Legislature(2017 - 2018)
2017-04-15 House Journal
Full Journal pdf2017-04-15 House Journal Page 1118 HB 115 The following, which was advanced to third reading from the April 14 calendar (page 1102), was read the third time: CS FOR HOUSE BILL NO. 115(FIN) "An Act bearing the short title of the 'Education Funding Act'; relating to the taxation of income of individuals, partners, shareholders in S corporations, trusts, and estates; relating to a payment against the individual income tax from the permanent fund dividend disbursement; repealing tax credits applied against the tax on individuals under the Alaska Net Income Tax Act; and providing for an effective date." Representative Seaton moved and asked unanimous consent that CSHB 115(FIN) be returned to second reading for the specific purpose of considering Amendment No. 1. There being no objection, it was so ordered. The Speaker stated that, without objection, CSHB 115(FIN) would be returned to second reading for all amendments. Amendment No. 1 was offered by Representatives Seaton and Foster: Page 4, lines 4 - 14: Delete all material and insert: "Sec. 43.22.015. Calculation of tax on a nonresident individual. (a) Except as otherwise provided in AS 43.22.010(f)(2) or (b) of this section, the tax on a nonresident individual is the product of (1) the tax determined under AS 43.22.010(b) on the nonresident individual's taxable income computed as if the 2017-04-15 House Journal Page 1119 nonresident individual were a resident individual but taking a reduction under AS 43.22.030(b)(2); and (2) a fraction, the (A) numerator of which is the nonresident individual's income taxable under AS 43.22.045; and (B) denominator of which is the nonresident individual's taxable income computed as if the nonresident individual were a resident individual. (b) If a nonresident individual's taxable income computed under (a)(2)(B) is less than the nonresident individual's income taxable under (a)(2)(A), the tax imposed by this chapter is on the nonresident individual's taxable income as computed under AS 43.22.045." Page 9, lines 6 - 12: Delete all material and insert: "(b) In addition to the adjustments made to taxable income under (a) of this section, a taxpayer may receive a reduction from federal adjusted gross income for each exemption claimed on a taxpayer's federal income tax return for the individual, an individual filing jointly with the individual, or a dependent of the individual. The reduction under this subsection for a (1) resident taxpayer is $4,000 for each exemption claimed; (2) nonresident is, for each exemption claimed, the product of $4,000 and a fraction, the numerator of which is the nonresident individual's income taxable under AS 43.22.045, computed without the reduction under this subsection, and the denominator of which is the nonresident individual's taxable income computed as if the nonresident individual were a resident individual and without the reduction under this subsection; the reduction under this paragraph may not exceed $4,000 for each exemption claimed. (c) The reduction under (b) of this section may not (1) be claimed by a trust; (2) reduce a taxpayer's tax liability under this chapter to below zero." Reletter the following subsection accordingly. 2017-04-15 House Journal Page 1120 Page 22, line 7: Delete "AS 43.22.030(a)(2)(I)" Insert "AS 43.22.030(b)" Representative Seaton moved and asked unanimous consent that Amendment No. 1 be adopted. Objection was heard and withdrawn. There being no further objection, Amendment No. 1 was adopted. Amendment No. 2 was offered by Representative Eastman: Page 2, following line 17: Insert a new bill section to read: "* Sec. 4. AS 43.05.045(a), as amended by sec. 3 of this Act, is amended to read: (a) Unless [EXCEPT AS PROVIDED IN AS 43.22.075(i), OR UNLESS] an exemption is granted under (b) of this section, a taxpayer required to submit a return or report for a tax levied under this title or for any other tax administered by the department shall submit the return or report electronically in a format prescribed by the department. Failure to comply with this section may result in a civil penalty under AS 43.05.220(f). If a law under this title requires a report or return or a portion of a report or return to be in writing, an electronically filed report or return satisfies this section. A taxpayer shall submit attachments to a report or return required under this title electronically." Renumber the following bill sections accordingly. Page 26, following line 19: Insert a new bill section to read: "* Sec. 8. AS 43.22.010, 43.22.015, 43.22.020, 43.22.025, 43.22.030, 43.22.035, 43.22.040, 43.22.045, 43.22.050, 43.22.055, 43.22.060, 43.22.065, 43.22.070, 43.22.075, 43.22.080, 43.22.085, 43.22.090, 43.22.095, 43.22.100, 43.22.110, 43.22.150; and AS 43.23.092 are repealed January 1, 2023." Renumber the following bill sections accordingly. 2017-04-15 House Journal Page 1121 Page 26, line 22: Delete "sec. 4" Insert "sec. 5" Page 26, line 23: Delete "sec. 4" Insert "sec. 5" Page 26, line 29: Delete "Section 8" Insert "Section 10" Page 26, following line 29: Insert a new bill section to read: "* Sec. 12. Sections 4 and 8 of this Act take effect January 1, 2023." Renumber the following bill section accordingly. Page 26, line 30: Delete "sec. 9" Insert "secs. 11 and 12" Representative Eastman moved and asked unanimous consent that Amendment No. 2 be adopted. Representative Seaton objected. The question being: "Shall Amendment No. 2 be adopted?" The roll was taken with the following result: CSHB 115(FIN) am Second Reading Amendment No. 2 YEAS: 15 NAYS: 24 EXCUSED: 1 ABSENT: 0 Yeas: Birch, Chenault, Eastman, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Saddler, Talerico, Thompson, Tilton, Wilson Nays: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Johnson, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Tarr, Tuck, Westlake, Wool 2017-04-15 House Journal Page 1122 Excused: Neuman And so, Amendment No. 2 was not adopted. Amendment No. 3 was offered by Representative Pruitt: Page 1, line 5, following "Act;" (title amendment): Insert "relating to contributions from permanent fund dividends to the general fund;" Page 26, following line 12: Insert new bill sections to read: "* Sec. 5. AS 43.23.062(a) is amended to read: (a) Notwithstanding AS 43.23.069, the Department of Revenue shall prepare the electronic Alaska permanent fund dividend application to allow an applicant who files electronically to direct that money be subtracted from the dividend payment and contributed to the general fund or to one or more of the educational organizations, community foundations, or charitable organizations that appear on the contribution list contained in the application. A contribution to the general fund or to an organization may be $25, $50, $75, $100, or more, in increments of $50, up to the total amount of the permanent fund dividend that the applicant is entitled to receive. If the total amount of contributions elected by an applicant exceeds the amount of the permanent fund dividend that the applicant is entitled to receive, contributions shall be deducted from the dividend in the order of priority elected by the applicant on the application until the entire amount of the dividend that the applicant is entitled to receive is allocated for contribution. The electronic dividend application form must include notice that seven percent of the money contributed will be used for administrative costs incurred in implementing this section, and money from the dividend fund will not be used for that purpose. * Sec. 6. AS 43.23.062(b) is amended to read: (b) The department shall list each educational organization, community foundation, or charitable organization eligible under (c) and (d) of this section, [AND] each university campus that applies under (l) of this section, and the general fund on the contribution list. The department shall maintain an electronic 2017-04-15 House Journal Page 1123 database for the contribution list that is accessible to the public and that permits searches by organization name, geographic location, and type. The department shall provide a statement of the contributions made by an individual that is suitable for federal income tax purposes to each individual who elects to contribute under (a) of this section. * Sec. 7. AS 43.23.062(m) is amended to read: (m) In addition to the application fee in (f) of this section, the department shall withhold a coordination fee from each organization, foundation, or university campus that receives contributions under this section in the immediately preceding dividend year. The coordination fee for an organization, foundation, or university campus that receives contributions under this section shall be seven percent of the amount of contributions reported by the department under (j) of this section for the organization, foundation, or university campus for the immediately preceding dividend year. The coordination fee shall be separately accounted for under AS 37.05.142 and shall be accounted for separately from the application fee collected under (f) of this section. The annual estimated balance in the account maintained under AS 37.05.142 for coordination fees collected under this subsection may be appropriated for costs of administering this section. The department may not withhold a coordination fee for contributions to the general fund." Renumber the following bill sections accordingly. Page 26, line 29: Delete "Section 8" Insert "Section 11" Page 26, line 30: Delete "sec. 9" Insert "sec. 12" Representative Pruitt moved and asked unanimous consent that Amendment No. 3 be adopted. Representative Seaton objected. 2017-04-15 House Journal Page 1124 The question being: "Shall Amendment No. 3 be adopted?" The roll was taken with the following result: CSHB 115(FIN) am Second Reading Amendment No. 3 YEAS: 15 NAYS: 24 EXCUSED: 1 ABSENT: 0 Yeas: Birch, Chenault, Eastman, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Saddler, Talerico, Thompson, Tilton, Wilson Nays: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Johnson, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Tarr, Tuck, Westlake, Wool Excused: Neuman And so, Amendment No. 3 was not adopted. Amendment No. 4 was offered by Representative Pruitt: Page 1, line 1, following "Act'; (title amendment)": Insert "allowing a state employee to withhold income for deposit into the general fund;" Page 2, following line 7: Insert a new bill section to read: "* Sec. 3. AS 39.25.050 is amended by adding a new subsection to read: (c) The director of personnel shall establish a program to allow an employee to deduct from the employee's compensation at the end of each payroll period a donation to the general fund." Renumber the following bill sections accordingly. Page 26, line 22: Delete "sec. 4" Insert "sec. 5" 2017-04-15 House Journal Page 1125 Page 26, line 23: Delete "sec. 4" Insert "sec. 5" Page 26, line 29: Delete "Section 8" Insert "Section 9" Page 26, line 30: Delete "sec. 9" Insert "sec. 10" Representative Pruitt moved and asked unanimous consent that Amendment No. 4 be adopted. Representative Seaton objected. The question being: "Shall Amendment No. 4 be adopted?" The roll was taken with the following result: CSHB 115(FIN) am Second Reading Amendment No. 4 YEAS: 15 NAYS: 24 EXCUSED: 1 ABSENT: 0 Yeas: Birch, Chenault, Eastman, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Saddler, Talerico, Thompson, Tilton, Wilson Nays: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Johnson, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Tarr, Tuck, Westlake, Wool Excused: Neuman And so, Amendment No. 4 was not adopted. Amendment No. 5 was offered by Representative Pruitt: Page 1, line 5, following "Act;" (title amendment): Insert "relating to donations to the state;" 2017-04-15 House Journal Page 1126 Page 26, following line 18: Insert a new bill section to read: "* Sec. 6. AS 43.98 is amended by adding a new section to read: Article 5. Donations to the State. Sec. 43.98.080. Donations to the state. The department may (1) accept a donation from a person for a public purpose; and (2) adopt regulations under AS 44.62 (Administrative Procedure Act) to implement this section." Renumber the following bill sections accordingly. Page 26, line 29: Delete "Section 8" Insert "Section 9" Page 26, line 30: Delete "sec. 9" Insert "sec. 10" Representative Pruitt moved and asked unanimous consent that Amendment No. 5 be adopted. Representative Seaton objected. The question being: "Shall Amendment No. 5 be adopted?" The roll was taken with the following result: CSHB 115(FIN) am Second Reading Amendment No. 5 YEAS: 15 NAYS: 24 EXCUSED: 1 ABSENT: 0 Yeas: Birch, Chenault, Eastman, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Saddler, Talerico, Thompson, Tilton, Wilson Nays: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Johnson, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Tarr, Tuck, Westlake, Wool 2017-04-15 House Journal Page 1127 Excused: Neuman And so, Amendment No. 5 was not adopted. Amendment No. 6 was offered by Representative Eastman: Page 2, line 20: Delete "Each" Insert "Unless otherwise provided under AS 43.22.012, each" Page 4, following line 3: Insert a new section to read: "Sec. 43.22.012. Suspension of income tax. The commissioner of revenue shall determine whether, in the previous four calendar quarters for which data has been published, the percentage change in real gross domestic product was negative for at least two consecutive quarters. To make the determination under this section, the commissioner shall rely on the percent change in real gross domestic product reported by the Bureau of Economic Analysis in the United States Department of Commerce. If the commissioner determines that the percent change in real gross domestic product for the state was negative during at least two consecutive quarters of the previous four calendar quarters, the tax under this chapter shall be suspended for one year, beginning with the next calendar quarter." Representative Eastman moved and asked unanimous consent that Amendment No. 6 be adopted. Representative Seaton objected. The question being: "Shall Amendment No. 6 be adopted?" The roll was taken with the following result: CSHB 115(FIN) am Second Reading Amendment No. 6 YEAS: 13 NAYS: 26 EXCUSED: 1 ABSENT: 0 2017-04-15 House Journal Page 1128 Yeas: Birch, Chenault, Eastman, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Talerico, Tilton, Wilson Nays: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Johnson, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Saddler, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Tarr, Thompson, Tuck, Westlake, Wool Excused: Neuman And so, Amendment No. 6 was not adopted. HB 115 CSHB 115(FIN) am was before the House in second reading. Amendment No. 7 was offered by Representative Ortiz: Page 9, line 4: Delete "and" Page 9, line 12, following "zero": Insert "; and (J) 50 percent of municipal property taxes paid in the taxable year on the residence in the state of an individual; the deduction under this subparagraph may not be taken for more than one residence for each tax return" Representative Ortiz moved and asked unanimous consent that Amendment No. 7 be adopted. There was objection. 2017-04-15 House Journal Page 1129 Representative Ortiz moved and asked unanimous consent to withdraw Amendment No. 7. There being no objection, it was so ordered. CSHB 115(FIN) am was automatically in third reading. Pursuant to Uniform Rule 4 the Speaker temporarily relinquished the Chair to Representative Tuck, Majority Leader. The Speaker resumed the Chair. The question being: "Shall CSHB 115(FIN) am pass the House?" The roll was taken with the following result: CSHB 115(FIN) am Third Reading Final Passage YEAS: 22 NAYS: 17 EXCUSED: 1 ABSENT: 0 Yeas: Claman, Drummond, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Josephson, Kawasaki, Kito, Kreiss-Tomkins, LeDoux, Ortiz, Parish, Seaton, Spohnholz, Stutes, Tarr, Tuck, Westlake, Wool Nays: Birch, Chenault, Eastman, Johnson, Johnston, Knopp, Kopp, Millett, Pruitt, Rauscher, Reinbold, Saddler, Sullivan-Leonard, Talerico, Thompson, Tilton, Wilson Excused: Neuman And so, CSHB 115(FIN) am passed the House. Representative Tuck moved the effective date clause. The question being: "Shall the effective date clause be adopted?" The roll was taken with the following result: CSHB 115(FIN) am Third Reading Effective Date YEAS: 34 NAYS: 5 EXCUSED: 1 ABSENT: 0 Yeas: Birch, Claman, Drummond, Eastman, Edgmon, Fansler, Foster, Gara, Grenn, Guttenberg, Johnston, Josephson, Kawasaki, Kito, 2017-04-15 House Journal Page 1130 Kreiss-Tomkins, LeDoux, Millett, Ortiz, Parish, Pruitt, Rauscher, Saddler, Seaton, Spohnholz, Stutes, Sullivan-Leonard, Talerico, Tarr, Thompson, Tilton, Tuck, Westlake, Wilson, Wool Nays: Chenault, Johnson, Knopp, Kopp, Reinbold Excused: Neuman And so, the effective date clause was adopted. Representative Millett gave notice of reconsideration of the vote on CSHB 115(FIN) am.