Legislature(2015 - 2016)SENATE FINANCE 532
04/08/2015 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB15 | |
| SB39 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 26 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 39 | TELECONFERENCED | |
| += | SB 51 | TELECONFERENCED | |
| += | SB 15 | TELECONFERENCED | |
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."
1:37:34 PM
GERMAN BAQUERO, LEGISLATIVE INTERN, SENATOR JOHN COGHILL,
presented SB 15. He explained that the bill was a tax cut
on the premiums for life insurance policies. He pointed out
that in Section 1, the rate of tax on policies over
$100,000 would be changed from 0.1 percent to 0.08 percent.
He explained that the other feature of the legislation was
an applicability date set for December 31st, 2015. He
furthered that the bill was developed in conjunction with
members of the insurance industry and the trust industry in
Alaska as an effort to maintain the competitive edge the
state had in the insurance market across the United States.
He mentioned the state of South Dakota, which currently
taxed policies over $100,000 at 0.08 percent. He asserted
that the legislation was a means of attracting future life
insurance policies to be held in the state, thereby
bringing more revenue to the state.
1:40:03 PM
LORI WING-HEIER, DIRECTOR, DIVISION OF INSURANCE,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
JUNEAU, affirmed that SSSB 15 would reduce the premium tax
on life insurance premiums over $100,000. She disclosed
that the industry believed that the legislation would
increase the revenues paid to the state by making insurance
in Alaska more competitive as compared to other states. She
commented that the state of South Dakota had passed a
similar piece of legislation in 2010; thereby increasing
the number of companies writing life insurance from 29 to
32 and increasing premiums from $97 million to $120 million
in four years.
Co-Chair MacKinnon stated that she was not convinced of the
merit of the legislation, and asked Ms. Wing-Heier to
justify the lowering of premium tax rates. Ms. Wing-Heier
related that the state was attempting to be competitive
with two other states (South Dakota and Connecticut) that
had also lowered their tax rates on premiums. She heard
from brokers that such a change would make Alaska an
attractive market for setting up trusts and financing for
retirements for residents as well as those outside of the
state.
Senator Dunleavy asked if Ms. Wing-Heier anticipated the
potential for job creation in the industry as a result of
the legislation. Ms. Wing-Heier anticipated an increase in
individuals hired in the insurance industry.
1:43:25 PM
Co-Chair MacKinnon asked Senator Dunleavy to address the
fiscal note.
Senator Dunleavy discussed the bill's fiscal note, which
had zero fiscal impact, and read from the narrative section
(copy on file):
SB15 would reduce the premium taxes collected by the
Division on individual insurance policies with a
written premium exceeding $100,000.00 from 0.1% to
0.08%. The reduction in tax is expected to increase
competition, potentially resulting in additional
policies issued in the state.
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.
1:44:30 PM
Senator Dunleavy MOVED to REPORT SSSB 15 out of committee
with individual recommendations and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SSSB 15 was REPORTED out of committee with a "do pass"
recommendation and with one previously published zero
fiscal note: FN1 (CED).
1:44:49 PM
AT EASE
1:47:15 PM
RECONVENED