Legislature(2019 - 2020)SENATE FINANCE 532
02/01/2019 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Indirect Expenditures | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
February 1, 2019
9:02 a.m.
9:02:24 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Peter Micciche
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Lyman Hoffman
ALSO PRESENT
Senator Cathy Giessel; Senator Mia Costello; Dan Stickel,
Chief Economist, Economic Research Group, Tax Division,
Department of Revenue; Ky Clark, Economist, Department of
Revenue; Alexei Painter, Analyst, Legislative Finance
Division.
SUMMARY
PRESENATION: INDIRECT EXPENDITURES
^PRESENTATION: INDIRECT EXPENDITURES
9:03:47 AM
Co-Chair Stedman discussed the agenda.
DAN STICKEL, CHIEF ECONOMIST, ECONOMIC RESEARCH GROUP, TAX
DIVISION, DEPARTMENT OF REVENUE, introduced himself, and
informed that the project manager for indirect expenditures
was a subject matter expert and would be discussing the
presentation.
KY CLARK, ECONOMIST, DEPARTMENT OF REVENUE, introduced
himself and discussed his background. He had been in the
position for two years. He had a degree in economics.
Mr. Clark discussed the presentation "Overview of DORs
Indirect Expenditure Report, Report for FY 2013 - FY 2017"
(copy on file).
9:05:27 AM
Mr. Clark moved to slide 2, " Overview":
• Indirect Expenditure Report Legislation Overview
• DOR Indirect Expenditure Report
• Considerations/Recommendations
Mr. Clark reminded that the Legislative Finance Division
also produced a report of the same name. He would give an
overview of the Department of Revenue's (DOR) report.
9:06:25 AM
Mr. Clark showed slide 3, "Indirect Expenditure Report
Legislation Overview."
9:06:30 AM
Mr. Clark showed slide 4, "Indirect Expenditure Report
Overview":
• Passed in 2014 and signed on July 7, 2014 (House
Bill 306)
• Requires DOR to submit a report to the
Legislature biennially on July 1 detailing
indirect expenditures of all agencies in the
State (AS 43.05.095)
• Requires the Legislative Finance Division to
provide a report to the Legislature on the
indirect expenditures of certain agencies before
the start of Legislative Session following the
release of DOR's biennial report
• The 1st DOR Indirect Expenditure Report was
released the day after the bill was signed, July
8, 2014
• The 2nd DOR Indirect Expenditure Report was
released July 1, 2016
• The 3rd DOR Indirect Expenditure Report was
released July 1, 2018
9:07:41 AM
Mr. Clark reviewed slide 5, " Indirect Expenditures
Defined":
Indirect expenditure: Any foregone revenue by the
state designed to encourage an activity to benefit the
public in the form of a credit, exemption, deduction,
deferral, discount, exclusion, or other differential
allowance.
As defined by AS 43.05.095(d):
• An express provision of state law that results in
foregone revenue for the state by providing:
• A tax credit or other credit
• An exemption, but does not include federal tax
exemptions adopted by reference in AS 43.20.021
• A discount
• A deduction, but does not include costs incurred
in the ordinary course of business that are
deducted in the calculation of a tax under this
title or in the calculation of a royalty or net
profit share payment for a lease issued under AS
38
• A differential allowance
Mr. Clark gave an example of an indirect expenditure and a
tax credit for the fisheries business tax. He gave
additional examples of indirect expenditures through
exemption of fees. He mentioned discounted fees for hunting
and fishing licenses for certain user groups.
9:10:47 AM
Co-Chair Stedman clarified that the Sheldon Jackson Museum
was owned by the Alaska State Museum.
Mr. Clark continued to address slide 5 and gave more
examples of fee deductions. Municipal and federal taxes
could be deducted from the state gambling tax. He gave an
example of a differential allowance and described a
resident in an Alaska Pioneer Home through which the state
paid the differential amount over that which the resident
could pay.
9:12:27 AM
Mr. Clark discussed slide 6, "DOR Indirect Expenditure
Report":
• Released July 1, 2018 by DOR
o The DOR Indirect Expenditure Report was
revised on August 14, 2018 to reflect the
repeal of one indirect expenditure through
HB 398 (pg. 164)
o Provides details on 260 indirect
expenditures across 11 departments and
agencies, including 78 provisions
administered by DOR
9:13:24 AM
Mr. Clark showed slide 7, "DOR Indirect Expenditure
Report."
Mr. Clark displayed slide 8, "Methodology":
Examples of provisions not meeting definition of
"Indirect Expenditure":
• Alaska Housing Finance Corporation (AHFC)
o Identified one potential indirect expenditure;
reduced loan rates. But, it was part of their
normal operations and not "required by
statute." Statutorily, AHFC can set the rates.
• Department of Commerce, Community, and Economic
Development (DCCED):
o Has certain licensing fees, which are set by
statute to cover program costs, that were
reduced for residents vs. non-residents. It was
determined not to be foregone revenue, because
the fee differential doesn't affect total
revenue.
• University of Alaska (UA):
o Addressed tuition waivers to employees and
dependents; they are a part of the employee's
benefit package, so are not considered foregone
revenue.
o Non-resident vs. Resident tuition; UA is not
discounting the resident tuition rate, rather
the out-of-state student is paying a non-
resident surcharge (so no foregone revenue).
9:15:26 AM
Mr. Clark looked at slide 9, "Reported Information":
Each department was required to report the following
information:
• The name of the indirect expenditure
• A brief description
• The statutory authority
• The repeal date, if applicable
• The intent of the legislature in enacting the
statute authorizing the indirect expenditure
• The public purpose served by the indirect
expenditure
• The estimated revenue impact of the indirect
expenditure for the previous five fiscal years
(excluding the fiscal year immediately preceding
the date the report is due)
• The estimated cost to administer the indirect
expenditure, if applicable
• The number of beneficiaries of the indirect
expenditure and who benefits
9:16:20 AM
Mr. Clark displayed slide 10,
"Recommendations/Considerations."
Mr. Clark discussed the material on slide 11,
"Recommendations/Considerations":
DOR identified several areas for the committee to
consider:
• House Bill 155 from 2015-2016
• House Bills 399 & 409 from 2017-2018
• House Bill 398 from 2017-2018
• Review of recommendations produced by the
Legislative Finance Division
• Indirect Expenditures were reviewed in both
January 2015 and January 2017
• Fee Setting Authority
Mr. Clark noted that HB 155 attempted to make changes to
different taxes within the Department of Revenue. He noted
that all the bills had to do with excise taxes.
Co-Chair Stedman asked if the bills listed on the slide had
been enacted.
9:17:41 AM
Mr. Clark reviewed slide 12, " House Bill 155 from 2015-
2016":
The following indirect expenditures were addressed
in a proposed bill:
• Tobacco Products Tax
o Gives a four-tenths of one percent deduction
to cover the expense of account and filing
the return for the tobacco tax
o FY 2015 revenue impact of $54,053
• Cigarette Tax
o Gives a discount of up to $50,000 as
compensation for affixing stamps to packs of
cigarettes
o FY 2015 revenue impact of $360,326
• Motor Fuel Tax
o Gives a timely filing credits of 1% of the
total monthly tax due to a maximum of $100
o FY 2015 revenue impact of $62,590
• Large Passenger Vessel Gambling Tax Deduction
o Allows a deduction of federal and municipal
taxes paid from gambling gross income
o Revenue impact is unknown
Co-Chair Stedman asked if the bills being discussed had
been passed or were deceased.
Mr. Clark stated that the listed bills on slide 12 had not
been passed.
Co-Chair Stedman asserted that the committee did not want
to hear about deceased bills.
Mr. Stickel recalled that the previous year, members had
requested a list of areas in which the legislature could
contemplate ways to change indirect expenditures. The
department had highlighted previous legislation for the
committee to consider as an example of a starting point for
changes.
Co-Chair Stedman reiterated that the committee was not
interested in deceased bills.
Mr. Stickel noted that the presentation provided example of
four previous pieces of legislation to serve as an example
of past proposals. The fourth example had been enacted.
Co-Chair Stedman asked the testifiers to discuss the
department's recommendations and items that were ready for
review.
9:19:32 AM
Mr. Clark affirmed that most of the indirect expenditures
listed had been recommended by review or termination by the
Legislative Finance Division (LFD).
9:20:03 AM
Co-Chair von Imhof looked forward at slide 16 and recalled
reading reports and recommendations and thought there was
greater interest at present. She thought it was important
to consider the environment at present. She wondered if the
department had specific recommendations based on the
current fiscal climate.
Mr. Stickel stated that the department's role in the
indirect expenditure report was to compile information
rather than make policy recommendations. He noted that the
department compiled information, which it turned over to
LFD to make policy recommendations for different indirect
expenditures based on the report.
Co-Chair Stedman understood that the administration could
submit bills if it felt there was a change needed. He
gleaned that Mr. Stickel was suggesting that the department
had no recommendations at present.
Mr. Stickel clarified that he was not prepared to speak to
policy at present, but there was another chief economist in
the room that might be able to do so.
9:22:02 AM
Senator Micciche thought slide 15 discussed a bill that had
been passed. He asked about the effect of the bill.
Co-Chair Stedman asked if the agency had a position on the
information and stated that the committee did not need a
legislative history. He asked if the testifiers wanted to
discuss the mechanics of the indirect expenditures listed
on slide 12.
9:23:09 AM
Mr. Clark went back to slide 12. He reiterated that he and
Mr. Stickel did not have a position but thought the
information on the slides was for the benefit of the
committee.
Co-Chair Stedman asked Mr. Clark to discuss the function of
the taxes listed on slide 12.
Mr. Stickel discussed the particularities of the taxes
listed on slide 12. He specified that there was a $2 per
pack of cigarettes tax on sales of cigarettes in the state.
The Motor Fuels Tax was a per-gallon tax of most motor
fuels sold in the state. The highway rate was 8 cents per
gallon, and there were other rates for different types of
motor fuel. The Large Passenger Vessel Gambling Tax was a
tax on the share on net profits from gambling in state
waters on cruise ships.
9:25:52 AM
AT EASE
9:26:01 AM
RECONVENED
Co-Chair Stedman recalled a slide with a list of the
largest indirect expenditures that was not showing in the
slide deck.
Mr. Stickel answered in the affirmative.
Co-Chair Stedman asked the testifiers to discuss the
information and provide the committee with a copy.
Mr. Stickel discussed an additional slide entitled "Large
Indirect Expenditures" (copy on file):
• Oil & Gas Tax Credits (FY17 = $686 million)
• Mining License Tax - Depletion Deduction (FY16 =
$29 million)
• Insurance: all programs - Deduction from premiums
written for claims paid (DCCED*)(FY17 = $18
million)
• Royalty Modification - Ooguruk Unit (FY17 =$18
million)
• Sport Fishing, Hunting & Trapping Senior Discount
(FY 18 = $14 million)
• Commercial Passenger Vessel Taxes - Tax Reduction
for Local Levies (FY17 = $13 million)
• Motor Fuel Tax - Foreign Flight Exemption (FY17 =
$8.8 million)
• Discounted Interest Rates - SRF Municipal Loans
(FY17 = $6.3 million)
• Insurance: all programs - Lower Tax Rate
(DCCED*)(FY17 = $5 million)
• Multiple Tax Programs - Film Production Credit
(FY17 = $5 million; credit phasing out under
current law)
• Permanent Registration for 8-Year-Old Vehicles
(FY17 = $4.6 million)
Mr. Stickel informed that the oil and gas tax credits were
the largest indirect expenditure and were integral to the
tax calculation itself. He mentioned that the City of
Juneau had a local head tax on cruise ship passengers, the
amount of which could be deducted against the state tax. He
noted that Juneau and Ketchikan both had the levies in
place when the state enacted the tax and both cities were
grandfathered into the ability to deduct it against the
state tax.
9:29:44 AM
Mr. Stickel advanced to slide 13, "House Bill 399 from
2017-2018":
The following indirect expenditures were addressed
in a proposed bill:
• Federal Tax Credits
o Under Alaska's adoption of the Internal
Revenue Code, taxpayers can claim most
federal incentive credits
o FY 2014 revenue impact of $1,578,843 (FY
2016: $1,936,758)
• Foreign Royalty Exclusion
o Excludes 80% of foreign royalties from
apportionable income
o FY 2014 revenue impact of $1,408,557 (FY
2016: $1,382,229)
• Reduced Tax Rate on Capital Gains
o Long term capital gains are taxed at a
maximum rate of 4.5%, while other income is
taxed at a maximum rate of 9.4%
o FY 2014 revenue impact of $1,551,095 (FY
2016: $1,802,151)
• Exemption from tax under Stranded Gas Development
Act
o Corporations that are a party to a contract
under the Stranded Gas Development Act are
exempt from corporate income tax filing
requirements, if the agreement provides for
a payment in lieu of tax
o Revenue impact is $0; no beneficiaries
because there is no contract
Mr. Stickel explained that the slide looked at several
indirect expenditures against the state's corporate income
tax as potential considerations.
9:31:07 AM
Mr. Stickel reviewed slide 14, "House Bill 409 from 2017-
2018":
The following indirect expenditures were addressed in
a proposed bill:
• State Identification Cards for Senior Citizens
o Waives identification card fees for
applicants that are 60 years or older
o FY 2017 revenue impact of $198,630
• Motor Vehicle License Plates and Registrations
Fees for Amateur Radio Users
o Waives registration fees for certain amateur
radio users
o FY 2017 revenue impact of $4,400
• Motor Vehicle License Plates and Registrations
Fees for Municipal Governments and Charitable
Organizations
o Discounts vehicle registration fees from
$100 to $10 for vehicles owned by municipal
governments, charitable or non-profit
organizations, church/religious
organizations and Alaska Tribal Village
Councils
o FY 2017 revenue impact of $532,125
• Permanent Registration for 8-Year-Old Vehicles
o Allows permanent registration for vehicles 8
years or older in unorganized boroughs or in
communities that have passed an ordinance to
allow permanent registration
o FY 2017 revenue impact of $4,664,100
Mr. Stickel explained that slide 14 addressed several
indirect expenditures within the Division of Motor Vehicles
(DMV).
9:31:49 AM
Mr. Stickel looked at slide 15, "House Bill 398 from 2017-
2018":
The following indirect expenditure was eliminated in a
passed bill:
• Utilities Exempted from Water's Edge Combination
Reporting
o Income from public utilities including
telephone services is exempt from water's
edge combination reporting requirements.
These companies can instead pay tax only on
Alaska net income, based on separate-entity
reporting
o Revenue impact is unknown because relevant
information is not collected
• HB 398 fiscal note:
"Within the last 10 years some public utilities
have started using their own methods of
allocating and apportioning income to Alaska.
These methods are less than favorable to Alaska?
we are unable to provide an estimate of the
additional potential revenue due to
confidentiality concerns. However, we estimate
that there will be a material amount of
additional revenue collected, between $100,000
and $5,000,000, if this legislation were to
pass."
Mr. Stickel noted that slide 15 addressed a piece of
legislation that made a change to corporate income tax
calculation for utility companies. Prior to the previous
year, a utility company could pay corporate income tax
based only on its Alaska subsidiaries income apportioned to
Alaska. Most other companies were made to pay based on
Water's Edge Combination Reporting.
9:33:06 AM
Co-Chair von Imhof recalled working on the legislation
listed on the slide.
9:33:43 AM
Mr. Stickel moved to slide 16, "Recommendations from
Legislative Finance":
• There are recommendations made by
Legislative Finance Division in both their
2015 & 2017 Indirect Expenditure Reports
• 2015 Report
o Recommended 17 indirect expenditures be
terminated
o Recommended 33 indirect expenditures be
reconsidered
o Recommended 24 indirect expenditures be
reviewed
o Recommended 37 indirect expenditures be
continued
• 2017 Report
o Recommended 2 indirect expenditures be
terminated
o Recommended 13 indirect expenditures be
reconsidered
o Recommended 3 indirect expenditures be
reviewed
o Recommended 48 indirect expenditures be
continued
9:34:17 AM
Mr. Stickel showed slide 17, "Fee Setting Authority":
Legislature has granted fee setting authority to
certain agencies, for example:
• Department of Transportation and Public
Facilities
o Alaska Marine Highway (AMHS): foregone
revenue related to AMHS discounts amounted
to over $4.7 million in FY 2015
• University of Alaska
o Scholarship awarding authority
o Western Undergraduate Exchange
o Senior Citizen Tuition Waiver
• Discounts offered by agencies with fee setting
authority may not qualify as "indirect
expenditures" since they are not an "express
provision of state law"
• Office of Management and Budget (OMB) produces
annual Fee Report
o Details department and agency fees,
including name and purpose
o Details authorizing statute or regulation
and the amount of the fee.
Mr. Stickel noted that there could be discounts allowed by
agencies when there was not actually an express provision
in state law. He thought that the combination of the OMB
Fee Report and the departments Indirect Expenditure Report
was a comprehensive view of potential differentials and
allowances being offered throughout state government.
9:35:37 AM
Co-Chair von Imhof asked if with the ability and authority
to grant fees, she assumed that the corresponding
responsibility of evaluating the fees would also lie within
the agencies. She asked if there was a recommendation or
discussion of evaluating whether the fee structures were
working.
Mr. Stickel stated that the report was a large spreadsheet
with a great deal of information. He was sure that OMB was
considering the fees and would be happy to discuss the
information with the committee.
Co-Chair Stedman affirmed that the committee would discuss
the subject with OMB.
Co-Chair Stedman wanted to ensure that the committee
understood that the head tax issue was an indirect
expenditure. He thanked the testifiers from DOR. He noted
that the committee would consider recommendations from OMB.
9:38:17 AM
ALEXEI PAINTER, ANALYST, LEGISLATIVE FINANCE DIVISION,
introduced himself and discussed his background. He
recounted that he had previously worked for DOR.
Mr. Painter discussed the presentation, "Overview of
Legislative Finance Division Indirect Expenditure Reports"
(copy on file). He noted that there was two Indirect
Expenditure Reports: one compiled by DOR with data from all
state agencies, and one from LFD. The LFD report made
recommendations to the legislature based on the DOR report
data. On the first day of the legislative session, LFD
submitted a report that looked at provisions within state
agencies.
9:40:25 AM
Mr. Painter looked at slide 2, "LFD Indirect Expenditure
Reports":
• Make recommendations to legislature based on data
from DOR
• Look at several agencies each report, on a six-
year cycle
• Past recommendations may be based on outdated
information, so use with caution
9:40:34 AM
Mr. Painter discussed slide 3, "Agencies in 23015 Report":
• Commerce, Community and Economic Development
• Fish and Game
• Health and Social Services
• Labor and Workforce Development
• Revenue
9:40:51 AM
Mr. Painter showed slide 4, "Summary of 2015
Recommendations":
• Terminate: 17 provisions
o Total known revenue impact of $5 million (in
FY14)
o Three provisions had unknown revenue impact
• Modify or review: 59 provisions
• Continue: 37 provisions
• No recommendation: 25 provisions
Mr. Painter noted that some of the provisions that were
recommended to be terminated remained on the books. The
slide also showed a pie chart. He noted that the number of
recommendations to review or modify provisions was due to
the fact that several areas of the tax code or fees had to
be revisited, due to the fact that the legislature had not
examined the information in decades. He used the example of
the ADFG fee structure, which had not been modified since
the 1980s. He noted that the legislature had subsequently
reviewed and revised the ADFG fees.
9:42:38 AM
Mr. Painter reviewed slide 5, "2015 Report Key Points":
• Future DOR reports added revenue estimates for
several provisions that had an unknown impact
when the first LFD report was prepared
• LFD did not review oil and gas tax credits
Legislative Actions
• HB 247 (SLA 2016) repealed an obsolete
exploration incentive
• HB 97 (SLA 2018) repealed an unused credit for
donations to the Fire Standards Council
• HB 398 (SLA 2018) repealed a Corporate Income Tax
provision related to water's edge reporting
Mr. Painter emphasized that LFD had not reviewed oil and
gas tax credits. There had been a referendum on the oil and
gas tax systems, and LFD had not had data on how the
systems were performing with modifications. He added that
subsequent DOR reports added a lot more revenue estimates
than in the past.
9:43:42 AM
Mr. Painter discussed slide 6, "Agencies in 2017 Report":
• Administration
• Education and Early Development
• Environmental Conservation
• Natural Resources
• Transportation
• Judiciary
• Plus review of the Education Tax Credit, which was
scheduled to sunset at the end of 2018.
9:44:18 AM
Co-Chair von Imhof asked what was done with the Alaska
Education Tax Credit. She recalled a robust discussion on
the topic.
Mr. Painter noted the HB 233 had extended the credit but
made some modifications. The bill had reduced the cap on
the credit per company from $5 million to $1 million. The
bill also reduced the rate of the credit. The committee had
passed a committee substitute that became enacted. Starting
in 2021, the rate would be 50 percent for all levels of
expenditure. The change was in line with a recommendation
that LFD made in its 2017 report.
9:46:00 AM
Mr. Painter moved to slide 7, "Summary of 2017
Recommendations":
• Terminate: 2 provisions
o Unknown revenue impact
• Modify or review: 13 provisions
• Continue: 56 provisions
• No recommendation: 6 provisions
Mr. Painter expanded that many of the modifications
pertained to fee differentials or exemptions in the
Department of Environmental Conservation. It was found that
in most cases the actual cost of conducting a fee study and
implementing regulations to capture the fee would largely
outweigh the revenue the state would get from the few
entities that would pay the fees.
9:47:15 AM
Mr. Painter addressed slide 8, "2017 Report Key Points":
• Some items do not have revenue generation as a
goal ("fix-it" tickets)
• Others have authority to set fee structure
(Marine Highway)
• Remainder are mostly routine (senior discounts,
fee waivers for disabled veterans, etc.)
Legislative Actions
• HB 233 (SLA 2018) extended the Education Tax
Credit and made some changes recommended by LFD
report to limit credit
Mr. Painter discussed why the 2017 report was biased in
favor on continuation. He used the example of the reversal
of a traffic ticket in the event of a repaired headlight.
It was found that the goal of such a ticket was to enhance
public safety rather than to generate income for the state.
Mr. Painter identified that senior citizen deductions
varied in age definition across state law, and LFD saw some
value in standardizing the definition of "senior."
9:49:13 AM
Mr. Painter showed slide 9, "2019 Report":
• No agencies covered ones not listed in statute
have reported no indirect expenditures
• LFD reviewed five provisions scheduled to sunset
Mr. Painter noted that the 2019 report was short in length.
He noted that LFD had chosen to do a review of the
provisions that were scheduled to sunset. Because there
were no other agencies to review, LFD went deeper in
evaluation one credit.
9:50:30 AM
Mr. Painter showed slide 10, "2019 Report," which showed a
table with the summary of recommendations. He noted that
LFD had recommended the sunset of the SHARP II program, as
it had not met expectations.
9:50:54 AM
Senator Wilson discussed development of the SHARP III
program and potential tax credits.
Co-Chair Stedman asked for a definition of the acronym.
Mr. Painter did not recall what the acronym signified.
Senator Wilson stated that the SHARP program was a payment
program that allowed reduced loan payments to certain
healthcare providers to help recruit and retain primary
care providers in rural areas.
9:52:27 AM
Mr. Painter continued to discuss slide 10. He noted that
the division had reviewed the In-State Refinery Tax Credit.
// He addressed the LNG Storage Facility Credit //
9:53:19 AM
Senator Bishop stated he disagreed with //
Mr. Painter thought it was possible the credit needed to be
modified. He thought it appeared as though the current //
Senator Bishop stated //
9:53:56 AM
Mr. Painter discussed the Salmon and Herring Product
Development Credit as listed on the table. He // HE
explained that LFD had wanted to examine // Due to
confidentiality constraints, LFD had been unable to
determine how much of the credit was used for herring. He
asserted that confidentiality rules should be revised by
the legislature if it desired LFD to examine the details of
the credit's effectiveness.
Mr. Painter continued discussing the credit, and suggested
that // One of the reauthorizations had added ice machines
//
Co-Chair Stedman recalled that the salmon and herring
credit was put into effect when the legislature
Mr. Painter thought the original version of the credit was
older
9:56:42 AM
AT EASE
9:59:18 AM
RECONVENED
Senator Wilson disclosed that //
Senator Micciche disclosed the he was a commercial
fisherman that sold to companies that may or may not take
advantage //
Mr. Painter explained that SHARP signified Supporting
Health Access (through loan) Repayment Program.
Mr. Painter addressed the Community Development Quota
Credit as listed on slide 10. // He noted that LFD
recommended that a scheduled sunset was not needed as the
credit did not affect state finances.
10:01:30 AM
Senator Micciche wanted to understand the //
Mr. Painter stated he would address the question // He
thought it was an important consideration // He expanded
that the division had considered how the tax credit had
affected the economy and broader economic impacts. In other
states that completed similar reviews, more work was done
on understanding broader //
10:03:00 AM
Senator Micciche wondered if LFD planned to conduct random
evaluation of a portion of credits as //
Co-Chair Stedman asked if Senator Micciche was asking for a
random analysis // He thought that //
10:04:08 AM
Mr. Painter looked at slide 11, "Looking Forward":
• Cycle restarts in 2021 with a review of the same
agencies as the 2015 report
• Pew recommendation to Alaska: "Selectively studying
major incentives in greater depth might lead to more
detailed evaluations."
• Exempt routine provisions from review? (Maine and
Washington state)
• Only review a few selected provisions per year?
(Minnesota, Indiana)
Mr. Painter thought that // He referenced the Pew
Charitable Trust, which had recommended that // It was
thought that the state could perhaps benefit from // The
division was looking for direction from the legislature
with regard to // He noted that there were provisions that
// He suggested that removing the provisions would not save
much time, but would rather //
Mr. Painter continued discussing // In Indiana, the
equivalent of LFD had made the selection // He preferred to
get recommendations from the legislature on what areas to
provide more in-depth review and perhaps revision. He
indicated that // Since LFD had done an initial review of
all the provisions, he thought there was value //
Co-Chair Stedman thought the review would be low on the
priority list considering the // He referenced the
confidentiality constraints and // He //
10:07:42 AM
Mr. Painter commented that other states that had
confidentiality concerns // He thought it was
Co-Chair Stedman thought disclosure was good when
concerning public finances. He thought //
Co-Chair Stedman thanked the department and LFD for //
Co-Chair Stedman discussed the agenda for the following
week. He reminded that the budget had a release date //
He was concerned about // He wanted the members to ponder
the larger budget components. He //
ADJOURNMENT
10:12:19 AM
The meeting was adjourned at 10:12 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020119 DOR Indirect Expenditure Report Presentation.pdf |
SFIN 2/1/2019 9:00:00 AM |
Indirect Expenditure Report |
| 020119 LFD Indirect Expenditure Report Overview SFC.pdf |
SFIN 2/1/2019 9:00:00 AM |
Indirect Expenditure Report |
| 020119 DOR Slide.pdf |
SFIN 2/1/2019 9:00:00 AM |
Indirect Expenditures |