SB 39-REPEAL FILM PRODUCTION TAX CREDIT  2:03:39 PM CHAIR COSTELLO reconvened the hearing and announced the consideration of SB 39. "An Act repealing the film production tax credit; providing for an effective date by repealing the effective dates of secs. 31 - 33, ch. 51, SLA 2012; and providing for an effective date." She noted that this is the fifth hearing and public testimony is closed. She stated her intention to address a technical amendment, take committee questions, and look to the will of the committee. 2:04:12 PM SENATOR GIESSEL moved Amendment 1. 29-LS0097\H.1 Nauman 3/12/15 AMENDMENT 1 OFFERED IN THE SENATE BY SENATOR COSTELLO TO: SB 39 Page 3, line 22: Delete "three" Insert "six" CHAIR COSTELLO objected for discussion purposes. SENATOR ELLIS expressed gratitude for the technical fix and stated he had no objection. 2:05:10 PM WESTON EILER, Staff, Senator Mia Costello, informed the committee that Amendment 1 makes a technical correction from three [years] to six [years] to conform to existing statute and avoid a regulatory takings claim. Case law stipulates that credits a government extends must be honored and any sort of preemptive taking or removal of those credits could constitute a violation. SENATOR COSTELLO asked the sponsor to comment on the amendment. 2:06:41 PM SENATOR BILL STOLTZE, sponsor of SB 39, described the change as substantive, adding that it was a legal and fiscal omission. SENATOR MEYER asked if he supports the amendment. SENATOR STOLTZE answered yes and thanked the committee for its due diligence. SENATOR COSTELLO found no further questions and solicited a motion. 2:08:30 PM SENATOR GIESSEL motioned to report SB 39, labeled 29-LS0097\H, as amended, from committee with individual recommendations and attached fiscal note. 2:08:42 PM SENATOR ELLIS objected. He stated that he was disappointed to see the bill leave the committee, but not surprised. He said the goal of the Alaska film and production incentives is to diversify the economy and it's worked. There has been steady progress in that direction and more could come. Since improvements to the program have taken effect, Alaska hire has increased. He reminded the members that the Alaskanization of the program has been successful and the abbreviated sunset timeframe and the increased audit opportunities were common- sense improvements. He reminded the committee of the testimony it heard about new companies forming to capture new high tech markets in post-production and editing. Most importantly, the committee heard from young people who are eager to continue their careers in Alaska. SENATOR ELLIS noted that a young man from Homer contacted him and begged him not to approve the legislation because he wanted to stay in Alaska to develop his career telling Alaska stories in the state he loves. Senator Ellis said he told the young man he'd do his best and share his thoughts with the committee. He said he's grateful to each Alaskan who took the time to testify and talk about the jobs and opportunities brought by the production incentives, and he knows that scores more are impacted. SENATOR ELLIS stated that his primary objection to moving this bill is that the governor already made the difficult decision to shut down the program. That was not an unreasonable step to take given the state's fiscal circumstance, but it didn't mean that Alaska is permanently closed to the multi-billion dollar film production industry. That is in sharp contrast to SB 39, which tells the global multi-billion dollar film industry that Alaska is permanently closed for business. That's an ill-advised message to send and it will hurt a lot of small Alaska businesses. It's unfortunate and doesn't need to happen. He suggested that a better option is to suspend the program until fiscal circumstances warrant revisiting the issue. CHAIR COSTELLO recognized that Senator Ellis was the author of the film tax incentive program and expressed appreciation for the work he's done. She noted that Alaska has benefited from the 146 productions that came to the state using $38 million in credits of the $200 million cap. She opined that it would be prudent for the Senate Finance Committee to look closely at the differences between what the governor has proposed for the program versus what this legislation seeks to achieve, which is to essentially take it off the books. 2:14:27 PM At ease. 2:15:19 PM CHAIR COSTELLO reconvened the hearing and removed her objection to Amendment 1. Finding no further objection, she announced that Amendment 1 is adopted and the amended bill is before the committee. SENATOR GIESSEL restated the motion to move SB 39, as amended, from committee with individual recommendations and attached fiscal note. SENATOR ELLIS maintained his objection. A roll call vote was taken. Senators Giessel, Meyer, Stevens, and Chair Costello voted in favor of SB 39. Senator Ellis voted against it. Therefore, CSSB 39(L&C) was reported out of the Senate Labor and Commerce Standing Committee by a vote of 4:1.