Legislature(2007 - 2008)SENATE FINANCE 532
02/28/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB273 | |
| SB230 | |
| HB61 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 273 | TELECONFERENCED | |
| += | SB 230 | TELECONFERENCED | |
| += | HB 61 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 61(FIN)
"An Act relating to tax credits for cash contributions
by taxpayers that are accepted for certain educational
purposes, including vocational education programs and
courses at the secondary school level and to tax
credits for cash contributions by tax payers that are
accepted by a state-operated vocational technical
education and training school; and providing for an
effective date."
REPRESENTATIVE MARK NEUMAN, SPONSOR, explained that HB 61
amends the current provision for educational tax credits.
The provision adds to statute that contributions made to
school districts for secondary school vocational education
programs are eligible for a corporate tax credit. In
essence, the provision allows a corporate tax credit for
direct cash contribution to a school. The limitations are;
a 50 percent corporate tax credit on the first $100,000 and
a 100 % credit on the second $100,000. He felt it important
to provide the high schools with an opportunity to receive
funds from private industry and to help incent industry to
do so.
10:27:02 AM
Representative Neuman shared dropout rate statistics:
60percent graduation rate, 40 percent drop out rate, and 25
percent in the native population. Of the 60 percent that
graduate, approximately 48 percent attempt higher education
but only 28 percent actually complete degree requirements.
Of the 28 percent, 12-14 percent enters four year programs.
He concluded that only 7 percent pursue and complete a four
year college program. He used the information to point out
the high percentage of students who could benefit from a
vocational education program.
10:28:38 AM
Co-Chair Stedman MOVED to ADOPT Amendment #1 to CSSB
61(FIN):
Page 3, lines 2 - 3:
Delete "the lesser of
(1) an amount equal to"
Page 3, line 4:
Delete "(A)"
Insert "(1)"
Page 3, line 5:
Delete "(B)"
Insert "(2)"
Page 3, lines 5 - 6:
Delete "; or
(2) 50 percent of the taxpayer's tax
liability under this title"
Page 3, lines 21 - 22:
Delete ", in current or emerging employment sectors"
Page 7, line 28:
Delete "2008"
Insert "2009"
Co-Chair Stedman objected.
REX SHATTUCK, STAFF TO REPRESENTATIVE NEUMAN, explained that
there was a drafting anomaly and the amendment is offered to
address that.
Mr. Shattuck reference the portion of the amendment on Page
3, lines 5-6. He explained that prior to 1991 this section
was repealed from statute. The section was inadvertently
put into the draft. The language in the amendment conforms
to existing statute by removing the section. He added that
on page 3, line 21-22 the language deletion is due to
conversations with the Department of Revenue regarding the
difficulties of administrating. On page 7, line 28 delete
"2008", insert "2009". He explained that the bill was
introduced last year and was uncertain of the time it would
take to move through the legislature.
Co-Chair Stedman WITHDREW his OBJECTION to adopt Amendment
1.
There being NO OBJECTION, Amendment 1 was adopted.
10:31:55 AM
Senator Elton informed the Committee that the partnership
with the Alaska Homebuilders Association at the Juneau
Douglas High School is a great example of private industry
support of vocational programs. The Juneau Douglas High
School students' participating in the building program won a
national contest in Orlando Florida last year.
Representative Neuman said the example by Senator Elton is
exactly what HB 61 supports through the incentive of a tax
credit for industry.
10:34:27 AM
BOB HAMMER, PRESIDENT, ALASKA STATE HOME BUILDERS
ASSOCIATION (Testified via teleconference), in strong
support of HB 61. He said Alaska will soon be facing a
critical shortage of qualified workers in many of the trade
and construction related areas. Sustainable funding for
vocational education is critical to the future of our state.
Future Alaskans will be called upon to fill the jobs vacated
by our aging workforce as well as the new jobs created by
the future gas line project. "It is imperative that these
Alaskans have access to quality, well-funded training
programs that will teach them the skills they will need to
help build Alaska's future." He further maintained that not
only can students be trained, but establishing incentive for
the industry, a partnership is created for all to benefit.
Co-Chair Stedman noted the indeterminate fiscal notes and
quoted from the analysis:
We anticipate that this bill will have a negligible
effect on revenue. The education tax credit is little-
used. In 2005, the most recent year for which data is
available, 26 companies took education tax credits
amounting to approximately $2.5 million. We have no
data to assess the amount of additional donations under
the provision. It is anticipated that the additional
amount will be a small fraction of the current credits.
10:36:57 AM
Senator Thomas asked if there were any changes from the
original statute regarding the removal of 50 percent of the
tax liability.
Mr. Shattuck replied that the percentage has not changed.
The provision repeals and reenacts the existing language in
statute for the university. He further clarified that at
the suggestion of legislative legal, conforming language was
added for continuity.
Senator Thomas referred to page 3, and asked why the
language regarding 50 percent is removed. He also asked if
there was a list of Regional Education Accreditation
facilities (REA). Mr. Shattuk reported that the reason for
settling on municipal school districts and REAs was to
ensure that public funds were contributed to a public
purpose. He further noted that the 50 percent suggested to
be removed was present in Sec. 21.89.070. When the bill was
drafted it was inadvertently added in Sec. 43.20.014. The
language repeals the redundancy and extends the 50 percent
tax credit to contributions made to vocational education.
Representative Neuman clarified that the funding would go
through the Department of Education and Early Development to
solely fund public education.
10:40:53 AM
Co-Chair Stedman questioned if private and non-profit
vocational education programs would qualify for the credit.
Representative Nueman did not think that private facilities
were eligible as it would be difficult to track the funds.
Senator Olson asked if technical educational programs had
commented on HB 61. Representative Neuman responded that the
legislation was amended in the House Finance Committee to
assure that technical programs would be allowed to take
advantage of the provisions.
Representative Neuman provided closing comments, noting the
importance of providing opportunities to the high percentage
of students who do not attend college. He felt that
allowing private industry to assist in the effort through
training and funds is the best way to help students.
CSHB 61(FIN) was HEARD and HELD in Committee for further
consideration.
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