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