03/21/2014 01:30 PM House FINANCE

HOUSE BILL NO. 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."                                                                                          
                                                                                                                                
1:50:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze continued the fiscal note discussion from                                                                      
earlier in the day. He appreciated the process encouraged                                                                       
by committee members.                                                                                                           
                                                                                                                                
Representative Costello discussed the seven fiscal notes                                                                        
attached to the bill.                                                                                                           
                                                                                                                                
1:54:28 PM                                                                                                                    
                                                                                                                                
MATT FONDER, DIRECTOR, TAX  DIVISION, DEPARTMENT OF REVENUE,                                                                    
ANCHORAGE  (via  teleconference)  commented  on  the  fiscal                                                                    
note. He explained that the  larger numbers on the front end                                                                    
of the  Department of  Revenue fiscal  note allowed  for the                                                                    
staff  to compile  the comprehensive  5-year  look back.  He                                                                    
explained the  legislative intent. Future years  would allow                                                                    
utilization  of the  information obtained  from the  report.                                                                    
The  division required  only one  full-time employee  in the                                                                    
out years.  He mentioned that  the first year  would require                                                                    
two economists, a tax technician, and a college intern.                                                                         
                                                                                                                                
1:56:05 PM                                                                                                                    
                                                                                                                                
Representative  Thompson asked  if the  first year  would be                                                                    
used to establish a methodology for compiling the report.                                                                       
                                                                                                                                
Mr. Fonder  concurred. He explained  that the  bill language                                                                    
required   analysis   of   indirect  expenditures   by   the                                                                    
Department of  Revenue and every  other department  in state                                                                    
government. A  methodology to  communicate with  each agency                                                                    
to  obtain   the  necessary   information  was   crucial  to                                                                    
compiling the report.                                                                                                           
                                                                                                                                
1:56:56 PM                                                                                                                    
                                                                                                                                
Representative Thompson  MOVED to REPORT CSHB  306 (FIN) out                                                                    
of  committee   with  individual  recommendations   and  the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative Gara objected. He  pointed out that the state                                                                    
adopted  a  new  rewritten  film   tax  credit  program.  He                                                                    
disagreed  with  the   sunset  in  2016  as   noted  in  the                                                                    
legislation.  He  discussed  the  veteran's  employment  tax                                                                    
credit that was also eliminated  in 2016. He appreciated the                                                                    
portions  of the  bill requiring  a report.  He agreed  that                                                                    
some tax credits should be eliminated.                                                                                          
                                                                                                                                
1:58:47 PM                                                                                                                    
                                                                                                                                
Representative Thompson replied that  he liked the film tax,                                                                    
but  changes   in  the   last  report   provided  inadequate                                                                    
information. He noted  that the bill would  allow for review                                                                    
of the  changes in the film  tax credit. He argued  that the                                                                    
current extension  was not  funded and  he wished  to review                                                                    
the credit with the analysis provided.                                                                                          
                                                                                                                                
2:02:12 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:03:22 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson, Costello,  Edgmon, Holmes,  Munoz, Neuman,                                                                    
Thompson, Austerman, Stoltze                                                                                                    
OPPOSED: Gara                                                                                                                   
                                                                                                                                
The MOTION PASSED (9/1).                                                                                                        
                                                                                                                                
CSHB  306 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass" recommendation and  with one new fiscal  note from the                                                                    
Department  of  Revenue,  one  new   fiscal  note  from  the                                                                    
Legislature, one  new zero fiscal  note from  the Department                                                                    
of  Labor and  Workforce  Development, one  new zero  fiscal                                                                    
note  from   the  Department  of  Commerce,   Community  and                                                                    
Economic  Development, one  new  zero fiscal  note from  the                                                                    
Department of  Natural Resources,  one new zero  fiscal note                                                                    
from the  Department of Environmental Conservation,  and one                                                                    
new  indeterminate  fiscal  note   from  the  Department  of                                                                    
Commerce, Community and Economic Development.