HB 306: "An Act relating to tax credits and administration of tax credit programs; requiring the Department of Revenue to report indirect expenditures; relating to the duties of state agencies; requiring the legislative finance division to analyze certain indirect expenditures; relating to lapse dates for appropriations for capital projects; repealing certain statutes authorizing indirect expenditures; and providing for an effective date."
00 HOUSE BILL NO. 306 01 "An Act relating to tax credits and administration of tax credit programs; requiring the 02 Department of Revenue to report indirect expenditures; relating to the duties of state 03 agencies; requiring the legislative finance division to analyze certain indirect 04 expenditures; relating to lapse dates for appropriations for capital projects; repealing 05 certain statutes authorizing indirect expenditures; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 21.09.210(j) is amended to read: 08 (j) The provisions of AS 21.96.075 [AS 21.96.070 AND 21.96.075] apply to a 09 taxpayer who is required to pay a tax due under this section. 10 * Sec. 2. AS 24.20.231 is amended to read: 11 Sec. 24.20.231. Duties. The legislative finance division shall 12 (1) analyze the budget and appropriation requests of each department, 13 institution, bureau, board, commission, or other agency of state government;
01 (2) analyze the revenue requirements of the state; 02 (3) provide the finance committees of the legislature with 03 comprehensive budget review and fiscal analysis services; 04 (4) cooperate with the office of management and budget in establishing 05 a comprehensive system for state budgeting and financial management as set out in 06 AS 37.07 (Executive Budget Act); 07 (5) complete studies and prepare reports, memoranda, or other 08 materials as directed by the Legislative Budget and Audit Committee; 09 (6) with the governor's permission, designate the legislative fiscal 10 analyst to serve ex officio on the governor's budget review committee; [AND] 11 (7) identify the actual reduction in state expenditures in the first fiscal 12 year following a review under AS 44.66.040 resulting from that review and inform the 13 Legislative Budget and Audit Committee of the amount of the reduction; and 14 (8) not later than the first legislative day of each first regular 15 session of each legislature, conduct a review in accordance with AS 24.20.235 of 16 the report provided to the division under AS 43.05.095. 17 * Sec. 3. AS 24.20 is amended by adding a new section to read: 18 Sec. 24.20.235. Indirect expenditure report. (a) Every year, the legislative 19 finance division shall deliver to the chair of the finance committee in each house of the 20 legislature a report analyzing the indirect expenditure report created under 21 AS 43.05.095 for the appropriate agencies listed in this subsection. The first review 22 shall occur in the calendar year set out after each agency's name, as follows, and 23 subsequent reviews of each agency shall occur every six years: 24 (1) Department of Commerce, Community, and Economic 25 Development, 2015; 26 (2) Department of Fish and Game, 2015; 27 (3) Department of Health and Social Services, 2015; 28 (4) Department of Labor and Workforce Development, 2015; 29 (5) Department of Revenue, 2015; 30 (6) Alaska Court System, 2017; 31 (7) Department of Administration, 2017;
01 (8) Department of Education and Early Development, 2017; 02 (9) Department of Environmental Conservation, 2017; 03 (10) Department of Natural Resources, 2017; 04 (11) Department of Transportation and Public Facilities, 2017; 05 (12) all remaining agencies, 2019. 06 (b) The report prepared under this section must provide 07 (1) an estimate of the revenue foregone by the state because of the 08 indirect expenditure; 09 (2) an estimate of the monetary benefit of the indirect expenditure to 10 the recipients of the benefit of the indirect expenditure; 11 (3) a determination of whether the legislative intent of the indirect 12 expenditure is being met and, if necessary, a determination of why the legislative 13 intent of the indirect expenditure is not being met; 14 (4) a recommendation as to whether each indirect expenditure should 15 be continued, modified, or terminated, a basis for the recommendation, and the 16 expected effect on the economy of the state if the recommendation is executed; and 17 (5) an explanation of the methodology and assumptions used in 18 preparing the report. 19 * Sec. 4. AS 37.05.316 is amended by adding a new subsection to read: 20 (c) An appropriation or allocation for a grant to a named recipient that is not a 21 municipality lapses if substantial, ongoing work on the project has not begun within 22 five years after the effective date of the appropriation or allocation. 23 * Sec. 5. AS 37.05.317 is amended by adding a new subsection to read: 24 (c) An appropriation or allocation for a grant to an unincorporated community 25 lapses if substantial, ongoing work on the project has not begun within five years after 26 the effective date of the appropriation or allocation. 27 * Sec. 6. AS 37.25.020 is amended to read: 28 Sec. 37.25.020. Unexpended balances of appropriation for capital projects. 29 An appropriation made for a capital project is valid for the life of the project and the 30 unexpended balance shall be carried forward to subsequent fiscal years if substantial, 31 ongoing work on the project has begun within five years after the effective date of
01 the appropriation. Between July 1 and August 31 of each fiscal year, a statement 02 supporting the amount of the unexpended balance required to complete the projects for 03 which the initial appropriation was made and the amount that may be lapsed shall be 04 recorded with the Department of Administration. 05 * Sec. 7. AS 38.05.150(d) is amended to read: 06 (d) For the privilege of mining or extracting the coal in the land covered by 07 the lease, the lessee 08 (1) shall pay to the state the royalties specified in the lease; the 09 royalties shall be fixed before offering the lease, and shall be effective for a period of 10 not more than 20 years; the royalties shall be not less than five cents a ton of 2,000 11 pounds; [THE ROYALTY PAYMENT IS SUBJECT TO THE EXPLORATION 12 INCENTIVE CREDIT AUTHORIZED BY AS 27.30;] 13 (2) shall also pay an annual rental, payable at the date of the lease and 14 annually thereafter, on the land or coal deposits covered by the lease, at a rate fixed by 15 the commissioner before offering the lease; the annual rental shall be effective for a 16 period of not more than 20 years; the annual rental shall be not less than 25 cents an 17 acre for the first year of the lease, not less than 50 cents an acre for the second year, 18 third year, fourth year and fifth year, and not less than $1 an acre for each year 19 thereafter during the continuance of the lease; the rental for each year shall be credited 20 against the royalties as they accrue for that year; each lease shall provide that the 21 annual rental payment is subject to adjustment at intervals of not [NO] more than 20 22 years and adjustments shall be based on the current rates for properties similarly 23 situated. 24 * Sec. 8. AS 38.05.212(b) is amended to read: 25 (b) The production royalty 26 [(1)] is three percent of net income as determined under AS 43.65 [; 27 AND 28 (2) IS SUBJECT TO THE EXPLORATION INCENTIVE CREDIT 29 AUTHORIZED BY AS 27.30]. 30 * Sec. 9. AS 43.05 is amended by adding a new section to read: 31 Sec. 43.05.095. Indirect expenditure report. (a) The commissioner shall, not
01 later than November 1 before the first regular session of each legislature, submit a 02 report to the chair of the finance committee of each house of the legislature and to the 03 legislative finance division that states, for each indirect expenditure made by the state, 04 (1) the name of the indirect expenditure; 05 (2) a brief description of the indirect expenditure; 06 (3) the statutory authority for the indirect expenditure; 07 (4) the date the statute authorizing the indirect expenditure is to be 08 repealed, if applicable; 09 (5) the intent of the legislature in enacting the statute authorizing the 10 indirect expenditure; 11 (6) the public purpose served by the indirect expenditure; 12 (7) the estimated annual effect on revenue of the indirect expenditure 13 for the previous five years; 14 (8) the estimated cost to administer the indirect expenditure; 15 (9) the number of beneficiaries of the indirect expenditure. 16 (b) A department, agency, or public corporation of the state shall, upon the 17 request of the commissioner, provide the records, reports, data analysis, or other 18 information necessary for the commissioner to complete the report required by this 19 section. The commissioner may enter into a confidentiality agreement if necessary to 20 obtain information or a record required to prepare the report under this section. 21 (c) In this section, "indirect expenditure" means a credit, exemption, 22 deduction, deferral, discount, exclusion, or other differential allowance designed to 23 encourage an activity or benefit the public or a taxpayer and that results in foregone 24 revenue for the state. 25 * Sec. 10. AS 43.65.020(a) is amended to read: 26 (a) A person subject to tax under this chapter shall make a return stating 27 specifically the items of gross income from the property, including royalty received 28 and the deductions and credits allowed by this chapter [AND THE EXPLORATION 29 INCENTIVE CREDIT AUTHORIZED BY AS 27.30], and other information for 30 carrying out this chapter that the department prescribes. The return must show the 31 mining license number and must be signed by the taxpayer or an authorized agent of
01 the taxpayer, under penalty of unsworn falsification in the second degree. If receivers, 02 trustees, or assigns are operating the property or business, they shall make returns for 03 the person engaged in mining, or the recipient of royalty in connection with mining 04 property. The tax due on the basis of the returns shall be collected in the same manner 05 as if collected from the person of whose business they have custody and control. [IN A 06 TAX YEAR IN WHICH A TAXPAYER APPLIES AGAINST THE TAX LEVIED 07 UNDER THIS CHAPTER THE EXPLORATION INCENTIVE CREDIT 08 AUTHORIZED BY AS 27.30, THE COMMISSIONER SHALL REQUIRE THE 09 TAXPAYER TO SUBMIT THE ACCOUNTING OF MINING OPERATION 10 ACTIVITIES FORM REQUIRED BY AS 27.30.030(b).] 11 * Sec. 11. AS 43.77.050(b) is amended to read: 12 (b) The tax collected under this chapter shall be paid into a separate account in 13 the general fund. The annual balance in the account may be appropriated by the 14 legislature for revenue sharing under AS 43.77.060. [THE AMOUNT OF ALL TAX 15 CREDITS APPROVED BY THE COMMISSIONER UNDER AS 43.77.040(b) 16 SHALL BE DEDUCTED FROM AMOUNTS PAID TO MUNICIPALITIES UNDER 17 AS 43.77.060(a) - (c).] 18 * Sec. 12. AS 21.66.110(b); AS 21.96.070, 21.96.075(c)(2); AS 24.20.271(12); 19 AS 27.30.010, 27.30.020, 27.30.025, 27.30.030, 27.30.040, 27.30.050, 27.30.060, 27.30.070, 20 27.30.080, 27.30.090, 27.30.095, 27.30.099; AS 43.05.010(15); AS 43.20.014, 43.20.044, 21 43.20.048; AS 43.55.019; AS 43.56.018; AS 43.65.018; AS 43.75.018, 43.75.032, 43.75.035, 22 43.75.036, 43.75.130(b), 43.75.130(f), 43.75.130(g); AS 43.77.035, 43.77.040, 43.77.045; 23 43.77.060(e); AS 43.98.030; AS 44.25.100, 44.25.105, 44.25.110, 44.25.115, 44.25.120, 24 44.25.125, 44.25.130, 44.25.135, 44.25.140, 44.25.145, 44.25.150, and 44.25.190 are 25 repealed. 26 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 TRANSITION. A taxpayer that accrues a credit authorized by a statute repealed by 29 sec. 12 of this Act before the effective date of sec. 12 of this Act, but whose tax year ends on 30 or after the effective date of sec. 12 of this Act, may take the tax credit in the tax year the 31 taxpayer accrues the credit, or, if the credit may be carried forward, the credit may be carried
01 forward in accordance with the statute under which it was accrued. 02 * Sec. 14. Sections 1, 7, 8, and 10 - 13 of this Act take effect on the day after the last day of 03 the Second Regular Session of the Twenty-Ninth Alaska State Legislature.