Legislature(2013 - 2014)CAPITOL 106
02/17/2014 08:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 278 | TELECONFERENCED | |
HB 278-EDUCATION: FUNDING/TAX CREDITS/PROGRAMS
8:01:58 AM
CHAIR GATTIS announced that the only order of business would be
HOUSE BILL NO. 278, "An Act increasing the base student
allocation used in the formula for state funding of public
education; repealing the secondary student competency
examination and related requirements; relating to high school
course credit earned through assessment; relating to a college
and career readiness assessment for secondary students; relating
to charter school application appeals and program budgets;
relating to residential school applications; increasing the
stipend for boarding school students; extending unemployment
contributions for the Alaska technical and vocational education
program; relating to earning high school credit for completion
of vocational education courses offered by institutions
receiving technical and vocational education program funding;
relating to education tax credits; making conforming amendments;
and providing for an effective date."
CHAIR GATTIS established that discussion would be restricted to
the language specific to tax credits, Sections 21-32.
8:02:54 AM
MIKE HANLEY, Commissioner, Office of the Commissioner,
Department of Education and Early Development (EED), described
the governor's bill, Alaska's Education Opportunity Act, as a
partnership between three departments: Department of Education
and Early Development (EED), Department of Labor & Workforce
Development (DLWD), and the Department of Revenue (DOR). The
tax credit portion is comprised of two parts, he said, and
directed attention to page 11 lines 23-28 to point out the
subparagraphs which contain new language and anticipated actions
of the proposed measures. He paraphrased subparagraph (8),
which reads as follows:
(8) the funding of a scholarship awarded by a
nonprofit organization to a dual-credit student to
defray the cost of tuition, registration, course, and
textbook fees; and
COMMISSIONER HANLEY said this component allows tax credits for
corporations that sponsor scholarships specifically designed to
assist students in defraying the costs associated with the
pursuit of dual-credits. He paraphrased subparagraph (9), which
read as follows:
(9) the construction, operation, or maintenance of a
residential housing facility by a residential school
approved by the Department of Education and Early
Development under AS 14.16.200.
COMMISSIONER HANLEY explained that the second component
establishes language to extend tax credits to corporations
choosing to contribute funds specific to the construction,
operation, or maintenance of dormitories for residential
schools; four existing facilities and four which were approved
in 2013. He pointed out that Alaska lacks statute for
supporting residential school housing.
8:05:15 AM
REPRESENTATIVE LEDOUX referred to Section 21 to note the nine
subparagraphs, and pointed out that in the [10] subsequent tax-
related sections the differences appear to me minimal. She
asked whether it would be technically possible to provide an
inclusive statement for entitlement to a tax credit "period."
ALEXEI PAINTER, Economist, Tax-Economic Research Group, Tax
Division, Department of Revenue (DOR), responded that the
education tax credit appears in seven different tax types and
each has been modified. The proposed legislation adds the same
language for every type and it is the existing nature of the
credit that varies.
REPRESENTATIVE LEDOUX maintained that this may be the
opportunity to introduce consistency and eliminate variations,
save any overlooked advantages or disadvantages for such an
alignment.
MR. PAINTER pointed out that the suggested action would be a
policy call for the committee.
8:07:15 AM
COMMISSIONER HANLEY said the intent is to offer the two proposed
tax credits to all the identified taxpayer groups currently in
statute; language throughout is identical for each named group.
REPRESENTATIVE LEDOUX noted that some sections, pertinent to
individual groups, have a varying number of paragraphs
indicating the existence of differences.
COMMISSIONER HANLEY explained that the existing statute has
variances but the new additions are identical.
REPRESENTATIVE LEDOUX asked whether, in crafting the proposed
legislation, consideration was given to situations of major
support provided to a specific project or school - such as the
construction of a facility or identified educational program.
COMMISSIONER HANLEY responded yes, it was part of the
discussion, but ultimately the focus settled on tax credits.
The intent is to remove barriers in order to assist students
earning dual-credits, as well as to provide support to
residential facilities.
8:09:16 AM
REPRESENTATIVE SADDLER inquired about the typical means for
payment of dual-credit costs; do students pay out of pocket.
COMMISSIONER HANLEY answered that ways and means of payment is
handled according to the policy of individual school districts,
but typically students pay the university portion of the costs.
Exceptions exist, he said, and provided a theoretical example of
a student who has exhausted available high school math
department offerings and the local district agrees to sponsor
the credit/enrollment costs for a university level math course.
REPRESENTATIVE SADDLER asked if there are any corporations known
to be anticipating the opportunity for taking advantage of the
proposed tax credits.
COMMISSIONER HANLEY responded no.
REPRESENTATIVE SADDLER queried whether the administration's
support for the dual-credit provision is contingent on funding
via tax credits, or is student payment satisfactory.
COMMISSIONER HANLEY said that the department is fully supportive
of students earning dual-credits, while understanding that costs
can be a barrier; including the $50.00 charge for advanced
placement (AP) testing.
8:10:59 AM
CHAIR GATTIS noted that the tax credit doesn't incentivize the
student to take dual-credit courses, but rather encourages
industry to invest in the educational opportunity that allows
the student to participate.
COMMISSIONER HANLEY opined that a student could be incentivized.
He explained that a two credit course, at $50.00 per credit, a
$50.00 book fee, and a possible lab fee, could easily amount to
$200.00, which represents a significant amount for a student;
however, if the student knew that the sum could be offset, the
interest in attaining the credit may be incentivized.
CHAIR GATTIS agreed, and questioned why an across the board tax
credit isn't being proposed - why stop at residential
facilities.
COMMISSIONER HANLEY acknowledged that the question is valid and
may be worth exploring. Thus far, the focus has been on the two
identified components.
8:12:25 AM
REPRESENTATIVE DRUMMOND noted that public schools are not
nonprofit organizations, and as such, unable to receive
contributions. The Parent Teacher Association (PTA) is the
appropriate vehicle to accept the contribution [and the donee is
subsequently allowed a tax deduction]; however, a tax credit
works differently and provides a direct reduction of tax payment
commensurate to the amount of the contribution.
MR. PAINTER clarified that a donation up to $100,000 provide a
50 percent tax credit to the donor; a $10,000 donation would
result in a $5,000 tax credit.
REPRESENTATIVE DRUMMOND pointed out that a tax credit is a
direct reduction in the taxes paid versus an amount deducted
from taxed income.
8:14:09 AM
REPRESENTATIVE REINBOLD asked whether the proposed measures
include charter schools.
COMMISSIONER HANLEY answered yes, and said a student attending a
charter school may pursue dual-credits, thus benefiting from the
language in subparagraph (8). To a follow-up, he said the
facilities language, proposed in subparagraph (9), would not
pertain to charter schools.
CHAIR GATTIS acknowledged that charter schools could benefit
from secured construction funding.
8:16:10 AM
REPRESENTATIVE LEDOUX referred to the previous question and
answer to asked where the language is located that establishes
the 50 percent tax credit allowance [up to $100,000 of
contribution].
MR. PAINTER explained that the credit parameters are set in the
full section of the referenced statute, which he then
paraphrased, highlighting the pertinent language that read as
follows:
Sec. 43.20.014.
(b) The amount of the credit is
(1) 50 percent of contributions of not more than
$100,000;
(2) 100 percent of the next $200,000 of
contributions; and
(3) 50 percent of the amount of contributions
that exceed $300,000.
(d) A contribution claimed as a credit under
this section may not
(3) when combined with contributions that are the
basis for credits taken during the taxpayer's tax year
under AS 21.96.070, 21.96.075, AS 43.55.019, AS
43.56.018, AS 43.65.018, AS 43.75.018, or AS
43.77.045, result in the total amount of credits
exceeding $5,000,000;
REPRESENTATIVE LEDOUX noted that if a 100 percent allowance were
given, then the general fund could be used without differential
results.
MR. PAINTER concurred.
REPRESENTATIVE LEDOUX summarized proposed paragraph (8), as
previously read, to ask if the language applies to private or
religious schools.
COMMISSIONER HANLEY offered to check the legal component and
provide further information.
REPRESENTATIVE LEDOUX expressed interest in knowing whether the
dual-credit courses could be earned through attendance at a
private or religious postsecondary facility, as well as whether
the student receiving the benefit could be attending high school
at a private or religious school.
COMMISSIONER HANLEY reiterated that the intent is to defray
costs imposed by a postsecondary institution.
REPRESENTATIVE LEDOUX offered three scenarios of students
enrolled in a private, religious, or public school, deciding to
take a dual-credit course at the University of Alaska Anchorage
(UAA) or choosing a religious postsecondary facility and asked
how each situation might be addressed.
COMMISSIONER HANLEY said a student at a private school would not
be considered, as the proposed benefit is directed towards
public school students, and continued:
You can give a contribution to a church or to a
private school and get a tax credit. The state
doesn't give tax credits for donations to a private
school, so these would be public school students. As
for students taking courses at [a religious
postsecondary facility], this speaks to nonprofit -
we'd have to look at ... that status ... and I can get
the legal opinion on that for you.
COMMISSIONER HANLEY, to a follow-up question, said the context
of the bill is fully about the public system, containing no
reference to the private sector, thus negating any need to
include a definition for a public school student.
8:21:25 AM
REPRESENTATIVE SEATON referred to page 11, line 9, to point out
the current statute, which reads as follows:
(2) secondary school level vocational education
courses, programs, and facilities by a school district
in the state;
REPRESENTATIVE SEATON said this section is to encourage
donations from the private sector for furthering higher
education, and elementary schools are neither part of the
intent, nor targeted.
8:22:23 AM
REPRESENTATIVE SADDLER asked for further information regarding
the current participants of the education tax credit scheme; who
is receiving maximum benefit.
MR. PAINTER directed attention to the committee packet and the
handout titled, "Tax Division/2013 Annual Report, REVENUE
COLLECTIONS DETAIL" [pages numbered 17, 19, and 20] to summarize
the education credit receipts as follows:
Oil and Gas Production Tax and Surcharges = $2,529,361
Other Corporate Income Tax = $2,733,077
Fisheries Business Tax = $650,000
Mining License Tax = $343,564
Fisheries Resource Landing Tax = $932,500
MR. PAINTER pointed out that this represents approximately $7
million.
8:24:33 AM
CHAIR GATTIS acknowledged that businesses are donating money to
education outside of the funding formula, and pointed out that
this is another means to receive contributions while providing a
benefit to the businesses. She suggested that a closer look
might be given to the neighborhood and charter schools. She
asked whether a tax credit could be directed by the donor to a
named facility or specific educational purpose.
COMMISSIONER HANLEY said the bill adds to the current tax credit
law and deferred further comment.
MR. PAINTER offered that the taxpayer is allowed to specify a
qualified entity and he deferred further comment.
8:27:23 AM
JOHANNA BALES, Deputy Director, Tax Division, Department of
Revenue (DOR), outlined how the program works: the tax payer
directs where the contribution is applied, from the available
categories, and the state verifies that the recipient meets the
charitable, nonprofit criteria.
8:28:14 AM
REPRESENTATIVE SADDLER asked how the [$7 million], reported by
Mr. Painter, was distributed.
MS. BALES said that the 2013 calendar year totals are slightly
different from the fiscal figures, and reported: $3.3 million
for vocational education; $3.8 to universities and colleges; and
$1.5 million to other programs which are not split out for
confidentiality purposes. Historically, she pointed out, the
majority is distributed to universities and colleges.
REPRESENTATIVE SADDLER ascertained that the money is distributed
outside of the funding formula
MR. PAINTER concurred.
8:29:57 AM
REPRESENTATIVE P. WILSON noted that, if donations to charter
schools were allowed, and if the proposed bill became law, it
would be appropriate to amend Section 21 in the future, and
suggested [AS 43.20.014(a)] might then read as follows:
(a) A taxpayer is allowed a credit against the tax due
under this chapter for cash contributions accepted for
(10) charter schools.
MS. BALES agreed that an amendment could provide a clarifying
paragraph to include charter schools, but the Department of Law
(DOL) would need to provide an opinion.
REPRESENTATIVE P. WILSON said that, given the above amendment
scenario, a similar subparagraph, number (7), would need to be
proposed for Section 22, adding charter schools to the qualified
list.
MS. BALES agreed, and clarified the differences between sections
21 and 22. The education tax credit has been in existence for a
number of years, and in 2010 was increased from a maximum of
$150,000 per taxpayer to $5 million. At the same time, a sunset
provision was inserted, returning the maximum to $150,000 on
January 1, 2014. However, in 2011 the legislature altered the
statute once again to add a couple of tax credit programs and
extend the $5 million credit to 12/31/2020. Thus, on January 1,
2021, the maximum $5 million credit will again be subject to
being reduced to $150,000, and some of the entities will sunset
and no longer qualify for a credit, such as the Alaska Native
Cultural and Heritage program. The sunset language is what
separates these two sections, she pointed out, and explained
that the governor's intent is to add the two new qualifying
contribution categories and to ensure they are retained beyond
the sunset date of 2021.
8:34:59 AM
REPRESENTATIVE LEDOUX acknowledged that the intention is to
allow some of the tax credit categories to sunset, in 2021, but
to retain the two new categories [proposed in subparagraphs (8)
and (9)].
MS. BALES concurred, and clarified that it was the 2011
legislature that identified the categories for sunset in 2021.
The governor is not changing that legislative intent, but rather
adding two new contribution categories, with the expectation
that they will be carried forward; beyond 2021.
REPRESENTATIVE LEDOUX returned to the private versus public
concern, broached earlier by Representative Wilson, to comment
that various states have provided tax credits for scholarship
funds made to private/religious schools, and some courts have
ruled that it does not represent a legal violation of the Blaine
Amendment.
REPRESENTATIVE P. WILSON interjected that the legality may
depend on the constitution of each state.
8:38:00 AM
REPRESENTATIVE SADDLER asked how many students take advantage of
dual-credit options, and what the success rate.
COMMISSIONER HANLEY said the districts do not provide that
specific data to the department, but the practice is highly
encouraged.
REPRESENTATIVE SADDLER conjectured that the impetus for
extending the tax credit is to further that encouragement.
COMMISSIONER HANLEY opined that it provides a student the
opportunity to establish a vision beyond graduation and creates
a pathway to higher education. The result is a win-win
situation and the motivating factor behind HB 278.
REPRESENTATIVE SADDLER inquired how this action compliments the
advanced placement (AP) courses; is it an expansion of that
program.
COMMISSIONER HANLEY answered that it is a complimentary
opportunity and does not contradict the AP effort.
8:40:52 AM
REPRESENTATIVE SEATON noted that the sections appear to
rationalize the purposes served by the qualified facilities, as
grouped in each subparagraph, and directed attention to page 11,
line 9. The subparagraph appears to be inclusive as it states
tax credit eligibility for "secondary school level vocational
education courses, programs, and facilities by a school district
in the state." Alaska's charter schools operate as public
facilities, he pointed out, and asked if rationale exists in the
proposed bill that would make a distinction and exclude this
diverse faction of public institutions from eligibility for tax
credit funding.
COMMISSIONER HANLEY agreed that this is "slightly problematic,"
and conjectured how a taxpayer is likely to name a certain
charter school as the recipient; however, as pointed out by the
previous member, schools cannot receive the funds directly. The
inability to distribute funds to a district with strings
attached is where this action becomes problematic. He said
there could be a reason for this to be challenged, and suggested
the need for a legal opinion.
8:43:39 AM
CHAIR GATTIS noted that public charter schools lack equal
treatment, opined on the need for review of charter school
statute, and stated that a legal opinion would be provided to
the committee.
COMMISSIONER HANLEY agreed that charter schools face significant
challenges. He established that the department recognizes the
scope of the void and said the governor shares the concern.
REPRESENTATIVE P. WILSON offered that charter school parents may
be buoyed by the opportunity to gain a tax credit for supporting
their school of choice.
COMMISSIONER HANLEY emphasized that all charter schools in
Alaska are part of the public system.
8:47:48 AM
REPRESENTATIVE LEDOUX observed that the tax credit is applicable
to businesses that pay state taxes, not individuals.
8:48:31 AM
REPRESENTATIVE SADDLER paraphrased from page 11, line 24, to
note that scholarship funds may be used to, "defray the cost of
tuition, registration, course, and textbook fees;" and asked if
there are any fees that would be specifically denied. Further,
he asked if this list characterizes the majority of expenses for
college.
COMMISSIONER HANLEY indicated that costs could include an on-
line connection, but the list is designed to be inclusive, not
restrictive.
REPRESENTATIVE SADDLER asked about the intent for inclusion of
fees associated with campus activities, parking, student union,
and lab use.
COMMISSIONER HANLEY offered that it would be atypical for a
student to be on campus, when engaged in a dual-credit course;
the norm is for on-line course work.
8:50:45 AM
REPRESENTATIVE P. WILSON asked whether Native corporations
qualify as nonprofit organizations.
MS. BALES answered that the Native corporations are nonprofit
entities. Further, she clarified that a profit corporation
could contribute to a nonprofit organization which in-turn
establishes the scholarship fund to support the dual-credit
students. Any profit based corporation, Exxon for example, can
contribute in this way and receives a tax credit on its
corporate return; the nonprofit does not receive a tax benefit.
Students apply to the scholarship fund to defray educational
costs. To a follow-up question she said this does not prohibit
a corporation from making an earmarked contribution directly to
a district for a specific vocational program; possibly to
sponsor a teacher.
8:56:02 AM
REPRESENTATIVE SADDLER asked if there is a mechanism to measure
the effectiveness of the tax-credit program.
COMMISSIONER HANLEY deferred.
The committee took an at-ease from 8:57 a.m. to 9:03 a.m.
9:04:00 AM
BYRON CHARLES, Shareholder, Sealaska Corporation, sated support
for the intent of HB 278, and suggested it would be beneficial
if a request were made to have the Native corporations obtain
majority approval from all shareholders for prioritization of
educational support.
9:06:29 AM
MARY NANUWAK clarified that the Native corporations are profit
organizations, but not all of them are able to realize a profit.
However, even without profit innovative methods to meet needs
exist and she invited the members to visit the outlying areas.
9:10:36 AM
REPRESENTATIVE SEATON offered Amendment 1, labeled 28-
GH2716\A.5, Mischel, 2/14/14, which read as follows:
Page 11, line 25:
Delete "and"
Page 11, line 28, following "AS 14.16.200":
Insert "; and
(10) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 12, line 14:
Delete "and"
Page 12, line 17, following "AS 14.16.200":
Insert "; and
(7) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 13, line 16:
Delete "and"
Page 13, line 19, following "AS 14.16.200":
Insert "; and
(10) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 14, line 5:
Delete "and"
Page 14, line 8, following "AS 14.16.200":
Insert "; and
(7) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 15, line 7:
Delete "and"
Page 15, line 10, following "AS 14.16.200":
Insert "; and
(10) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 15, line 27:
Delete "and"
Page 15, line 30, following "AS 14.16.200":
Insert "; and
(7) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 16, line 30:
Delete "and"
Page 17, line 2, following "AS 14.16.200":
Insert "; and
(10) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
Page 17, line 20:
Delete "and"
Page 17, line 23, following "AS 14.16.200":
Insert "; and
(7) a program that provides early childhood education
by a nonprofit agency or school district in the state
or by the Department of Education and Early
Development"
REPRESENTATIVE REINBOLD objected for discussion.
9:11:25 AM
REPRESENTATIVE SEATON pointed out that this adds subparagraph
(10), and conforming language. He stressed that early childhood
education has been recognized as the most important area to
support in order to assure that a child will complete a
successful school career. The state has sponsored a pilot
program, but faced with budget cuts, funding has been a
challenge. He said it is important to incentivize businesses to
help with early childhood education in their communities through
established programs, which might include: Parents as Teachers;
Imagination Library; local school district preschool programs;
and the EED pilot program. The amendment covers three
categories for encouraging business contributions to further
local efforts in early childhood education.
9:13:57 AM
CHAIR GATTIS referred to the distribution of the $7 million, as
reported earlier by DOR, and asked if this would dilute or add
to that figure.
REPRESENTATIVE SEATON stated his belief that Amendment 1 would
expand the use, and said these are targeted tax credits for
rationale of the contributor. He opined that this would not
divert funds from colleges but bring attention and allow
corporate support to a vital area of early childhood education.
9:15:15 AM
REPRESENTATIVE SADDLER clarified that local businesses can
certainly provide financial support for early childhood
education programs, but a tax credit cannot be claimed for their
contributions.
REPRESENTATIVE SEATON agreed, and added that Amendment 1 allows
the state to provide encouragement for early childhood corporate
contributions by offering a tax credit. He suggested that not
including early childhood education was an oversight and this
brings it into the bill. The rationale contained in existing
statute directs education tax-credit funding to efforts of
direct instruction, research, and educational support purposes.
He opined that one of these primary rationales should be early
childhood education, and stressed that it is an important area
to target. Promoting early childhood education has been on the
legislative table for a decade, he finished.
9:18:42 AM
REPRESENTATIVE LEDOUX said the decision is a policy call of
whether to specify targeted programs or adopt blanket language.
The broad approach would be inclusive of everything in respect
to education. However, she said, if the targeted approach is
decided on, Amendment 1 is supportable. An additional amendment
could be proposed to address funding of charter school
buildings, which she said she may sponsor.
9:20:04 AM
REPRESENTATIVE DRUMMOND stated support for Amendment 1, and
directed attention to page 11, lines 16-18 to point out that
subparagraph (5) includes grades kindergarten through 12, as it
relates to Alaska Native cultural or heritage programs, thus,
early childhood education is not entirely excluded from the
bill. Although this subparagraph does not specify preschool, an
amendment to that effect may not be necessary, with the adoption
of Amendment 1.
9:21:16 AM
REPRESENTATIVE P. WILSON opined that subparagraph (5) may be
limited to Alaska Native cultural or heritage programs.
9:22:23 AM
COMMISSIONER HANLEY urged the committee to review the original
intent for including the statutory language of [Section 21,
subparagraph (5)] and counseled that the committee to explore
the reason that it was placed into law.
9:22:57 AM
REPRESENTATIVE SEATON recalled that the drafting of [AS
43.20.014(a)(5)] predated the focus, as understood today, for
preschools. He said Amendment 1 would allow a preschool program
to be developed and supported under the Alaska Native cultural
and heritage program rationale, but is not intended to limited
programs based on those principles.
9:24:14 AM
REPRESENTATIVE SADDLER agreed with the counsel to explore the
original intent of the education tax-credit measures. He
commented that reasons may exist to exclude particular
educational areas from this type of benefit.
9:24:55 AM
CHAIR GATTIS asked if there is a problem in removing limits and
establishing broad language for an inclusive policy.
COMMISSIONER HANLEY said that when the language was placed in
statute, a specific target was the goal. The governor intends
to remove barriers, and he said it would be a policy call for
the committee.
9:26:22 AM
REPRESENTATIVE REINBOLD stated support for providing tax credits
on a broad scale, not limited to public preschools.
9:27:13 AM
CHAIR GATTIS observed that all preschools seem to be beneficial
and helps provide children a "great jump" in their education.
9:27:37 AM
REPRESENTATIVE SEATON clarified that a nonprofit preschool will
qualify, regardless of the setting. The only limiting factor is
the qualification for the recipient program to be a qualified
nonprofit; a profit corporation that directly operates a
preschool could not qualify.
9:30:30 AM
REPRESENTATIVE LEDOUX asked whether a church qualifies as a
nonprofit, and whether a profit corporation that funds a
nonprofit subsidiary to operate a daycare or preschool would be
eligible.
9:31:37 AM
REPRESENTATIVE DRUMMOND confirmed, as a church official, that
sacred organizations hold a nonprofit status, authorized through
the Internal Revenue Service (IRS). She reported that only one
in five children in need of daycare/preschool are provided a
space in the Juneau area, perhaps throughout the state, and
opined that priority should be granted to create opportunities
and expand services. Many of the childcare facilities are
located in churches because of availability of space; however,
the location does not define the program.
9:33:54 AM
CHAIR GATTIS acknowledged that a challenge exists in directing
public money to preschool programs, as well as providing enough
opportunities.
9:34:28 AM
REPRESENTATIVE SADDLER asked the amendment sponsor whether the
intent is to allow corporations to claim tax-credits if the
donations is directed to a church preschool.
REPRESENTATIVE SEATON said the area of childcare/preschool does
not fall under the purview of EED or the school districts as a
system of public education, and, for that reason, funding a
church hosted preschool would not present a problem.
9:35:27 AM
REPRESENTATIVE REINBOLD said it would be helpful to support
every setting, including a profit corporation that maintains a
preschool for employees.
REPRESENTATIVE SEATON the amendment skirts the conflict of
interest areas where corporations provide benefits to their
employees. Certainly, the corporation could allow space for a
nonprofit childcare entity to operate.
REPRESENTATIVE REINBOLD emphasized that a daycare facility in a
corporate setting is a convenience to parents, and that it seems
appropriate to encourage onsite facilities.
REPRESENTATIVE SEATON clarified that the Amendment 1 addresses
programs, not facilities.
9:38:29 AM
REPRESENTATIVE LEDOUX noted that federal and state laws already
provide tax-credit/deductions for many corporate activities,
including salaries. She voiced support for allowing corporate
childcare, to be included in the qualified list.
9:39:09 AM
REPRESENTATIVE DRUMMOND pointed out that the IRS provides
parents a tax-credit of up to one third of the childcare cost.
She said British Petroleum (BP) offices in Anchorage, as well as
the University of Alaska Anchorage, both offer onsite childcare.
Corporations are free to provide whatever employee benefits they
so choose, and opined that the state should avoid involvement;
however, the Amendment 1 does not appear to impact these
activities or present a conflict.
CHAIR GATTIS expressed concern for existing private preschools
and, despite good intent, whether Amendment 1 might have a
negative effect on these facilities.
REPRESENTATIVE DRUMMOND suggested testimony be invited from a
number of the established facilities who provide early childhood
education, such as Rural Alaska Community Action Program, Inc.
(RurAL CAP) and Kids' Corp. Inc.
9:42:46 AM
REPRESENTATIVE P. WILSON said daycare, preschool, and education
are all on the table, and she suggested that the difference and
qualifications be noted.
9:43:34 AM
REPRESENTATIVE SADDLER asked the sponsor for a definition of
early childhood education; does statute provide one.
REPRESENTATIVE SEATON deferred.
COMMISSIONER HANLEY offered to provide the information.
REPRESENTATIVE SEATON interjected that childcare is often a
profit business and would not qualify.
CHAIR GATTIS described how some daycare situations provide
valuable preschool activities, and conflict may arise under
Amendment 1, as proposed.
9:45:55 AM
REPRESENTATIVE LEDOUX observed that private preschools, operated
for profit, appear to be the concern. She asked about licensing
requirements for preschools versus daycares. Tax credits should
be awarded to preschools and not babysitting services. Further,
she opined, it would be helpful to include language that
discerns the difference.
9:47:14 AM
CHAIR GATTIS asked for specific curriculum or other
differentiating conditions that identify daycare versus
preschools.
COMMISSIONER HANLEY indicated that criteria exist for the
licensing of each entity, and offered to provide further
information.
9:48:01 AM
REPRESENTATIVE SEATON stressed that Amendment 1 is not specific
to a physical preschool and named existing nonprofit
organizations that provide on-site services, including: Best
Beginnings; Sprout, Inc.; Imagination Library; and Parent's as
Teachers. He said these are examples of programs promoting
early childhood education that would qualify, and represent more
than a room with chairs and a specific curriculum.
9:48:52 AM
CHAIR GATTIS recapped the number of questions surrounding the
Amendment 1 and suggested holding it over.
REPRESENTATIVE SEATON agreed and indicated that it would be
helpful to have further stakeholder comments for the committee
to consider, particularly from corporations.
9:52:04 AM
CHAIR GATTIS announced HB 278 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB278 Testimony Vernessa Richards.pdf |
HEDC 2/17/2014 8:00:00 AM |
HB 278 |
| Letter from TCyrus_TVEP Reauthorization_2-6-2014.pdf |
HEDC 2/17/2014 8:00:00 AM |
HB 278 |