Legislature(2015 - 2016)SENATE FINANCE 532
03/24/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 39 | TELECONFERENCED | |
| + | SB 51 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 24, 2015
9:05 a.m.
9:05:09 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:05 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Carol Beecher, Director, Child Support Services, Department
of Revenue; Stacy Steinberg, Chief Assistant Attorney
General, Department of Law; Senator Bill Stolze, sponsor;
Daniel George, Staff to Senator Bill Stoltze
PRESENT VIA TELECONFERENCE
Ronan P. Nagle, Self, Fairbanks; James Hastings, Last
Frontier Aviation Group and Pathfinder, Inc., Matsu; Elinor
Maya Salganek, Director, Film Program, University of Alaska
Fairbanks, Fairbanks; Asmeret Payne, Film Student,
University of Alaska Fairbanks, Fairbanks; Cedar Cussins,
Co-Owner, 49th State Motor Tours, Anchorage; Thomas Daly,
President, Alaska Film Group, Kenai; Frank Flavin, Flavin
Photography, Anchorage; Andrew Macebo, self, Anchorage;
Elmer Pekoalok, Self, Nome; Dr. George Guthridge, self,
Dillingham
SUMMARY
SB 39 REPEAL FILM PRODUCTION TAX CREDIT
SB 39 was HEARD and HELD in committee for further
consideration.
SB 51 UNIFORM INTER.CHILD SUPPORT; PARENTAGE
SB 51 was HEARD and HELD in committee for further
consideration.
9:05:36 AM
SENATE BILL NO. 51
"An Act relating to the Uniform Interstate Family
Support Act, including jurisdiction by tribunals of
the state, registration and proceedings related to
support orders from other state tribunals, foreign
support orders, foreign tribunals, and certain persons
residing in foreign countries; relating to
determination of parentage of a child; and providing
for an effective date."
9:05:54 AM
CAROL BEECHER, DIRECTOR, CHILD SUPPORT SERVICES, DEPARTMENT
OF REVENUE, gave an overview of SB 51. She stated that SB
51 would amend current law by expanding it to provide an
efficient and effective mechanism for enforcing child
support orders between countries. She shared that the
current version of the Uniform Interstate Family Support
Act, contained in Alaska's statutes and passed in 1996, was
written in order to provide a clear framework for enforcing
orders between states. She furthered that the act cleared
up problems with multiple orders in various locations, as
well as other jurisdictional issues. She stressed that the
act had been instrumental in providing a uniform method for
enforcing child support orders between states. She noted
that the change in the act suggested by the W version of
the bill would greatly improve child support services when
one parent lived outside of the United States. She shared
that in 2008, the National Conference of Commissioners on
Uniform State Laws (also known as the Uniform Law
Commission) approved amendments to UIFSA to incorporate the
provisions of the Convention on the International Recovery
of Child Support and Other Forms of Family Maintenance
(Convention), concluded at The Hague, November 23, 2007.
She furthered that in 2010 the U.S. Senate provided a
resolution of advice and consent to The Convention, and in
September of 2014, public law 113-183, "Preventing Sex
Trafficking and Strengthening Families Act", was signed
into law. The law required that all 4-D child support
programs to pass UIFSA 2008 by the next legislative
session.
9:08:05 AM
Ms. Beecher continued that federal funding of the 4-D child
support program was a condition of passage and would mean
$19 million to the child support program; the Temporary Aid
for Needy Families block grant was also contingent on
passage.
9:09:04 AM
Ms. Beecher said that UIFSA 2008 would allow U.S. children
to receive child support if the non-custodial parent lived
in a treaty country. She explained that many countries
currently would not process foreign child support requests
in the absence of a treaty obligation. She relayed that the
2008 changes had been limited to those necessary to
accommodate the convention. She asserted that passage would
ensure a uniform method of enforcing child support orders
between participating countries.
9:09:53 AM
STACY STEINBERG, CHIEF ASSISTANT ATTORNEY GENERAL,
DEPARTMENT OF LAW, presented the sectional analysis (copy
on file):
As a preliminary matter, note that a sectional summary
of a bill should not be considered an authoritative
interpretation of the bill and the bill itself is the
best statement of its contents. If you would like an
interpretation of the bill as it may apply to a
particular set of circumstances, please advise.
Secs. 1 - 16. Amend definitions and add new
definitions applicable to AS 25.25 relating to the
Uniform Family Support Act.
9:10:36 AM
Co-Chair MacKinnon interjected that the section would
expand the definition of "home state", or "state."
Ms. Steinberg clarified that the section would amend some
definitions, including "foreign state", and add new
definitions for what would be the new Article 7 in the act.
She stated that the section amended the definition of
"foreign state", "initiating tribunal", "issuing state",
issuing tribunal", "obligee", "obligor", "register",
"registering tribunal", "responding state", "responding
tribunal", "state", "support order", and "support
enforcement agency."
Co-Chair MacKinnon added that the bill worked to expand
definitions in order to appropriately communicate with
other organization that may be foreign in nature, keeping
in-line with what other states were doing.
9:12:48 AM
Ms. Steinberg concurred. She continued with the sectional
analysis:
Sec. 17. Designates the child support services agency
created in AS 25.27.010 as the support enforcement
agency of the state.
Sec. 18. Amends AS 25.25.103 to clarify that
cumulative remedies do not affect the recognition of a
support order on the basis of comity.
Sec. 19. Adds a new subsection to AS 25 .25.103 to
establish that the bill does not establish the
exclusive method for establishing support orders in
the state and that it does not grant the state the
ability to issue an order related to custody or
parenting time under this chapter.
Sec. 20. Requires a tribunal of the state to apply
specified sections of the bill and law to proceedings
involving foreign support orders, foreign tribunals,
or obligees, obligors, or children residing in a
foreign country.
Sec. 21. Makes clarifying amendments to AS 25.25.201
pertaining to jurisdiction over nonresidents.
Sec. 22. Explains that the laws of the state may not
be used to acquire personal jurisdiction for a
tribunal of the state to modify a child support order
of another state, or a foreign support order, unless
certain requirements are met.
Sec. 23. Repeals and reenacts AS 25.25.202 to provide
that the state has continuing, exclusive jurisdiction
to modify or enforce its order if certain requirements
are met.
Co-Chair MacKinnon welcomed Co-Chair Kelly to the table.
9:14:36 AM
Ms. Steinberg continued:
Sec. 24. Makes clarifying revisions to AS 25.25.203
pertaining to initiating and responding tribunals.
Sec. 25. Makes clarifying revisions to AS 25.25.204
pertaining to simultaneous proceedings.
Sec. 26. Clarifies that jurisdiction is based on
residency at the time of filing and that the state can
have continuing jurisdiction with the consent of all
parties even when the parties no longer reside there.
Sec. 27. Clarifies when the state may not exercise
continuing, exclusive jurisdiction to modify a child
support order issued by a tribunal of the state.
Sec. 28. Requires a tribunal of the state to recognize
continuing, exclusive jurisdiction of the tribunal of
another state that has issued a child support order
under a law substantially similar to this chapter.
Sec. 29. Allows a tribunal of the state to serve as
the initiating tribunal to request the tribunal of
another state to modify a support order issued in that
state.
Secs. 30 and 31. Clarify when a tribunal of this state
can act as an initiating or responding tribunal to
enforce a support order.
Secs. 32 - 37. Amend procedures for determining which
order is the controlling order if two or more support
orders have been issued for the same obliger and
child. Adds requirements for controlling support
orders.
9:16:06 AM
Ms. Steinberg continued:
Sec. 38. Adds "foreign country" to AS 25.25.208
pertaining to orders for two or more obligees.
Sec. 39. Clarifies language regarding credit for
payments.
Sec. 40. Adds new sections regarding proceedings
involving nonresidents who are subject to personal
jurisdiction, and regarding jurisdiction for modifying
spousal support orders.
Sec. 41. Makes clarifying revisions to AS 25.25
.301(c).
Sec. 42. Amends AS 25.25.303 to remove "including the
rules on choice of law .... "
Sec. 43. Amends AS 25.25.304 relating to the duties of
a tribunal of this state to specify the amount of
support sought from a foreign country and to convert
the amount into foreign currency.
Sec. 44. Allows a tribunal of this state to determine
the controlling child support order.
Sec. 45. Provides the process for a tribunal of this
state to convert a foreign support order into the
equivalent amount in dollars.
Sec. 46. Makes clarifying revisions to AS 25.25.306.
Secs. 47 - 48. Makes clarifying revisions and adds
sections to the duties of child support agencies
regarding foreign support orders and income
withholding orders.
Sec. 49. Adds a new section setting out the duties of
the Department of Revenue under the Act.
Sec. 50. Makes clarifying revisions to AS 25.25.310.
Sec. 51. Makes clarifying revisions to AS 25.25.311.
Sec. 52. Changes requirements regarding when a court
may seal information to protect the health, safety, or
liberty of a party or a child.
Sec. 53. Makes clarifying revisions to AS 25.25.3 13.
Sec. 54. Makes clarifying revisions to AS 25.25.3 14.
Secs. 55 - 59. Make clarifying revisions to AS
25.25.316.
Sec. 60. Adds a new section providing that a certified
copy of a voluntary acknowledgement of paternity is
admissible to establish paternity.
Sec. 61. Allows tribunals to communicate through
electronic mail under the Act.
Sec. 62. Amends AS 25.25.318 to apply to tribunals
outside this state.
Sec. 63. Makes clarifying revisions to AS 25.25.3 19.
Sec. 64. Adds sections relating to the duties of the
support enforcement agency of this state or a tribunal
of this state when the child support services agency
of this state receives payments under a support order
and neither the obligor, the obligee, nor the child
resides in this state.
9:19:09 AM
Ms. Steinberg continued:
Sec. 65. Allows a responding tribunal of this state to
issue a support order if the tribunal has personal
jurisdiction over an individual residing outside of
the state.
Sec. 66. Clarifies when a tribunal may issue a
temporary child support order.
Sec. 67. Authorizes a tribunal of this state to serve
as a responding tribunal in a proceeding to determine
parentage.
Sec. 68. Makes clarifying revisions to AS 25.25.501.
Sec. 69. Makes clarifying revisions to AS 25.25.502.
Sec. 70. Makes clarifying revisions to AS 25.25.503.
Sec. 71. Makes clarifying revisions to AS 25.25.504.
Sec. 72. Makes clarifying revisions to AS 25.25.505.
Sec. 73. Clarifies how an obligor can challenge the
enforcement of an income withholding order issued in
another state and received by an employer of this
state.
Secs. 74 - 77. Add "foreign support order" as an order
that can be registered in this state.
Sec. 78. Provides procedures for registering an order
when more than one order is in effect.
Sec. 79. Adds "foreign support order" to AS 25.25.603,
dealing with effect of registration for enforcement.
Sec. 80. Provides that the law of the issuing state or
country governs certain proceedings relating to
support orders.
Sec. 81. Provides that a responding tribunal in this
state shall apply the procedures and remedies
available in this state to collect and enforce a
support order from another state or foreign country
but will prospectively apply the law of the state or
foreign country that issued the controlling order.
Sec. 82. Adds "foreign support order" to AS 25.25.605,
regarding notice of registration of order.
Sec. 83. Adds new subsections relating to procedures
required when a registering party asserts that two or
more orders are in effect.
Secs. 84 - 85. Make conforming amendments to AS
25.25.606.
9:21:21 AM
Ms. Steinberg continued:
Sec. 86. Adds "the alleged controlling order is not
the controlling order" to the list of defenses
available to a party contesting the validity or
enforcement of a registered support order.
Secs. 87 - 89. Make conforming amendments.
Sec. 90. Prohibits a tribunal of this state from
modifying the duration of the obligation of support
under a support order that could not be modified under
the Jaw of the issuing state.
Sec. 91. Makes clarifying amendments to AS 25.25.61
l(d).
Sec. 92. Adds new subsections providing that the law
of the state that issued the controlling support order
governs the duration of the obligation of support.
Sec. 93. Requires that when an order issued by a
tribunal of this state is modified by another state,
this state shall only enforce the original order for
the purposes of arrears and interest prior to
modification.
Sec. 94. Amends AS 25.25.613(b) to include references
to new sections added by this bill.
Sec. 95. Adds new sections relating to jurisdiction
and procedures to modify child support orders of
foreign countries.
Sec. 96. Adds a new article, Article 7 A, dealing with
proceedings under the Convention on the International
Recovery of Child Support and Other Forms of Family
Maintenance.
New sections include definitions, applicability,
initiation of support proceedings, registration of
convention support orders, contesting orders,
recognition and enforcement of orders, foreign support
agreements, modification of convention support orders,
and other sections.
Secs. 97 - 100. Make clarifying revisions to AS
25.25.801, AS 25.25.802, and AS 25.25.901.
Sec. 101. Repeals AS 25.25.101(7), AS 25.25.205(f), AS
25.25.206(c), AS 25.25.30l(b), AS 25.25.401 (c), and
AS 25.25.701.
Sec. 102. Provides that this Act applies to
proceedings begun on or after the effective date of
this section.
Sec. 103. Requires the Department of Revenue to adopt
transition regulations.
Sec. I 04. Directs the reviser to make conforming
amendments to various article headings and section
catch lines.
9:24:12 AM
Ms. Steinberg concluded the sectional analysis:
Sec. l05. Provides that sec. I 03 takes effect
immediately.
Sec. 106. Provides that the Act, except as provided in
sec. 105, takes effect July 1, 2015.
9:24:29 AM
Senator Dunleavy requested a brief summary of the
legislation.
Ms. Steinberg explained that the bill contained clarifying
amendments and would update the way Alaska handled child
support cases involving a parent in another country,
provided that the country had signed on to the 2008 treaty.
In order or the U.S. to finalize the ratification process
and ensure that it can meet all of the responsibilities
under the treaty, each state has to make the changes to
state law found in the bill.
9:28:19 AM
Senator Dunleavy understood that child custody was not
involved, only child support payments.
Ms. Steinberg responded in the affirmative.
Senator Dunleavy asked what would happen in the event the
legislation did not pass.
Ms. Steinberg stated that approximately $19 million in
federal funds would be at risk, SH noted that those funds
were also tied into the state's Temporary Assistance for
Needy Families block grant.
Senator Dunleavy asked why the states had to pass the law
in order for the treaty to take effect.
Ms. Steinberg explained that the same provisions and
requirements must be uniformly in place in each state
before working with international operations.
9:31:20 AM
Co-Chair Kelly opined that there was not a sponsor
statement among the backup documents. He was directed to
the governor's transmittal letter in his packet.
9:32:05 AM
AT EASE
9:32:29 AM
RECONVENED
Vice-Chair Micciche referred to Page 18, line 11 of the
bill:
Sec. 25.25.312. Nondisclosure of information in
exceptional circumstances.
If a party alleges in an affidavit or a pleading under
oath that the health, safety, or liberty of a party or
child would be jeopardized by disclosure of specific
identifying information, that information must be
sealed and may not be disclosed to the other party or
the public.
After a hearing in which a tribunal takes into
consideration the health, safety, or liberty of the
party or child, the tribunal may order disclosure of
information that the tribunal determines to be in the
interest of justice.
Vice-Chair Micciche asserted that other treaty countries
may or may not have a fully functional legal system. He
stated that the section could require someone to make
unfair claims against a parent. He wondered how the rights
of U.S. citizens would be protected in other countries.
Ms. Steinberg explained current law already contained a
similar provision to Section 52. She said that the language
in the section matched up with the language in the
equivalent uniform law for child custody. She relayed that
the provision provided an assurance that by disclosing the
address or whereabouts of the child, the child would not be
at risk of harm. She related that there were provisions in
the treaty that would ensure due process for parents in the
U.S. and abroad. She added that there was a provision in
state law that said that if a child support order that was
incompatible with U.S. law, the state did not have to
enforce the order. She assured the committee that foreign
countries would be required to give due process to parents;
including appeal rights, notice, and opportunity to be
heard.
9:36:36 AM
Vice-Chair Micciche noted that there were 26 reciprocating
countries that took part in the Hague Convention, with 48
being the projected total. He assumed that those countries
could put Americans out of reach of high level protection
for their children even without a burden of proof of a
health or safety risk. He said he would feel more
comfortable with the language if it pertained to a domestic
and not a foreign location.
Ms. Steinberg reiterated that countries needed to have a
legal infrastructure in place in order to sign the treaty,
which was why there were not more countries signed on. She
noted that the majority of countries who had already signed
the treat had advanced legal systems. She relayed that the
requirements for signing the treaty were onerous, thereby
inherently requiring a certain level of developed legal
system. She understood the concern but assured the
committee that the countries that had signed on had
advanced legal systems.
9:39:22 AM
Vice-Chair Micciche asked about Page 21, line 12.
Sec. 66. AS 25.25.401(b) is repealed and reenacted to
read:
(b) The tribunal may issue a temporary child
support order if the tribunal determines that an
order is appropriate and the individual ordered
to pay is
(1) a presumed father of the child;
(2) petitioning to have the individual's
paternity adjudicated;
(3) identified as the father of the child
through genetic testing;
(4) an alleged father who has declined to
submit to genetic testing;
(5) shown by clear and convincing evidence
to be the father of the child;
(6) an acknowledged father under AS
25.20.050;
(7) the mother of the child; or
(8) an individual who has been ordered to
pay child support in a previous proceeding
and the order has not been reversed or
vacated.
Vice-Chair Micciche spoke to (b)(1) and the phrase
"presumed fatherhood." He worried that men would be taken
advantage of by being falsely accused of paternity.
Ms. Steinberg replied that the section spoke to a temporary
child support order issued by a U.S. tribunal. She said
that the language in (b)(1) was a legal standard; in the
U.S. there was a presumption that if a man was married to
the mother of a child then he was the father of that child.
She said that there were legal provisions to rebut the
presumption of paternity once proof was brought forward.
She stated that the intention of the temporary order was to
ensure that children were cared for during the time it took
to gather all the proof and necessary evidence to finalize
a child support order.
9:43:04 AM
Vice-Chair Micciche worried that the intent could get lost
in translation across international lines. He supported the
intent of the legislation, but maintained his concern.
9:43:58 AM
Co-Chair MacKinnon asked for a copy of the original
language in Section 66.
9:44:13 AM
Senator Bishop understood that the U.S. Senate had
consented to the treaty.
Ms. Steinberg replied in the affirmative.
Co-Chair MacKinnon directed committee attention the
response from Senator Lisa Murkowski (copy on file).
9:44:47 AM
Senator Hoffman asked whether a list of participating
countries was available.
Ms. Steinberg replied that the list was in the back up,
titled "Exhibit 4"(copy on file).
9:45:13 AM
AT EASE
9:45:43 AM
RECONVENED
Senator Dunleavy asked whether the Indian Child Welfare Act
(ICWA) had been considered and incorporated into the
legislation.
Ms. Steinberg replied that the ICWA does not apply to the
treaty, as it solely dealt with child custody on Native
children. She said that the federal Full Faith and Credit
for Child Support Orders Act stated that states had to give
full faith and credit to child support orders from other
states; tribes in Indian Country had to give full faith and
credit to state orders. She noted that there were many
Indian Tribes that had child support agencies equivalent to
state child support service divisions; the agencies were
federally funded and followed strict rules on enforcing
orders from other states.
9:47:50 AM
Co-Chair Kelly read from the governor's transmittal letter
dated February 10, 2015 (copy on file):
In 1995, Alaska adopted the UIFSA (A.S 25.25.010 -
25.25.903). In 2008, the National Conference of
Commissioners on Uniform State Laws (also known as the
Uniform Law Commission) approved amendments to UIFSA
to incorporate the provisions of the Convention on the
International Recovery of Child Support and Other
Forms of Family Maintenance (Convention), concluded at
The Hague, November 23,2007 . The Convention contains
provisions to establish uniform procedures for the
processing of international child support orders.
In order to maintain compliance with federal law and
treaty obligations and to continue to qualify for
federal funding programs for child support matters,
there is a compelling need to update Alaska's statutes
this legislative session by adopting the 2008
amendments to the UIFSA.
The proposed bill is limited to amendments needed to
integrate the 2008 updates to UIFSA into State law.
The amendments must be effective by July 7, 2075, to
comply with federal law.
First, the bill would amend the UIFSA to remove the
fiction that a "foreign country" is a state of the
United States by amending existing text referring to a
tribunal of this state to add "or a foreign country."
Second, the proposed bill would provide guidelines
relating to the legislation, enforcement, and
modification of foreign support orders from countries
that, like the United States, are parties to the
Convention.
A third component of the bill would improve the
enforcement of United States child support orders
abroad and would ensure that children living in the
United States would receive financial support due them
from parents, wherever the parents reside.
These amendments would benefit Alaska families by
ensuring stable and predictable enforcement of Alaska
family support orders in other states and already.
Additionally, it would ensure that residents of this
state would be able to enforce support orders in this
state, regardless of where they originated.
Co-Chair Kelly lamented that the bill had not been properly
explained. He asserted that the transmittal letter may have
met requirements, but triggered his "radar." He opined that
the bill was 40 pages long and had come from the federal
government, which he did not trust in the same way he did
not trust the government of Bosnia, the European Union,
Norway, etc. He communicated that the materials did not
provide him the information needed to comprehend the
legislation and were, in fact, "gobbledy gook."
9:50:07 AM
Senator Bishop clarified that the bill was not a child
custody bill.
Ms. Steinberg replied in the affirmative.
9:50:55 AM
Co-Chair MacKinnon opened public testimony.
9:51:40 AM
Co-Chair MacKinnon closed public testimony.
9:51:43 AM
Vice-Chair Micciche supported the intent of the
legislation. He wanted assurances that other countries
would have the systems in place to respect the rights of a
parent whose children had been taken to another country,
and to have the legal wherewithal to deliver a fair
process.
9:53:44 AM
Co-Chair MacKinnon understood the committee's concern with
maintaining sovereignty as a state.
9:54:10 AM
Vice-Chair Micciche thought that issues surrounding
children could get emotional and he feared that parents
could be cut off from their children without due process.
9:54:33 AM
Senator Dunleavy understood that the issue was the state
ratifying a law, because states do not ratify treaties. He
thought that the purpose for ratification came down to
federal money.
9:55:11 AM
Senator Bishop wondered how many times the issue had
affected an Alaskan family.
Ms. Beecher estimated that the Alaska Child Support Agency
currently had approximately 300 cases with a foreign
address; in 130 instances the non-custodial parent lived in
a foreign country.
9:55:56 AM
Co-Chair MacKinnon felt that the issue was important to the
state. She directed the committee to carefully consider the
legislation.
9:57:17 AM
Senator Bishop asked whether the United States had an
embassy in each of the participating countries.
Ms. Steinberg replied that she could provide the
information.
9:57:35 AM
Senator Dunleavy asked how much funding Alaska would
receive from the federal government.
Ms. Beecher said that the federal portion would be $19
million.
9:57:57 AM
Co-Chair MacKinnon added that $45 million in family grants
were also tied to the ratification.
Ms. Beecher responded in the affirmative. She furthered
that it was required through the Social Security Act that
states have an approved child support plan in order to
receive the Temporary Aid for Needy Families block grant.
SB 51 was HEARD and HELD in committee for further
consideration.
9:58:38 AM
AT EASE
10:02:33 AM
RECONVENED
SENATE BILL NO. 39
"An Act repealing the film production tax credit;
providing for an effective date by repealing the
effective dates of secs. 31 - 33, ch. 51, SLA 2012;
and providing for an effective date."
10:02:50 AM
SENATOR BILL STOLZE, SPONSOR, shared that the legislation
was intended to reign in state spending during the current
fiscal climate. He stressed that he was not making a value
judgement on the product turned out by the film industry.
He believed that the Film Tax Credit should be repealed in
order to cut state expenditures.
10:07:02 AM
DANIEL GEORGE, STAFF TO SENATOR BILL STOLTZE, overviewed
the sectional analysis (copy on file):
As a preliminary matter, note that a sectional summary
of a bill should not be considered an authoritative
interpretation of the bill and the bill itself is the
best statement of its contents. If you would like an
interpretation of the bill as it may apply to a
particular set of circumstances, please advise.
Section 1 removes a reference to the film tax credit
from AS 43.75.130(f), related to the revenue sharing
with local governments of the fisheries business tax.
The effective date of this section is July 1, 2015.
Section 2 removes a reference to the film tax credit
from AS 43.75.130(f) as it is amended in sec. 14, ch.
61, SLA 2014. The effective date of this section is
the same as the effective date of sec. 14, ch. 61, SLA
2014, December 31, 2016.
Section 3 removes a reference to the film tax credit
from AS 43.77.060(e), related to the revenue sharing
with local governments of the fisheries resource
landing tax. The effective date of this section is
July 1, 2015.
Section 4 removes a reference to the film tax credit
from AS 43.77.060(e) as it is amended in sec. 17, ch.
61, SLA 2014. The effective date of this section is
the effective date of sec. 17, ch. 61, SLA 2014,
December 31, 2016.
Section 5 makes amendments conforming with the repeal
of AS 44.25. I 00 - 44.25 .190, related to the film
production incentive program. The effective date of
this section is July 1, 2015.
Section 6 removes a reference to the film tax credit
from sec. 28(b), ch. 61, SLA 2014, (the transition
language of SCS CSHB 306(FIN) am S of the 28th
Legislature) relating to the repeal of the film tax
credit and other tax credits. This section has an
immediate effective date.
Section 7 repeals AS 24.20.271(12) (related to the
duty of the legislative audit division to conduct
audits of the film production incentive program), AS
43.98.030 (film production tax credit), AS 44.25.100 -
44.25.130 (film production incentive program), AS
44.25.140 -44.25.190 (film production incentive
program), and AS 44.33.231(c) (administration of the
Alaska film production incentive program (AS
44.25.110)). The effective date of this section is
July 1, 2015.
Section 8 repeals AS 44.25.135, effective July 1,
2021, allowing six years for the recovery of the film
production tax credit after the credit program is
repealed if the film office determines that the film
producer or production is liable for damages to the
state, or any political subdivision of the state. This
section has an immediate effective date.
Section 9 repeals multiple sections of ch. 51, SLA
2012 and ch. 61, SLA 2014, related to the film tax
credit. The effective date of this section is July 1,
2015.
Section 10 provides transition language for the repeal
of the film tax credit. The effective date of this
section is July 1, 2015.
Section 11 repeals certain sections of ch. 51, SLA
2012, related to the film tax credit. The effective
date of this section is July 1, 2015.
Sections 12 - 15 provide the effective dates for the
bill, noted above. These various dates are necessary
because 2014 legislation will amend some sections in
2016, and to allow recovery of damages after the
program is repealed.
10:09:26 AM
Co-Chair MacKinnon OPENED public testimony.
10:09:54 AM
RONAN P. NAGLE, SELF, FAIRBANKS (via teleconference), spoke
in opposition to the bill. He shared that he was self-
employed and made his living contracting out to production
companies that came to Alaska to create reality television.
He believed that the tax credit was an important factor in
the diversification of the state's economy. He felt that
the industry would not in the state without incentive. He
suggested tying local hire requirements to tax credits. He
said that the show Ultimate Survival Alaska had spent
millions of dollars in the state and believed that removing
the credits would cause production companies to look
elsewhere for filming locations.
10:13:04 AM
JAMES HASTINGS, LAST FRONTIER AVIATION GROUP AND
PATHFINDER, INC., MATSU (via teleconference), echoed the
comments of the previous speaker. He shared that he worked
for a veteran owned and veteran run company. He spoke of
his concerns for smaller local businesses that had
benefited from the incentives.
10:15:21 AM
ELINOR MAYA SALGANEK, DIRECTOR, FILM PROGRAM, UNIVERSITY OF
ALASKA FAIRBANKS, FAIRBANKS (via teleconference), spoke in
opposition to the legislation. She related that the program
graduated its first student in 2012. She said that the
university had worked to develop pathways between students
and the industry and that the work was now just coming to
fruition; the degree program was one of the largest growing
degree programs in the state. She relayed film was second
largest export of the United States and that the funding
available to the industry was astronomical. She believed
that the industry could be a vehicle for Alaska language
and history and should be supported.
10:18:34 AM
ASMERET PAYNE, FILM STUDENT, UNIVERSITY OF ALASKA
FAIRBANKS, FAIRBANKS (via teleconference), testified in
opposition to the bill. She related that she was majoring
in film at UAF and if the incentives were to disappear then
she would have to leave the state as well. She believed
that films made in Alaska, and viewed worldwide, would
prompt more tourism and lead to economic growth. She
believed that the film industry touched on numerous other
industries in a positive way.
10:19:49 AM
CEDAR CUSSINS, CO-OWNER, 49TH STATE MOTOR TOURS, ANCHORAGE
(via teleconference), spoke in opposition to the bill. She
shared that through her husband's work as a contractor on
the film "Big Miracle" he had found a way to earn
significant wages to support their family. She hoped that
the committee would consider the financial impact the
incentives had on families statewide. She concluded that
she understood the reasoning behind putting a freeze on
incentives but hoped they would not be permanently
eliminated.
10:22:48 AM
THOMAS DALY, PRESIDENT, ALASKA FILM GROUP, KENAI (via
teleconference), opposed the bill. He commented that in
order for a new industry to grow in the state it needed
stability; a stable economy required diversification, and
as the state was currently living through the downside of
an economy heavily dependent on one sector, the incentives
were vital. He asserted that the continued changes in the
incentives for the industry created doubt in the minds of
investors. He noted that the incentives were currently on
hold and all state film positions had been terminated,
which meant that passage of the bill would not save the
state any additional money. He said that he had recently
met with film producers in California who had been excited
to film in Alaska, but that a competitive film incentive
was necessary. He opined that the bill would kill new jobs
in technology and destroy a business environment that was
necessary for Alaskan businesses to make decisions for
investment in hardware, training, and infrastructure. He
stressed that there was a plethora of new businesses and
positions that had been created in the state due to the
film industry. He believed that a film program could be
designed that the legislature could support, but that the
legislature needed to define what it believed was a
fiscally responsible rate of return on investment. The last
legislative audit showed a return of $2.10 for each dollar
of tax credit issued and out of the $100 million budget
only $43 million had been issued.
10:26:27 AM
FRANK FLAVIN, FLAVIN PHOTOGRAPHY, ANCHORAGE (via
teleconference), testified in opposition to the bill. He
stressed the importance the industry in the state. He hoped
that the film office would not be closed entirely.
10:29:04 AM
ANDREW MACEBO, SELF, ANCHORAGE (via teleconference), spoke
in opposition to the bill. He said that his business had
benefited greatly from the film industry. He believed that
shutting down the office would send a negative message to
the rest of the world. He felt that the state should
diversify its economic portfolio.
10:31:23 AM
ELMER PEKOALOK, SELF, NOME (via teleconference), spoke in
opposition to the bill. He praised the film tax incentive
as the catalyst for bringing in the movie "Big Miracle." He
related that he had been an actor in the film. He felt that
the industry brought hope to rural Alaska and could be a
positive influence on the high rate of suicide and
depression the area. He highlighted the myriad of jobs
associated with the film industry.
10:34:00 AM
DR. GEORGE GUTHRIDGE, SELF, DILLINGHAM (via
teleconference), spoke against the legislation. He relayed
that he had taught in rural Alaska for 40 years. He thought
that passage of the bill would close the door on future
economic opportunities. He believed that there should be
Alaska hire contingency language added to the legislation.
He shared that he was the coach for the "Kids from
Nowhere", the only Native Americans in history to win the
national championship in academics, and he had written a
screen play about it that had won 5 national awards. He
feared that without the tax incentive program his film
would never be produced. He felt that children in the state
needed to see inspiring film with Alaskan role models.
10:37:55 AM
Co-Chair MacKinnon CLOSED public testimony. She encouraged
testifiers to send any additional testimony to her office.
SB 39 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:39:04 AM
The meeting was adjourned at 10:39 a.m.