03/03/2025 03:15 PM House LABOR & COMMERCE

              HB 113-TAX EXEMPTION: SMALL BUSINESS                                                                          
                                                                                                                                
3:54:32 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS announced  that the final order  of business would                                                              
be HOUSE  BILL NO. 113,  "An Act relating  to a tax  exemption for                                                              
qualified  small  businesses;  and   providing  for  an  effective                                                              
date."                                                                                                                          
                                                                                                                                
3:55:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BURKE surveyed  the  differences  in fiscal  notes                                                              
between HB 113 and HB 94.                                                                                                       
                                                                                                                                
3:55:44 PM                                                                                                                    
                                                                                                                                
BRANDON  SPANOS,  Deputy  Director, Tax  Division,  Department  of                                                              
Revenue (DNR), explained  that the fiscal note for  HB 94 included                                                              
data through  fiscal year 2023 (FY  23), and that the  fiscal note                                                              
for HB 113 had included data through FY 24.                                                                                     
                                                                                                                                
3:57:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS opened public testimony on HB 113.                                                                              
                                                                                                                                
3:57:28 PM                                                                                                                    
                                                                                                                                
JESSE GLAMANN,  CEO, Big  Ray's, testified in  support of  HB 113.                                                              
He  explained that  his business,  Big  Ray's was  started in  the                                                              
1940s and  became a corporation  in 1967.   He said Big  Ray's has                                                              
been a  C-Corporation "for  a very long  time."  He  reported that                                                              
Big Ray's  has leveraged the exemption  in HB 113 in  business for                                                              
the  past eight  years,  using saved  money  to  open new  stores,                                                              
enhance  physical  infrastructure,  and  invest  in  employees  by                                                              
providing health and  benefits packages.  He noted  that Big Ray's                                                              
currently has  five stores in Alaska.   He asserted  that, without                                                              
the  exemption, his  company would  anticipate many  changes.   He                                                              
offered his support for HB 113.                                                                                                 
                                                                                                                                
3:59:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER noted  that  Mr. Glamann  stated that  the                                                              
exemption  allowed him  to expand  business  and provide  employee                                                              
benefits.   He asked  whether the  exemption  allowed him  to "get                                                              
ahead or just hold  on" with regards to the cost  of inflation and                                                              
providing healthcare and benefits.                                                                                              
                                                                                                                                
MR.  GLAMANN noted  that  the costs  of  providing healthcare  and                                                              
benefits continue to  increase every year.  He  responded that the                                                              
exemption under HB 113 would help his business "hold on."                                                                       
                                                                                                                                
4:00:44 PM                                                                                                                    
                                                                                                                                
LLOYD  STIASSNY,  Owner,  Egan   Management  Group,  testified  in                                                              
support  of HB  113.   He asserted  that  HB 113  would provide  a                                                              
critically  important exemption  for small  businesses in  Alaska.                                                              
He  explained that  many  small businesses  transitioned  to a  C-                                                              
corporation after  the [Tax  Cuts and Jobs  Act] in  [2017], which                                                              
allowed  small   businesses  to  invest  in   themselves,  enhance                                                              
employment,  and  grow their  platforms.    He asserted  that  the                                                              
State  of Alaska  needs  to invest  in  new businesses  and  small                                                              
businesses,   stating  that   they  provide   the  blueprint   for                                                              
employment  and economic  growth.   He voiced  strong support  for                                                              
continuing  the small business  exemption  and offered his  belief                                                              
that  the  exemption  had  existed  for  10  years  prior  to  its                                                              
expiration.                                                                                                                     
                                                                                                                                
4:02:49 PM                                                                                                                    
                                                                                                                                
MR.  STIASSNY, in  response to  Representative Saddler's  question                                                              
on  his  representation, stated  that  he  is  the owner  of  Egan                                                              
Management  Group,  a  canvas  platform  company  in  southcentral                                                              
Alaska.                                                                                                                         
                                                                                                                                
4:03:32 PM                                                                                                                    
                                                                                                                                
KARI NORE, Director,  External Affairs, Alaska  Chamber, testified                                                              
in support of HB  113.  She stated that the Alaska  Chamber is the                                                              
largest  statewide   business  advocacy   organization   with  700                                                              
members, representing  58,000 Alaska  workers and $4.6  billion in                                                              
wages.   She  stated  that  its mission  is  to foster  a  vibrant                                                              
business environment  in Alaska.  She gave a brief  history of the                                                              
small business exemption,  which was instated in  2013 and allowed                                                              
to  expire in  2023,  much  to the  "surprise  of  the handful  of                                                              
businesses  who  used  the  exemption."   She  asserted  that  the                                                              
exemption  had  allowed  small  businesses  in  Alaska  to  invest                                                              
millions of dollars  in staff, inventory and infrastructure.   She                                                              
stated  that, according  to  the  DOR's small  business  exemption                                                              
analysis,  the  three-year average  cost  to  the state  was  $2.5                                                              
million, with 50  businesses taking advantage of the  credit.  She                                                              
asserted  that "every  dollar  counts" with  the  "ever-increasing                                                              
cost of  labor and supplies"  and the tax  exemption "goes  a long                                                              
way  for the  small number  of businesses  who do  qualify."   She                                                              
concluded  by reiterating  the Alaska  Chamber's  support for  and                                                              
urging swift passage of HB 113.                                                                                                 
                                                                                                                                
4:05:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  stated that money  is fungible.   He asked                                                              
whether  the value  of the  exemption was  allowing businesses  to                                                              
increase investment or mitigate effects of inflation.                                                                           
                                                                                                                                
4:05:45 PM                                                                                                                    
                                                                                                                                
MS. NORE  responded that prior  to significant inflation,  the tax                                                              
exemption   allowed   businesses   to   increase   investment   in                                                              
additional   infrastructure,   stores,   inventory,   et   cetera.                                                              
However, she  concurred with prior  testimony, stating  that, with                                                              
inflation, the exemption  "at this point ... just keeps  them on a                                                              
level playing field."                                                                                                           
                                                                                                                                
4:06:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS,  after ascertaining  that there  was no  one else                                                              
who wished to testify, closed public testimony on HB 113.                                                                       
                                                                                                                                
[HB 113 was held over.]