Legislature(1995 - 1996)
02/14/1996 09:10 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 269 "An Act relating to credits against certain taxes for contributions to certain public educational radio and television networks and stations and to endowments for public educational radio and television networks; and providing for an effective date." Tom Wright, staff to Representative Ivan was invited to join the committee and offered this testimony regarding HB 269. Referred to work draft numbered 9-LS0937\Z. Changes in CS title reflect the removal of those sections addressing the fisheries taxes from the CS. Sections 2, 4, 6, 8, and 10 would reduce the amount of the tax credit for the next $300,000 in contributions from 100% to 90%. Also included is a change in the sunset date from December 31, 2000, to December 31, 2001. Sections 3, 5, 7, 9 and 11 the changes in these sections reflect the amended portion of the sections where the contribution for the next $300,000 has been reduced from 100% to 90%. Credits may not exceed $320,000 through December 31, 2001. The amount in the version passed by the House totaled $350,000. In the CS previously before you sections 12 through 16 establishing credits for fisheries taxes were deleted. The section that allowed tax credits for shared revenues in the fish taxes by both the state and municipalities was also deleted. Final change was in the effective date in section 13 which was changed from January 1, 1966 to January 1, 1997. Advised co-chairman Halford that this would require a resolution on a title change and a new fiscal note. Co-chairman Halford noted that the fiscal notes are two- sided; one being a savings in the Department of Administration and the other is a revenue loss in the Department of Revenue. No conclusion has been reached at this time. Requested document showing existing University credit system, the proposed changes in the original bill and the proposed changes in the CS so questions on first $100,000, the next "X" amount, the percentage and the limitation on the overall percentage of business or corporations tax return can be focused on. Then the negative revenue fiscal note can be balanced with the beneficial fiscal note in the administration fiscal note. Tom Wright indicated that a fiscal note was received from the Department of Revenue based on the present CS. Co-chairman Frank voiced concern over institutional advertising on a public broadcasting station. Tom Wright said that Public Broadcasting Commission could better address the concerns. Senator Sharp also voiced same concerns. Would also like to see, whenever any publicity is given on a donation resulting from legislation, a disclaimer in the news article stating these funds are an actual reduction of this corporation's tax liability to the State of Alaska. Co-chairman Frank and Senator Sharp discussed the fact that the public is deceived on this matter. Senator Phillips deals with the subcommittee that handles public television and noted that if public television were eliminated then there would be a balance regarding the current State share general fund dollars. Co-chairman Halford advised that the latest fiscal note reads $2.6 million per year. Co-chairman Frank discussed question of distribution of our public treasury. Money for public broadcasting has been appropriated in a lump sum basis and it has been doled out in a fair fashion throughout the State. Concern for smaller stations in outlying areas and that this may be the only communication system in rural Alaska. Senator Phillips responded as to division of funds between public radio and public television. Senator Halford cautioned the effect of cuts on smaller area public broadcasting stations and possible options that could be explored. Tom Wright informed the committee there is a non-profit public broadcast endowment trust benefiting the small stations. It represents all public broadcast stations at this time and can be donated to by anyone in order to help the small stations out. Senator Zharoff voiced concern about advertising also. Bob Jenkins, Executive Director, Alaska Public Broadcasting Commission was invited to join the committee. He said the Alaska Public Broadcasting Commission fully supports this bill and is consistent with long-term planning that is ongoing. Federal grant of $954,000 funded the satellite interconnection. Several regional radio networks have formed consortiums to share facilities. Advised co-chairman Frank that public broadcasting stations are restricted from accepting advertising. Explained function of endowment trust. Co-chairman Halford felt there would be less concern about the taxpayer choices if it were going through a more public system rather than a trust. Mr. Jenkins advised that the two are interrelated and interdependent. Pointed out the sunset provision and its primary benefit may be in the five-year period to fuel a trust that works off the endowment principal. Bob Bartholomew, Deputy Director, Income & Excise Tax Division was invited to join the committee and explained that no more than a $320,000 credit could be taken across all the taxes. There is a limit of $320,000 covering all the taxes. Explained attempt to estimate the increase that would happen both on education institution side of the credit or the public broadcasting and the current estimate of what the total potential loss in revenue is. The maximum contribution would be limited to $400,000 and $320,000 would be credited against state taxes. Tax liability cannot be reduced below fifty percent. Multiple corporations must file under parent corporation and the parent takes the credit. A quick overview was given. Voiced concern over the intent of credit and noted that the department is willing to discuss the problems. In answer to Senator Zharoff's question advised that the fiscal note is based on current legislation. It is not a high figure when the trend over the past few years is looked at. Tried to strike a balance between the old and new corporations and their contributions. (tape changed to SFC-96, #25, Side 1 Co-chairman Halford questioned regarding maximum exposure on large corporations and difficulties faced by the smaller corporations and the combination of credits. Bill held before the committee awaiting further information from the Department of Administration. ADJOURNMENT The meeting was adjourned at approximately 10:41 A.M.