03/13/2012 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB208 | |
| SB29 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 208 | TELECONFERENCED | |
| += | SB 29 | TELECONFERENCED | |
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 |