Legislature(2011 - 2012)BUTROVICH 205

03/13/2012 09:00 AM STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 208 DISASTER PLANNING AND SERVICES TELECONFERENCED
Moved CSSB 208(STA) Out of Committee
+= SB 29 TAX EXPENDITURE REPORT TELECONFERENCED
Moved CSSB 29(STA) Out of Committee
Bills Previously Heard/Scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         March 13, 2012                                                                                         
                           9:02 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bill Wielechowski, Chair                                                                                                
Senator Albert Kookesh                                                                                                          
Senator Kevin Meyer                                                                                                             
Senator Cathy Giessel                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                              
Senator Joe Paskvan, Vice Chair                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 208                                                                                                             
"An Act establishing  an Alaska intrastate mutual  aid system and                                                               
relating  to  the  duties  of the  Alaska  division  of  homeland                                                               
security and  emergency management and  the duties of  the Alaska                                                               
State Emergency Response Commission."                                                                                           
                                                                                                                                
     - MOVED CSSB 208(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
SENATE BILL NO. 29                                                                                                              
"An  Act  relating  to  the reporting  and  analysis  of  certain                                                               
information  relating  to  tax credits,  deductions,  exclusions,                                                               
exemptions, deferrals, and other  tax expenditures; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
     - MOVED CSSB 29(STA) OUT OF COMMITTEE                                                                                      
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
BILL: SB 208                                                                                                                  
SHORT TITLE: DISASTER PLANNING AND SERVICES                                                                                     
SPONSOR(s): SENATOR(s) PASKVAN                                                                                                  
                                                                                                                                
02/21/12       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/21/12       (S)       STA, FIN                                                                                               
03/06/12       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
03/06/12       (S)       Heard & Held                                                                                           
03/06/12       (S)       MINUTE(STA)                                                                                            
03/13/12       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB  29                                                                                                                  
SHORT TITLE: TAX EXPENDITURE REPORT                                                                                             
SPONSOR(s): SENATOR(s) WIELECHOWSKI                                                                                             
                                                                                                                                
01/19/11       (S)       PREFILE RELEASED 1/7/11                                                                                
01/19/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/11       (S)       STA, FIN                                                                                               
03/01/12       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
03/01/12       (S)       Scheduled But Not Heard                                                                                
03/06/12       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
03/06/12       (S)       Heard & Held                                                                                           
03/06/12       (S)       MINUTE(STA)                                                                                            
03/13/12       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ANNA SORENSON, Staff                                                                                                            
Senator Joe Paskvan                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced SB 208 on behalf of the sponsor.                                                               
                                                                                                                                
MICHAEL O'HARE, Deputy Director                                                                                                 
Homeland Security and Emergency Management                                                                                      
Division of Military and Veterans Affairs                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Provided information related to SB 208.                                                                   
                                                                                                                                
DENNIS BRODIGAN, Director                                                                                                       
Emergency Management System                                                                                                     
Matanuska-Susitna Borough                                                                                                       
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 208.                                                                           
                                                                                                                                
SAM GOTTSTEIN, Staff                                                                                                            
Senator Bill Wielechowski                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Reviewed SB 29 on behalf of the sponsor.                                                                  
                                                                                                                                
DAVID TEAL, Director                                                                                                            
Legislative Finance Division                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions pertaining to SB 29.                                                                   
                                                                                                                                
JOHANNA BALES, Deputy Director                                                                                                  
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions related to SB 29.                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:02:15 AM                                                                                                                    
CHAIR BILL WIELECHOWSKI called the  Senate State Affairs Standing                                                             
Committee meeting  to order at 9:02  a.m. Present at the  call to                                                               
order   were  Senators   Giessel,  Meyer,   Kookesh,  and   Chair                                                               
Wielechowski. Senator Paskvan was excused from the meeting.                                                                     
                                                                                                                                
             SB 208-DISASTER PLANNING AND SERVICES                                                                          
                                                                                                                                
9:02:26 AM                                                                                                                    
CHAIR  WIELECHOWSKI announced  that the  first order  of business                                                               
before the committee was SB  208, which facilitates collaboration                                                               
between  state and  local agencies  in a  state of  emergency. On                                                               
March 6, Senator  Paskvan provided an overview of SB  208 [and CS                                                               
for  SB  208, labeled  27-LS0611\B  was  adopted as  the  working                                                               
document.]  The  bill enacts  the  Alaska  Intrastate Mutual  Aid                                                               
System, a comprehensive, integrated  system of assistance between                                                               
state and local  agencies. Previous testimony and  letters are in                                                               
support of the bill.                                                                                                            
                                                                                                                                
ANNA SORENSON, staff,  Senator Joe Paskvan, introduced  SB 208 on                                                               
behalf  of  the sponsor.  She  read  from the  following  sponsor                                                               
statement:                                                                                                                      
                                                                                                                                
     SB 208 is  an essential piece of  legislation that will                                                                    
     provide  a statewide  framework  for mutual  assistance                                                                    
     among  participating  political   subdivisions  in  the                                                                    
     prevention   of,  response   to,   and  recovery   from                                                                    
     disasters.  The  provisions  of the  Alaska  Intrastate                                                                    
     Mutual  Aid  System were  developed  with  the goal  of                                                                    
     supplementing existing regional  or local agreements by                                                                    
     establishing  a  comprehensive,  integrated  system  of                                                                    
     mutual  aid  at  a  state level  that  will  ensure  an                                                                    
     efficient  and effective  response to  all hazards  and                                                                    
     disasters. However,  the system provided for  in SB 208                                                                    
     would not prevent  participating entities from entering                                                                    
     into  supplementary  agreements  with  other  political                                                                    
     subdivisions or  impact existing or  future agreements.                                                                    
     Though  mutual   aid  agreements   between  neighboring                                                                    
     political   subdivisions  are   somewhat  common,   aid                                                                    
     agreements   may   not    necessarily   exist   between                                                                    
     subdivisions  that do  not have  a  history of  sharing                                                                    
     emergency assistance.                                                                                                      
                                                                                                                                
     As Senator  Paskvan mentioned  during the  hearing last                                                                    
     Tuesday, Interior Alaska  recently faced this challenge                                                                    
     when  the  Fairbanks  North  Star  Borough  encountered                                                                    
     obstacles  in  providing  timely aid  during  the  2009                                                                    
     flooding  of  Eagle  and other  communities  along  the                                                                    
     Yukon   River  due   to  an   absence  of   mutual  aid                                                                    
     agreements.  SB  208  would  act as  a  safety  net  in                                                                    
     similar situations  where aid  is needed but  no mutual                                                                    
     aid agreement currently exists.                                                                                            
                                                                                                                                
     Through SB  208, the Division of  Homeland Security and                                                                    
     Emergency  Management will  be tasked  with playing  an                                                                    
     integral   part   in    developing   and   implementing                                                                    
     guidelines  and procedures  for  the Alaska  Intrastate                                                                    
     Mutual Aid System. The  Alaska State Emergency Response                                                                    
     Commission,  created  under  the Alaska  Disaster  Act,                                                                    
     will facilitate  the preparation and  implementation of                                                                    
     the  system. The  commission will  also provide  review                                                                    
     and make recommendations about the mutual aid System.                                                                      
                                                                                                                                
     The  System would  automatically include  all political                                                                    
     subdivisions.  A  political  subdivision may  elect  to                                                                    
     withdraw   by  enacting   a   resolution  through   its                                                                    
     governing   body.  SB   208  further   allows  that   a                                                                    
     participating  entity  will  have  sole  discretion  to                                                                    
     withhold  or withdraw  requested assistance  to provide                                                                    
     reasonable  protection  and  services  within  its  own                                                                    
     territorial limits.                                                                                                        
                                                                                                                                
     Other details  in the Alaska Mutual  Aid System include                                                                    
     guidelines  for  requesting   aid;  what  assistance  a                                                                    
     participating  member may  request; qualifications  and                                                                    
     employment    of    emergency   responders;    workers'                                                                    
     compensation  for  emergency responders;  reimbursement                                                                    
     procedures for aid  provided by participating political                                                                    
     subdivisions; and pertinent definitions.                                                                                   
                                                                                                                                
     Senate Bill 208 is supported  by the Alaska Fire Chiefs                                                                    
     Association,   the   Alaska   Municipal   League,   the                                                                    
     Fairbanks  North  Star  Borough, AARP  of  Alaska,  the                                                                    
     Alaska Commission  on Aging, the Division  of Emergency                                                                    
     Management, the Alaska State  Fair Association, and the                                                                    
     Food  Bank of  Alaska.  Additionally, this  legislation                                                                    
     has a zero  fiscal note which the  Division can explain                                                                    
     in further detail.                                                                                                         
                                                                                                                                
9:05:52 AM                                                                                                                    
CHAIR  WIELECHOWSKI  requested  an   explanation  of  changes  in                                                               
version B of SB 208.                                                                                                            
                                                                                                                                
MS.  SORENSON explained  that version  B addresses  some concerns                                                               
raised by  both the Fairbanks  North Star Borough and  the Alaska                                                               
Fire Chiefs Association. She read from the following:                                                                           
                                                                                                                                
     The changes  on page 7,  lines 11  and 16, and  page 8,                                                                    
     line 26,  provide for emergency service  providers that                                                                    
     contract  with a  political subdivision  to be  covered                                                                    
     under this legislation.   This will specifically ensure                                                                    
     that  volunteer fire  departments  and their  volunteer                                                                    
     fire  fighters and  emergency  medical technicians  are                                                                    
     covered under the Alaska  Intrastate Mutual Aid System.                                                                    
     This issue  was of  concern to  the Alaska  Fire Chiefs                                                                    
     Association  due  to  much of  their  membership  being                                                                    
     comprised   of   fire    chiefs   of   volunteer   fire                                                                    
     departments.                                                                                                               
                                                                                                                                
     The second major change is  the deletion of language on                                                                    
     page  7,  lines 17-20.  This  change  was made  by  the                                                                    
     request of  the borough  due to  the feeling  that this                                                                    
     language  created an  unacceptable  level  of risk  for                                                                    
     local governments.                                                                                                         
                                                                                                                                
CHAIR WIELECHOWSKI opened public testimony.                                                                                     
                                                                                                                                
9:10:02 AM                                                                                                                    
MICHAEL O'HARE, Deputy Director,  Homeland Security and Emergency                                                               
Management,  Division of  Military and  Veterans Affairs  (DMVA),                                                               
Anchorage,  Alaska, provided  information related  to SB  208. He                                                               
noted that  DMVA has been  working with the Fairbanks  North Star                                                               
Borough   and   various   Emergency   Management   System   (EMS)                                                               
representatives to bring  the working draft to  the committee. It                                                               
primarily allows the pre-development of  the agreements to be put                                                               
into place  prior to  any disaster. If  the mutual  aid agreement                                                               
were  not in  place, each  community would  have to  sign an  aid                                                               
agreement with  all other communities.  The mutual  aid agreement                                                               
mirrors  the  National  Emergency Assistant  compact  with  other                                                               
states.                                                                                                                         
He noted  a zero fiscal  note from  DMVA. A statewide  mutual aid                                                               
committee  would be  incorporated within  the Emergency  Response                                                               
Commission.                                                                                                                     
                                                                                                                                
9:12:12 AM                                                                                                                    
DENNIS   BRODIGAN,   Director,   Emergency   Management   System,                                                               
Matanuska-Susitna Borough, Wasilla,  Alaska, testified in support                                                               
of  SB  208. He  stated  that  the  bill  would provide  a  great                                                               
foundation  for interagency  assistance  during disaster  events.                                                               
All areas of  Alaska have a finite amount  of resources available                                                               
to them and  the legislation will go a long  way toward providing                                                               
more resources faster to local jurisdictions.                                                                                   
                                                                                                                                
CHAIR WIELECHOWSKI closed public testimony.                                                                                     
                                                                                                                                
CHAIR WIELECHOWSKI thanked the bill sponsor.                                                                                    
                                                                                                                                
9:14:05 AM                                                                                                                    
SENATOR MEYER moved to report the  CS for SB 208, version B, from                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note. There being  no objection, CSSB 208  (STA) was                                                               
reported from the Senate State Affairs Standing Committee.                                                                      
                                                                                                                                
                 SB  29-TAX EXPENDITURE REPORT                                                                              
                                                                                                                              
9:14:58 AM                                                                                                                  
CHAIR WIELECHOWSKI announced that the next bill before the                                                                      
committee would be SB 29, which calls for greater transparency                                                                  
and review of indirect state spending, resulting from the many                                                                  
tax credits, exemptions, exclusions, and waivers contained in                                                                   
state law. Alaska is one of only a handful of states in the                                                                     
country that does not provide the public and lawmakers with                                                                     
clear and comprehensive information on an annual basis about                                                                    
indirect state spending. This is despite the fact that tax                                                                      
credits, exemptions, and exclusions constitute a significant                                                                    
percentage of Alaska's annual spending. According to rough                                                                      
calculations, it is as much as 15 percent.                                                                                      
                                                                                                                                
SAM GOTTSTEIN, staff, Senator Bill Wielechowski, reviewed SB 29                                                                 
on behalf of the sponsor. The intent of SB 29 is to have basic                                                                  
information on tax expenditures, or credits, provided to the                                                                    
legislature so that everyone, including citizens, has a better                                                                  
understanding of what the money goes to, and if it achieves the                                                                 
legislature's state objectives. Alaska spends more on tax                                                                       
credits annually than the budgets of the Departments of Revenue,                                                                
Natural Resources, Environmental Conversation, Law, the Court                                                                   
System, and the Legislature combined.                                                                                           
                                                                                                                                
Since the last hearing, Senator Wielechowski's office has worked                                                                
with the Department of Revenue (DOR), Legislative Budget and                                                                    
Audit (LB&A), Legislative Research, and Legislative Finance to                                                                  
find the right balance between making this information                                                                          
transparent and not putting undue burden on agencies.                                                                           
                                                                                                                                
9:17:11 AM                                                                                                                  
SENATOR MEYER moved to adopt the CS for SB 29, labeled 27-                                                                      
LS0305\E, as the working document.                                                                                              
                                                                                                                                
CHAIR WIELECHOWSKI objected for discussion purposes.                                                                            
                                                                                                                                
MR. GOTTSTEIN addressed the changes in version D. He explained                                                                  
that the first change was on page 1, line 2; it more clearly                                                                    
defined and narrowed the definition of tax expenditures. The                                                                    
words "deductions and deferrals" were removed from the title of                                                                 
the bill, and the word "waivers" was added at DOR's request. The                                                                
same change was made on page 4, in lines 20-21. On page 4, lines                                                                
23-24, language was added to ensure that tax deductions are                                                                     
exempt from the definition.                                                                                                     
                                                                                                                                
On page 1, line 12 to page 2, 1ine 10, a new Section 3 was added                                                                
to provide for a one-time analysis of whether tax expenditures                                                                  
over $1 million have achieved their legislative purposes. The                                                                   
authority to do so was moved from DOR to Legislative Finance. A                                                                 
provision was added that DOR would only have to look back to                                                                    
2000 to determine if the tax expenditure had reached the $1                                                                     
million level.                                                                                                                  
                                                                                                                                
9:20:03 AM                                                                                                                  
MR. GOTTSTEIN addressed the change on page 4, line 12, where old                                                                
subsection (c) was removed and new section 3 was added.  On page                                                                
4, lines 15-19, new language was added which provides that DOR                                                                  
notify Legislative Finance if a tax expenditure has exceeded the                                                                
$1 million threshold, and provide the information for                                                                           
Legislative Finance to complete the analysis. He noted the final                                                                
change is on page 4, line 25; a new section is added changing                                                                   
the effective date on sections 1 and 2 to make them immediate.                                                                  
                                                                                                                                
MR. GOTTSTEIN explained the rationale behind the pros and cons                                                                  
related to the tax credit audits. The Department of Revenue does                                                                
not have the research capacity to do performance audits and                                                                     
maintains that the bill would have a large fiscal impact on the                                                                 
department. Also, DOR is a part of the Administration, which                                                                    
might have a partisan take on the bill.                                                                                         
                                                                                                                                
MR. GOTTSTEIN addressed the advantages and disadvantages of                                                                     
having Legislative Budget and Audit (LB&A) do the audits. He                                                                    
said that LB&A was thorough and non-partisan; however the                                                                       
decision was made not to go with LB&A due to a large fiscal                                                                     
impact and their need to follow national auditing standards, as                                                                 
well as the fact that it would expand their statutory authority.                                                                
He showed an example of a national tax preference performance                                                                   
audit which was way beyond what would be required for the                                                                       
purposes of SB 29.                                                                                                              
                                                                                                                                
MR. GOTTSTEIN discussed the pros and cons of a decision to go                                                                   
with Legislative Research. The final decision was to go with                                                                    
Legislative Finance for the research and analysis required for                                                                  
SB 29 because it would cost only $50,000 to hire a consultant,                                                                  
and Legislative Finance has a philosophy of transparency in                                                                     
government. One disadvantage they have is a lack of broad                                                                       
research experience.                                                                                                            
                                                                                                                                
9:27:12 AM                                                                                                                  
SENATOR MEYER asked about costs depicted in the fiscal notes and                                                                
if technology was a factor in the cost analysis. He wondered if                                                                 
technology costs would affect Legislative Finance's fiscal note.                                                                
He also requested more information about the effective date.                                                                    
                                                                                                                                
MR. GOTTSTEIN explained that the effective date has been pushed                                                                 
back to July 1, 2015, in order for the Department of Revenue to                                                                 
upgrade their system. Technology was a factor in previous fiscal                                                                
notes.                                                                                                                          
                                                                                                                                
SENATOR MEYER expressed an interest in having the audit done                                                                    
sooner than the effective date.                                                                                                 
                                                                                                                                
CHAIR WIELECHOWSKI asked if there was a way to accelerate the                                                                   
process.                                                                                                                        
                                                                                                                                
MR. GOTTSTEIN said it would cost close to a $1 million due to                                                                   
the numbers of personnel needed to do the job if the effective                                                                  
date was sooner than July 1, 2015.                                                                                              
                                                                                                                                
SENATOR MEYER agreed it was a policy call and $1 million might                                                                  
be a cheap investment. He hoped Legislative Finance might have a                                                                
method of speeding it up.                                                                                                       
                                                                                                                                
9:30:52 AM                                                                                                                    
CHAIR WIELECHOWSKI moved to adopt Amendment E.1:                                                                                
                                                                                                                                
     On page 1, line 14, change 2000 to 2012                                                                                    
     On page 2, line 16, change 2000 to 2012                                                                                    
                                                                                                                                
CHAIR WIELECHOWSKI objected.                                                                                                    
                                                                                                                                
MR. GOTTSTEIN explained that Amendment E.1 would change the date                                                                
of the one-time analysis and the $1 million threshold. The                                                                      
Department of Revenue would only have to look back three years                                                                  
when determining whether a tax expenditure had reached the $1                                                                   
million threshold.                                                                                                              
                                                                                                                                
CHAIR WIELECHOWSKI withdrew his objection. Seeing no further                                                                    
objection, Amendment E.1 was adopted.                                                                                           
                                                                                                                                
9:32:33 AM                                                                                                                    
DAVID TEAL, Director, Legislative Finance Division, answered                                                                    
questions pertaining to SB 29. He said the legislation is                                                                       
something the state needs and DOR should already be doing. The                                                                  
bill clearly spells out its intent and goal.                                                                                    
                                                                                                                                
CHAIR WIELECHOWSKI asked if Legislative Finance was comfortable                                                                 
performing the analysis.                                                                                                        
                                                                                                                                
MR. TEAL said he has no concerns about the current version of                                                                   
the bill. The earlier effective date was problematic due to                                                                     
problems with getting the data from DOR on time. He gave an                                                                     
example of the need for the bill. He maintained that it was                                                                     
impossible to get the information outside of DOR, and with the                                                                  
new technology, accessing the data will be easier.                                                                              
                                                                                                                                
He explained how Legislative Finance would accomplish the job by                                                                
analyzing how much the tax credit cost and the economic impact                                                                  
of it. He gave an example of the jet fuel tax credit, which is                                                                  
intended to attract more airlines to fly through Anchorage. The                                                                 
fact that many airlines do fly through Anchorage, shows that it                                                                 
works. Legislative Finance cannot state that if the tax credit                                                                  
is removed, airlines will quit coming to Anchorage. He termed                                                                   
Legislative Finance's work "a quick and dirty analysis." He                                                                     
added that the fiscal note is very low because the analysis                                                                     
would be fairly simple and straight-forward.                                                                                    
                                                                                                                                
CHAIR WIELECHOWSKI asked if there were any problems assigning                                                                   
the analysis to Legislative Finance.                                                                                            
                                                                                                                                
MR. TEAL said no, as long as DOR will provide the necessary                                                                     
data.                                                                                                                           
                                                                                                                                
CHAIR WIELECHOWSKI asked if the $50,000 fiscal note was                                                                         
adequate.                                                                                                                       
                                                                                                                                
MR. TEAL said it was if the requirement was for a rough analysis                                                                
of whether the tax credit is working.                                                                                           
                                                                                                                                
9:37:16 AM                                                                                                                    
SENATOR MEYER asked how much is spent on tax credits currently.                                                                 
He listed several taxes.                                                                                                        
                                                                                                                                
MR. TEAL said he thought the point of the bill was to find out.                                                                 
He pointed out that the film tax credit is allowed up to $100                                                                   
million. Most of the tax credit amounts are from oil, but the                                                                   
totals are unknown, but most of the tax credits have no                                                                         
information about how much they total.                                                                                          
                                                                                                                                
SENATOR MEYER assumed that oil tax credits would be 90 percent                                                                  
of all tax credits and suggested the focus be in that area. He                                                                  
agreed with the intent of the bill.                                                                                             
                                                                                                                                
CHAIR WIELECHOWSKI agreed that the purpose was to determine if                                                                  
the tax credits were effective and should continue.                                                                             
                                                                                                                                
9:40:14 AM                                                                                                                    
JOHANNA BALES, Deputy Director, Tax Division, Department of                                                                     
Revenue, answered questions related to SB 29.                                                                                   
                                                                                                                                
CHAIR WIELECHOWSKI asked if Ms. Bales had any concerns about                                                                    
version E.                                                                                                                      
                                                                                                                                
MS. BALES agreed with the change Amendment E.1 made to the date.                                                                
She commented on Senator Meyer's question about the amount of                                                                   
tax credits. She said the Tax Division Annual Report provides                                                                   
information about the amount of tax credits claimed in each                                                                     
program. The Revenue Sources Book shows the oil tax credits.                                                                    
                                                                                                                                
SENATOR MEYER said he does have a copy of the Fall 2010 Revenue                                                                 
Sources Book.                                                                                                                   
                                                                                                                                
MS. BALES clarified that the Tax Division Annual Report contains                                                                
information about tax credits.                                                                                                  
                                                                                                                                
SENATOR MEYER wondered if there was a place where the total                                                                     
amount of tax credits was shown.                                                                                                
                                                                                                                                
MS. BALES said the appendix in the Revenue Sources Book shows                                                                   
all credits and the amounts claimed and projected, but not the                                                                  
sum.                                                                                                                            
                                                                                                                                
SENATOR MEYER located the information.                                                                                          
                                                                                                                                
MS. BALES explained that the information does not include 24 tax                                                                
exemptions, 12 of which are over $1 million.                                                                                    
                                                                                                                                
9:45:21 AM                                                                                                                    
CHAIR WIELECHOWSKI wondered about the fiscal impact to DOR from                                                                 
version E.                                                                                                                      
                                                                                                                                
MS. BALES thought probably one new position would be needed to                                                                  
deal with tax exemption information.                                                                                            
                                                                                                                                
CHAIR WIELECHOWSKI summarized the changes in version E.                                                                         
                                                                                                                                
SENATOR MEYER asked Ms. Bales for her thoughts on Legislative                                                                   
Finance's involvement in the audit process.                                                                                     
                                                                                                                                
MS. BALES said the division is fine with working with another                                                                   
entity on the requirements of the bill. The previous issue was                                                                  
regarding the type of additional analysis required outside of                                                                   
financial audits. She said she was surprised that Legislative                                                                   
Finance could analyze all the tax credits and exemptions for                                                                    
only $50,000. She opined that taxpayers would need to be                                                                        
contacted. She summarized that there are 24 tax exemptions and                                                                  
12 tax credits to analyze.                                                                                                      
                                                                                                                                
9:49:05 AM                                                                                                                    
MR. TEAL addressed Ms. Bales' comments and said DOR would                                                                       
probably be best at doing the job because they release the tax                                                                  
information. Legislative Finance can look at Department of Labor                                                                
(DOL) for relative statistics. It is difficult to say who                                                                       
benefits by the tax credits. He did not know if a solid                                                                         
conclusion could be reached. He considered the analysis as a                                                                    
simpler task than DOR sees it. If more money is required to do                                                                  
the job, then a request for more will be forthcoming. He pointed                                                                
out that there is a 7-year cycle in which to complete the                                                                       
analysis.                                                                                                                       
                                                                                                                                
CHAIR WIELECHOWSKI thought that originally DOR was considered as                                                                
the department to do the work. He justified the choice to use                                                                   
Legislative Finance.                                                                                                            
                                                                                                                                
9:53:40 AM                                                                                                                    
SENATOR GIESSEL asked if Legislative Finance is including tax                                                                   
exemptions in the analysis.                                                                                                     
                                                                                                                                
MR. GOTTSTEIN addressed the question and said the tax exemptions                                                                
are included. He gave an example of the fuel tax, which is a tax                                                                
exemption. He referred to page 4 of the bill for the definition                                                                 
of tax exemption.                                                                                                               
                                                                                                                                
SENATOR GIESSEL questioned the accuracy of DOL data, which she                                                                  
maintained is flawed.                                                                                                           
                                                                                                                                
CHAIR WIELECHOWSKI noted the bill has a referral to the Senate                                                                  
Finance Committee.                                                                                                              
                                                                                                                                
SENATOR MEYER thought the bill could move forward with the                                                                      
understanding that the analysis is less comprehensive than in                                                                   
the original version.                                                                                                           
                                                                                                                                
CHAIR WIELECHOWSKI added that there was the option to change the                                                                
parameters and ask for further analysis. The idea is to get the                                                                 
rough information and then decide whether to proceed further.                                                                   
                                                                                                                                
9:56:44 AM                                                                                                                    
SENATOR MEYER moved to report CSSB 29, version E, as amended,                                                                   
from committee with individual recommendations and the                                                                          
accompanying fiscal note from Legislative Finance, and with a                                                                   
forthcoming DOR fiscal note. There being no objection, CSSB 29                                                                  
(STA) was reported from the Senate State Affairs Standing                                                                       
Committee.                                                                                                                      
                                                                                                                                
9:58:05 AM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Wielechowski adjourned the Senate State Affairs Standing                                                                  
Committee at 9:58 a.m.                                                                                                          
                                                                                                                                

Document Name Date/Time Subjects
SB 29, version A.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Sectional Analysis.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Approved Film Production Tax Credits by Year.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Redeemed Film Production Tax Credits by Year.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Sponsor Statement.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Tax Expenditures 101.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 DOR 1-27-12 Presentation on Oil Production Tax Credits.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 DOR 2010 Fall Revenue Sourcebook Overview.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
Draft CS for SB 29 version B.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Explanation of Changes in S STA CS, Version A, to Version I.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 DOR 2011 Fall Revenue Sourcebook Appendix on Total Tax Expenditures.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Alaska public disclosures of tax expenditures.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB029-DOR-TAX-02-28-12.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 29
SB 208_Sectional Summary.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
SB 208_Version M.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
SB 208_Sponsor Statement.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
CSSB 208_Version B.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
CSSB 208-B_Sectional Summary.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
SB 208_Support Letter_Alaska Municipal League.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
SB 29 List of Tax Expenditures from DOR, 3-12-12.pdf SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 Ver.E.pdf SSTA 3/13/2012 9:00:00 AM
SB 29
SB 29 fiscal note Leg Audit 13 March 12 2012.xls SSTA 3/13/2012 9:00:00 AM
SB 29
SB208-DMVA-MVA-DHSEM-3-5-12.pdf SSTA 3/6/2012 9:00:00 AM
SSTA 3/13/2012 9:00:00 AM
SB 208
SB 208 AARP Letter of Support.pdf SSTA 3/13/2012 9:00:00 AM
SB 208