Legislature(2015 - 2016)HOUSE FINANCE 519
04/16/2015 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB39 | |
| SB34 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 39 | TELECONFERENCED | |
| + | SB 34 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 16, 2015
8:37 a.m.
8:37:01 AM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 8:37 a.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Bill Stoltze, Sponsor; Jerry Burnett, Deputy
Commissioner, Treasury Division, Department of Revenue;
PRESENT VIA TELECONFERENCE
DK Johnson, Tri-Seven Pictures, Anchorage; Dan Duque,
Seawolf Student Filmmakers, Anchorage; Ron Holmstrom,
SAG/AFTRA Representative, Anchorage; Kevin Kurka, Alpine
Productions, Anchorage; Tess Weaver, Self, Anchorage;
Gordon Carlson, Self, Cantwell; Stacy Nicholi, Self,
Anchorage; David McGovern, Self, Anchorage; Brad Swenson,
Gold Ring Group, Girdwood; Maxine Doogan, Community United
for Safety and Protection, Anchorage; Bob Crockett, Piksik,
Anchorage; Kelly Bender, Whittier Chamber of Commerce,
Whittier; Deborah Schildt, Alaska Film Group, Anchorage;
Byron Charles, Self, Ketchikan; Cedar Cussins, Gecko
Services LLC., Anchorage;
SUMMARY
SB 39 REPEAL FILM PRODUCTION TAX CREDIT
CSSB 39(L&C) was REPORTED out of committee with a
"do pass" recommendation and with a previously
published zero fiscal note: FN1 (DOR).
SB 34 PCE ENDOWMENT FUND INVESTMENT
CHSB 34(FIN) was REPORTED out of committee with a
"do pass" recommendation and with a previously
published zero fiscal note: FN1 (DOR).
Co-Chair Thompson reviewed the meeting agenda.
SENATE BILL NO. 39
"An Act repealing the film production tax credit;
providing for an effective date by repealing the
effective dates of secs. 31 - 33, ch. 51, SLA 2012;
and providing for an effective date."
8:38:07 AM
SENATOR BILL STOLTZE, SPONSOR, explained that SB 39 was a
very serious bill which he had introduced in the previous
year [HB 112 was introduced during the second year of the
28th legislature]. He indicated that although HB 112 had
been reported out of the House Finance Committee in 2014 he
did not push for a floor vote. Instead, he reported working
with the committee chairman on a compromise measure, House
Bill 306 [Short Title: Eval. Indirect Expenditures; Tax
Credits], which evaluated all tax credits. He added that
tax credits were ultimately general fund expenditures. In
order to ensure the passage of HB 306 there were some
compromises that had to be made which lead to drafting new
legislation in the form of SB 39. He suggested that the
state was in a vastly different financial condition
currently and opined that a value judgement made at present
would be much different than three or five years prior. He
believed a fresh look at whether the state wanted to
continue subsidizing the film industry was necessary. He
reiterated that film tax credits were general fund
expenditures. He mentioned that the governor was slowing
the breaks and relayed that, when queried, the Department
of Revenue (DOR) took the position that SB 39 provided
clarity. He highlighted the deliberative process that
accompanied the evaluation of the film tax credit as well
as all other tax credits. He noted that the "tax credit"
reference was a bit of a misnomer because the film industry
did not pay taxes.
8:43:24 AM
Senator Stoltze continued to explain that it was money
being depleted from the general fund including a charge for
a third-party broker that would otherwise be available for
roads, schools, and other items. He relayed that in his
legislation he left the film office in place in case there
were opportunities where the state could act as an agent.
He felt that it was an appropriate economic component of
Department of Commerce, Community and Economic Development
(DCCED). However, in the governor's budget deliberations
the funding was removed. He would have left the funding in
place, but it was a time of difficult decision making. He
pointed out his main theme; economics. He added that there
had been many positive outcomes within communities of
Alaska and for select business people as a result of the
film tax credit. He made clear that he was not impressed
with the audit which found that for every dollar the state
spent two dollars feed the economy. He voiced that the
state dividend was far better at enriching the economy than
the film tax credit. He elaborated that although monies
might go into the state's economy, there were no dollars
going back into state coffers. He acknowledged that there
was no expectation that tax credits would result in money
being put back into the treasury. At the time the tax
credit was instituted significant funding was available.
However, he argued that due to the current fiscal situation
the state needed to make different decisions.
Senator Stoltze further discussed some of the positive
economic benefits resulting from the tax credits for
individual communities including bed taxes and short-term
employment. He stressed that there had been benefits, but
argued that if a person was spending their own money they
might make a different choice. He suggested that some
people view tax credits as an economic diversification tool
for Alaska. He stated that the largest employer in the
state was the commercial fishing industry in which the
state received unrestricted general fund revenues from both
business and landing taxes in the amount of $24.7 million
in the current year. Costs such as insurance premiums were
about $58.5 million. He wanted to provide a perspective
comparison and added that nothing was going to replace oil
revenues. He argued that the only thing that really created
jobs and provided revenue was when outside capital came
into the state without the state paying for it. A film tax
credit or other types of subsidies would not provide the
diversification needed in the economy.
Co-Chair Thompson acknowledged that Representative
Guttenberg and Representative Pruitt had joined the
meeting.
8:48:17 AM
Vice-Chair Saddler assumed the chair and asked if members
had questions.
Representative Gara asked about the current sunset date.
Senator Stoltze responded 2018, which was changed from 2016
on the Senate floor.
Representative Guttenberg asked if the film office would
stay open.
Senator Stoltze responded that the film office was not
funded.
Representative Guttenberg asked what the film office would
accomplish by staying in place.
Senator Stoltze responded that the office would provide
assistance with identifying locations, would be involved
with Department of Natural Resources, and help in
identifying land sites. The rational was that a person
would be available to help someone wanting to spend money
in the state.
Representative Wilson asked about the film group. She
believed the group had changed and wondered exactly who
would be impacted and where the state stood.
Vice-Chair Saddler invited Mr. Burnett to the table.
Senator Stoltze explained that he had tried to clarify what
his bill did and did not do.
8:51:42 AM
JERRY BURNETT, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, restated Representative Wilson's
question about the amount in the budget for the film office
if the bill did not pass. He reported that in the
governor's version of the DOR budget all of the funding for
the Alaska Film Office was removed. He explained that it
equated to three positions totaling $347 thousand in
personal services. The three people in the positions had
been made aware of the situation. The governor's stance was
to place a freeze to the office and avoid creating
additional liabilities to the state.
Representative Kawasaki referred to the fiscal note that
mentioned the $350 thousand that was not appropriated in
the governor's budget. He wondered how a film tax credit
would exist without the film office and mentioned the 2012
law.
Mr. Burnett relayed that the way the statute was written
DOR would operate the film office subject to appropriation.
Department of Revenue would not be reviewing film scripts
and the film tax incentive review commission would not be
meeting under the current budget. He added that without
funding for the program the department would not take new
applications after July 1. There were existing and pre-
approved films that were ongoing and the associated credits
would be processed with existing staff within DOR.
Representative Kawasaki clarified that without the
additional funding for the film office in DOR the film
industry credit was defunct.
Mr. Burnett responded that no new credits would be
approved.
Representative Kawasaki asked if Mr. Burnett's answer was
yes.
Mr. Burnett responded in the affirmative.
Representative Munoz asked how many notices of
qualifications were issued prior to July 1, 2015.
Mr. Burnett was unsure of the exact amount. He offered that
there were approximately $38 million in outstanding credits
that had not been paid. He stated that in the current
program, which had a $200 million cap, there would have
been $172 million left under the cap. He suggested that it
did not fit with the $38 million because there was a
previous program.
8:55:22 AM
Representative Munoz reiterated that the legislation would
allow for the payment of outstanding credits.
Mr. Burnett responded that it would allow for any of the
outstanding credits.
Representative Munoz reconfirmed that anything after July
1st would not be allowed.
Mr. Burnett stated that no new applications would be
processed. He did not believe there were any applications
that were approved since Governor Walker took office for
films that were actually going to be made in Alaska. He
could not verify his information due to the nature of the
proprietary applications.
Representative Edgmon wanted to hear from DOR about the
broader impact of the film industry. He believed that it
was a clear case that the state was paying more in terms of
tax credits than the state was receiving in benefits. He
wanted to know if any documentation was available such as a
McDowell study, or a Northern Economics study that pointed
to an economic multiplier effect. In other words, the state
was paying a significant amount of money for a significant
number of bad reality shows in return.
Senator Stoltze stated that he was not a spokesman for the
film industry. He believed that there had been some
positive impacts on individual towns. He also relayed that
the City of Unalaska had to hire a public relations firm to
undo some of the damage to the economic wellbeing and to
the perception that the community experienced as a result
of some of the non-fiction reality television shows. Many
people of Alaska had issues of how they were portrayed as
well. He added that some from the film industry stated that
the introduction of the bill killed the film industry in
Alaska. He reported that the governor had suspended the
program prior to Senator Stoltzes' bill introduction. He
wanted to clarify the sequence of events.
8:58:56 AM
Representative Gara stated that Alaska had "C" corporation
taxes but did not have "S" corporation taxes and that the
taxes collected were based on company profits. He wondered
if the state had received corporate income tax from any of
the film corporations. He wanted to know if Alaska pursued
any taxes and whether the state was entitled.
Mr. Burnett replied that the question was very difficult to
answer for a number of reasons. He understood that most of
the production companies that came to Alaska were set up as
limited partnerships and limited liability companies (LLC).
He suggested that there might be a corporate sponsor entity
that received income. However, he made it clear that
identifying the entity was next to impossible. He added
that if a "C" corporation was actively doing business in
Alaska and earned an income anywhere in the country they
would be required to file an Alaska tax return and pay
taxes. He was unsure how the production companies were
organized and did not believe any were organized as "C"
corporations in Alaska.
Representative Gara asked if the state had received any
revenue and whether he thought the department's efforts had
been adequate in determining whether the state was entitled
to any corporate tax revenue.
Mr. Burnett could not speak directly to whether the state
had received any income, but believed that the department's
efforts to pursue income from corporate entities had been
adequate.
Representative Gara wanted confirmation about the receipt
of revenue. He opined that there were "C" corporations that
had produced some of the larger films and that the state
should have received some revenue.
Vice-Chair Saddler asked if the bill sponsor had any new
information regarding how film tax credits operated in the
Lower 48.
Senator Stoltze replied that the trend was that states were
backing away from film tax credits. He reported that he had
attended a National Conference of State Legislatures (NCSL)
for fiscal policy leaders. He stated that attendees
included state treasurers and state office of management
and budget directors. A dominant theme of the conference
was out-of-control tax credits. He argued that SB 21
[Secretary's note: Oil and gas production tax legislation
passed in 2014] was legislation that attempted to reign in
tax credits. He conveyed that tax credits and subsidies
were part of the budget debate. At the NCSL conference a
common discussion was eliminating tax credits and
incentives, inherently general fund expenditures. He
suggested that doing away with film tax credits was only
one piece of getting control of tax credits. He added that
the state had significant tax credits and only a couple of
tax payers.
9:04:35 AM
Representative Kawasaki asked about HB 306 and the Indirect
Expenditures book from the current year. He wondered about
the qualified capital expenditure credit. He relayed that
the Legislative Finance Division (LFD) reported that the
credit was not being used as intended and that oil
companies were using the qualified capital expenditures to
do general maintenance, rather than using them for
development. He interjected that he had voted against the
film tax credit along with the finance co-chair and the
majority leader. He wanted proof that the tax credits
worked. He suggested an audit had been conducted prior to
the second iteration of the bill becoming law. He suggested
that the legislature allow the credit to die on its own on
the sunset date in 2018. He voiced that the film tax credit
was effectively gutted and would not convey credits in the
future.
Senator Stoltze stated that a decision could be made by a
single person. He spoke of his legislation providing more
certainty and clarity.
Representative Gara understood the resistance to paying for
salaries of Hollywood actors and producers. He also
understood that the state wanted the business but did not
want to pay out a large sum of money. He wondered about a
provision that would cap the program at a certain amount to
offset travel costs to get to Alaska.
Senator Stoltze opined that if the state was going to
continue offering tax credits Representative Gara's
suggestion would be productive in terms of subsidizing
smarter. However, he was uncertain about existing
structural problems and thought that it would be better to
address the issue when evaluating all state expenditures.
He added that there were already complexities and problems
and that the ongoing obligation of tax credits and
subsidies was a larger issue. He felt that it would be
better to raise the house and build a better foundation
with a new structure, with a new bill.
9:09:34 AM
Representative Gattis commented that the film tax credit
was not free marketing. She recalled Representative Gara's
statement that the film tax credits were essentially free
marketing for Alaska's tourism. She concluded that it was
the state that was paying for the marketing.
Representative Gara agreed.
Representative Gattis commented about compensating for
travel costs. She agreed that it was expensive to travel to
and around Alaska. She recalled the television show,
Northern Exposure. The show provided credit to Alaska even
though it was not filmed in the state. She reported that
there were other shows filmed about Alaska in a location
outside the state. She stressed that the state needed to
cease subsidizing during a fiscal crunch. She appreciated
the idea of doing a better job. However, she suggested that
the state could not afford subsidies at present.
Senator Stoltze commented that he had watched one of the
movies produced in Alaska that featured the Knik River
valley, one of the most beautiful spots in his Senate
district. He indicated that the beauty of the area was not
portrayed as such in the film. He furthered that the film
did not necessarily benefit or harm the area, but alleged
that the state had spent a significant amount of money
subsidizing the film.
Vice-Chair Saddler relayed that there were several people
online waiting to provide testimony.
Senator Stoltze thanked the committee for its time and
indicated his staff would be available for questions. He
would be leaving for another committee.
9:13:01 AM
Vice-Chair Saddler OPENED public testimony.
9:13:14 AM
DK JOHNSON, TRI-SEVEN PICTURES, ANCHORAGE (via
teleconference), opposed SB 39. He relayed that he had
spent the previous few years working side-by-side with one
of the most talented and dedicated production communities
ever assembled. He highlighted the hard work that had been
done in spite of consistent roadblocks set by the
legislature. He furthered that the community had worked
with lawmakers to better the state's production industry
making it work for the benefit of the state and its
residents. He discussed the benefits of the production
industry such as diversification of the economy. He
mentioned that each year members of the industry had to
come before the legislature to defend the industry's
progress. As a result, he opined that industry development
was often delayed by a minimum of two years. He stressed
that SB 39 created an unstable work environment and that
the passage of the bill would put hundreds of Alaskans out
of work. He mentioned that an example of a lost opportunity
resulting from legislation was the feature film, "Hunter -
Killer." He spoke against the elimination of the program.
He opined that the state had a large gambling problem with
its budget and believed that a different strategy was
needed. He urged committee members to vote against SB 39.
9:16:11 AM
Representative Guttenberg expressed his concern about the
structure of the film tax credits. He thought the state
could do a better job of encouraging the production
industry.
9:16:54 AM
DAN DUQUE, SEAWOLF STUDENT FILMMAKERS, ANCHORAGE (via
teleconference), spoke in opposition of SB 39. He indicated
that he was not a fan of reality television. He suggested
that there were post production companies in Anchorage that
were happy to hire new talent. He continued to relay his
experience. He mentioned the talent of the people in
Alaskan villages. He believed that the people of the state
were the state. He did not understand how legislators could
not see the benefits of the program including a 100 percent
return on investment. He opposed the legislation and wanted
incentives left in place.
9:20:00 AM
RON HOLMSTROM, SAG/AFTRA REPRESENTATIVE, ANCHORAGE (via
teleconference), clarified that reality television shows
hired very few people, generated very little revenue for
the state, and had programing sold prior to filming.
Whereas, the motion picture industry hired hundreds of
people, invested millions of dollars in the state, but
still had to sell its product. He opined that the reality
television shows would remain in Alaska whether or not a
film tax credit continued. He furthered that the
legislation ended Alaska's interest in a multi-billion
dollar global industry. He mentioned other states and
countries investing in infrastructure to improve programs
in order to attract additional motion picture development.
He suggested that Alaska adjusted its program multiple
times making it unclear to producers what state incentives
were in place. He pointed out that in the 27th legislature
the state cut out directly paying actors, producers, and
writers. He believed that Alaska's film program was
unattractive. He conveyed that SB 39 suspended the program
placing a hold on the film industry. He urged the committee
to vote against SB 39.
9:23:04 AM
KEVIN KURKA, ALPINE PRODUCTIONS, ANCHORAGE (via
teleconference), spoke in opposition of the bill. He
reported that he was a cameraman for reality shows and
motion pictures. He discussed the benefits of the tax
credits. He suggested a suspension of the tax credit rather
than removing it entirely. He suggested adjusting and
improving the tax credits in the interim. He thanked the
committee for its time.
9:24:55 AM
TESS WEAVER, SELF, ANCHORAGE (via teleconference), spoke in
strong opposition to SB 39. She reported that she was a
freelance stylist for the previous six years. She conveyed
that she and her family made their living from film making.
She describe the work she had been doing for the previous
two years. She believed that SB 39 would kill the current
project she was working on. She furthered that the state
would lose hard-working Alaskans upon the passage of the
bill. She appealed to the legislature to allow the program
to continue at least until 2018 when her project would be
completed. She opined that the incentive provided endless
possibilities. She thanked committee members for their
time.
9:26:13 AM
GORDON CARLSON, SELF, CANTWELL (via teleconference), spoke
in opposition to SB 39. He discussed working on a film that
had been produced in Alaska and the associated benefits to
the area. He reported that the film left a significant
amount of revenue in Alaska. He was disheartened to hear of
legislators' believing only one industry could save Alaska.
He disagreed and believed in branching out. He furthered
that with enough diversification oil revenues could be
replaced. He asked the committee to give the film industry
a chance by maintaining the current tax credits. He thanked
the committee for the opportunity to testify.
9:27:32 AM
STACY NICHOLI, SELF, ANCHORAGE (via teleconference), spoke
in opposition to SB 39. She reported that she had heard
many misconceptions about reality television shows and film
companies in earlier testimonies. She purported that the
two businesses were significantly different. She believed
that there were very shoddy reality television shows which
she admitted opposing. She was not opposed to large film
groups and companies coming to Alaska that hired local
Alaskans such as herself. She relayed that she took the
time to vote. She also brought up oil tax credits. She
expressed concern that people only took interest in Alaska
when there were incentives. She expressed her frustration
with the legislature. She commented that she would have
difficulty feeding her two children and her husband if the
legislature killed the film industry in Alaska by passing
SB 39.
9:31:34 AM
DAVID MCGOVERN, SELF, ANCHORAGE (via teleconference), spoke
in opposition of SB 39 and conveyed that he was a self-
employed entrepreneur. He relayed his disappointment in the
legislation. He opined that the bill was a vicious attack
against an industry that had done nothing to harm the
state, the administration, or the current budget. He
mentioned the possibility of a bidding war with incentive
programs. He shared three things about the people in the
Alaska film industry; they were not greedy, they were not
all "left-wingers", and they were not asking the
legislature to create an opportunity. He shared about a
current project he was working on with a veteran to help
him raise funds to participate in the Challenge Alaska hand
cycle race. He was not making a dime on the project. He
conveyed his disappointment in state legislators and in
particular the legislators in his district. He stressed
that Alaskans had been making opportunities for themselves
as far back as 1921 when the Native Alaskan, Ray Wise Mala,
first began his film career and went on to have great
success in front of and behind the camera. He thanked the
committee for the opportunity to testify.
9:34:12 AM
BRAD SWENSON, GOLD RING GROUP, GIRDWOOD (via
teleconference), spoke against SB 39. He shared that he and
his business partner were considering suspending their film
production in Alaska due to the proposed legislation. He
stated that their decision would be based strictly on
economics. He mentioned an article in Forbes Magazine about
the long range forecast for oil being at or below $65 per
barrel. He opined that the economy was changing. He relayed
a story about a prior legislator in the 90's ranting and
raving about the economic studies in the 80's which
revealed that Alaska's economy suffered from its dependence
on oil. He urged legislators to promote a sustainable long-
term economy. He urged legislators to keep the film
industry alive.
9:36:38 AM
MAXINE DOOGAN, COMMUNITY UNITED FOR SAFETY AND PROTECTION,
ANCHORAGE (via teleconference), opposed SB 39. She believed
there was a need for diversification in Alaska's job
market. The film industry provided other types of
employment. She opined that without the Alaska state
subsidy movies such as "Frozen Ground" would not be made.
She reiterated that she opposed SB 39 and thanked the
committee for hearing her testimony.
9:37:44 AM
BOB CROCKETT, PIKSIK, ANCHORAGE (via teleconference), spoke
in opposition of SB 39. He discussed the nature of his
business and stated that the legislation would heavily
effect his business. He believed an economic incentive
leveled the playing field and allowed Alaska to remain
competitive globally. He suggested that it took
approximately two years to process a tax credit. He
reviewed a list of impacts of the bill. He suggested to
legislators that they hold off on passing the legislation
before the committee for a year to further discuss
alternative options. He thanked members for their
consideration and time.
9:39:55 AM
KELLY BENDER, WHITTIER CHAMBER OF COMMERCE, WHITTIER (via
teleconference), opposed SB 39. She highlighted that the
film industry crossed over many different business sectors
including transportation, lodging, food, and others. She
discussed the benefits of the film tax credit and its
contribution to feeding Alaska's economy. She estimated
that her small business in Whittier would have made
approximately $20 thousand to $30 thousand in revenue
associated with the movie, "Hunter-Killer." She stressed
the effects on her employees and her Alaskan vendors. She
relayed additional details of the benefits of the film
industry. She urged the committee to consider its decision.
She thanked committee members for their time.
9:42:09 AM
DEBORAH SCHILDT, ALASKA FILM GROUP, ANCHORAGE (via
teleconference), stated that SB 39 was the wrong choice for
Alaska. She recommended suspending the program rather than
ending the program altogether. She relayed some statistics
regarding tax credits. She opined that ending the program
did not save the state money. She suggested that the
program offered diversification and economic prosperity
circulating dollars through the economy through local hire,
local vendors, and local businesses across the state. She
urged the committee to oppose SB 39 and thanked members for
their time.
9:45:00 AM
BYRON CHARLES, SELF, KETCHIKAN (via teleconference),
opposed SB 39. He pointed out that the film industry would
continue to grow. He suggested that the legislation be set
aside for additional input. He thanked the committee.
9:47:00 AM
CEDAR CUSSINS, GECKO SERVICES LLC., ANCHORAGE (via
teleconference), spoke in opposition of the legislation.
She reported having benefited greatly from the tax credit.
Her husband worked on the film, "Big Miracle." She relayed
that he made enough money to purchase two pieces of heavy
equipment and launch a landscaping business. She conveyed
another beneficial personal experience related to the film
industry. She believed that the citizens of Alaska catering
to the film industry profited substantially. She strongly
urged the committee to vote in opposition to the bill. She
thanked the committee for its consideration.
9:49:34 AM
Vice-Chair Saddler CLOSED public testimony and set the bill
aside [This bill was heard later in the meeting and was
reported out of committee. See 10:18:53 for detail.]
SENATE BILL NO. 34
"An Act relating to investment of the power cost
equalization endowment fund; and providing for an
effective date."
9:49:52 AM
Mr. Burnett referred to SB 34, the companion bill to HB 86.
He relayed that the current version was changed in the
Senate Finance Committee adding only a few words. He
reported that in the original bill in lines 9 to 10 the
word "seven" was deleted. In the newest version "seven" was
replaced with "four" and new language was added specifying
"over a five-year period." The rest of the language in the
bill remained the same. He conveyed that DOR supported the
changes and offered that the changes provided an achievable
floor and comfortable risk factor. He summarized that the
intent of the bill was to create a situation in which the
state could invest in a risk profile sufficient to meet the
needs of the program.
Representative Edgmon asked if there would ever be a
scenario in which the state would invest in a long-term
endowment targeting less than 4 percent.
Mr. Burnett responded that in the current environment the
department was looking at a profile in the range of 6
percent. He suggested that there could be a situation where
the capital market assumptions were invested at 4 percent.
He indicated that the state had not had any capital market
assumptions below 4 percent in the last several years (30
years). He pointed out that at present the Permanent Fund
was invested to achieve just over a 6 percent rate of
return, gross of fees, for a very long-term endowment.
Representative Edgmon thought that Mr. Burnett' response
tied into the earlier discussion about the House vehicle of
the bill. He felt the change was academic in the scheme of
things and he reported he would be supporting the changes
to the bill.
Representative Wilson wanted to know if the chair was going
to move the bill. Vice-Chair Saddler stated that he would
wait until the co-chairmen returned to the committee.
9:54:25 AM
Vice-Chair Saddler OPENED public testimony.
Vice-Chair Saddler CLOSED public testimony.
9:54:43 AM
AT EASE
9:59:59 AM
RECONVEYNED
Vice-Chair Saddler called the meeting back to order and
indicated that he would entertain a motion on SB 34.
Representative Wilson MOVED to REPORT CSSB 34(FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
There being NO OBJECTION, CHSB 34(FIN) was REPORTED out of
committee with a "do pass" recommendation and with a
previously published zero fiscal note: FN1 (DOR).
10:02:10 AM
RECESSED
10:18:53 AM
RECONVEYNED
SENATE BILL NO. 39
"An Act repealing the film production tax credit;
providing for an effective date by repealing the
effective dates of secs. 31 - 33, ch. 51, SLA 2012;
and providing for an effective date."
Co-Chair Thompson brought CSSB 39(L&C) back up for
discussion.
Co-Chair Neuman MOVED to REPORT CSSB 39(L&C) out of
committee with individual recommendations and the
accompanying fiscal note.
There being NO OBJECTION, CSSB 39(L&C) was REPORTED out of
committee with a "do pass" recommendation and with a
previously published zero fiscal note: FN1 (DOR).
Co-Chair Thompson reviewed the agenda for the afternoon
meeting.
ADJOURNMENT
10:20:00 AM
The meeting was adjourned at 10:20 a.m.