Legislature(2015 - 2016)HOUSE FINANCE 519
03/18/2015 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB88 | |
| HB68 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 88 | TELECONFERENCED | |
| + | HB 68 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 18, 2015
1:33 p.m.
1:33:03 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 1:33 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
MEMBERS ABSENT
Representative Tammie Wilson
ALSO PRESENT
Jerry Burnett, Deputy Commissioner, Treasury Division,
Department of Revenue; Representative Jonathan Kreiss-
Tomkins, Sponsor.
PRESENT VIA TELECONFERENCE
Brandon S. Spanos, Deputy Director, Tax Division,
Department of Revenue.
SUMMARY
HB 68 ELECTRONIC DISTRIB. OF REPORTS
HB 68 was HEARD and HELD in committee for further
consideration.
HB 88 FEES FOR TIRES
HB 88 was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson discussed the meeting agenda.
HOUSE BILL NO. 88
"An Act relating to remittance of tire fees; and
providing for an effective date."
1:34:07 PM
JERRY BURNETT, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, testified that the bill would align
the filing date for tire fees with other taxes filed on a
monthly basis. He shared that tire fees currently were
filed every 30 days, after the beginning of each quarter,
rather than the end of the month.
BRANDON S. SPANOS, DEPUTY DIRECTOR, TAX DIVISION,
DEPARTMENT OF REVENUE (via teleconference), relayed that
the bill would align the filing date for quarterly tire fee
tax payers. He said that the tax return and payment were
currently due after the end of quarter, which confused some
tax payers during the months of July, October and January
because the quarter ended one day before the end of the
month. He shared that the confusion had led to late filings
which resulted in their losing a timely filing credit,
causing complaints. He stated that the legislation would
eliminate confusion for tax payers, as well as protect them
from the 5 percent penalty for filing only one day late.
1:37:16 PM
Co-Chair Thompson recalled that the committee had studied
the change when it examined the Indirect Expenditure
Report. He noted that the change had the potential of
costing the state money. He believed that filing timely
reports should be a practice of doing business in Alaska.
Vice-Chair Saddler understood that there was a credit to be
earned by vendors who filed in a timely manner as well as a
5 percent penalty for filing late.
Mr. Spanos replied in the affirmative. He said that the
penalty applied to all tax types in the division and the
timely filing credit was specific to only a few tax types,
the tire fee being one of those tax types.
Vice-Chair Saddler asked how much the fees were and how
much of the fee was passed onto the consumer.
Mr. Spanos answered that the tax was $2.50 per new tire and
the additional studded tire fee of $5.00; a new studded
tire would be $7.00 total. He said that there were
exemptions for tires not used on roads, such as tires for
all terrain vehicles.
Vice-Chair Saddler asked how much revenue came in from the
tire fees.
Mr. Spanos replied that he did not have the figure on hand.
Mr. Burnett interjected that the figure was approximately
$1 million annually.
Co-Chair Thompson noted that the 5 percent of the amount
collected would not exceed $900 per quarter. He asked for
further detail.
1:40:54 PM
Mr. Spanos replied that the $900 per quarter figure had
been created when the fee was passed. He believed that the
cap stemmed from concern that the state would pay too much
of an incentive for timely filing.
Co-Chair Thompson understood that the maximum was $900. Mr.
Spanos replied in the affirmative; if 5 percent of the tax
exceeded $900 dollars then the credit would be limited to
$900.
Representative Kawasaki asked for the total value of the
indirect expenditure credits. He surmised that the amount
of money collected did not appear to be high.
Mr. Spanos answered that he did not have the detail on
hand.
Co-Chair Thompson wondered why the vendors received the
credit. He did not believe the state gave rental car
companies credits.
Mr. Spanos relayed that he did not know. He pointed out to
the committee that there was a vehicle rental tax in place.
Mr. Burnett noted that the legislation had been passed
during the Murkowski Administration. He noted that other
credits were being examined in order to decide whether it
made sense to continue to honor them.
Co-Chair Neuman asserted that there were significant
requirements for tire sales that made the credits
necessary. He referred to data provided by Dave and Judy
Schneider, Diversified Tires, Wasilla. He wondered why the
type of tire sold was of such importance.
Mr. Spanos replied that it was fairly common in the
division to request gross income before a net number was
realized. He used the example of cigarette sales; the
division wanted to know whether the cigarettes were being
sold to Indian Reservations or being exported out of the
state. He stated that for exempt purposes the tire would be
taxable except for the exemption; if a tire was sold to the
United States government for official use then it would not
be taxed but the division would still require a record of
the sale of the tire.
1:45:59 PM
Co-Chair Neuman noted that sellers were required to report
how many tires were studded each day. He observed that
companies had to stud tires in September to be ready for
the winter season. He opined that the businesses had to
physically count the number of tires each season. He
believed that the businesses were subject to too many
requirements.
Co-Chair Thompson observed that state government was making
the issue more complex than necessary.
Representative Gattis relayed that she spoke to the same
business owners. She thought that the bill insulted the
intelligence of business owners. She expressed
embarrassment that the legislation was under debate during
the current fiscal climate.
Mr. Burnett rebutted that the bill would make it easier for
tire dealers to know when to report. He noted that there
had been confusion on the issue and cited examples of
businesses reporting at the incorrect time and being
penalized. He said that the department had reviewed some
internal processes and that this particular issue had risen
to the forefront.
1:49:23 PM
Representative Kawasaki thought the change should be made
in regulation, not statute.
Mr. Burnett replied that there was a specific date set in
statute, which could not be changed by regulation.
Representative Kawasaki wondered whether it was the
department's intention to include language that changed the
date to a specific day of the month.
Mr. Burnett replied that the date would be the last day of
the calendar month.
Representative Kawasaki understood that a previous months
tire receipts were due 15 days into the following month.
Mr. Spanos clarified that it was currently 30 days after
the end of the calendar quarter. He explained that the
change would be to the end of month following the end of
the calendar quarter.
Representative Kawasaki queried how many Alaskans filed the
tire tax.
Mr. Spanos replied that the data was available in the
division's annual report. He believed it was approximately
100 filers.
Representative Kawasaki asked for the title of the
division's report.
Mr. Spanos answered that it was the department's tax
division's annual report.
Representative Kawasaki wondered if the report was provided
to the legislature in paper form.
Mr. Burnett replied no. He shared that the report could be
found online.
Representative Guttenberg understood that the bill had been
crafted as a result of complaints from tire tax filers. He
wondered how many filers were repeat offenders and what the
average penalty was.
1:53:14 PM
Mr. Spanos responded was not sure about repeat offenders.
He said that when filers appealed they had claimed that the
date had confused them and should be clarified.
Representative Guttenberg asked how the businesses filed
for the tax.
Mr. Spanos answered that the process included a new online
filing option. Previously filing had been only in paper
form; filers now had both options.
Representative Guttenberg asked about any feedback given on
the integration of the two options.
Mr. Spanos replied that there had been hiccups, but
feedback had primarily been positive.
Representative Guttenberg whether the date change would be
problematic for the computerized filing process.
Mr. Spanos replied no; it involved in simply changing the
field on the computerized spreadsheet.
Representative Gara stated that the bill was to protect
businesses who had been caught in the glitch in the law. He
thought that the bill offered a simple fix that would save
the state money. He expressed confusion at individual
committee member's opposition to the legislation.
1:58:09 PM
Vice-Chair Saddler believed that the bill would provide
simplicity and consistency.
Representative Gattis recommended that the inventory forms
for businesses be reviewed and changed.
Representative Pruitt wondered why this tax item had been
chosen as a priority. He probed whether there were other
opportunities within the tax division for change that could
be included in the bill.
Mr. Burnett answered that the bill had come up through the
tax division to the commissioner's office in the time
needed to get a bill introduced at the beginning of the
current legislative session. He believed there would be
additional items in the future.
Representative Pruitt wondered whether the possible other
items would be introduced in multiple small bills.
Co-Chair Thompson replied in the negative.
HB 88 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 68
"An Act relating to the preparation, electronic
distribution, and posting of reports by state
agencies."
2:02:08 PM
REPRESENTATIVE JONATHAN KREISS-TOMKINS, SPONSOR,
communicated that the bill sought to digitize annual
reports and other printed public records. He felt that this
could save the state $.5 million per year in printing and
production costs. He relayed that the bill had a negative
fiscal note.
Co-Chair Thompson appreciated the negative fiscal note,
which reflected a savings to the state of approximately
$400,000 per year.
Representative Kreiss-Tomkins said that additional figures
from the Department of Transportation and Public Works
reflected a possible savings of $580,000 per year.
Co-Chair Thompson understood there were some reports that
were required to be printed.
Representative Kreiss-Tomkins replied in the affirmative.
He elaborated that the printing of the reports was at the
discretion of commissioners. He anticipated that documents
with wide public circulation would need to be printed. He
shared that publishing of certain reports could cost up to
$20 per copy.
2:06:48 PM
Representative Gara relayed that one of the money savers
related to contracting out for graphic design. He gave
former Representative Kyle Johannsen credit for work on a
similar bill in the past.
Co-Chair Thompson noted that there were people in the
audience available for invited testimony.
Representative Edgmon spoke in support of the legislation.
He believed the bill reflected that the state was becoming
more connected by broadband. He wondered if the sponsor had
received any pushback due to a lack of broadband capability
in areas of the state.
Representative Kreiss-Tomkins replied in the negative. He
shared that he had consulted with libraries statewide and
learned that libraries would sent physical reports to
residents statewide.
2:10:38 PM
Vice-Chair Saddler felt that the bill presumed that the
public interest in state government could be satisfied
online. He wondered whether the benefit of the estimated
savings would outweigh the benefit of offering the fullest
possible access to public information.
Representative Kreiss-Tomkins did not believe that bill
would jeopardize the public's access to information. He
countered that a large number of the reports that would be
affected by the legislation were not in circulation, in
hard copy, for the general public.
Vice-Chair Saddler asked about confidence in the $530,000
savings to the state.
Representative Kreiss-Tomkins believed there was
variability around the number. He believed that there would
be a savings to the state, but that it could not be
precisely projected how much.
Co-Chair Thompson remarked that glossy cardstock used in
printing increased the cost.
Vice-Chair Saddler thought that any savings could go to
expanded broadband in the state.
Representative Kawasaki queried the types of reports
covered in the bill.
Representative Kreiss-Tomkins answered that the bill would
apply to all state publications. He stated that there were
publications that the departments would choose to print. He
said that many of the documents that had inspired the bill
were the ones read by legislators and their staff.
Representative Kawasaki wondered if the legislature would
have less access to publications. He referred several
reports that he would have missed in an email link.
Representative Kreiss-Tomkins replied that legislators
might need to scrutinize their email more closely or search
for reports online. He thought that the legislation would
require legislators to be more proactive in seeking out
information.
2:19:22 PM
Representative Kawasaki wondered whether there would be an
opt-out element to the program.
Representative Munoz spoke in support of the bill. She
wondered about agencies that provided publications that
were key to their mission. She provided examples such as
the Alaska Marine Highway System (AMHS) and tourism.
Representative Kreiss-Tomkins answered that language in the
bill that would preempt the problem was located on page 3,
lines 14-15; exceptions would be allowed for agencies to
print necessary reports for the public.
2:22:04 PM
Representative Guttenberg asserted that the assumption that
residents statewide had internet access was inaccurate. He
strongly advocated for broadband expansion across the
state. He spoke to Section 3 of the bill. He worried that
the documents would difficult to locate, and queried
whether the documents would be easily found in a specific
place online. He wondered if libraries would be charged
with the responsibility of tracking the documents.
Representative Kreiss-Tomkins spoke to the universality of
internet access in Alaska. He opined that there were areas
his district that had poor internet access. He felt that
public access to information was relative; the bill would
not manifestly impair access to public information. He
offered that operations like the Alaska Housing Finance
Corporation, for instance, did not currently send a copy of
their annual report to every resident of Alaska. He
explained that the Alaska Online Public Notice System would
be the repository for documents and the State Library would
keep 5 hard copies on file in perpetuity; the archival
would be dual, digital and analog. He suggested that the
public notice system would need to be assessed for user
friendliness.
2:28:08 PM
Representative Guttenberg reiterated his concerns.
Vice-Chair Saddler cautioned that savings due to the bill
in paper and trees would not be reflected in all of
Alaska's natural resources. He expounded that graphite,
petroleum, gold and other resources would be used. He
warned that radical technological changes had unforeseen
consequences. He worried that the files might be
inaccessible in 15 - 100 years. He encouraged libraries to
employ archival storage techniques when handling hard
copies. He wondered if the sponsor would consider an
amendment to allow for a transition period from analog to
digital and that there be public notice when a document was
no longer going to be physically available.
Representative Kreiss-Tomkins replied that the spirit of
the amendment was well received. He wondered that if the
transition could be eased by agencies opting to alert the
public in advance of expiring documents.
Representative Gara directed the committee's attention to
Page 3, line 20:
Sec. 44.99.260. Print copy requests.
A person may obtain, at no charge, up to five print
copies of reports from the state library distribution
and data access center under AS 14.56.170 each day. A
person may obtain additional print copies of reports
from the state library distribution and data access
center for a reasonable fee under AS 14.56.170.
He highlighted Page 2, line 3:
Except as provided in AS 44.99.260, reasonable
[REASONABLE] fees for reproduction or printing costs
and for mailing and distribution of materials may be
charged by the center.
He wondered about the difference between the two passages.
Representative Kreiss-Tomkins replied that the state
library fee referenced in the bill was $0.10 per copy. He
said that the first 5 copies would be free, beyond that
there would be a minimal user fee.
Representative Gara concluded that physical copies would be
available to the public. He thought that the public could
be easily alerted to hard copies expiring with a one page
document. He said that the public would always want
Department of Fish and Game documents available in print
and the bill would make that possible. He referred to
publications from the executive branch and wondered how the
sending of documents would be approved by that branch.
Representative Gattis remarked that the documents in the
Capitol Building alone required a large amount of paper.
She spoke in support of the legislation. She believed the
issue was timely.
2:36:56 PM
Representative Kawasaki wondered whether the bill included
the legislative and judicial branches under the "agencies"
language.
Representative Kreiss-Tomkins replied that he would
investigate the issue further.
HB 68 was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson discussed housekeeping.
ADJOURNMENT
2:38:45 PM
The meeting was adjourned at 2:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB88 Sponsor Statement.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 88 |
| HB 68 Sectional Analysis.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB 68 Sponsor Statement.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB 68 Supporting Documents - ASCC Letter.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB 68 Supporting Documents - Leg Research Report.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB 68 Supporting Documents - OMB Report.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB68 Summary of Changes ver A to ver H.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB 88 NEW FN DOR.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 88 |
| HB 88 DOR Tire Fee Form.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 88 |
| HB 68 Response to HFIN Qustions.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 68 |
| HB 88 DOR Tire Fee Form.pdf |
HFIN 3/18/2015 1:30:00 PM |
HB 88 |