Legislature(2013 - 2014)
04/19/2014 04:03 PM Senate FIN
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| HB306 | |
| HB140 | |
| HB287 | |
| HJR10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 306(FIN)
"An Act relating to the review 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 the
insurance tax education credit, the income tax
education credit, the veteran employment tax credit,
the oil or gas producer education credit, the property
tax education credit, the mining business education
credit, the fisheries business education credit, the
fisheries business tax credit for scholarship
contributions, the fisheries business salmon product
development tax credit, the fisheries business salmon
utilization tax credit, the fisheries business landing
tax credit for scholarship contributions, the
fisheries resource landing tax credit for the
fisheries resource harvested under the community
development quota, the fisheries resource landing tax
education credit, and the film production tax credit;
and providing for an effective date."
5:20:06 PM
REPRESENTATIVE STEVE THOMPSON, presented HB 306:
HB 306 is sound fiscal policy. HB 306 provides the
legislature with an effective tool to identify and
capture potential lost revenue. A Legislative Research
report shows that over the past five years, the State
has forgone almost half a billion dollars through
identified indirect spending across all departments,
inclusive of $20 million in Department of Revenue tax
credits not related to oil and gas.
HB 306 will provide a mechanism to help the
legislature identify its spending by providing
information on indirect expenditures, and capital
grants to projects by bringing them back before the
legislature for fiscal review.
HB 306 lapses grants to capital projects that have not
begun substantial, ongoing work within five years of
the effective date of the appropriation or allocation.
Thereby, each capital project without action within a
five-year period will lapse, if its ongoing existence
is not justified for re-appropriation.
Secondly, HB 306 requires that before the start of the
first regular session of each new Legislature, the
Dept. of Revenue provide to the chairs of the Finance
Committees, and the Legislative Finance Division, a
report on indirect expenditures. An "indirect
expenditure" is defined in HB 306 as a credit,
exemption, deduction, deferral, discount, exclusion,
or other differential allowance designed to encourage
an activity to benefit the public by forgoing revenue
to the state, an example being the credits used
against corporate taxes.
Then, the Legislative Finance Division will take
Department of Revenue's report and analyze the
indirect expenditures for each department, as
scheduled in the bill, with subsequent reviews every
six years. The Legislative Finance will then issue a
report to the legislature providing an estimate of
forgone revenue due to the indirect expenditure, an
estimate of monetary benefits, whether the legislative
intent of the statute is being met, and a
recommendation as to continuance of the indirect
expenditure, its economic effect, and an explanation
of the methodology used in preparing the report.
Lastly, the bill sunsets specific Department of
Revenue Tax Credits, not related to gas or oil by the
end of the Second Regular Session of the Twenty-Ninth
Legislature. Bringing these credits back before future
Legislatures for a review will continue to guarantee
the effectiveness of the State's indirect spending.
5:27:07 PM
Vice-Chair Fairclough wondered if the legislation repealed
the film tax credit. She surmised that the legislation
generally examines all tax credits. Representative Thompson
replied that the legislation gave the film tax credit a
sunset date for the end of 2016, at which time the
legislature would review the tax credit. He explained that
the film tax credit was developed with $300 million, and
there were already commitments for over $100 million of
that fund. He stated that the fund would need to
recapitalize at the end of 2015.
Vice-Chair Fairclough wondered if there was any additional
information.
BRODIE ANDERSON, STAFF REPRESENTATIVE STEVE THOMPSON,
stated that Representative Thompson covered the major
components of the legislation.
5:28:58 PM
PATRICIA HULL, MEMBER, ALASKA FILM GROUP, JUNEAU, spoke
against HB 306. She related that film tax credit had built
the industry in Alaska. She thought that eliminating the
film production tax credit would kill the industry in
Alaska.
Vice-Chair Fairclough noted that there was still confusion
and requested an explanation of the inclusion of the film
tax credit in the legislation. Mr. Anderson replied that
legal aspect of the legislation dealt with a sunset and
repeal the same way and that it was the legislature. He
stated that the intent was to review the credits.
5:35:07 PM
STACEY BOLES, PROGRAM DIRECTOR, ALASKA NEW MEDIA, ANCHORAGE
(via teleconference), testified against HB 306. She
remarked that the film tax credits provided an increase to
Alaska's economy.
5:38:13 PM
AUDRA HENDERSON, SELF, UNIVERSITY OF ALASKA ANCHORAGE,
ANCHORAGE (via teleconference), spoke against HB 306. She
explained that she had a career in film in television,
which started at the David Letterman Show. She hoped to
continue her career in the state. She felt that the film
tax credits encouraged and strengthened Alaska's economy,
and it needed more time to fully develop.
5:39:50 PM
LAWRENCE DAVID FOLDES, MEMBER, AWARDS EXECUTIVE COMMITTEE,
ACADEMY MOTION PICTURE ARTS & SCIENCES IN LOS ANGELES,
ANCHORAGE (via teleconference), testified against HB 306.
He related that financing for the film industry was
difficult, especially in Alaska. He remarked that the film
tax credits helped to encourage the development of film and
television in Alaska. He stressed that it was a new
program, and needed much more time to be developed and
become fully integrated and utilized.
5:44:04 PM
DEBORAH SCHILDT, SELF, ANCHORAGE (via teleconference),
spoke against HB 306. She stated that Alaskans across the
state supported the film tax credits, and the film
industry. She stressed that the program gave Alaskans
unique career opportunities, and exposed the state to much
needed marketing.
5:47:14 PM
BOB CROCKET, GENERAL MANAGER, PIKSIK LLC, ANCHORAGE (via
teleconference), testified against HB 306. He felt that
there would be great ramifications of the film industry in
Alaska. He felt that the jobs and businesses would have a
great negative effect, and remarked that the film industry
was growing in Alaska.
5:50:16 PM
NATALIA LAMONT, SELF, ANCHORAGE (via teleconference), spoke
against HB 306. She stated that she was a part of the
Alaska New Media program, and hoped to develop a script in
order to make a successful screenplay. She felt that the
film tax credits would make it possible to develop her
screenplay.
5:52:50 PM
JOE MATHIS, VICE PRESIDENT, EXTERNAL AFFAIRS, NANA
DEVELOPMENT CORPORATION, testified against HB 306. HE
expressed concerns about the inclusion of the film tax
credit in the bill. He stated that NANA had over $40
million invested in Alaska's film industry, and hoped that
the industry would continue to flourish. He discouraged the
sunset of the film tax credit program.
5:54:28 PM
RON HOLMSTERON, SAG-AFTRA, ANCHORAGE (via teleconference),
spoke against HB 306. He worked in the film industry, and
knew many people working in the Alaska film industry. He
felt that the legislation would have a great negative
impact on his industry, his peers, and the state.
5:56:02 PM
SARAH SAARLOOS, SELF, GIRDWOOD (via teleconference),
testified against HB 306. She expressed concerns about the
inclusion of the film tax credit in the legislation. She
stated that the Alaska film industry supported her family.
She witnessed the positive impacts of the film industry
across the state.
KENT SCHELER, MOUNTAIN SAFETY LOGISTICS, ANCHORAGE (via
teleconference), testified against HB 306. He stated that
the film tax credits had encouraged the production of ski
films in Alaska. He felt that the film industry provided a
great support and infrastructure in Alaska.
6:01:12 PM
CEDAR CUSSINS, GECKO SERVICES LLC, ANCHORAGE (via
teleconference), testified against the inclusion of the
film tax credit in HB 306. She stated that her husband had
worked on the production of the movie, "Big Miracle", which
had a great positive impact on her company. She stated that
his work on the film catapulted her company into a
successful Alaskan business.
6:02:39 PM
RICHARD GEIGER, SELF, ANCHORAGE (via teleconference), spoke
against the inclusion of the film tax credit in HB 306. He
felt that sun setting the film tax credit program would
destroy Alaska's film industry.
6:04:03 PM
TESS WEAVER, SELF, ANCHORAGE (via teleconference),
testified against the inclusion of the film tax credit in
HB 306.
6:05:07 PM
KATHY ROBINSON, WHEEL GOOD FOOD, ANCHORAGE (via
teleconference), supported the removal of the film tax
credit from HB 306.
6:06:53 PM
LAUREN TRAWYER, SELF, ANCHORAGE (via teleconference),
testified in support of removing the film tax credit from
HB 306.
6:09:51 PM
DK JOHNSTON, TRI SEVEN PICTURES, ANCHORAGE (via
teleconference), requested the removal of the film tax
credit sunset form the legislation.
6:11:19 PM
BETH SKABAR, SELF, ANCHORAGE (via teleconference),
testified against the inclusion of the film tax credit in
HB 306.
Vice-Chair Fairclough CLOSED public testimony.
CSHB 306(FIN) was HEARD and HELD in committee for further
consideration.
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