02/24/2022 03:00 PM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB37 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 37 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 24, 2022
3:05 p.m.
MEMBERS PRESENT
Representative Jonathan Kreiss-Tomkins, Chair
Representative Matt Claman, Vice Chair
Representative Geran Tarr
Representative Andi Story
Representative Sarah Vance
Representative David Eastman
MEMBERS ABSENT
Representative James Kaufman
COMMITTEE CALENDAR
HOUSE BILL NO. 37
"An Act relating to deposits into the dividend fund; relating to
income of and appropriations from the earnings reserve account;
relating to the taxation of income of individuals, partners,
shareholders in S corporations, trusts, and estates; 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."
- MOVED CSHB 37(STA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 37
SHORT TITLE: INCOME TAX; PERMANENT FUND; EARNINGS RES.
SPONSOR(s): REPRESENTATIVE(s) WOOL
02/18/21 (H) PREFILE RELEASED 1/8/21
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) CRA, STA, FIN
04/28/21 (H) W&M REPLACES CRA REFERRAL
04/28/21 (H) BILL REPRINTED
05/11/21 (H) W&M AT 11:30 AM DAVIS 106
05/11/21 (H) -- MEETING CANCELED --
05/13/21 (H) W&M AT 11:30 AM DAVIS 106
05/13/21 (H) Heard & Held
05/13/21 (H) MINUTE(W&M)
05/15/21 (H) W&M AT 11:30 AM DAVIS 106
05/15/21 (H) Heard & Held
05/15/21 (H) MINUTE(W&M)
05/18/21 (H) W&M AT 11:30 AM DAVIS 106
05/18/21 (H) Moved CSHB 37(W&M) Out of Committee
05/18/21 (H) MINUTE(W&M)
05/19/21 (H) W&M RPT CS(W&M) 5DP 2DNP
05/19/21 (H) DP: SCHRAGE, STORY, JOSEPHSON, WOOL,
SPOHNHOLZ
05/19/21 (H) DNP: PRAX, EASTMAN
01/27/22 (H) STA AT 3:00 PM GRUENBERG 120
01/27/22 (H) Heard & Held
01/27/22 (H) MINUTE(STA)
02/17/22 (H) STA AT 3:00 PM GRUENBERG 120
02/17/22 (H) Heard & Held
02/17/22 (H) MINUTE(STA)
02/22/22 (H) STA AT 3:00 PM GRUENBERG 120
02/22/22 (H) <Bill Hearing Postponed>
02/24/22 (H) STA AT 3:00 PM GRUENBERG 120
WITNESS REGISTER
REPRESENTATIVE ADAM WOOL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided introductory remarks during the
hearing on CSHB 37(W&M), as the prime sponsor.
KEN ALPER, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced two amendments to CSHB 37(W&M)
on behalf of Representative Wool, prime sponsor.
ACTION NARRATIVE
3:05:49 PM
CHAIR JONATHAN KREISS-TOMKINS called the House State Affairs
Standing Committee meeting to order at 3:05 p.m.
Representatives Story, Eastman, Claman, Vance, and Kreiss-
Tomkins were present at the call to order. Representative Tarr
arrived as the meeting was in progress.
HB 37-INCOME TAX; PERMANENT FUND; EARNINGS RES.
3:07:24 PM
CHAIR KREISS-TOMKINS announced that the only order of business
would be HOUSE BILL NO. 37, "An Act relating to deposits into
the dividend fund; relating to income of and appropriations from
the earnings reserve account; relating to the taxation of income
of individuals, partners, shareholders in S corporations,
trusts, and estates; 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." [Before the committee was CSHB
37(W&M).]
3:08:01 PM
REPRESENTATIVE ADAM WOOL, Alaska State Legislature, prime
sponsor, provided brief introductory remarks.
CHAIR KREISS-TOMKINS moved to adopt Amendment 1 to CSHB 37(W&M),
labeled 32-LS0275\B.3, Nauman, 2/10/22, which read as follows:
Page 2, lines 20 - 31:
Delete all material.
Renumber the following bill sections accordingly.
Page 3, line 1:
Delete ", as amended by sec. 2, ch. 16, SLA
2018,"
Page 24, line 11:
Delete "2020"
Insert "2022"
Page 30, line 22:
Delete "2021"
Insert "2022"
Page 30, line 23:
Delete "2022"
Insert "2024"
Page 30, line 27:
Delete "sec. 10"
Insert "sec. 9"
Page 30, line 28:
Delete "sec. 10"
Insert "sec. 9"
Page 31, line 3:
Delete "Section 18"
Insert "Section 17"
Page 31, lines 4 - 5:
Delete all material.
Renumber the following bill sections accordingly.
Page 31, line 6:
Delete "1 - 8, 11 - 13, 15, and 17"
Insert "1 - 7, 10 - 12, 14, and 16"
Delete "2021"
Insert "2022"
Page 31, line 7:
Delete "secs. 20 - 22"
Insert "secs. 19 and 20"
Page 31, line 8:
Delete "2022"
Insert "2024"
REPRESENTATIVE CLAMAN objected for the purpose of discussion.
3:08:45 PM
KEN ALPER, Staff, Representative Adam Wool, Alaska State
Legislature, on behalf of Representative Wool, prime sponsor,
explained Amendment 1, which proposed an effective date change.
CHAIR KREISS-TOMKINS invited questions from committee members.
3:10:22 PM
REPRESENTATIVE CLAMAN removed his objection. There being no
further objection, Amendment 1 was adopted.
3:10:42 PM
CHAIR KREISS-TOMKINS moved to adopt Amendment 2 to CSHB 37(W&M),
as amended, labeled 32-LS0275\B.4, Nauman, 2/11/22, which read
as follows:
Page 10, line 13:
Delete "The"
Insert "Subject to adjustment under (d) of this
section, the"
Page 10, line 15:
Delete "$12,550"
Insert "$12,950"
Page 10, line 17:
Delete "$18,800"
Insert "$19,400"
Page 10, line 18:
Delete "$25,100"
Insert "$25,900"
Page 10, line 19:
Delete "$12,550"
Insert "$12,950"
Page 10, line 24:
Delete "$12,550"
Insert "$12,950"
Page 10, line 27:
Delete "$18,800"
Insert "$19,400"
Page 11, line 1:
Delete "$18,800"
Insert "$19,400"
Page 11, line 2:
Delete "$25,100"
Insert "$25,900"
Page 11, line 7:
Delete "$25,100"
Insert "$25,900"
Page 11, following line 11:
Insert a new subsection to read:
"(d) Each year, the department shall adjust the
amounts of the standard deduction under (b) of this
section for inflation. The adjustment for inflation is
equal to the adjustment for inflation calculated for
the standard deduction against the federal income tax
as set out in 26 U.S.C. 63."
Reletter the following subsection accordingly.
REPRESENTATIVE EASTMAN objected.
REPRESENTATIVE CLAMAN objected for the purpose of discussion.
3:10:58 PM
MR. ALPER explained that Amendment 2 would adjust the standard
deduction to maintain consistency with current federal law,
which updates each year.
3:12:19 PM
REPRESENTATIVE EASTMAN, referencing the legal memorandum, titled
"HB 37 Amendment B.4 (standard deduction)" [included in the
committee packet], wondered whether other options had been
considered.
MR. ALPER indicated that Legislative Legal Services wanted to
avoid tying state law to federal code. Nonetheless, he pointed
out that there were "dozens" of instances in Alaska Statute
where that occurred. He believed that giving Alaskans the same
benefit of nontaxable income as the federal government would be
the easiest path forward.
3:14:12 PM
MR. ALPER, in response to a follow-up question from
Representative Eastman, said adding "not less than" language
would mean that someone at the Department of Revenue (DOR) would
need to assign a standard deduction each year, which would be an
unconstitutional delegation of legislative power to the
executive branch.
3:14:50 PM
REPRESENTATIVE STORY asked for the bill sponsor's opinion on the
legal memorandum.
REPRESENTATIVE WOOL believed it was wise to link the standard
deduction to the federal amount, as it would change over time
with inflation. In agreement with Mr. Alper, he reiterated his
lack of concern with the legal memorandum, as "dozens" of state
laws were linked to federal code.
REPRESENTATIVE CLAMAN shared his understanding that with respect
to the topic of indexing for inflation and tying certain state
statutes to the national standard, the legal memorandum should
be perceived as a warning. He believed that Amendment 2 offered
a reasonable approach.
3:17:39 PM
REPRESENTATIVE EASTMAN withdrew his objection.
REPRESENTATIVE CLAMAN withdrew his objection. There being no
further objection, Amendment 2 was adopted.
CHAIR KREISS-TOMKINS invited closing comments pertaining to CSHB
37(W&M), as amended.
3:18:29 PM
REPRESENTATIVE TARR said she would not object to moving the bill
from committee today; however, she did not support the proposal
in its entirety. Specifically, she expressed concern regarding
the dividend provision and the proposed PFD amount.
3:19:09 PM
REPRESENTATIVE EASTMAN characterized the proposed legislation as
a "different approach" to the state's financial problems. He
indicated that he disagreed with the argument that Alaskans were
taxed the lowest in the nation. He opined that the bill would
solve the state's problem at the expense of the people.
3:20:26 PM
REPRESENTATIVE STORY appreciated the hard work put into the
bill, opining that Alaska needed certainty about its financial
future. She believed that the lack of a fiscal plan was costing
the state investment revenue and talented individuals. She
expressed her support for the proposed legislation.
REPRESENTATIVE CLAMAN echoed Representative Tarr's comments,
explaining that he was undecided on his stance on the bill but
happy to move it from committee today.
REPRESENTATIVE VANCE said she would be opposing the bill to stay
consistent with her word and her constituents.
3:22:49 PM
REPRESENTATIVE CLAMAN moved to report CSHB 37(W&M), as amended,
out of committee with individual recommendations and the
accompanying fiscal notes.
REPRESENTATIVE EASTMAN objected.
3:23:07 PM
A roll call vote was taken. Representatives Tarr, Story,
Claman, and Kreiss-Tomkins voted in favor of moving CSHB
37(W&M), as amended, from committee. Representatives Vance and
Eastman voted against it. Therefore, CSHB 37(STA) was reported
out of the House State Affairs Standing Committee by a vote of
4-2.
3:25:26 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 3:25
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 37 Amendment B.3 (effective date) -- Kreiss-Tomkins.pdf |
HSTA 2/24/2022 3:00:00 PM |
HB 37 |
| HB 37 Amendment B.4 (standard deduction) -- Kreiss-Tomkins.pdf |
HSTA 2/24/2022 3:00:00 PM |
HB 37 |
| HB 37 Legal Memo re Amendment B.4 (standard deduction)_22-061mjt.pdf |
HSTA 2/24/2022 3:00:00 PM |
HB 37 |
| Revised HB 37 Fiscal Note PF-PFD-1-24-22.pdf |
HSTA 2/24/2022 3:00:00 PM |
HB 37 |
| HB 37 Amendments with vote tally_H STA_02.24.22.pdf |
HSTA 2/24/2022 3:00:00 PM |
HB 37 |