Legislature(1999 - 2000)
04/10/1999 10:07 AM House HES
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* first hearing in first committee of referral
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HB 142 - EDUCATION CREDIT FOR FISHERY TAXES Number 1830 CO-CHAIRMAN COGHILL announced the next order of business as House Bill No. 142, "An Act relating to the education credit for the fisheries business tax and the fisheries resource landing tax; and providing for an effective date." He passed the gavel back to Co- Chairman Dyson. Number 1824 REPRESENTATIVE GARY DAVIS, sponsor, told the committee that HB 142 is housekeeping legislation. Currently there is legislation allowing tax credits for certain fisheries businesses to make donations and get credit for the donations. It allows donations to Alaska two-year and four-year colleges accredited by a regional accrediting association. Most of those business that are allowed the tax credit relate to vocational professions. The Alaska Vocational Technical Center (AVTEC) in Seward does not fall under the current legislation, but this legislation makes AVTEC eligible for some of those donations. They have been forced to turn down over $100,000 worth of donations because they don't fall under current legislation. They are accredited by a national accreditation association, and the current legislation addresses regional accreditation. REPRESENTATIVE GREEN asked if $100,000 is donated, do the institutions reduce their budget requests for general fund dollars for the amount of the contribution. REPRESENTATIVE DAVIS explained, with his experience on the Finance Committee as they review individual budgets, that they are aware of donations and dollars institutions have received. Even if they know there is an opportunity of some of the donations coming in, they eyeball the general fund dollars and replace them with the donated dollars if they are there. They do have that flexibility but Representative Green is correct, in that without keeping a keen eye on some of these transactions, there could be some impacts to the revenue. REPRESENTATIVE GREEN asked if they do watch that. REPRESENTATIVE DAVIS replied yes they do. REPRESENTATIVE DAVIS offered an amendment to tighten up the wording which the Department of Education wanted. CO-CHAIRMAN DYSON asked if Representative Davis preferred a sponsor substitute or committee substitute. REPRESENTATIVE DAVIS answered that an amended version of the legislation would be fine. Number 1608 DEBORAH VOGT, Deputy Commissioner, Department of Revenue, came forward to answer any tax questions. The taxpayer can deduct 50 percent of the amount he donates up to $100,000 and then 100 percent of the next $100,000. At least for the first $100,000, they might replace the donation with general funds, but there is an extra $50,000 that comes into the educational institution that they can't look at as general fund monies. It does bring some extra money in even if they balance out the budget dollar for dollar from the donations. CO-CHAIRMAN DYSON suggested they stick with the educational issues. Number 1526 DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education, informed the committee that she had suggested the amendment. It is to insure that the institutions, in the future that may fall under this provision, are actually accredited by a recognized accrediting association rather than simply some peer group that forms an association, calls itself an accrediting body, and issues certificates. CO-CHAIRMAN DYSON asked who wins under this legislation. MS. BARRANS clarified that the only institution that would be added would be AVTEC. Currently, the University of Alaska, Sheldon Jackson College and Alaska Pacific University benefit. If in the future, the Alaska Technical Center in Kotzebue became nationally accredited, then it too might benefit from this. Number 1423 REPRESENTATIVE Green made a motion to adopt Amendment 1, which read: Page 1, line 10, following "association": Insert "that is recognized by the Council for Higher Education Accreditation" Page 2, line 12, following "association": Insert "that is recognized by the Council for Higher Education Accreditation" CO-CHAIRMAN DYSON asked whether there was any objection. There being none, Amendment 1 was adopted. Number 1404 REPRESENTATIVE WHITAKER made a motion to move HB 142, as amended, from the committee with individual recommendations and zero fiscal note. There being no objection, CSHB 142(HES) moved from the House Health, Education and Social Services Standing Committee. REPRESENTATIVE GREEN asked why HB 142 has a Finance Committee referral with a zero fiscal note. MS. VOGT answered that it has a revenue impact; it doesn't have an operating cost.
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