if they were  only to look  at oil and  gas credits                                                              
or deferrals, how much would that reduce the load.                                                                              
                                                                                                                                
MS. BALES replied about 50 percent.                                                                                             
                                                                                                                                
4:15:54 PM                                                                                                                    
CO-CHAIR  WAGONER  maintained his  objection  to  Amendment 1  and                                                              
announced the  discussion would resume  tomorrow. HB 118  was held                                                              
in committee.                                                                                                                   

Document Name Date/Time Subjects
HCR 24 Hearing Request for Senate Resources.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HCR 24 Sponsor Statement.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HCR 24 Summary of changes.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HCR 24 Supporting Letters.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HCR024A.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HCR024B.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HCR24 2 Fiscal Note.pdf SRES 4/10/2012 3:30:00 PM
HCR 24
HB 118 - BW Amendment #1.pdf SRES 4/10/2012 3:30:00 PM
HB 118