Legislature(2017 - 2018)HOUSE FINANCE 519

03/29/2017 01:00 PM FINANCE

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Audio Topic
01:10:20 PM Start
01:12:25 PM HB115
01:12:39 PM Public Testimony: Anchorage, Fairbanks, Juneau, Offnets
04:50:12 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+= HB 115 INCOME TAX; PFD CREDIT; PERM FUND INCOME TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit Two Minutes> --
1:00 - 4:30 PM Anchorage, Fairbanks, Juneau, Off
Nets
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- Continue to access meeting through akleg.gov
- The hearing may be televised on Gavel to Gavel,
please check listings
Written testimony may be sent to
housefinance@akleg.gov
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 29, 2017                                                                                            
                         1:10 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:10:20 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:10 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO, PRESENT                                                                                                                 
                                                                                                                                
Christine Niemi, Self, Juneau;  Ron Pagenkopf, Self, Juneau;                                                                    
Ron Somerville, Self, Juneau;  Alexander Hoke, Self, Juneau;                                                                    
Kate  Blair, Tesoro,  Juneau; Judy  Andree, League  of Women                                                                    
Voters,   Juneau;  Bob   Sylvester,   Self,  Juneau;   Sally                                                                    
Donaldson, Self,  Juneau; Roy Fulwiler, Self,  Juneau; Aimee                                                                    
Kniaziowski, City  of Kodiak, Kodiak;  Rich Walker,  City of                                                                    
Kodiak, Juneau;  Kathie Wasserman, Alaska  Municipal League,                                                                    
Anchorage; John Sonin, Civilized Humanity, Juneau.                                                                              
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Justin Vanzant, Self,  Anchorage; Douglass Blattmachr, Self,                                                                    
Anchorage;  Bob Pawlowski,  Self,  Anchorage; Janet  McCabe,                                                                    
Self, Anchorage; Orin Seybert,  Self, Anchorage; Mike Coons,                                                                    
Self,   Palmer;   Dave   Hanson,  Self,   Anchorage;   Peter                                                                    
Caltagirone,   Self,  Anchorage;   Zacharrah  Yates,   Self,                                                                    
Fairbanks; Libby  Dalton, Self, Fairbanks;  Cris Eichenlaub,                                                                    
Self,  Eagle River;  Debbie  Joslin,  Self, Delta  Junction;                                                                    
Ruth  Bueneman,  Self,  Fairbanks;  Shelby  Standley,  Self,                                                                    
Anchorage;   Claire  Steffens,   Self,  Anchorage;   Patrick                                                                    
Balton, Self,  Delta Junction; Wayne Todd,  Self, Anchorage;                                                                    
Mary Geddes,  Self, Anchorage; Bob Batrra,  Self, Anchorage;                                                                    
John  Blaine,  Self,   Anchorage;  Helen  Nienhueser,  Self,                                                                    
Anchorage; Cheryl  Keepers, Self, Fairbanks;  Lynette Clark,                                                                    
Self, Fairbanks; David Scott,  Self, Auke Bay; Erika Wolter,                                                                    
Self,  Anchorage;   Robin  Smith,  Self,   Anchorage;  Janie                                                                    
Taylor, Self,  Anchorage; Donald Crandall,  Self, Anchorage;                                                                    
Ronald Yarnell, Self, Fairbanks;  Dan Donkel, Donkel Oil and                                                                    
Gas LLC,  Orlando, FL;  Lynn McCabe,  Self, Big  Lake; Karen                                                                    
Perry,  Self,   Chugiak;  Brandy  Dixon,   Self,  Anchorage;                                                                    
Kathryn Andrews,  Self, Anchor  Point; Pamela  Samash, Self,                                                                    
Nenana;  Paul D.  Kendall,  Self,  Anchorage; Deanna  James,                                                                    
Self,  Anchorage; Sara  Aldwell, Self,  Douglas; Mark  Carr,                                                                    
Self, Anchorage;  Mark Richards, Self,  Fairbanks; Elizabeth                                                                    
Newell,  Self, Anchorage;  Martha Artz,  Self, Wasilla;  Amy                                                                    
Hosea,  Self, Delta  Junction; Jeremy  Price, Americans  For                                                                    
Prosperity,  Anchorage; Paul  Verhagen, Self,  Nenana; Janet                                                                    
Coffin,  Self,  Juneau;   Byron  Charles,  Self,  Ketchikan;                                                                    
Conrad  Muller,  Self,  Juneau; Pat  Fox,  Self,  Fairbanks;                                                                    
Roselynn   Cacy,  Self,   Anchorage;  Laura   Bomner,  Self,                                                                    
Anchorage; Peter Mjos, Self,  Anchorage; Julian Mason, Self,                                                                    
Anchorage;  Donald  Frederick,   Self,  Anchorage;  Wolfgang                                                                    
Falke,  Self, Fairbanks;  Kristi  Sherman, Self,  Fairbanks;                                                                    
Molly   Sherman,  Self,   Fairbanks;  B.A.   Sherman,  Self,                                                                    
Fairbanks;  Patrice  Lee,  Self, Fairbanks;  Amie  Verhagen,                                                                    
Self, Nenana;  Terry Reed, Self, Homer;  Michael Bucy, Self,                                                                    
Juneau; Michael  Hanzuk, Self, Anchorage; Mike  Swain, Self,                                                                    
Anchorage; Evelyn Verhagen, Self, Nenana.                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 115    INCOME TAX; PFD CREDIT; PERM FUND INCOME                                                                              
                                                                                                                                
          HB 115 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
Co-Chair Foster addressed the meeting agenda.                                                                                   
                                                                                                                                
HOUSE BILL NO. 115                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  permanent  fund  dividend;                                                                    
     relating  to the  appropriation of  certain amounts  of                                                                    
     the earnings reserve account;  relating to the taxation                                                                    
     of  income  of  individuals;   relating  to  a  payment                                                                    
     against the  individual income  tax from  the permanent                                                                    
     fund  dividend  disbursement;   repealing  tax  credits                                                                    
     applied  against  the  tax  on  individuals  under  the                                                                    
     Alaska  Net  Income  Tax  Act;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
1:12:25 PM                                                                                                                    
                                                                                                                                
^PUBLIC TESTIMONY: ANCHORAGE, FAIRBANKS, JUNEAU, OFFNETS                                                                      
                                                                                                                                
1:12:39 PM                                                                                                                    
                                                                                                                                
CHRISTINE NIEMI, SELF, JUNEAU, spoke  in support of the bill                                                                    
and  the  income tax  included  in  the  bill on  behalf  of                                                                    
herself and  her husband.  She recalled  when an  income tax                                                                    
had  existed  in the  1980s.  She  appreciated the  services                                                                    
provided to  Alaskans and believed they  needed to continue.                                                                    
She wanted her income tax  and Permanent Fund Dividend (PFD)                                                                    
to go towards services and not oil companies.                                                                                   
                                                                                                                                
1:14:59 PM                                                                                                                    
                                                                                                                                
RON PAGENKOPF, SELF, JUNEAU,  spoke against the legislation.                                                                    
He recalled when the state  budget exceeded $100 million and                                                                    
former  Governor Bill  Egan had  been upset  about that.  He                                                                    
shared that he  and his wife had moved to  the state over 50                                                                    
years earlier. He  spoke to his background  in economics and                                                                    
finance. He  was concerned that  the state  was overreacting                                                                    
to  its  financial  situation. He  explained  that  once  an                                                                    
income tax was implemented it  would be almost impossible to                                                                    
remove  the tax  even  when revenue  came  in elsewhere.  He                                                                    
spoke to potential  new oil coming online in  the future. He                                                                    
did not  endorse a state  income tax. He continued  that the                                                                    
state had  $58.5 billion in  Permanent Fund assets,  much of                                                                    
which  was  untouchable  by constitution.  He  continued  to                                                                    
speak  about   the  Permanent  Fund  amount.   He  spoke  to                                                                    
financial  institutions  return  on  investment.  With  a  5                                                                    
percent rate of return  the principal would remain constant.                                                                    
Historically  the fund  had  done well  at  an 8.22  percent                                                                    
return. He spoke to use of  the principal and money it would                                                                    
generate.                                                                                                                       
                                                                                                                                
1:21:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:22:12 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr. Pagenkopf  believed the citizens  of Alaska  should have                                                                    
longer than 2 minutes to speak.                                                                                                 
                                                                                                                                
Co-Chair Foster shared that the  committee wanted to be able                                                                    
to  give everyone  time  to testify.  He  offered the  email                                                                    
address as another option.                                                                                                      
                                                                                                                                
RON  SOMERVILLE, SELF,  JUNEAU, spoke  against the  bill. He                                                                    
shared  that   he  worked  with  numerous   seniors  in  the                                                                    
community and  he was concerned  that costs would  be pushed                                                                    
to them.  He stressed  that the state  could not  afford its                                                                    
current level of government. He  thought it was unbelievable                                                                    
what  was expected  for  every individual  to  pitch in.  He                                                                    
discussed the elimination of some  senior tax exemptions. He                                                                    
underscored that some  seniors would be forced  to leave the                                                                    
state due to high costs.  He urged the committee to consider                                                                    
that individuals on  fixed income only had  a limited amount                                                                    
of discretionary income. He discussed  it was cheaper to get                                                                    
goods  from  out  of  state  than  from  businesses  in  the                                                                    
community. He asked the legislature  to put a sunset date on                                                                    
the  income tax  if it  was implemented.  He understood  the                                                                    
legislature had a difficult job.                                                                                                
                                                                                                                                
1:27:11 PM                                                                                                                    
                                                                                                                                
JUSTIN  VANZANT,   SELF,  ANCHORAGE   (via  teleconference),                                                                    
testified in  support of  an income  tax at  a maximum  of 2                                                                    
percent and  the use  of the Permanent  Fund to  support the                                                                    
state.  He spoke  on behalf  of himself  and his  family. He                                                                    
requested a  cap on  the time on  the implementation  of the                                                                    
bill in order  for it to be reconsidered and  voted on again                                                                    
in  the  future. He  shared  that  he  was the  sole  income                                                                    
provider  for his  family that  included his  wife and  four                                                                    
daughters. He  communicated that  he had  worked in  the oil                                                                    
and gas industry. He shared that  he had to purchase part of                                                                    
his household goods on Amazon due  to the high cost of goods                                                                    
in  Alaska. He  reiterated  his support  for  an income  tax                                                                    
capped at 2 percent and a time cap.                                                                                             
                                                                                                                                
Co-Chair Seaton  shared that a  family of six would  not pay                                                                    
any  income  tax up  to  $50,000.  He wondered  whether  Mr.                                                                    
Vanzant was aware of that provision.                                                                                            
                                                                                                                                
Mr.  Vanzant  replied that  he  understood  and would  still                                                                    
accept a 2 percent income tax on his family.                                                                                    
                                                                                                                                
Co-Chair Foster  announced that the  proposed income  tax in                                                                    
Alaska would be the fourth lowest in the country.                                                                               
                                                                                                                                
1:32:58 PM                                                                                                                    
                                                                                                                                
DOUGLASS BLATTMACHR,  SELF, ANCHORAGE  (via teleconference),                                                                    
felt that there  were some drafting errors in  the taxing of                                                                    
the non-resident  trust. He remarked that  the definition of                                                                    
resident trust  included all trusts.  He noted  that Section                                                                    
43.22.150 stated  that a "trust consisting  of property that                                                                    
is or will be disposed  or administered in the state", which                                                                    
he felt were  all trusts which had assets.  He remarked that                                                                    
taxation  of non-resident  trust would  eliminate the  trust                                                                    
industry  in  Alaska.  He felt  that  all  the  non-resident                                                                    
trusts would go to other states  that did not have an income                                                                    
tax. He  stated that  there were 18  states who  had adopted                                                                    
similar  legislation   as  Alaska,  but   Alaska,  Delaware,                                                                    
Nevada,  were  considered the  best  states  for trusts.  He                                                                    
stressed  that the  state  would  lose the  14  jobs in  the                                                                    
state, and many attorneys,  insurance agents, stock brokers,                                                                    
and CPAs.                                                                                                                       
                                                                                                                                
Co-Chair Seaton asked  if there were 14 jobs  with trusts in                                                                    
Alaska, or only with the company.                                                                                               
                                                                                                                                
Mr.  Blattmachr  answered there  were  14  positions in  his                                                                    
business. He did not know about other institutions.                                                                             
                                                                                                                                
Co-Chair Seaton spoke  to the investments held.  He asked if                                                                    
they were Alaskan investments.                                                                                                  
                                                                                                                                
Mr.   Blattmachr  replied   that  most   were  not   Alaskan                                                                    
investments.                                                                                                                    
                                                                                                                                
1:37:05 PM                                                                                                                    
                                                                                                                                
BOB   PAWLOWSKI,  SELF,   ANCHORAGE  (via   teleconference),                                                                    
thanked the  bill sponsors  for restructuring  the Permanent                                                                    
Fund, but  he had a  concern about the income  tax component                                                                    
of the bill. He spoke  about senior exemptions. He asked the                                                                    
committee to consider seniors who  were beyond their earning                                                                    
potential.  He addressed  what  an income  tax  could do  to                                                                    
military  retirees.  He  felt  an  income  tax  would  cause                                                                    
individuals to leave the state.                                                                                                 
                                                                                                                                
1:40:25 PM                                                                                                                    
                                                                                                                                
JANET   MCCABE,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
testified in  favor of the  bill, which she and  her husband                                                                    
believed  was  a  balanced,  fair,  and  effective  approach                                                                    
towards filling the budget gap.  She spoke to the importance                                                                    
of  a stable  structure.  She believed  the  income tax  was                                                                    
correct  in  the  bill.  Additionally,  the  Permanent  Fund                                                                    
portion was right.                                                                                                              
                                                                                                                                
1:42:14 PM                                                                                                                    
                                                                                                                                
ORIN   SEYBERT,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
supported  the  legislation.  He  stated  that  no  one  was                                                                    
talking about touching the corpus  of the Permanent Fund. He                                                                    
believed  the state  could rely  on living  on the  earnings                                                                    
reserve portion. He shared he  would adamantly oppose use of                                                                    
the principal.                                                                                                                  
                                                                                                                                
1:44:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster  shared that individuals could  listen in at                                                                    
various locations.                                                                                                              
                                                                                                                                
MIKE  COONS, SELF,  PALMER  (via teleconference),  testified                                                                    
against  the  legislation. He  stated  that  the income  tax                                                                    
would hit  him at about  $1,000. He shared that  seniors and                                                                    
working lower  income individuals would be  the hardest hit.                                                                    
The  ones  hurt  the  most  would be  hit  the  hardest.  He                                                                    
discussed that  former President  Obama, Bernie  Sanders and                                                                    
others  were  all  for  redistribution  of  wealth.  He  was                                                                    
against the bill.                                                                                                               
                                                                                                                                
1:48:10 PM                                                                                                                    
                                                                                                                                
DAVE HANSON, SELF,  ANCHORAGE (via teleconference), strongly                                                                    
supported  the  bill.  He identified  himself  as  a  fiscal                                                                    
conservative. He  believed it was  time for everyone  to pay                                                                    
their fair share.  He recalled that the state  had an income                                                                    
tax in  the past  that had  been as high  as 16  percent. He                                                                    
believed it  was needed again.  He believed a $1,000  cap on                                                                    
the dividend made more sense  than getting $1,200. He shared                                                                    
that no one had complained  when the dividend had been under                                                                    
$1,000.  He  discussed that  43  states  already had  income                                                                    
taxes;  six of  the  states without  income  taxes had  high                                                                    
sales taxes. He reiterated his support of the bill.                                                                             
                                                                                                                                
1:51:34 PM                                                                                                                    
                                                                                                                                
PETER  CALTAGIRONE,  SELF, ANCHORAGE  (via  teleconference),                                                                    
shared that he had moved to  Alaska one year earlier. He had                                                                    
lived in a location that had  a high sales tax and an income                                                                    
tax.  He  believed it  seemed  to  be  a no-brainer  to  use                                                                    
Permanent Fund  earnings and then  implement an  income tax.                                                                    
He stated that a portion of  a dividend would be eaten up by                                                                    
the income tax,  which he found confusing. He  spoke to bill                                                                    
language related to capital gains that he found unclear.                                                                        
                                                                                                                                
1:53:44 PM                                                                                                                    
                                                                                                                                
ZACHARRAH  YATES,  SELF,   FAIRBANKS  (via  teleconference),                                                                    
spoke in strong opposition to  the bill. He remarked that it                                                                    
was not a matter of state  programs were needed, it was more                                                                    
of  a matter  of what  the state  could afford.  He remarked                                                                    
that  the  country  had recently  voted  Donald  Trump  into                                                                    
office  because  of  a desire  for  smaller  government.  He                                                                    
discussed  ways  his family  had  cut  back on  spending  in                                                                    
recent years  in order to  afford heating oil and  taxes. He                                                                    
shared he had paid $16,000 on  land tax the past year, which                                                                    
was an  extraordinary amount. He believed  the Democrats had                                                                    
not made a single cut in  the budget. He spoke in support of                                                                    
more cuts.                                                                                                                      
                                                                                                                                
1:56:19 PM                                                                                                                    
                                                                                                                                
LIBBY   DALTON,   SELF,  FAIRBANKS   (via   teleconference),                                                                    
strongly opposed a  state income tax. She  shared that state                                                                    
operating costs had  grown an average of  8 percent annually                                                                    
over  the  past  decade.  She believed  the  answer  to  the                                                                    
problem was simple  - the state had a  spending problem. She                                                                    
stressed that  the legislature was already  capping the PFD,                                                                    
which  would  hurt  the  economy  and  limit  spending.  She                                                                    
believed state  government was bloated. She  suggested using                                                                    
// savings  to help bridge the  budget gap. She wanted  to a                                                                    
cap to prevent runaway spending.  She asked the committee to                                                                    
protect the PFD and the  earnings reserve account. She asked                                                                    
the committee to improve the  budget process by establishing                                                                    
a committee  from both sides of  the aisle to work  with the                                                                    
governor on  a budget  over the  interim. She  stressed that                                                                    
she paid property  and federal income taxes.  She wanted the                                                                    
legislature to come up with  a better solution to the budget                                                                    
gap.                                                                                                                            
                                                                                                                                
Vice-Chair Gara  appreciated the  testimony. He  shared that                                                                    
the  bill would  impose no  income  tax on  a couple  making                                                                    
$30,000 annually.                                                                                                               
                                                                                                                                
2:00:14 PM                                                                                                                    
                                                                                                                                
ALEXANDER HOKE,  SELF, JUNEAU,  discussed that  the dividend                                                                    
program  had been  created in  1980. He  was concerned  that                                                                    
many people seemed prepared to  bargain away their dividend;                                                                    
however,  it meant  they were  bargaining away  the dividend                                                                    
for  future generations  as well.  He  believed the  problem                                                                    
resided in a budget that  had been developed during high oil                                                                    
prices. He was  concerned that the ratio  of sharing between                                                                    
the  people and  the  government  was a  one-third/two-third                                                                    
arrangement. He hoped the ratio  could be reversed in future                                                                    
years  where  two-thirds of  the  revenue  would go  to  the                                                                    
people. He believed the Percent  of Market Value (POMV) draw                                                                    
was  too aggressive.  He  spoke  to erring  on  the side  of                                                                    
caution  and  protecting the  Permanent  Fund.  He was  also                                                                    
concerned  that the  state would  be obliged  to withhold  a                                                                    
portion of  a person's  dividend - he  believed there  was a                                                                    
time conflict.                                                                                                                  
                                                                                                                                
Co-Chair  Seaton clarified  that if  person wanted  to apply                                                                    
the dividend to  their payment it was  optional. He compared                                                                    
the option to Pick, Click, Give.                                                                                                
                                                                                                                                
Mr. Hoke understood the issue.                                                                                                  
                                                                                                                                
2:04:46 PM                                                                                                                    
                                                                                                                                
KATE  BLAIR, TESORO,  JUNEAU, shared  information about  the                                                                    
company.  She pointed  to  a  flaw in  the  bill related  to                                                                    
withholding in non-investment  partners. She provided detail                                                                    
about how the provision could  impact the company. She spoke                                                                    
to the unduly burdensome provision.  She shared that most of                                                                    
the  units were  held  by brokers;  the PTP  had  no way  of                                                                    
determining  who  the  unit holders  were.  Withholding  was                                                                    
calculated on  an interim  basis; there was  no way  to know                                                                    
how to determine the amount.  She supported an exemption for                                                                    
PTPs as was done in Idaho and Illinois.                                                                                         
                                                                                                                                
Representative  Wilson  asked if  it  was  handled in  other                                                                    
states.                                                                                                                         
                                                                                                                                
Ms. Blair shared that the  exemption was straight forward in                                                                    
Illinois and applied to every  partnership other than a PTP.                                                                    
She stressed  that Idaho was  different -  withholdings were                                                                    
exempted. She stated that if  a unit withheld more than $500                                                                    
it was reported back to the state.                                                                                              
                                                                                                                                
Co-Chair  Seaton  asked Ms.  Blair  to  provide her  written                                                                    
comments.                                                                                                                       
                                                                                                                                
2:09:53 PM                                                                                                                    
                                                                                                                                
JUDY  ANDREE,  LEAGUE  OF WOMEN  VOTERS,  JUNEAU,  spoke  in                                                                    
strong support of the legislation.  The league supported the                                                                    
progressive income tax that did  not have an undue burden on                                                                    
low  income families.  The league  did  not support  further                                                                    
cuts at  the time  due to  the $3 billion  in cuts  that had                                                                    
already been made.  The league did not  support further cuts                                                                    
to education. She and her  husband also personally supported                                                                    
the bill.                                                                                                                       
                                                                                                                                
2:11:49 PM                                                                                                                    
                                                                                                                                
CRIS  EICHENLAUB, SELF,  EAGLE  RIVER (via  teleconference),                                                                    
spoke against  the legislation. He believed  the bill raided                                                                    
the   Permanent  Fund.   He  recalled   that  in   2000  the                                                                    
legislature had  tried to  buy residents  out by  offering a                                                                    
$25k payout.  He asked  about the  fuel savings.  He thought                                                                    
there was plenty  of time for people to weigh  in on the use                                                                    
of the PF. He opposed HB 115. He thanked the committee.                                                                         
                                                                                                                                
2:14:25 PM                                                                                                                    
                                                                                                                                
DEBBIE  JOSLIN, SELF,  DELTA JUNCTION  (via teleconference),                                                                    
opposed HB  115. She had  been a  resident of Alaska  for 28                                                                    
years. She  was a  real estate broker  and had  seen several                                                                    
people leave.  She did not  feel enough reductions  had been                                                                    
made.  She did  not think  it  was necessary  to initiate  a                                                                    
complicated income tax.  She opined that folks  would not be                                                                    
able to stay in the state.                                                                                                      
                                                                                                                                
2:16:44 PM                                                                                                                    
                                                                                                                                
RUTH   BUENEMAN,  SELF,   FAIRBANKS  (via   teleconference),                                                                    
opposed  HB 115.  She had  been  in Alaska  since 1975.  She                                                                    
queried amount of the PFD for 2017.                                                                                             
                                                                                                                                
Co-Chair Foster relayed that the  amount had been determined                                                                    
and would not until the fall sometime.                                                                                          
                                                                                                                                
Ms.  Bueneman  continued  to   provide  her  testimony.  She                                                                    
understood  there  were a  couple  of  ways to  balance  the                                                                    
budget. She  was most  concerned with  people that  would be                                                                    
affected the most.  She did not believe  using the Permanent                                                                    
Fund to run government had not been the intent.                                                                                 
                                                                                                                                
Co-Chair  Foster relayed  that if  the bill  passed the  PFD                                                                    
would be $1,250 in the current year.                                                                                            
                                                                                                                                
2:20:28 PM                                                                                                                    
                                                                                                                                
SHELBY  STANDLEY,  SELF,   ANCHORAGE  (via  teleconference),                                                                    
spoke against  the bill. He  believed there were  many other                                                                    
solutions to  fill the spending  gap. He spoke to  the large                                                                    
budget of  the Anchorage School  District. He suggested  a 1                                                                    
percent  property tax  increase  in Anchorage  and still  be                                                                    
less than  other locations. He  explained a similar  tax had                                                                    
funded much of the education  system in Houston, Texas where                                                                    
he had previously lived. One of  the reasons he had moved to                                                                    
Alaska was  due to the  lack of a  sales and income  tax. He                                                                    
did not have  a strong opinion about the PFD  because he did                                                                    
not think it was a large long-term economic stimulus.                                                                           
                                                                                                                                
2:24:26 PM                                                                                                                    
                                                                                                                                
CLAIRE STEFFENS,  SELF, ANCHORAGE (via  teleconference), she                                                                    
was disappointed in the operating  budget process where cuts                                                                    
had not  been made.  She believed the  bill taxed  merely to                                                                    
raise  money.  She stated  that  heaping  money on  Alaska's                                                                    
schools   had  not   been  successful.   She  believed   the                                                                    
education's success  was pitiful. She believed  the value of                                                                    
the Permanent Fund  would be eroded if the  funds were used.                                                                    
She  was opposed  to the  electronic  filing component.  She                                                                    
believed there  had been  numerous ways  to cut  the budget,                                                                    
but the  Democrats had  not wanted  to do  so. She  spoke to                                                                    
cost  savings. She  asked the  committee to  vote no  on the                                                                    
bill. She  believed the  legislature did  not listen  to the                                                                    
public.                                                                                                                         
                                                                                                                                
2:28:58 PM                                                                                                                    
                                                                                                                                
PATRICK BALTON,  SELF, DELTA JUNCTION  (via teleconference),                                                                    
spoke  against the  legislation.  He shared  that  he ran  a                                                                    
small business  in Alaska. He  was opposed to  income taxes,                                                                    
which he  believed penalized productivity. He  spoke to cuts                                                                    
to  government that  did not  have a  multiplier effect.  He                                                                    
stated  that   Alaska  ranked  the  highest   in  government                                                                    
spending.  He  believed government  was  too  large. He  was                                                                    
opposed to  the income  tax. He believed  there should  be a                                                                    
cap on government spending.                                                                                                     
                                                                                                                                
2:32:07 PM                                                                                                                    
                                                                                                                                
WAYNE TODD, SELF,  ANCHORAGE (via teleconference), testified                                                                    
in  strong  support of  the  legislation  or any  bill  that                                                                    
resulted   in   restructuring   the   Permanent   Fund   and                                                                    
implementing a state  income tax. He stressed  the more that                                                                    
was cut  the deeper  and longer the  recession would  be. He                                                                    
stated that  PFD restructuring would  allow all  Alaskans to                                                                    
pitch in.  He spoke  against further  cuts. He  believed the                                                                    
bill should be passed immediately.                                                                                              
                                                                                                                                
2:34:22 PM                                                                                                                    
                                                                                                                                
MARY   GEDDES,   SELF,   ANCHORAGE   (via   teleconference),                                                                    
testified in favor  of the bill. She supported a  cap on the                                                                    
PFD,  but  believed  it  should   be  lower.  She  supported                                                                    
changing   the   time   of   the   PFD   program   residency                                                                    
requirements. She  was in  favor of  the reinstitution  of a                                                                    
state income tax.  She believed an income  tax was necessary                                                                    
to maintain  essential services such as  roads, schools, and                                                                    
other. She spoke  to a budget that had been  approved by the                                                                    
House that  would cut over  $300 million more.  She stressed                                                                    
the cuts  were substantial. She believed  further cuts would                                                                    
harm public safety.                                                                                                             
                                                                                                                                
2:37:06 PM                                                                                                                    
                                                                                                                                
BOB BATRRA,  SELF, ANCHORAGE (via teleconference),  spoke in                                                                    
strong  support  of an  income  tax.  He believed  it  would                                                                    
provide  a  stable income  stream.  He  thought that  people                                                                    
actively  invested in  government  would be  more likely  to                                                                    
participate. He supported  flexibility if conditions changed                                                                    
in the future.  He believed it was a good  deal for Alaskans                                                                    
where 25 percent would be paid by non-residents.                                                                                
                                                                                                                                
2:38:49 PM                                                                                                                    
                                                                                                                                
JOHN   BLAINE,   SELF,   ANCHORAGE   (via   teleconference),                                                                    
testified in support of the bill.  He shared that he and his                                                                    
family had  been fortunate to  use the dividend to  help pay                                                                    
for  college  for  their  sons. He  relayed  that  for  many                                                                    
individuals  the dividend  helped  pay rent,  for food,  and                                                                    
other important items. He shared  that cuts had been made to                                                                    
the  dividend  the  previous year,  which  he  believed  was                                                                    
wrong.  He  believed  a  graduated  income  tax  would  mean                                                                    
Alaskans  would  have   skin  in  the  game.   He  spoke  to                                                                    
legislators  who  were  financially  dependent  on  the  oil                                                                    
industry  for  work.  He  believed  it  was  a  conflict  of                                                                    
interest that  should be  changed. He  spoke to  an improved                                                                    
educational system and society in Alaska.                                                                                       
                                                                                                                                
2:41:58 PM                                                                                                                    
                                                                                                                                
HELEN  NIENHUESER,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
testified in support  of the bill. She  supported the income                                                                    
tax because  they had three  granddaughters who loved  it in                                                                    
Alaska. She  stressed the  girls wanted  to live  in Alaska,                                                                    
but could  only do so if  jobs were available. She  tried to                                                                    
understand  why Alaskans  would not  support an  income tax.                                                                    
She  provided  her  thoughts  on the  matter.  She  did  not                                                                    
support much deeper cuts.                                                                                                       
                                                                                                                                
2:44:57 PM                                                                                                                    
                                                                                                                                
BOB SYLVESTER, SELF, JUNEAU, supported  the bill in general;                                                                    
however, he  hoped the dividend  amount could  be maintained                                                                    
as high as possible. He  recognized that many people used it                                                                    
as  disposable  income; however,  others  relied  on it.  He                                                                    
believed  a tax  would mean  people would  have skin  in the                                                                    
game.                                                                                                                           
                                                                                                                                
2:46:31 PM                                                                                                                    
                                                                                                                                
SALLY DONALDSON,  SELF, JUNEAU, testified in  support of the                                                                    
legislation. She  recognized the committee's hard  work. She                                                                    
did not support  further cuts to the budget.  She noted that                                                                    
the  budget had  been  severely cut  since  2013. She  hoped                                                                    
education was not  cut further. She believed  the income tax                                                                    
in the legislation was very reasonable.                                                                                         
                                                                                                                                
2:48:06 PM                                                                                                                    
                                                                                                                                
ROY  FULWILER, SELF,  JUNEAU, testified  in  support of  the                                                                    
bill. He supported the senior  tax exemption. He shared that                                                                    
he lived next  to his daughter and granddaughter.  He gave a                                                                    
personal  story  about  walking with  his  granddaughter  to                                                                    
school. He did not believe the  income tax in the bill would                                                                    
harm him.  He spoke to  his limited life savings  that would                                                                    
not be impacted.                                                                                                                
                                                                                                                                
2:50:38 PM                                                                                                                    
                                                                                                                                
AIMEE  KNIAZIOWSKI, CITY  OF  KODIAK,  KODIAK, testified  in                                                                    
support of  the bill and a  sustainable comprehensive budget                                                                    
solution.  She was  fully in  support of  an income  tax and                                                                    
capping  the PFD  to fund  state services.  She thanked  the                                                                    
committee for its time.                                                                                                         
                                                                                                                                
Vice-Chair Gara  asked if Ms. Kniaziowski  was testifying on                                                                    
behalf of the City of Kodiak.                                                                                                   
                                                                                                                                
Ms. Kniaziowski replied she was  testifying on behalf of the                                                                    
City of Kodiak and herself.                                                                                                     
                                                                                                                                
Vice-Chair  Gara asked  if the  City of  Kodiak had  taken a                                                                    
position on the bill.                                                                                                           
                                                                                                                                
Ms.  Kniaziowski  answered that  she  believed  the City  of                                                                    
Kodiak supported a sustainable budget plan.                                                                                     
                                                                                                                                
2:52:49 PM                                                                                                                    
                                                                                                                                
CHERYL  KEEPERS,   SELF,  FAIRBANKS   (via  teleconference),                                                                    
testified  in favor  of the  legislation.  She believed  the                                                                    
budget  had been  sufficiently  cut. She  did  not want  the                                                                    
economy to go  into further recession. She  spoke to impacts                                                                    
on the  university. She  believed it  was important  to take                                                                    
advantage of  Permanent Fund earnings. She  was unsure about                                                                    
the impact on federal taxes.                                                                                                    
                                                                                                                                
2:55:11 PM                                                                                                                    
                                                                                                                                
LYNETTE  CLARK, SELF,  FAIRBANKS  (via teleconference),  did                                                                    
not support  the bill.  She believed  it was  the governor's                                                                    
bill and  thought it the administration  represented a trail                                                                    
of lies.  She was opposed  to the  entire bill. She  did not                                                                    
believe an income  tax was the answer to  the state's budget                                                                    
problems.  She believed  further  cuts  were necessary.  She                                                                    
believed the  legislature needed  to address  shipping costs                                                                    
legislators could have paid for  by the state - she referred                                                                    
to  a  recent case  that  she  called "shipping  gate."  She                                                                    
thought more cuts could be made.                                                                                                
                                                                                                                                
2:58:55 PM                                                                                                                    
                                                                                                                                
DAVID SCOTT,  SELF, AUKE BAY (via  teleconference), spoke in                                                                    
favor of  HB 115. He  was a  68-year resident of  Alaska. He                                                                    
appreciated all of the work the legislature had done.                                                                           
                                                                                                                                
3:00:24 PM                                                                                                                    
                                                                                                                                
ERIKA   WOLTER,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
supported   HB   115.  She   thought   she   was  a   fiscal                                                                    
conservative.  However,  she  believed  the  state  had  cut                                                                    
enough. She  preferred a sales  tax as opposed to  an income                                                                    
tax. She also spoke  to additional sideboards for qualifying                                                                    
to receive a PFD.                                                                                                               
                                                                                                                                
3:02:10 PM                                                                                                                    
                                                                                                                                
ROBIN   SMITH,   SELF,   ANCHORAGE   (via   teleconference),                                                                    
supported  HB  115. She  spoke  in  favor of  an  individual                                                                    
income tax.  She was  a business owner  and was  starting to                                                                    
experience  the  effects  of   the  recession.  She  favored                                                                    
funding  education  which is  why  she  was amenable  to  an                                                                    
income tax.  She advocated  a fiscal  plan. She  thanked the                                                                    
committee.                                                                                                                      
                                                                                                                                
3:04:45 PM                                                                                                                    
                                                                                                                                
JANIE  TAYLOR, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in favor of HB 115.                                                                                                             
                                                                                                                                
3:06:19 PM                                                                                                                    
                                                                                                                                
DONALD  CRANDALL,  SELF,   ANCHORAGE  (via  teleconference),                                                                    
supported  HB  115.  He  had some  concerns  with  the  4.75                                                                    
percent  draw. He  wanted  to ensure  that  PF was  properly                                                                    
inflation-proofed. He spoke in support  of an income tax. He                                                                    
thought  several  budget  cuts  had already  been  made.  He                                                                    
opposed   additional  cuts   to   education   which  was   a                                                                    
responsibility  that legislators  should take  seriously. He                                                                    
thanked the committee for its time.                                                                                             
                                                                                                                                
Co-Chair Foster  shared that the  public could  submit their                                                                    
testimony in writing.                                                                                                           
                                                                                                                                
3:09:38 PM                                                                                                                    
                                                                                                                                
RICH WALKER, CITY OF KODIAK,  JUNEAU, spoke in support of HB                                                                    
115. He  reported that  the City of  Kodiak had  supported a                                                                    
fiscal plan.  He suggested an  income tax that  followed the                                                                    
federal  income  tax.  He  also  thought  the  legislature's                                                                    
attempt to continue  issuing a PFD. He noted  the large size                                                                    
of Alaska and the hardships  associated with living in rural                                                                    
Alaska. He  thought taking action was  important. He invited                                                                    
members to come to Kodiak for a visit some time.                                                                                
                                                                                                                                
3:12:19 PM                                                                                                                    
                                                                                                                                
RONALD YARNELL, SELF,  FAIRBANKS (via teleconference), spoke                                                                    
in  support of  HB 115.  He  thanked the  committee for  its                                                                    
time.                                                                                                                           
                                                                                                                                
3:13:07 PM                                                                                                                    
                                                                                                                                
DAN  DONKEL,  DONKEL  OIL  AND GAS  LLC,  ORLANDO,  FL  (via                                                                    
teleconference), spoke  about the  oil industry.  He thanked                                                                    
members  for  trying  to  lead   the  state  into  a  better                                                                    
financial  situation. He  suggested members  take a  look at                                                                    
the oil and  gas agency. He really believed  that Alaska was                                                                    
driving out  investment. He talked about  working on getting                                                                    
some  lease  extensions.  He   urged  members  to  encourage                                                                    
production. [He did not report on HB 115].                                                                                      
                                                                                                                                
Co-Chair  Foster  clarified  that  in the  meeting  was  the                                                                    
public  testimony for  HB 115,  and felt  that Mr.  Donkel's                                                                    
testimony was in reference to HB 111.                                                                                           
                                                                                                                                
Mr. Donkel elaborated that  additional production would make                                                                    
it possible to  not tax the system. He felt  that the system                                                                    
blocked  the additional  production.  He praised  Vice-Chair                                                                    
Gara for his commitment.                                                                                                        
                                                                                                                                
3:17:56 PM                                                                                                                    
                                                                                                                                
LYNN MCCABE,  SELF, BIG  LAKE (via  teleconference), opposed                                                                    
HB  115. She  thought  additional  spending reductions  were                                                                    
needed. She urged members to  encourage development. She did                                                                    
not believe  actual cuts had  occurred. She referred  to the                                                                    
governor's pipe  dream. She asserted that  education funding                                                                    
was bloated.  She suggested  that if  the members  could not                                                                    
make   specific  cuts,   they  could   apply  a   percentage                                                                    
reduction.                                                                                                                      
                                                                                                                                
3:22:29 PM                                                                                                                    
                                                                                                                                
KAREN  PERRY,  SELF,  CHUGIAK  (via  teleconference),  spoke                                                                    
against HB 115. She thought  the people of Alaska was better                                                                    
at  spending the  state's money  than  the legislature.  She                                                                    
accused  the  legislature of  stealing  from  the people  of                                                                    
Alaska.  She   asserted  that  government  needed   to  stop                                                                    
spending.  She encouraged  the growth  of  the economy.  She                                                                    
continued  to accuse  the government  stealing the  people's                                                                    
money. She  quoted an Alaskan  She strongly opposed  HB 115.                                                                    
***                                                                                                                             
                                                                                                                                
3:26:32 PM                                                                                                                    
                                                                                                                                
BRANDY DIXON, SELF,  ANCHORAGE (via teleconference), opposed                                                                    
HB 115.  She was a business  owner, and felt that  she would                                                                    
need to pass extra costs to her customers.                                                                                      
                                                                                                                                
3:27:43 PM                                                                                                                    
                                                                                                                                
KATHRYN  ANDREWS, SELF,  ANCHOR POINT  (via teleconference),                                                                    
opposed HB 115. She felt that  adding an income tax would do                                                                    
damage  to the  economy. She  suggested getting  rid of  the                                                                    
nonessentials.  She did  not believe  enough  cuts had  been                                                                    
made and  that that  should be  addressed before  taxing the                                                                    
people. She thanked the committee for its time.                                                                                 
                                                                                                                                
3:31:18 PM                                                                                                                    
                                                                                                                                
PAMELA SAMASH,  SELF, NENANA (via teleconference),  spoke in                                                                    
opposition of HB 115. She did  not feel the House had worked                                                                    
hard enough on compromise. She  believed taxes should be the                                                                    
last resort.                                                                                                                    
                                                                                                                                
3:33:04 PM                                                                                                                    
                                                                                                                                
PAUL  D.  KENDALL,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
spoke  in  opposition  of  HB   115.  He  expressed  various                                                                    
concerns.  He   referenced  an  article  from   an  Oklahoma                                                                    
newspaper  regarding  a  home   invasion.  He  mentioned  an                                                                    
intellectual   steal.  He   continued  to   provide  various                                                                    
opinions.   He   encouraged   the  legislature   moving   to                                                                    
Anchorage. People  needed to gather  together to  decide the                                                                    
direction  of the  state. He  continued  to mention  various                                                                    
items not related to the bill.                                                                                                  
                                                                                                                                
3:38:13 PM                                                                                                                    
                                                                                                                                
DEANNA  JAMES, SELF,  ANCHORAGE (via  teleconference), spoke                                                                    
in favor  of a  flat tax but  discouraged touching  the PFD.                                                                    
She thanked the committee for considering a flat tax.                                                                           
                                                                                                                                
3:39:59 PM                                                                                                                    
                                                                                                                                
SARA ALDWELL, SELF,  DOUGLAS (via teleconference), supported                                                                    
HB 115.  She spoke of  some of her family  members attending                                                                    
the university.  She also spoke  of the increased  burden on                                                                    
state workers as  result of various cuts.  She encouraged an                                                                    
income tax. She  was very willing to pay an  income tax. She                                                                    
did not what the state beholden  to the oil companies and if                                                                    
an income tax helped with that she would support of it.                                                                         
                                                                                                                                
3:43:01 PM                                                                                                                    
                                                                                                                                
MARK CARR,  SELF, ANCHORAGE (via  teleconference), supported                                                                    
HB 115. He was a small  business owner. He thought an income                                                                    
tax was fair and progressive. He  liked the idea that out of                                                                    
state workers  would be  paying a tax.  He noted  that times                                                                    
had changed,  and that people needed  to start contributing.                                                                    
He appreciated members' efforts.                                                                                                
                                                                                                                                
3:44:48 PM                                                                                                                    
                                                                                                                                
MARK   RICHARDS,  SELF,   FAIRBANKS  (via   teleconference),                                                                    
opposed the  legislation. He wanted more  individual freedom                                                                    
and  less  government  involvement.   He  was  a  government                                                                    
employee. He reported a gentleman  on the radio who had lots                                                                    
of great ideas, Bob Gillam.  He encouraged members to take a                                                                    
look at Mr. Gillam's idea. He thanked the committee.                                                                            
                                                                                                                                
3:47:10 PM                                                                                                                    
                                                                                                                                
ELIZABETH  NEWELL,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
supported HB  !!%. She was  a self-employed  science fiction                                                                    
writer. She supported  a state income tax. It  placed a hard                                                                    
link  between the  economy and  the government.  She thought                                                                    
Alaska was  one of the only  tax without an income  tax. She                                                                    
thought investment was necessary. She thanked members.                                                                          
                                                                                                                                
3:49:34 PM                                                                                                                    
                                                                                                                                
MARTHA ARTZ,  SELF, WASILLA  (via teleconference),  spoke in                                                                    
opposition of  HB 115.  She indicated she  was aware  of the                                                                    
problems of  the state.  She asked  the legislature  to stop                                                                    
spending. She  believed in a state  sales tax and a  sin tax                                                                    
and a  tax on  luxury items. She  thanked members  for their                                                                    
time.                                                                                                                           
                                                                                                                                
3:51:47 PM                                                                                                                    
                                                                                                                                
AMY  HOSEA,  SELF,   DELTA  JUNCTION  (via  teleconference),                                                                    
opposed  HB 115.  She suggested  the use  of a  lottery. She                                                                    
spoke  to  the  expense  of living  in  Delta  Junction  and                                                                    
reported needing all of the income possible.                                                                                    
                                                                                                                                
3:53:05 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
JEREMY  PRICE,  AMERICANS  FOR  PROSPERITY,  ANCHORAGE  (via                                                                    
teleconference),  spoke in  opposition  of HB  115. He  came                                                                    
from a  line of self-employed  business owner. He  thought a                                                                    
spending cap  was a good  idea. He  referred to some  of the                                                                    
history of a spending cap.                                                                                                      
                                                                                                                                
3:55:26 PM                                                                                                                    
                                                                                                                                
PAUL  VERHAGEN, SELF,  NENANA (via  teleconference), opposed                                                                    
HB 115.  He believed that reductions  to government spending                                                                    
was  necessary. He  voiced concerns  of thousands  of people                                                                    
moving away from the state. He opposed HB 115.                                                                                  
                                                                                                                                
3:57:03 PM                                                                                                                    
                                                                                                                                
3:57:54 PM                                                                                                                    
                                                                                                                                
JANET  COFFIN, SELF,  JUNEAU  (via teleconference),  opposed                                                                    
the legislation. She spoke of  the legislature wasting money                                                                    
with special  session. She thought  the tax  was outrageous.                                                                    
She opposed HB 115.                                                                                                             
                                                                                                                                
3:59:15 PM                                                                                                                    
                                                                                                                                
KATHIE WASSERMAN, ALASKA  MUNICIPAL LEAGUE, ANCHORAGE, spoke                                                                    
in favor  of HB  115. She reported  that the  membership was                                                                    
happy  with the  legislation being  offered. She  supplied a                                                                    
list of  items the  league recommended to  the legislatures.                                                                    
The  league did  not believe  that just  one thing  could be                                                                    
done to solve the whole problem.                                                                                                
                                                                                                                                
4:01:54 PM                                                                                                                    
                                                                                                                                
BYRON  CHARLES,  SELF,  KETCHIKAN (via  teleconference),  He                                                                    
reported that he had supplied  a document to members. He had                                                                    
just  spoken to  the attorney  general of  Alaska. He  noted                                                                    
Alaska had made $2.2 billion. He was 65 years old.                                                                              
                                                                                                                                
Co-Chair  Seaton  asked  the  testifier  to  submit  further                                                                    
comments to the committee.                                                                                                      
                                                                                                                                
4:05:59 PM                                                                                                                    
                                                                                                                                
CONRAD  MULLER, SELF,  JUNEAU (via  teleconference), favored                                                                    
HB 115. He  thanked members for the work put  into the bill.                                                                    
He was  glad to see  a progressive  income tax. He  spoke of                                                                    
the  detriments  of  a  sales  tax. He  liked  the  idea  of                                                                    
collecting  taxes for  those  who work  in  Alaska but  live                                                                    
outside of it.                                                                                                                  
                                                                                                                                
4:07:38 PM                                                                                                                    
                                                                                                                                
PAT FOX, SELF, FAIRBANKS  (via teleconference), supported HB                                                                    
115.  However, she  was concerned  with all  of the  give-a-                                                                    
ways. She was a senior citizen.  She thought a sales tax was                                                                    
good.  She encouraged  people to  stop giving  away Alaska's                                                                    
resources. She ran  her own business and had  not been given                                                                    
anything to help her business. She thanked the committee.                                                                       
                                                                                                                                
4:10:08 PM                                                                                                                    
                                                                                                                                
ROSELYNN CACY,  SELF, ANCHORAGE (via  teleconference), asked                                                                    
about  the sign  for the  Anchorage Legislative  Information                                                                    
Office. She  opposed HB 114.  She asked the  legislature not                                                                    
to change  the PF. She thought  the PFD existed to  keep the                                                                    
fund permanent.  She suggested  a 1  percent income  tax. It                                                                    
would be simpler than the tax proposed in HB 115.                                                                               
                                                                                                                                
4:13:18 PM                                                                                                                    
                                                                                                                                
LAURA   BOMNER,   SELF,  ANCHORAGE   (via   teleconference),                                                                    
testified in  support of the  legislation. She  believed the                                                                    
restructuring  of  the  PFD  would   help  to  maintain  the                                                                    
dividend into  the future.  She stated  an income  tax could                                                                    
help fund infrastructure and other.  She would not support a                                                                    
sales tax, which  she believed should be  reserved for local                                                                    
governments. She  favored the bill  over the Senate  bill SB                                                                    
26.  She stressed  a  fiscal plan  included  an income  tax,                                                                    
restructuring the PFD, and passing  HB 111 that would reduce                                                                    
oil credits.                                                                                                                    
                                                                                                                                
4:16:06 PM                                                                                                                    
                                                                                                                                
PETER MJOS, SELF,  ANCHORAGE (via teleconference), testified                                                                    
in support  of the  bill. He  relayed that  many individuals                                                                    
had left Alaska. He believed  the proposed $750 million cuts                                                                    
would result in  significant job loss. He  had recently been                                                                    
in  California that  had numerous  taxes and  was a  vibrant                                                                    
state. He asked the legislature to implement the tax.                                                                           
                                                                                                                                
4:19:06 PM                                                                                                                    
                                                                                                                                
JULIAN MASON, SELF, ANCHORAGE  (via teleconference), did not                                                                    
support the  legislation; however, he  did not object  to an                                                                    
income  tax or  a restructuring  of the  Permanent Fund.  He                                                                    
thought all Alaskans  should pay the same rate.  He spoke to                                                                    
a new  way to tax  that was in  the trust provision  that he                                                                    
believed was messed up.                                                                                                         
                                                                                                                                
Vice-Chair  Gara asked  Mr. Mason  to provide  ideas on  the                                                                    
provision.                                                                                                                      
                                                                                                                                
Mr. Mason recommended removing the provision.                                                                                   
                                                                                                                                
4:21:33 PM                                                                                                                    
                                                                                                                                
DONALD  FREDERICK,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
spoke  to  seniors  paying  federal  income  tax  on  social                                                                    
security. He shared that if  the state enacted an income tax                                                                    
that seniors  would be negatively  affected. He  shared that                                                                    
most states  did not  charge taxes  on retirement  income or                                                                    
military   He  suggested   reduced   spending  and   reduced                                                                    
Permanent Fund checks. He was  tired for paying for the lazy                                                                    
and greedy.                                                                                                                     
                                                                                                                                
4:24:17 PM                                                                                                                    
                                                                                                                                
WOLFGANG  FALKE,   SELF,  FAIRBANKS   (via  teleconference),                                                                    
opposed HB  115. He suggested  that the decision be  left to                                                                    
the people and  wanted to see it on the  ballot. He provided                                                                    
some  of his  background. He  was a  naturalized citizen  of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
4:26:37 PM                                                                                                                    
                                                                                                                                
KRISTI  SHERMAN,   SELF,  FAIRBANKS   (via  teleconference),                                                                    
supported  HB 115.  She  thought it  was  long overdue  that                                                                    
citizens of the  state help out. She thought the  bill was a                                                                    
good start.                                                                                                                     
                                                                                                                                
4:27:12 PM                                                                                                                    
                                                                                                                                
MOLLY   SHERMAN,  SELF,   FAIRBANKS  (via   teleconference),                                                                    
supported HB 115. Alaskans needed to pay their share.                                                                           
                                                                                                                                
4:27:40 PM                                                                                                                    
                                                                                                                                
B.A.   SHERMAN,   SELF,  FAIRBANKS   (via   teleconference),                                                                    
supported  HB  115.  She   appreciated  the  opportunity  to                                                                    
testify.                                                                                                                        
                                                                                                                                
4:28:16 PM                                                                                                                    
                                                                                                                                
PATRICE LEE, SELF, FAIRBANKS  (via teleconference), spoke in                                                                    
support of HB  115. She did not want to  see additional cuts                                                                    
to  the point  of the  decimation of  various programs.  She                                                                    
used childcare  as an  example. She also  wanted to  see the                                                                    
pupil teacher ratios remain small.  She was willing to pitch                                                                    
in. She thanked the committee.                                                                                                  
                                                                                                                                
4:30:09 PM                                                                                                                    
                                                                                                                                
JOHN SONIN,  CIVILIZED HUMANITY,  JUNEAU, was in  support of                                                                    
HB 115. He thought maximizing the PFD distribution.                                                                             
                                                                                                                                
4:32:42 PM                                                                                                                    
                                                                                                                                
AMIE VERHAGEN,  SELF, NENANA (via teleconference),  spoke in                                                                    
strong  opposition  of   HB  115.  She  did   not  feel  the                                                                    
legislature  was making  reasonable  decisions. She  thought                                                                    
additional cuts  were necessary. She thought  spending would                                                                    
continue.  She  urged  the  committee  consider  many  ideas                                                                    
instead of  taking the  easy way  out. She  provided several                                                                    
examples.  She asked  members to  work  together. She  noted                                                                    
Alaska was  one of the  most expensive state in  the nation.                                                                    
She would  not oppose  an income tax,  but not  before other                                                                    
measures were taken.                                                                                                            
                                                                                                                                
4:35:15 PM                                                                                                                    
                                                                                                                                
TERRY  REED,  SELF,  HOMER (via  teleconference),  spoke  in                                                                    
opposition  of HB  115. She  thought an  income tax  was the                                                                    
last  measure to  take. She  thought the  legislature should                                                                    
kick  SB  21 to  the  curb  and obtain  additional  revenues                                                                    
through  a   different  oil   tax  system.   She  encouraged                                                                    
additional cuts.                                                                                                                
                                                                                                                                
Vice-Chair  Gara  encouraged  her  to stay  tuned  for  more                                                                    
debate on the oil tax bill HB 111.                                                                                              
                                                                                                                                
4:37:01 PM                                                                                                                    
                                                                                                                                
MICHAEL BUCY,  SELF, JUNEAU (via  teleconference), supported                                                                    
HB  115. He  listed several  programs and  services that  he                                                                    
wanted.  He thought  government was  good when  it was  done                                                                    
right.  He  used  Canada  as  an  example.  He  thought  oil                                                                    
companies  had  benefited more  than  Alaskans  and the  tax                                                                    
system should change.                                                                                                           
                                                                                                                                
4:40:24 PM                                                                                                                    
                                                                                                                                
MICHAEL  HANZUK,   SELF,  ANCHORAGE   (via  teleconference),                                                                    
staunchly opposed HB 115. He  did not believe there had been                                                                    
enough  budget cutting  measures  taken in  the session.  He                                                                    
thought tax  implications and reductions  to the  PFD should                                                                    
not take place before additional  cuts were made. He thought                                                                    
under no  circumstance should an  income tax be  imposed and                                                                    
encouraged a spending cap.                                                                                                      
                                                                                                                                
4:43:21 PM                                                                                                                    
                                                                                                                                
MIKE SWAIN,  SELF, ANCHORAGE (via teleconference),  spoke in                                                                    
opposition of HB 115. He  wondered about the number of $750.                                                                    
He appreciated the time.                                                                                                        
                                                                                                                                
4:45:03 PM                                                                                                                    
                                                                                                                                
EVELYN  VERHAGEN, SELF,  NENANA (via  teleconference), spoke                                                                    
in  opposition  of  HB  115.   She  encouraged  looking  for                                                                    
wasteful  spending.   She  thought   taxes  should   be  the                                                                    
legislature's  last  resort. She  had  seen  an increase  in                                                                    
government    employee    salaries.    She    wanted    more                                                                    
accountability   from   government  workers.   She   thought                                                                    
additional   resources  should   be   developed.  She   also                                                                    
suggested increasing  tourism into the winter  months to see                                                                    
Northern Lights. She thanked the chairman.                                                                                      
                                                                                                                                
Co-Chair Foster relayed the agenda  for the evening at which                                                                    
time  public testimony  would continue  to be  heard for  HB                                                                    
115.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
4:50:12 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:50 p.m.                                                                                          

Document Name Date/Time Subjects
HB 115 - Support Documents - Public Testimony (2) 3.29.17.pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB 115 - Opposition Documents - Public Testimony (2) 3.29.17.pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB115 Support 3.29.17 2.pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB115 Oppose 3.29.17 2.pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB115 Oppose 040417 3.pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB115 Support 040417 4.pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB115 - Opposing (040617).pdf HFIN 3/29/2017 1:00:00 PM
HB 115
HB115 - Supporting (040617).pdf HFIN 3/29/2017 1:00:00 PM
HB 115