04/17/2018 03:30 PM Senate STATE AFFAIRS

     HB 97-REPEAL ALASKA FIRE STANDARDS COUNCIL TAX CREDIT                                                                  
                                                                                                                                
4:08:44 PM                                                                                                                    
CHAIR MEYER called the committee  back to order and announced the                                                               
consideration of House Bill 97 (HB 97).                                                                                         
                                                                                                                                
4:09:19 PM                                                                                                                    
FORREST  WOLFE,  Staff,  Representative  Thompson,  Alaska  State                                                               
Legislature,  Juneau,  Alaska,   announced  his  availability  to                                                               
answer questions regarding HB 97.                                                                                               
                                                                                                                                
4:09:26 PM                                                                                                                    
REPRESENTATIVE STEVE THOMPSON,  Alaska State Legislature, Juneau,                                                               
Alaska, sponsor of HB 97, provided an overview as follows:                                                                      
                                                                                                                                
     House Bill  97 would  repeal the Alaska  Fire Standards                                                                    
     Council tax  credit program  that was  established back                                                                    
     in  2000, it  came about  because we've  been reviewing                                                                    
     the indirect  expenditure reports.  The tax  credit was                                                                    
     intended to provide a funding  mechanism for the Alaska                                                                    
     Fire   Standards  Council   via   donations  from   the                                                                    
     insurance  companies  and   these  insurance  companies                                                                    
     would then be  able to take a tax  credit against their                                                                    
     Alaska  tax; but  in  the mean  time  before this  bill                                                                    
     passed, the  Alaska Fire Standards Council  found their                                                                    
     own  funding  mechanism  through  a  certification  fee                                                                    
     schedule from all of their members.                                                                                        
                                                                                                                                
     The  2015  Legislative   Finance  Indirect  Expenditure                                                                    
     Report recommended  that the tax credit  be reviewed to                                                                    
     determine if  it was  still applicable  and potentially                                                                    
     terminated if  the credit is deemed  ineffective. While                                                                    
     the original  legislation was  no doubt  well intended,                                                                    
     it's proven to not  only be ineffective but unnecessary                                                                    
     as  well  and  therefore  it  should  be  repealed  and                                                                    
     removed  from statutes.  In the  18 years  that it  has                                                                    
     been in statutes there have  been no donations made, no                                                                    
     tax credits  issued under this program.  So, House Bill                                                                    
     97  would  take the  tax  credit  established under  AS                                                                    
     21.96.075 out of  the statute books and not  have it be                                                                    
     printed every year.                                                                                                        
                                                                                                                                
CHAIR MEYER asked if he  said the Alaska Fire Standards Council's                                                               
tax credit has never been used.                                                                                                 
                                                                                                                                
REPRESENTATIVE  THOMPSON answered  that  since 2000,  no one  has                                                               
ever donated  or applied for a  tax credit under the  statute. He                                                               
reiterated  that the  Alaska Fire  Standards Council  found their                                                               
own funding mechanism through member fees.                                                                                      
                                                                                                                                
4:11:40 PM                                                                                                                    
CHAIR MEYER asked when the tax credit expires.                                                                                  
                                                                                                                                
REPRESENTATIVE THOMPSON answered  that with HB 97  the tax credit                                                               
would expire January 1, 2019.                                                                                                   
                                                                                                                                
CHAIR MEYER  asked when  the tax credit  would expire  without HB
.                                                                                                                             
                                                                                                                                
REPRESENTATIVE  THOMPSON answered  that  there  is no  expiration                                                               
date or sunset.                                                                                                                 
                                                                                                                                
SENATOR WILSON asked why the  sunset date is effective January 1,                                                               
2019 rather than upon passage.                                                                                                  
                                                                                                                                
REPRESENTATIVE THOMPSON explained that  the effective date was in                                                               
the bill  as a pre-file in  2017 with the thinking  that the bill                                                               
would pass  in 2017. He specified  that the intent was  to ensure                                                               
there  were no  problems with  the bill  until the  expiration on                                                               
January 1, 2019.                                                                                                                
                                                                                                                                
SENATOR WILSON  admitted that  his fear is  someone will  rush to                                                               
file  and  take  advantage  of   the  tax  credit  prior  to  its                                                               
expiration date.                                                                                                                
                                                                                                                                
REPRESENTATIVE  THOMPSON  replied  that he  assumed  because  the                                                               
Alaska Fire  Standards Council  has its own  funding and  the tax                                                               
credit has  never been used  that it was time  to get rid  of the                                                               
credit.                                                                                                                         
                                                                                                                                
SENATOR WILSON  thanked Representative  Thompson and  opined that                                                               
the  Legislature should  go through  the statutes  more often  to                                                               
find out what is being used and what is not being used.                                                                         
                                                                                                                                
CHAIR  MEYER asked  if Representative  Thompson  could find  more                                                               
statutes that addressed expenditures.                                                                                           
                                                                                                                                
REPRESENTATIVE  THOMPSON   replied  that   House  Bill   97  also                                                               
addresses indirect expenditures.                                                                                                
                                                                                                                                
CHAIR MEYER  asked if there  was any  interest in the  tax credit                                                               
program prior to expiration.                                                                                                    
                                                                                                                                
4:13:47 PM                                                                                                                    
GORDON  DESUTNER,  Fire  Training  Administrator,  Department  of                                                               
Public  Safety,  Anchorage,  Alaska,  replied  that  he  has  not                                                               
received any letters  of interest. He noted that  the Alaska Fire                                                               
Standards  Council  did  opt  to  send letters  out  to  all  the                                                               
insurance companies that were operating  in the state in 2016 and                                                               
no meaningful responses were received.                                                                                          
                                                                                                                                
SENATOR  GIESSEL  commended  Representative  Thompson  for  going                                                               
through the  indirect expenditure documents that  all legislators                                                               
receive.  She said  she  appreciated  the representative  finding                                                               
obsolete tax credits and for bringing the bill forward.                                                                         
                                                                                                                                
4:14:50 PM                                                                                                                    
CHAIR MEYER opened and closed public testimony.                                                                                 
                                                                                                                                
4:15:24 PM                                                                                                                    
SENATOR  GIESSEL moved  to report  the  committee substitute  for                                                               
House  Bill   97,  [CSHB   97(STA)],  version   30-LS0180\D  from                                                               
committee  with  individual  recommendations  and  attached  zero                                                               
fiscal note.                                                                                                                    
                                                                                                                                
4:15:42 PM                                                                                                                    
CHAIR  MEYER  announced  there being  no  objection,  the  motion                                                               
carried.                                                                                                                        
                                                                                                                                
4:15:49 PM                                                                                                                    
At ease.