Legislature(2023 - 2024)BARNES 124
03/06/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB254 | |
| HB204 | |
| HB233 | |
| HB333 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 189 | TELECONFERENCED | |
| += | HB 204 | TELECONFERENCED | |
| *+ | HB 333 | TELECONFERENCED | |
| *+ | HB 233 | TELECONFERENCED | |
| + | HB 226 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 254 | TELECONFERENCED | |
HB 333-TAX CREDIT CHILD CARE/UTILITY/HOUSE/FOOD
5:15:45 PM
CHAIR SUMNER announced that the final order of business would be
HOUSE BILL NO. 333 "An Act establishing a corporate income tax
credit for certain expenditures on child care services, utility
rates, residential housing, and food security and availability;
and providing for an effective date."
5:16:16 PM
FADIL LIMANI, Deputy Commissioner, Department of Revenue, Office
of the Commissioner, presented HB 333, on behalf of the House
Rules Standing Committee, sponsor by request of the governor.
He directed attention to a PowerPoint presentation, entitled
"House Bill 333" [hard copy included in the committee packet and
began on slide 2, "HB 333 Overview," which read as follows
[original punctuation provided]:
This proposed legislation focuses on four key areas:
• Childcare
• Housing
• Energy
• Food Security
The idea behind this legislation is that it creates a
tax incentive for Corporations and businesses to
offset their corporate income tax liability for
qualified expenditures in those key areas.
The Department of Revenue will define the qualified
expenditures through regulations.
Further, the tax credits are limited to 50% of
qualified expenditures and may not exceed 50% of the
Corporation's tax liability for any year.
MR. LIMANI continued to slide 3, which featured data
demonstrating the annual general fund (GF) revenue from
corporate income tax, totaling $436 million. He turned to slide
4, "HB 333 Estimated Revenue Impact," which read as follows
[original punctuation provided]:
At this time, we don't have clear visibility on the
revenue impact as we can't predict taxpayer behavior
and how much they may contribute to each of these
areas; however, we have run an analysis and determined
the maximum revenue impact to the State on Corporate
Income Tax Revenue would range from ($238) million in
FY25 to ($267) million in FY30.
MR. LIMANI estimated that the maximum impact on tax revenue
ranges from -$237.6 million in FY 25 to -$266.8 million in FY
30.
CHAIR SUMNER asked how Mr. Limani would envision a credit of
$239 million.
MR. LIMANI said the modeling looks at the maximum amount based
on the 50 percent threshold, which would include both petroleum
and non-petroleum revenue. Returning to slide 4, he reported
that the maximum impact on non-petroleum corporate income tax
revenue would range from -$87.5 million in FY 25 to -$126.3
million in FY 30. Maximum impact on petroleum corporate income
tax revenue ranges from -$150.1 million to $140.5 million.
5:20:16 PM
MR. LIMANI proceeded to slide 5, "HB 333 Implementation Cost,"
which read as follows [original punctuation provided]:
The department will need to make minor changes to its
Tax Revenue Management System (TRMS) and tax forms to
implement this bill. The Tax Division will use
existing resources to absorb the costs to update tax
forms, TRMS, and other miscellaneous implementation
costs.
5:21:31 PM
REPRESENTATIVE RUFFRIDGE referred to paragraph (3) on page 1,
line 12, and asked whether there would be an application process
for this tax credit.
MICHAEL WILLIAMS, Director, Division of Tax, Department of
Revenue (DOR), said a number of things could be developed
through the regulatory process. He referenced a rebate program
that was offered through [the Alaska Housing Finance Corporation
(AHFC)] that was partially funded through state dollars and said
he envisioned similar contributions qualifying for the credit in
HB 333. Another qualifying expenditure could be on-site
childcare provided by employers.
MR. LIMANI said the obligations of corporate expenses would not
change on the administrative front. From the regulation
standpoint, he highlighted the need to define the qualified
expenditures and who the recipients would be.
5:23:56 PM
REPRESENTATIVE RUFFRIDGE asked whether organizations attempting
to driving down the state's energy costs would be eligible for
the tax credit.
MR. WILLIAMS said that that is an example of what the regulatory
process would contemplate.
5:24:59 PM
REPRESENTATIVE SADDLER observed that the bill language is vague
in terms of implementation. He asked how an organization would
demonstrate its contribution to decreasing heating or mortgage
rates or improving food security.
MR. LIMANI said that the idea behind the legislation is to keep
it vague for the intended purpose of meeting with stakeholders
and refining regulation.
REPRESENTATIVE SADDLER suggested doing that work first.
5:26:41 PM
REPRESENTATIVE WRIGHT asked how many broad-based taxes exist in
Alaska.
MR. LIMANI said currently, there are none.
REPRESENTATIVE WRIGHT asked whether corporate income tax in the
only lever available to incentivize investments and whether
that's the primary intent of the proposed legislation.
MR. LIMANI answered yes, corporate income tax is the only way to
incentivize investment and development within the state.
5:27:44 PM
CHAIR SUMNER announced that HB 333 would be held over.