HB 399-CORP. TAX: REMOVE EXEMPTIONS/CREDITS                                                                       
                                                                                                                                
6:49:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR TARR announced that the  next order of business would be                                                               
HOUSE BILL NO.  399, "An Act disallowing a federal  tax credit as                                                               
a  credit  against the  corporate  net  income tax;  repealing  a                                                               
provision allowing the exclusion  of certain royalties accrued or                                                               
received from foreign corporations  for purposes of the corporate                                                               
net income  tax; repealing the  reduced rate for  the alternative                                                               
tax  on capital  gains for  corporations; repealing  an exemption                                                               
from filing  a return under  the corporate  net income tax  for a                                                               
corporation engaged in  a contract under the  Alaska Stranded Gas                                                               
Development Act; and providing for an effective date."                                                                          
                                                                                                                                
6:49:46 PM                                                                                                                    
                                                                                                                                
BRODIE ANDERSON, Staff, Representative  Neal Foster, Alaska State                                                               
Legislature, relayed  that HB 399 would  address foregone revenue                                                               
by the  elimination of  certain indirect  expenditures identified                                                               
in  the [Department  of Revenue  (DOR)  2015 Legislative  Finance                                                               
Indirect  Expenditure Report].   The  indirect expenditures  that                                                               
would  be  eliminated are:    certain  federal tax  credits,  the                                                               
foreign royalty  exclusion, the reduced  rate for  capital gains;                                                               
and credit  associated with the  Alaska Stranded  Gas Development                                                               
Act   (ASGDA)  [passed   during   the   Twentieth  Alaska   State                                                               
Legislature,  1997-1998, and  updated during  Twenty-Third Alaska                                                               
State  Legislature, 2003-2004].    He stated  that the  estimated                                                               
potential new  revenue generated  by these  indirect expenditures                                                               
combined is $6.9 million.                                                                                                       
                                                                                                                                
CO-CHAIR TARR  asked for confirmation  that the work  on indirect                                                               
expenditures began  in 2015, and  Mr. Anderson has  been involved                                                               
throughout the process.                                                                                                         
                                                                                                                                
MR. ANDERSON  concurred.  He  mentioned that [during  the Twenty-                                                               
Eighth  Alaska State  Legislature, 2013-2014,  HB 306  was passed                                                               
and signed into  law 9/9/14] creating the  requirement that every                                                               
two  years DOR  and  the Legislative  Finance  Division create  a                                                               
report to  identify indirect  expenditures that  address foregone                                                               
revenue - revenue that could be  collected but for some reason is                                                               
not captured by the state.   Since that time, there have been two                                                               
indirect  expenditure  reviews;  the last  review  includes  nine                                                               
agencies  and  was  published in  the  2015  Legislative  Finance                                                               
Indirect Expenditure Report.                                                                                                    
                                                                                                                                
6:51:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JOSEPHSON moved  to report HB 399 out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being  no objection, HB 399  was reported out of  the House                                                               
Resources Standing Committee.