House Bill 252 becomes part of Senate Bill 23, passes, heads for the Governor’s desk!

Written on May 11 2012

Wow, we did it!

The passing of House Bill 252 brings to an end my first legislative experience. I had a chance to sit alongside Joshua Walton, Representative Mia Costello’s Chief of Staff among others as Allan Johnston, my mentor and SimplySocial investor, originally pitched the idea of the bill.

Piggybacking on national legislation, House Bill 252 would use existing IRS tax code (1202) to apply Federal tax breaks to the State level. Since Alaskan income tax only applies to C-Corporations, most companies just incorporated as LLCs. However, since C-Corporations are better geared towards international business and raising capital, the capacity of Alaska to produce successful companies was greatly hindered.

At least, that’s what was discussed over a year ago. Jeroen Erne was visiting me in Alaska as we started to pitch the idea of SimplySocial to investors for the first time. It was June, and things were quiet at the LIO (Legislative Information Office). I remember a pretty informal dress… Some folks were wearing flip flops. Jeroen got an inside look at Alaskan lawmaking (as a Dutchie), and I got to participate in changing our State’s policy.

The idea of House Bill 252 was informally passed around as a bill that could drive innovation in Alaska. Most companies were thinking small and incorporating as LLCs, so offering tax-breaks for innovative companies that qualified for federal 1202 status could help raise aspirations of Alaskan entrepreneurs and get them thinking about bigger and better opportunities.

With some interest, the idea of the bill moved forward to a meeting with the Department of Revenue. We wanted to measure it’s potential effect on the State’s finances. Since 1202 restrictions were significant, few existing businesses would qualify. Rather, only new startups or companies pouring capital into R&D (more specifically, a company using 80%+ of its assets for growth related activities) would be exempt from Alaskan corporate income tax.

At the meeting, the bill came off as largely non-controversial with virtually zero downsides. No other State had taken advantage of code 1202, so this offered Alaska a chance to get ahead.

Fast forward to February of this year. Months of discussions and shared ideas had manifested itself into House Bill 252. I was in Romania at the time, and frequently had to stay up until 3-4am to testify for the bill while it was in committee. We also pushed ahead with a social media campaign (seen here) that easily allowed supporters to email their lawmakers.

Indeed, the hardest part of supporting House Bill 252 was the 11 hour time difference from being in Romania. 4am testimony isn’t easy!

After making its way through committee, House Bill 252 passed the House unanimously. Things seemed bright as the bill then sailed through committee in the Senate as well. However, as the 90 day lawmaking session in Alaska began to come to a close, the window was quickly closing for 252 to hit the Senate floor for a vote.

In the final hours of the session, House Bill 252 was rolled into Senate Bill 23 and passed just before midnight.

What I learned throughout the process of House Bill 252 was how difficult lawmaking really is. Even a non-controversial bill like 252 required a decent sized social campaign and a lot more work that I’m sure I didn’t see.

All in all, it’s been fun. I’m looking forward to seeing what other legislation we can help support to make Alaska more competitive in the future.

In the meantime, let’s see how we as Alaskans take advantage of this great opportunity!

Discuss this post

3 Responses to this article

  1. By [email protected] on May 12, 2012, 12:21 AM

    Congratulations on a very successful journey that will be of significant value to all Alaskans. You did an excellent job and we are all very proud of the effort and time that you and Simply Social contributed to the cause.

  2. By Radu Ticiu on May 12, 2012, 4:39 AM

    Congrats, Tyler, for being such involved and also succesful in involving others in this process resulting in a legislation so favorable for startups in Alaska. I’m proud to both following it’s evolution and also actively participating at your invitation trough filling in a written testimony.

    I hope we will be similarly successful here in Romania at some point in improving the tax framework for our startups.

    I am pretty sure we’ll benefit from your involvement…


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