1997-01-15                     Senate Journal                      Page 0050
SB 49                                                                        
SENATE BILL NO. 49 BY THE SENATE RULES COMMITTEE                               
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act repealing certain filing statements and                                
bonds for enforcement and collection of certain                                
taxes and license fees; relating to service of process                         
on nonresident taxpayers; and providing for an                                 
effective date.                                                                
                                                                               

1997-01-15                     Senate Journal                      Page 0051
SB 49                                                                        
was read the first time and referred to the Labor and Commerce and             
Judiciary Committees.                                                          
                                                                               
Zero fiscal notes published today from Department of Commerce and              
Economic Development, Department of Revenue.                                   
                                                                               
Governor's transmittal letter dated January 15, 1997:                          
                                                                               
Dear President Miller:                                                         
                                                                               
Much of my effort in advertising Alaska as open and ready for                  
business includes removing unnecessary barriers to doing business              
in our state.  This bill does just that.  It discontinues our requirement      
that nonresident businesses file a bond or other security with the             
Department of Revenue -- a requirement, I must note, that makes                
Alaska unique among all 50 states.  In this area, Id rather join the           
norm than be different.                                                        
                                                                               
The bonding requirement, with a minimum $1,000 bond, was enacted               
in 1955 to ensure the collection of state taxes and license fees from          
nonresident businesses which have little security or property in the           
state.  It may have made sense back then when it was hard to find              
people if they abruptly closed up shop and left the state with a tax           
debt.  But modern technology has fixed that problem.                           
                                                                               
Many taxpayers now complain the bonding and related filing                     
requirements are excessive considering the amount of business they             
do in the state.  Moreover, no one in the Department of Revenue                
can recall a case where a bond was actually used to pay a delinquent           
tax lien; the department has other means of ensuring that tax                  
payments are made.                                                             
                                                                               
In fiscal year 1995, more than 2,000 corporations had to fill out              
lengthy paperwork and file these bonds.  If the program is                     
eliminated, the time the state spends on processing all these forms            
can be redirected toward expanded tax compliance work which would              
result in increased revenue to the state.                                      
                                                                               
                                                                               

1997-01-15                     Senate Journal                      Page 0052
SB 49                                                                        
I submitted this same proposal last year to the legislature where it           
received much support.  It passed the Senate as well as every                  
committee of referral in the House of Representatives. The non-                
resident tax bond program serves only to discourage business in                
Alaska.  Its time to take it off the books.                                    
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Tony Knowles                                                             
						Governor