03/16/2000 03:00 PM House FIN

HOUSE BILL NO. 380                                                                                                              
                                                                                                                                
An Act relating to contributions to the Alaska Fire                                                                             
Standards Council and to an insurer tax credit for                                                                              
those contributions; and providing for an effective                                                                             
date.                                                                                                                           
                                                                                                                                
Co-Chair Therriault stated that HB 380 would create an                                                                          
insurance tax credit for contributions to the Alaska Fire                                                                       
Standards Council for fire services training programs.                                                                          
Development of fire standards that address the unique                                                                           
challenges posted by Alaska's climate will benefit Alaskans                                                                     
as the incidence of casualty and property loss goes down,                                                                       
including fatalities.                                                                                                           
                                                                                                                                
The Alaska Fire Standards Council will be established on                                                                        
July 1, 2000 as directed in legislation passed by the 20th                                                                      
Alaska State Legislature.  It will adopt minimum standards                                                                      
for employment and curriculum requirements for firefighters                                                                     
and fire instructors and their certification.  The                                                                              
legislation would establish and maintain firefighter and                                                                        
fire instructor-training programs.  The certification of                                                                        
firefighters would be optional.  While the national                                                                             
standards already exist, they do not take into account many                                                                     
of the unique qualities which Alaska's climate presents.                                                                        
                                                                                                                                
Representative G. Davis suggested that action would be                                                                          
"taking from one hand and giving to the other" as it all                                                                        
comes from the general fund.  Co-Chair Therriault advised                                                                       
that the loss to the State Treasury would be $150 thousand                                                                      
dollars, while the revenue generated would be $220 thousand                                                                     
dollars creating a net gain of $70 thousand dollars.                                                                            
                                                                                                                                
JASON ELSON, (TESTIFIED VIA TELECONFERENCE), CHIEF, KENAI                                                                       
FIRE DEPARTMENT, KENAI, commented that a major factor is                                                                        
that there has been a commitment made through previous                                                                          
legislation to establish the Fire Standard Council.  The                                                                        
Council was assigned to find alternative funding methods.                                                                       
HB 380 allows the Council to determine funding by offering a                                                                    
tax credit to the insurance companies for the premiums that                                                                     
they collect for fire insurance.  That action allows the                                                                        
Council to stay within the philosophy of no new taxes by                                                                        
offering a credit for contribution made.  Mr. Elson noted                                                                       
that the insurance industry has looked favorably at the                                                                         
proposal and that it seems to benefit everyone, while                                                                           
funding the Council to establish the training standards for                                                                     
firefighters throughout the State of Alaska.                                                                                    
                                                                                                                                
Vice Chair Bunde asked how the legislation would impact the                                                                     
Division of Insurance.  Co-Chair Therriault pointed out it                                                                      
would not take money directly from that entity.  The funding                                                                    
would be taken from the general fund and would not cut what                                                                     
had been budgeted for the Division of Insurance's                                                                               
operations.                                                                                                                     
                                                                                                                                
Vice Chair Bunde questioned how the money transfer would                                                                        
occur.  Co-Chair Therriault replied that the Division of                                                                        
Insurance generates more money for the State Treasury than                                                                      
it costs to operate.  He added, it would be a potential                                                                         
funding source and that the Legislature would control how                                                                       
much would be appropriated.                                                                                                     
                                                                                                                                
Representative J. Davies requested further clarification of                                                                     
the mechanism.  Co-Chair Therriault replied that there would                                                                    
be a separate contribution to the account and then take a                                                                       
corresponding decrement would be taken to the State taxes.                                                                      
                                                                                                                                
Representative Foster MOVED to report CS HB 380 (L&C) out of                                                                    
Committee with individual recommendations and with the                                                                          
accompanying fiscal notes.  There being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CS HB 380 (L&C) was reported out of Committee with a "do                                                                        
pass" recommendation and with a fiscal note by the                                                                              
Department of Community & Economic Development and a zero                                                                       
note by the Department of Public Safety dated 2/23/00.