Legislature(2001 - 2002)
05/02/2002 04:22 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 267 "An Act establishing the Alaska veterans' memorial endowment fund and providing for credits against certain taxes for contributions to that fund; relating to other tax credits for certain contributions; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Amendment #1: This amendment inserts, "relating to a tax credit program for postsecondary colleges of universities;" on page 1, line 1. The amended title of the bill reads as follows. An Act relating to a tax credit program for postsecondary colleges or universities; establishing the Alaska veterans' memorial endowment fund and providing for credits against certain taxes for contributions to that fund; relating to other tax credits for certain contributions; and providing for an effective date. This amendment also changes the qualifications of educational facilities eligible to receive tax-deductible contributions in AS 21.87.070(a), 43.20.014(a), 43.55.019(a), 43.56.018(a), 43.65.018(a), 43.75.018(a), and 43.77.045(a), to include those accredited by a national accreditation association. Senator Leman moved for adoption. Co-Chair Kelly objected for an explanation. Senator Leman commented this legislation reminded him of a topic he discussed with the late Elmer Rasmuson, who had expressed concern that Alaska statute is inconsistent in governing tax credits. Senator Leman explained that tax credits are extended to contributions made to regionally accredited institutions only and pointed out that some nationally accredited institutions operate in the State. He relayed the Alaska Commission on Postsecondary Education (ACPE) determination that national accreditation is equivalent to regional accreditation. Senator Wilken objected to adoption of the amendment, expressing it changes the intent of the tax credit program. He explained the current program includes the University of Alaska, Alaska Pacific University and Sheldon Jackson College. If this amendment were adopted, he observed, the program would be expanded to provide tax credits to "church schools", for-profit schools: including Career Academy and Charter College, and trade schools: including truck driving schools, massage therapy schools, cosmetology schools, etc. He predicted this expansion of the tax credit program would have "far ranging implications" and stressed that if this is the intent, the matter should receive further consideration. He furthered that ACPE has concerns about this amendment and should be given an opportunity to speak to those concerns. Senator Leman countered, "This is not a new idea," noting he has raised the issue on several occasions over the past ten years. He added that the ACPE has not indicated any concerns to him. He surmised if the concerns were serious, he would have been contacted. Co-Chair Kelly objected to adoption of the amendment for similar reasons as those voiced by Senator Wilken. Senator Wilken directed attention to written testimony submitted for this bill by the ACPE whereby the concerns are detailed. A roll call was taken on the motion. IN FAVOR: Senator Olson, Senator Ward, Senator Green, and Senator Leman OPPOSED: Senator Wilken, Senator Austerman, Senator Hoffman, Co- Chair Donley and Co-Chair Kelly The motion FAILED (4-5) The amendment FAILED to be adopted. Amendment #2: This conceptual amendment reduces the amount of tax credit eligible for the second $100,000 of contributions, from 100 percent to 75 percent. Co-Chair Donley moved for adoption at the request of Co-Chair Kelly. The amendment was ADOPTED without objection. Amendment #3: This conceptual amendment changes the language in the title of the bill to specifically reflect the tax credit structure adopted in Amendment #2. Co-Chair Donley moved for adoption. There was no objection and the amendment was ADOPTED. Senator Wilken relayed "hearsay" observation of the activities of the veterans' organizations to secure funding for services. He noted the result is this legislation to provide tax credits for private donations. While he did not oppose this method, he surmised the motive for introducing and encouraging passage of this legislation was political. Senator Ward shared that the topic of establishing an endowment fund was discussed at his local Veterans of Foreign Wars (VFW) and American Legion chapters. Co-Chair Donley pointed out the difference between this proposed endowment fund with others discussed during the legislative session that have been created entirely with public funds. He asserted the proposed veterans' fund "appears to have the more appropriate intent for an endowment than those other so-called endowments". He remarked he supports this legislation. Senator Green asked the potential impact of funds diverted from the "State coffers" to the proposed veterans' endowment fund and whether the amount is unlimited. Senator Ward replied, " It is subject to appropriations." He could not guarantee the Veterans Advisory Council would not request additional funds in the future, but expressed that the intent is private contributions and grants would comprise the majority of the fund. Co-Chair Kelly clarified Senator Green's question was to the impact of the tax credit on the State's general fund. Co-Chair Donley replied the donation amount eligible for a tax credit is limited to $200,000 annually, which he characterized as the "control" limiting the impact on the general fund. Senator Green "moved Senate Bill 267 out of Committee with individual recommendations and accompanying fiscal notes." There was no objection and SB 267 (FIN) MOVED from Committee with accompanying $125,000 fiscal noted #1 from the Department of Military and Veterans Affairs, zero fiscal note #2 from the Department of Revenue and indeterminate fiscal note #3 from the Department of Community and Economic Development.