Legislature(1993 - 1994)
04/21/1993 01:45 PM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
April 21, 1993
1:45 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Rick Halford, Vice-Chairman
Senator George Jacko
Senator Suzanne Little
Senator Dave Donley
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 185
"An Act relating to the limitations period for assessments for
certain state taxes, and for collection, after assessment, of
taxes due the state; and providing for an effective date."
HOUSE BILL NO. 181 am
"An Act relating to the state's right to appeal in criminal
cases; relating to sentence appeals; amending Rule 202 of the
Alaska Rules of Appellate Procedure; and providing for an
effective date."
CS FOR HOUSE BILL NO. 254(JUD) am(ct rule fld)
"An Act relating to open meetings of governmental bodies."
PREVIOUS SENATE COMMITTEE ACTION
SB 185 - See Judiciary minutes dated 4/20/93.
HB 181 - No previous action to record.
HB 254 - No previous action to record.
WITNESS REGISTER
Larry Meyers, Director
Income & Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, AK 99811-0420
POSITION STATEMENT: Testified in support of SB 185
Paul Sullivan
Exxon Co. USA
240 Main St., #202
Juneau, AK 99801
POSITION STATEMENT: Opposes SB 185
Attorney General Charles Cole
Department of Law
P.O. Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Supports SB 185
Eric Musser, Staff to Representative Brian Porter
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on HB 181
Richard Monkman
Alaska State Hospital & Nursing Home Association
One Sealaska Bldg.
Juneau, AK 998-1
POSITION STATEMENT: Addressed concerns with Section 3
of HB 254
Wendy Redman, Vice President for University
Relations
University of Alaska
910 Yukon Drive
Fairbanks, AK 99775-2388
POSITION STATEMENT: Supports HB 254
Ken Swisher
Alaska Municipal League
217 2nd St.
Juneau, AK 99801
POSITION STATEMENT: Supports HB 254
ACTION NARRATIVE
TAPE 93-47, SIDE A
Number 001
Chairman Robin Taylor called the Judiciary Committee meeting
to order at 1:45 p.m.
SENATOR TAYLOR introduced SB 185 (LIMITATIONS PERIOD FOR TAX
ASSESSMENTS) as the first order of business.
LARRY MEYERS, Director, Income & Excise Audit Division,
Department of Revenue, stated the department's support for SB
185.
Number 040
SENATOR TAYLOR asked Mr. Meyers what currently is the oldest
unresolved tax case. LARRY MEYERS responded that the oldest
unresolved tax case in the Income & Excise Audit Division was
approximately ten years old.
Number 075
PAUL SULLIVAN, General Tax Counsel, Exxon Company, U.S.A.,
stated the company's strong opposition to SB 185.
Mr. Sullivan said the committee is being asked to consider a
bill containing statements of "legislative findings and
purpose" that are clearly incorrect and not factually
supported. He said the facts are:
(1) This bill is merely an after the fact administrative
interpretation of the current assessment deadline statute.
The interpretation is an issue the department has flip-flopped
on since 1978.
(2) The department's prior interpretation of the
assessment deadline statute is not correct and the Alaska
Court has told the department so.
(3) The department's ability to audit tax returns is not
constrained by its audit resources.
(4) Taxpayers did not contribute to any delay in the
period required to issue tax assessments.
(5) Arguments that substantial public revenues are at
risk in pending litigation cannot be substantiated.
(6) The statement that the decisions reached by the
Superior Court in the Exxon and Tesoro Petroleum Corporation
cases are inconsistent is not supportable; in fact they're not
even related.
(7) Three years is enough time to analyze a taxpayer's
return and determine the taxes due the state. In addition,
the statute allows for further written extensions if
necessary. Exxon has always granted division requests for
extensions.
Mr. Sullivan said that there should be no doubt that this
legislative proposal attempts to completely change the statute
under which taxpayers have conducted their business for the
last 17 years. He said Exxon has had a long-standing
interpretation and practice with respect to the existing
statute. The difference between Exxon's interpretation and
that state's is that Exxon's has been reviewed by the Alaska
Court and accepted, while the state's interpretation, first
revealed in May of 1989, was reviewed and has been rejected.
Mr. Sullivan outlined the following reasons why SB 185 is bad
legislation:
(1) It removes any incentive for the division to bring
cases to final resolution while they try to create new ways
to extract more money from the taxpayers that will ultimately
not be supportable.
(2) It leaves taxpayers at the whim of the division and
never able to finally resolve their tax years in Alaska.
(3) It will increase an already over burdensome
litigation situation on tax issues in Alaska since taxpayers
will be required to defend against some entirely new and
perhaps misdirected interpretation embodied in an assessment
that could be issued 15, 20 or more years after the fact.
Referring to testimony at a previous hearing on SB 185, Mr.
Sullivan said it was suggested that the Texas statute on
assessments was similar to SB 185. He said that is not true.
Texas has a four-year period for assessments, except in the
case of taxpayer refund claims. No new assessments may be
made after the four-year period, the only exception being
taxpayer refund claims.
Concluding his testimony, Mr. Sullivan urged rejection of SB
185.
Number 415
ATTORNEY GENERAL CHARLES COLE, Department of Law, stated he
disagreed with Mr. Sullivan's testimony.
Attorney General Cole said Exxon was incorrect in stating that
the assessment may not be amended if there is an
administrative appeal. He noted an assistant attorney general
had spoken to the Texas comptroller earlier in the day and she
was assured that the theory of the Alaska proposed statute,
which was before the committee, was applicable in Texas.
Attorney General Cole said one of reasons that the state wants
to have SB 185 enacted is so that there won't be any
misunderstanding or confusion in the Alaska Supreme Court
about what the law of this state should be as declared by the
legislature. He said they ask by virtue of this legislation
to make clear to the Alaska Supreme Court as to what the
legislative policy is in Alaska.
Attorney General Cole declared that SB 185 is not changing the
substantive law of taxation in the State of Alaska, as was
indicated by Exxon. He said it is only a situation where it
affects tax law dealing with the statute of limitations.
Attorney General Cole said it is a uncontroverted fact that
the resources of the Department of Revenue to audit the
returns in this area have been constrained. In addition,
resolving these cases takes so long because Exxon and other
taxpayers and producers string them out themselves. They can
quickly ask for a formal hearing, a formal hearing can be held
and the issue can be resolved expeditiously.
In his closing comments, Attorney General Cole reiterated that
the State of Texas has the very same statute that is being
sought in SB 185.
TAPE 93-47, SIDE B
Number 005
SENATOR LITTLE asked Attorney General Cole why is was a good
idea to have the bill retroactive. ATTORNEY GENERAL COLE
answered that first it all it is constitutional, and in the
state's view the issue should be clarified that the
Legislature intended that if the taxpayer appeals from an
assessment during the administrative appeal process and the
judicial appeal process, that the department may raise as well
as lower the assessment so that the assessments need not be
litigated through the courts for the next ten or fifteen years
to resolve this issue.
SENATOR LITTLE asked if the state would be in the position of
gaining additional revenues if the bill passes and changes
were made by the Department of Revenue in the amount owed in
the assessment. ATTORNEY GENERAL COLE answered that it is
conceivable that if the legislation is not enacted, the Alaska
Supreme Court could get confused and it would be very costly
to the state.
Number 145
PAUL SULLIVAN said Exxon has kept their books and records and
they continue to keep them with respect to known assessments.
His concern is 20 years down the road when the people who were
involved in the transactions are no longer there or can't
remember, particularly when you have legislation which is
retroactive 17 years.
Number 175
There being no further testimony on SB 185, SENATOR TAYLOR
closed the public hearing.
Number 180
SENATOR TAYLOR brought HB 181 am (APPEALS BY STATE IN CRIMINAL
CASES) before the committee as the next order of business.
Number 185
ERIC MUSSER, staff to Representative Brian Porter, said the
thrust of HB 181 is to allow the state a right of appeal in
adjudicated criminal cases without infringing on a defendant's
constitutional right to double jeopardy. He noted Margo Knuth
of the Department of Law was present to address any technical
questions on the legislation.
There being no further testimony on HB 181 am, SENATOR TAYLOR
asked for the pleasure of the committee.
SENATOR DONLEY moved that HB 181 am be passed out of committee
with individual recommendations. Hearing no objection, it was
so ordered.
Number 210
SENATOR TAYLOR introduced CSHB 254(JUD) am(ct rule fld) (OPEN
MEETING ACT) as the next order of business.
RICHARD MONKMAN, testifying on behalf of the Alaska State
Hospital and Nursing Home Association, said his comments would
be on Section 3 of the legislation. The Association's only
concern with the bill is the proposal to delete language which
speaks to the governing body or any committee of the hospital
from the exemptions to the Act. Under present law, meetings
of governing bodies of a hospital on subjects relating to
hospital privileges are exempt from the Open Meetings Act.
He said this is important for two reasons: patient privacy
and the physicians reputation being at issue.
Mr. Monkman said his understanding of the intent of the
amendment to the statute was to roll in the phrase "public
body." However, there are private hospitals, public
hospitals, as well as quasi public hospitals, which are
private hospitals that receive some sort of public funds. The
Hospital Association's preference would be not to change this
section at all, but, if it is changed, they request that it
be made clear that the meetings of the governing body or
committee of the hospital be kept exempt from the Open
Meetings Act.
Mr. Monkman added that the present statute works in terms of
protecting the physician's reputation and protecting the
patient interest.
Number 330
SENATOR DONLEY moved the following amendment to Section 2:
Page 2, line 15: After the words "attorney-client" insert "or
doctor-patient privilege."
SENATOR LITTLE objected to adoption of the amendment, stating
she didn't think the proposed amendment resolves the issue.
SENATOR DONLEY commented that he strongly believes in open
meetings, and, if there are some hospitals that may be a
public body, then they should be subject to the Open Meetings
Act.
Number 400
There was extensive discussion on the definition and clarity
of "public body." Senator Donley withdrew his amendment until
the committee could obtain more information on the issue.
Number 515
KENT SWISHER, representing the Alaska Municipal League,
testified in support of HB 254, stating it deals with a
problem they have been concerned with for some time and does
many of the things the League has hoped to achieve.
Mr. Swisher said the League has prepared an amendment which
would: clarify the definition of "public body" so that the
Open Meetings Act does not apply to administrative staff
meetings and other similar gatherings; provide that any number
of officials from a public body may attend meetings and
conferences without violating the Open Meetings Act; provide
that the court may decide whether an action taken in violation
of the Act should be declared voidable; and an individual
member of the council or assembly would not be named as the
subject of a suit.
TAPE 93-48, SIDE A
Number 020
SENATOR DONLEY acknowledged that there are some problems with
the application of the law, but he said he also thinks that
the law hasn't been enforced by the courts the way it was
intended by the people. He said he is concerned with new
language that says an action is voidable, because the courts
don't even do it when it says it is void.
Number 050
WENDY REDMAN, Vice President, University of Alaska, stated the
Board of Regent's support for HB 254, and said their interest
is at the heart of the bill, which is the definition of a
"meeting." Also, they have some concern with Section 3, and
Ms. Redman said she would submit those concerns in writing.
Ms. Redman said the University is not covered under the
state's Personnel Act, so committees like faculty tenure
committees for their non-organized faculty really work,
according to the court, as a subordinate group of the Board
of Regents and, therefore, are subject to the Open Meetings
Act. She said it does not work well to have those committees
open to the general public.
Number 095
SENATOR TAYLOR commented that the definition of "meeting" in
Section 6 was poorly drafted and he has requested that staff
provide the members with a copy of the AML proposed
legislation that can be laid along side of HB 254 and possibly
be used as a working document. He invited any suggestions and
input into the legislation and said it would be back before
the committee after it has been worked on.
There being no further business to come before the committee,
the meeting was adjourned at 3:37 p.m.
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