Legislature(2015 - 2016)SENATE FINANCE 532

03/23/2015 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 30 Presentation: Overview FY17 Operating Budget TELECONFERENCED
Moved CSSB 30(FIN) Out of Committee
+ SB 64 SCHOOL BOND DEBT REIMBURSEMENT TELECONFERENCED
Moved CSSB 64(EDC) Out of Committee
+ SB 15 LIFE INSURANCE POLICY PREMIUM TAX TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 23, 2015                                                                                            
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:28 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Peter Micciche, Vice-Chair                                                                                              
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Laura  Pierre,  Staff,  Senator  Anna  MacKinnon;  Elizabeth                                                                    
Nudelman,   Director,   School  Finances   and   Facilities,                                                                    
Department of Education and  Early Development; Senator John                                                                    
Coghill;  German  Baquero,  Staff,  Senator  Coghill;  Marty                                                                    
Hester, Deputy  Director, Division of  Insurance, Department                                                                    
of  Commerce,  Community   and  Economic  Development;  Erin                                                                    
Shine, Staff, Senator Anna MacKinnon.                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
David   Nees,   Self,   Anchorage;  Linda   Hulbert,   Self,                                                                    
Fairbanks; Matthew Blattmachr,  Vice-President, Alaska Trust                                                                    
Company, Anchorage;  Douglas Blattmachr, President  and CEO,                                                                    
Alaska Trust Company, Arizona.                                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 15     LIFE INSURANCE POLICY PREMIUM TAX                                                                                     
                                                                                                                                
          SB 15 was HEARD and  HELD in committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SB 30     MARIJUANA REG;CONT. SUBST;CRIMES;DEFENSES                                                                             
                                                                                                                                
          CS SB 30 (FIN) was  REPORTED out of committee with                                                                    
          a "do  pass" recommendation and with  two new zero                                                                    
          fiscal    notes    from    the    Department    of                                                                    
          Administration; one new zero  fiscal note from the                                                                    
          Department  of Corrections;  one  new zero  fiscal                                                                    
          note  from the  Department  of Law;  one new  zero                                                                    
          fiscal note from the  Department of Public Safety;                                                                    
          one  new   zero  fiscal   note  from   the  Alaska                                                                    
          Judiciary System;  and one new fiscal  impact note                                                                    
          from  the Department  of  Commerce, Community  and                                                                    
          Economic Development.                                                                                                 
                                                                                                                                
SB 64     SCHOOL BOND DEBT REIMBURSEMENT                                                                                        
                                                                                                                                
          SB 64  was REPORTED  out of  committee with  a "do                                                                    
          pass"    recommendation   and    with   one    new                                                                    
          indeterminate fiscal  note from the  Department of                                                                    
          Education and Early Development.                                                                                      
                                                                                                                                
SENATE BILL NO. 64                                                                                                            
                                                                                                                                
     "An Act relating to school bond debt reimbursement;                                                                        
     and providing for an effective date."                                                                                      
                                                                                                                                
9:05:30 AM                                                                                                                    
                                                                                                                                
LAURA PIERRE,  STAFF, SENATOR  ANNA MACKINNON,  explained SB                                                                    
64. She  said that SB 64  would sunset the school  bond debt                                                                    
reimbursement program  for five years, and  would reduce the                                                                    
rates. Currently,  the reimbursement  rates were  70 percent                                                                    
for a  standard construction or  new build on a  school; and                                                                    
60 percent on non-standard expansion and construction.                                                                          
                                                                                                                                
Ms. Pierre discussed the Sectional Analysis (copy on file):                                                                     
                                                                                                                                
     Section  1: Amends  AS 14.11.014,  adds new  subsection                                                                    
     (d) Sunsets the bond  debt reimbursement provisions for                                                                    
     school  construction  and  major maintenance  for  five                                                                    
     years, January 1, 2015 - July 1, 2020.                                                                                     
                                                                                                                                
     Section  2:  Amends AS  14.11.100(a)  Page  6, line  21                                                                    
     restricts  reimbursement  of   bonds  authorized  after                                                                    
     January  1,  2015.  Page  7,  lines  1  -  11,  deletes                                                                    
    language relating to bonds authorized after May 1,                                                                          
     2015.                                                                                                                      
                                                                                                                                
     Section 3:  Amends AS 14.11.100(a)  Page 12, line  17 -                                                                    
     Page  13, line  2  inserts language  relating to  bonds                                                                    
     authorized on or after July  1, 2020. (18) For projects                                                                    
     approved under AS 14.11.100 (h),  (i), and (j)(2) - (5)                                                                    
     the reimbursement would be 50 percent.                                                                                     
                                                                                                                                
          (19) For projects approved under AS 14.11.100                                                                         
          (h), (i), and (j)(2), (3), and                                                                                        
          (5) the reimbursement would be 40 percent.                                                                            
                                                                                                                                
     Section 4: Amends AS 14.11.100, adds a new section (s)                                                                     
     Restricts   the   Commissioner    from   approving   an                                                                    
     application   for  bond   debt  reimbursement   between                                                                    
     January 1, 2015 - July 1, 2020                                                                                             
                                                                                                                                
     Section  5:  Amends  AS  14.11.102,  adds  new  section                                                                    
     (c)Restricts   the  Commissioner   from  approving   an                                                                    
     application   for  bond   debt  reimbursement   between                                                                    
     January 1, 2015 - July 1, 2020                                                                                             
                                                                                                                                
     Section 6: Repeals sections 1, 4,  and 5 of this act on                                                                    
     July 1, 2020                                                                                                               
                                                                                                                                
     Section 7: Retroactivity clause                                                                                            
                                                                                                                                
          Sections 1, 2, 4, and 5 of this act are                                                                               
          retroactive to January 1, 2015                                                                                        
                                                                                                                                
     Section 8: Section  3 of this act takes  effect July 1,                                                                    
     2020                                                                                                                       
                                                                                                                                
     Section 9: Sections 1, 2, 4,  5, and 7 of this act take                                                                    
     effect immediately                                                                                                         
                                                                                                                                
9:08:49 AM                                                                                                                    
                                                                                                                                
Senator Olson  remarked that  the bill  was a  positive move                                                                    
toward addressing the shortfall  in revenue. He wondered how                                                                    
the bill  affected the construction  of the  Kivalina School                                                                    
as related  to the Kasayulie  Case. Ms. Pierre  replied that                                                                    
the only school with projects  on a potential ballot was the                                                                    
Anchorage  School  District,  and their  election  would  be                                                                    
April  7,  2015. The  Anchorage  School  District would  not                                                                    
receive  reimbursement  for  the  bonds, if  the  bill  were                                                                    
signed and  passed into law  prior to the election.  She did                                                                    
not know how the other  school districts' bond packages were                                                                    
structured.                                                                                                                     
                                                                                                                                
Senator  Olson wondered  if the  bill affected  the Kivalina                                                                    
School   construction.   Ms.   Pierre   replied   that   the                                                                    
legislation   did    not   affect   the    Kivalina   School                                                                    
construction.                                                                                                                   
                                                                                                                                
Senator Bishop  wondered if  there would  be any  new budget                                                                    
requests for new projects.                                                                                                      
                                                                                                                                
ELIZABETH   NUDELMAN,   DIRECTOR,    SCHOOL   FINANCES   AND                                                                    
FACILITIES, DEPARTMENT  OF EDUCATION AND  EARLY DEVELOPMENT,                                                                    
explained  that  the  timeline  eligibility  throughout  the                                                                    
legislation  was voter  authorization.  Some  of the  voter-                                                                    
authorized  bonds were  not yet  applied to  the department,                                                                    
and some had not yet sold  all of the bonds. The legislation                                                                    
stated   that  the   commissioner   may   not  approve   and                                                                    
application  for indebtedness  authorized  by the  qualified                                                                    
voters of the municipality.                                                                                                     
                                                                                                                                
DAVID NEES, SELF,  ANCHORAGE (via teleconference), testified                                                                    
in support of the legislation.                                                                                                  
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
9:16:58 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:18:36 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:18:48 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  discussed   the  retroactive  effective                                                                    
date. She  remarked that there  was some concerns  about the                                                                    
legality of  the retroactive  date of  January 1,  2015, and                                                                    
how it affected language consistent with statute.                                                                               
                                                                                                                                
Ms. Pierre explained that she  had some discussion regarding                                                                    
the  retroactive  effective   date.  The  legislative  legal                                                                    
department  suggested and  effective  date of  May 1,  2015,                                                                    
which reflected  current state  statute. The  statute stated                                                                    
that  districts  could issue  bond  debt  from October  2006                                                                    
through May  1, 2015.  She announced that  legislative legal                                                                    
did not  express concern regarding the  retroactive date, so                                                                    
long  as  the legislation  were  signed  and passed  by  the                                                                    
Anchorage election on April 7, 2015.                                                                                            
                                                                                                                                
Senator Olson  asked if the  administration was in  favor of                                                                    
the  legislation.  Ms. Pierre  responded  that  there was  a                                                                    
scheduled meeting with the governor to discuss the bill.                                                                        
                                                                                                                                
Co-Chair   MacKinnon   announced  that   local   communities                                                                    
currently had the  ability to indebt the state  to an amount                                                                    
that the  community determines, rather  than what  the state                                                                    
determines.                                                                                                                     
                                                                                                                                
Senator   Dunleavy  felt   that   SB   64  was   responsible                                                                    
legislation. He believed that  the legislature often invited                                                                    
lawsuits, but he  felt the fear of litigation  should not be                                                                    
a driving force behind supporting a bill.                                                                                       
                                                                                                                                
9:23:30 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:23:59 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:24:06 AM                                                                                                                    
                                                                                                                                
Senator Olson agreed  with the focus of  the legislation. He                                                                    
remarked that  school construction  was important,  but also                                                                    
very expensive. He felt that the legislation was prudent.                                                                       
                                                                                                                                
Senator Dunleavy  stressed that there was  no guarantee that                                                                    
the  state  would provide  funding,  because  it was  always                                                                    
subject  to appropriation.  Co-Chair  MacKinnon agreed  with                                                                    
that assertion.                                                                                                                 
                                                                                                                                
Vice-Chair Micciche  stated that the fiscal  note related to                                                                    
debt service.                                                                                                                   
                                                                                                                                
9:25:51 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Micciche  expected the  bill to have  zero fiscal                                                                    
impact on the state.                                                                                                            
                                                                                                                                
Vice-Chair Micciche MOVED  to REPORT SB 64  out of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SB  64  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation and  with one  new indeterminate  fiscal note                                                                    
from the Department of Education and Early Development.                                                                         
                                                                                                                                
9:28:03 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:09 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 15                                                                                                            
                                                                                                                                
     "An Act  relating to  the tax  on policy  year premiums                                                                    
     for  life insurance  policies; relating  to single  and                                                                    
     group life  insurance policies;  and relating  to other                                                                    
     types  of insurance  policies that  insure the  life of                                                                    
     one or more individuals."                                                                                                  
                                                                                                                                
9:33:09 AM                                                                                                                    
                                                                                                                                
SENATOR   JOHN   COGHILL,   SPONSOR,  explained   that   the                                                                    
legislation would install eight-tenths  of a percent instead                                                                    
of  one-tenth  of  one percent  on  policies  that  exceeded                                                                    
$100,000.  He  stated  that  the  issue  was  broad  to  his                                                                    
attention as he was dealing  with some trust legislation for                                                                    
estate planning.  He remarked that  the bill came by  way of                                                                    
request, dealing with some of  the people that were involved                                                                    
in state planning.                                                                                                              
                                                                                                                                
GERMAN BAQUERO,  STAFF, SENATOR  COGHILL, remarked  that the                                                                    
legislation  would only  affects the  tax collected  on life                                                                    
insurance policies that exceed  $100,000 by changing the tax                                                                    
from   one-tenth  of   a  percent   to  0.08   percent.  The                                                                    
legislation also  added an  applicability that  would affect                                                                    
all future  life insurance policies from  December 31, 2015.                                                                    
He shared  that there was a  zero fiscal note that  was from                                                                    
the Division of  Insurance. He read from the  second page of                                                                    
the fiscal note:                                                                                                                
                                                                                                                                
     The reduction in  tax is expected to  have a negligible                                                                    
     fiscal  impact  on  the  Division,  as  the  amount  of                                                                    
     premium that is subject to  this tax is very small. The                                                                    
     potential increase  as a  result of  additional premium                                                                    
     sales is expected to negate  any reduction in revenues,                                                                    
     if  not  increase the  tax  revenues  beyond what  they                                                                    
     previously.                                                                                                                
                                                                                                                                
9:38:16 AM                                                                                                                    
                                                                                                                                
Senator Coghill Alaska  had been a main player  in the trust                                                                    
investment  strategy  in the  U.S.  He  remarked that  other                                                                    
states had followed Alaska's  strategy in trust investments.                                                                    
He felt  that legislation  would attract  further investment                                                                    
by reducing the tax rate.                                                                                                       
                                                                                                                                
Senator Olson  wondered how the  change affected  the policy                                                                    
purchaser or  the policy pay out  recipient. Senator Coghill                                                                    
stated  that legislation  would have  very little  effect on                                                                    
the purchaser or recipient.                                                                                                     
                                                                                                                                
Senator Olson surmised  that the purchaser would  not see an                                                                    
increase in the cost of  the premium. He further wondered if                                                                    
there were  consumer groups  that would  be affected  by the                                                                    
change. Senator  Coghill responded that the  estate planning                                                                    
industry   felt   the   legislation   was   a   benefit   to                                                                    
beneficiaries by the lower tax rate.                                                                                            
                                                                                                                                
Co-Chair  MacKinnon looked  at the  South Dakota  rates. She                                                                    
wondered  how Alaska  compared to  all states.  She remarked                                                                    
that the  rate was reduced  at the request of  the insurance                                                                    
companies.  Therefore  the  insurance  companies  benefitted                                                                    
from the change. She felt  that Alaska could obtain addition                                                                    
policies  that had  been lost  over some  of the  years. She                                                                    
wondered if Alaska wanted to  be number one in the insurance                                                                    
industry. Senator Coghill deferred to Mr. Baquero.                                                                              
                                                                                                                                
Mr.  Baquero explained  that the  intent of  the legislation                                                                    
was to remain competitive with the other states.                                                                                
                                                                                                                                
9:43:11 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon did not know  if the lower taxes would be                                                                    
good  for the  state. She  remarked that  the policies  were                                                                    
slightly  reduced,  but  noted  that the  only  people  that                                                                    
advocated for the legislation  were the insurance companies.                                                                    
Mr.  Baquero  replied  there  was   no  opposition  for  the                                                                    
legislation.  There  was  only support  from  the  insurance                                                                    
industry.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon   noted  that  South  Dakota   taxed  on                                                                    
annuities,  but  Alaska did  not.  She  looked at  insurance                                                                    
policies under $100,000, Alaska  was taxing at two-tenths of                                                                    
a percent higher  than South Dakota. She  wondered why there                                                                    
was  not a  reduction  on the  under  $100,000. Mr.  Baquero                                                                    
replied that reducing the tax  for under $100,000 was also a                                                                    
policy issue.                                                                                                                   
                                                                                                                                
Senator Coghill furthered that the  issue was mostly related                                                                    
to estate planning in the trust industry.                                                                                       
                                                                                                                                
9:46:38 AM                                                                                                                    
                                                                                                                                
LINDA   HULBERT,  SELF,   FAIRBANKS  (via   teleconference),                                                                    
testified in support  of the legislation. She  felt that the                                                                    
insurance industry in Alaska should be competitive.                                                                             
                                                                                                                                
MATTHEW  BLATTMACHR, VICE-PRESIDENT,  ALASKA TRUST  COMPANY,                                                                    
ANCHORAGE (via teleconference), testified  in support of the                                                                    
legislation. He  remarked that  the insurance  companies may                                                                    
benefit from  increased business,  but the  legislation also                                                                    
benefitted the consumer. He stated  that the legislation was                                                                    
proposed to change the structure of the larger policies.                                                                        
                                                                                                                                
Senator Olson  wondered how to  reduce the  "frenzy" between                                                                    
Alaska and South Dakota. Mr.  Blattmachr replied that it was                                                                    
a valid  concern, which is  why the state was  only matching                                                                    
the rate in South Dakota.  He furthered that it was possible                                                                    
that South Dakota may lower  their tax structure, but shared                                                                    
that it was highly unlikely  because their tax structure had                                                                    
been established for a number of years.                                                                                         
                                                                                                                                
Vice-Chair Micciche wondered if  the bill required an annual                                                                    
review. Mr.  Blattmachr responded  that he  did not  know if                                                                    
there would  be an annual  review. He stated that  the issue                                                                    
was monitored by the industry.                                                                                                  
                                                                                                                                
9:54:30 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  wondered  if there  were  people  that                                                                    
would switch their  date of service, because  of tax policy.                                                                    
Mr. Blattmachr  replied in the  affirmative. He  stated that                                                                    
trust  accounts  were  created to  purchase  life  insurance                                                                    
policies.                                                                                                                       
                                                                                                                                
DOUGLAS   BLATTMACHR,  PRESIDENT   AND  CEO,   ALASKA  TRUST                                                                    
COMPANY, ARIZONA  (via teleconference), spoke in  support of                                                                    
the legislation.                                                                                                                
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
MARTY  HESTER,  DEPUTY   DIRECTOR,  DIVISION  OF  INSURANCE,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
stated that he was available for questions.                                                                                     
                                                                                                                                
Co-Chair MacKinnon  wondered why Alaska wanted  to be number                                                                    
one on a taxation issue. Mr.  Hester responded that it was a                                                                    
policy  decision.  He explained  that  he  was available  to                                                                    
speak  to  the differences  in  premiums  from the  previous                                                                    
years versus the small amounts.                                                                                                 
                                                                                                                                
Co-Chair MacKinnon asked if he  had the current spreadsheet.                                                                    
Mr. Hester replied that he had the updated spreadsheet.                                                                         
                                                                                                                                
9:58:13 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:59:12 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:59:18 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon looked  at a  spreadsheet titled,  "Life                                                                    
Insurance Companies  Licensed in the State  of Alaska" (copy                                                                    
on file).  She queried the  difference in the  premiums. Mr.                                                                    
Hester replied  that he  had done  calculations on  2013 and                                                                    
2011, because they  were the smallest and  largest years. He                                                                    
explained that in 2011, if the  premium tax was reduced to a                                                                    
0.08 percent,  the difference to the  state collection would                                                                    
have been $88,656.  In 2013, the state  would have collected                                                                    
a difference of  $15,961. The amount of  the collected taxes                                                                    
would  vary depending  on the  premium amount.  He explained                                                                    
that  the increase  in 2011  was due  to a  policy that  was                                                                    
written in excess of $300 million.                                                                                              
                                                                                                                                
Co-Chair MacKinnon  wondered if he  said $3 million  or $300                                                                    
million. Mr. Hester replied that it was $300 million.                                                                           
                                                                                                                                
Senator Dunleavy  wondered if the bill  would translate into                                                                    
state investment in which companies  would hire more people.                                                                    
Mr.  Hester responded  that  he did  not  know the  business                                                                    
plans of the companies.                                                                                                         
                                                                                                                                
Senator Dunleavy stressed that he  would like to know if the                                                                    
companies  would pursue  instate hire.  Ms. Hulbert  replied                                                                    
that the Alaska  Trust Act passed in 1967  required that one                                                                    
must  have a  major asset  in Alaska  in order  to set  up a                                                                    
trust.  The Alaska  Trust,  and the  premium  tax bills  had                                                                    
added  financial  capacity  to  Alaskan banks,  as  well  as                                                                    
attracted many individuals to invest in the state.                                                                              
                                                                                                                                
Co-Chair  MacKinnon wondered  if  the  Alaska Trust  Company                                                                    
located  in   Alaska.  Mr.   Blattmachr  replied   that  the                                                                    
corporate headquarters were located in Alaska.                                                                                  
                                                                                                                                
Co-Chair MacKinnon  remarked that  there was a  letter which                                                                    
stated that 362  life insurers were licensed  to do business                                                                    
and none  were domiciled  in the state.  She asked  for more                                                                    
information. Mr. Hester replied  that a domesticated insurer                                                                    
was  an  insurance company  that  was  based in  Alaska.  He                                                                    
stated that Alaska had seven  domesticated insurers, and the                                                                    
majority  were property  and  casualty  insurers. He  stated                                                                    
that  the life  insurers were  domesticated in  other states                                                                    
and  were admitted  to write  in  any state  they decide  to                                                                    
conduct business.                                                                                                               
                                                                                                                                
10:05:49 AM                                                                                                                   
                                                                                                                                
Senator   Olson  felt   suspicion   when  the   corporations                                                                    
attempted to  speak in  favor of  consumers. He  wondered if                                                                    
there was an  effect on the consumers.  Mr. Hester responded                                                                    
that the  premium must reflect  the risk if the  premium was                                                                    
less, and  the premium  taxes were built  into the  price of                                                                    
the premium. He  stressed that each risk  must be determined                                                                    
on its own merit.                                                                                                               
                                                                                                                                
Senator  Olson surmised  that consumer  groups  would be  in                                                                    
favor of  the legislation.  Mr. Hester  replied that  he had                                                                    
not   heard  from   any   consumer   groups  regarding   the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Vice-Chair  Micciche  noted  that  there  was  an  estimated                                                                    
$16,000  reduction in  taxes. He  wondered if  there was  an                                                                    
anticipated increase  to make up the  difference in revenue.                                                                    
Mr. Hester replied that there  could one or many policies to                                                                    
make up the difference in revenue.                                                                                              
                                                                                                                                
Vice-Chair Micciche  wondered if there was  a national trend                                                                    
for  a  reduction in  life  insurance  policies. Mr.  Hester                                                                    
replied that  he was  not aware  of a  trend, and  agreed to                                                                    
provide more information.                                                                                                       
                                                                                                                                
Vice-Chair   Micciche  remarked   that   the  state   should                                                                    
understand the policy, and there should be some resistance.                                                                     
                                                                                                                                
SB  15  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:10:22 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
12:14:00 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 30                                                                                                            
                                                                                                                                
     "An Act relating to  controlled substances; relating to                                                                    
     marijuana;  relating  to  driving motor  vehicles  when                                                                    
     there  is an  open marijuana  container; and  providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
12:14:32 PM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche MOVED to  ADOPT the committee substitute                                                                    
for  SB 30,  Work Draft  29-LS0231\V (Martin,  3/13/15). Co-                                                                    
Chair MacKinnon OBJECTED for discussion.                                                                                        
                                                                                                                                
ERIN  SHINE, STAFF,  SENATOR ANNA  MACKINNON, explained  the                                                                    
changes  in the  committee substitute.  She stated  that the                                                                    
committee  substitute incorporated  some  of the  amendments                                                                    
from March  12 and March 13.  She looked at page  1, line 3,                                                                    
which  deleted "relating  to municipalities"  as related  to                                                                    
Amendment 4.  She referred to  page 3, lines 13  through 29,                                                                    
which  incorporated Amendment  22: the  promoting contraband                                                                    
amendment.  She  explained   that  currently,  a  controlled                                                                    
substance was  not allowed in  a prison. The  change treated                                                                    
marijuana  like  alcohol, and  lowered  the  penalty from  a                                                                    
Class C felony to a Class  A misdemeanor. She looked at page                                                                    
5, lines 17 through 20,  which incorporated Amendment 6 that                                                                    
changed the  aggregate to usable marijuana.  She referred to                                                                    
page  6, line  18, as  related to  Amendment 18  that was  a                                                                    
technical   fix  that   included   misconduct  involving   a                                                                    
controlled  substance.  She  looked  at  page  6,  lines  24                                                                    
through  25, which  clarified  that  home possession  levels                                                                    
were  not applicable  for  criminal  possession levels.  She                                                                    
referred  to  page  7,  lines 2  through  7,  which  removed                                                                    
manufacturers,  because the  initiative clearly  allowed for                                                                    
manufacturing. She  looked at page  7, line 28  through page                                                                    
8, and line 1, which  incorporated the usable marijuana. She                                                                    
referred  to  page  8,  lines   6,  9,  12,  and  19,  which                                                                    
incorporated usable marijuana.                                                                                                  
                                                                                                                                
12:22:45 PM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly remarked  that the  CS did  not include  the                                                                    
amendment that was previously adopted.                                                                                          
                                                                                                                                
Co-Chair  MacKinnon surmised  that the  committee substitute                                                                    
included all previously adopted  amendments, except for one.                                                                    
Ms. Shine agreed.                                                                                                               
                                                                                                                                
Co-Chair  MacKinnon REMOVED  her objection.  There being  NO                                                                    
further  OBJECTION, the  proposed  committee substitute  was                                                                    
adopted.                                                                                                                        
                                                                                                                                
Senator Hoffman  MOVED to ADOPT Amendment  1, 29-LS0231\V.2,                                                                    
Martin, 3/19/15 (copy on file).                                                                                                 
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
Senator Hoffman explained the amendment.                                                                                        
                                                                                                                                
Co-Chair  MacKinnon REMOVED  her objection.  There being  NO                                                                    
further OBJECTION, Amendment 1 was adopted.                                                                                     
                                                                                                                                
12:27:23 PM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
12:27:49 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
12:27:55 PM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche discussed the attached fiscal notes.                                                                        
                                                                                                                                
12:32:08 PM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
12:34:42 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
12:34:49 PM                                                                                                                   
                                                                                                                                
Vice-Chair Micciche  remarked that the Department  of Public                                                                    
Safety (DPS) would identify other funding sources.                                                                              
                                                                                                                                
Senator Hoffman  noted that the fiscal  note from Department                                                                    
of  Commerce,  Community  and Economic  Development  (DCCED)                                                                    
reflected that the governor had requested.                                                                                      
                                                                                                                                
Co-Chair  MacKinnon stated  that there  was a  separate bill                                                                    
that address regulations.                                                                                                       
                                                                                                                                
                                                                                                                                
Senator Dunleavy  did not support  adding more funds  to the                                                                    
legislation, because of Alaska's current fiscal situation.                                                                      
                                                                                                                                
Co-Chair MacKinnon  remarked that  there was a  similar bill                                                                    
that was currently in the legislative process.                                                                                  
                                                                                                                                
Vice-Chair Micciche MOVED  to REPORT SB 30  out of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
CS SB  30 (FIN)  was REPORTED  out of  committee with  a "do                                                                    
pass"  recommendation and  with  two new  zero fiscal  notes                                                                    
from the  Department of Administration; one  new zero fiscal                                                                    
note  from  the  Department  of Corrections;  one  new  zero                                                                    
fiscal note from the Department  of Law; one new zero fiscal                                                                    
note  from the  Department of  Public Safety;  one new  zero                                                                    
fiscal note  from the Alaska  Judiciary System; and  one new                                                                    
fiscal  impact   note  from  the  Department   of  Commerce,                                                                    
Community and Economic Development.                                                                                             
                                                                                                                                
12:37:47 PM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
12:38:54 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon discussed the following day's agenda.                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
12:39:34 PM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 12:39 p.m.                                                                                         

Document Name Date/Time Subjects
SB 64 - Explanation of Changes.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 64 - Sectional Analysis.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 64 - Sponsor Statement.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 64 EDC- Sectional Analysis.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 15 Sponsor Substitute Letter of Support.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Original Statute.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research Alaska Life Insurance Facts.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research Copy of Life Premium Taxes.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research Life Insurance Industry.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research on AK Life Insurance Companies.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research on Revenue.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research South Dakota Law.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Sectional Analysis.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Sponsor Statement.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 30 Public Testimony - Opposition to version X - Hale.pdf SFIN 3/23/2015 9:00:00 AM
SB 30
SB 30 work draft Version V.pdf SFIN 3/23/2015 9:00:00 AM
SB 30
SB 30 Version V Amendment 1.pdf SFIN 3/23/2015 9:00:00 AM
SB 30