Legislature(2023 - 2024)DAVIS 106
04/19/2023 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB148 | |
| HB139 | |
| HB144 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 144 | TELECONFERENCED | |
| += | HB 139 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 148 | TELECONFERENCED | |
HB 144-REPEAL EDUCATION TAX CREDITS SUNSET
9:31:56 AM
CO-CHAIR RUFFRIDGE announced that the final order of business
would be HOUSE BILL NO. 144, "An Act relating to education tax
credits; and providing for an effective date by repealing the
effective date of secs. 1, 2, and 21, ch. 61, SLA 2014."
9:32:34 AM
BUD SEXTON, Staff, Representative Justin Ruffridge, Alaska State
Legislature, presented HB 144, via PowerPoint presentation [hard
copy included in the committee packet], on behalf of
Representative Ruffridge, prime sponsor. He discussed the
bill's background, as shown on slides 2 and 3, titled
"Background," which read as follows [original punctuation
provided]:
The Education Tax Credit program was first established
in 1987 by the Legislature.
Goal is to encourage private businesses to make
charitable contributions to schools in Alaska.
The education tax credit is a credit for qualifying
contributions to Alaska universities and accredited
nonprofit Alaska two-or four-year colleges for
facilities, direct instruction, research and
educational support purposes;
Donations to a school district or a state-operated
technical and training school for vocational education
courses, programs and facilities;
Donations for Alaska Native cultural or heritage
programs for public school staff and students, and a
facility in the state that qualifies as a coastal
ecosystem learning center under the Coastal American
Partnership
9:33:49 AM
MR. SEXTON moved to slide 4, titled "Recent Education Tax Credit
Legislation," which read as follows [original punctuation
provided]:
HB 278 in 2014 expanded the list of eligible
recipients for donations.
HB 223 in 2018 created the allowance for cash or
equipment contributions.
HB 223 established the current sunset expiration date
of December 31, 2024
9:34:42 AM
MR. SEXTON proceeded to slide 5, titled "Credits offset taxes,"
which read as follows [original punctuation provided]:
State net income tax (Corporate)
Mining License tax
Fisheries Business Tax
Fishery Resource Landing Tax
Oil and Gas Production tax
Oil and Gas Property tax and Insurance tax
9:35:02 AM
MR. SEXTON continued to slide 6, titled "2011-2022 Contributions
& Credits," which featured a spreadsheet. He pointed out that
the contents of the spreadsheet were available online as well.
He said that the "Credits Claimed" column shows the amount that
has impacted the state budget, and the "Total of Contributions"
column represents the following four columns: "U of A," "APU,"
"Secondary/Vocational," and "Other."
9:36:22 AM
MR. SEXTON moved to slide 7, titled "HB 223 - lowered tax
credits in phases," which read as follows [original punctuation
provided]:
Up to $100K $100K-$300K >$300K CAP
2018 50% 100% 50% $5m
2019 50% 75% 50% $1m
2021 50% 50% 50% $1m
9:37:42 AM
REPRESENTATIVE PRAX observed that there was a strong correlation
between the reduction in the amount of contributions and the
percentage that could be claimed.
MR. SEXTON explained that to answer that question, he could look
at the figure in the summary total. He added that there were
years in which the amount of donations was significant compared
to other years; however, he said it was hard to suggest one way
or the other.
9:39:11 AM
REPRESENTATIVE HIMSCHOOT suggested including a column that
showed how many total donors there were by year.
MR. SEXTON responded that some information is not made public.
9:39:46 AM
MR. SEXTON continued on slide 8, titled "HB 144," which read as
follows [original punctuation provided]:
Proposed legislation to remove the sunset date for the
Education Tax Credit.
HB 144 strikes a reasonable level of deductions which
impact State budget
Proposes to leave tax deduction levels at the 2021
levels
Up to $100K $100K-$300K >$300K CAP
2021 50% 50% 50% $1m
MR. SEXTON stressed that removing the sunset provision also
allowed various companies the ability to plan their donations
further ahead.
9:41:13 AM
REPRESENTATIVE STORY asked whether Mr. Sexton surveyed the
districts to find out if different entities were donating to
them at different levels.
MR. SEXTON replied he had, but only to a small number of
districts. He noted the challenge of pinpointing any one causal
or correlating factor.
REPRESENTATIVE STORY revisited a point on the third slide and
asked for clarification on the entities that qualify for tax
credits.
MR. SEXTON directed attention to the second bullet point on the
same slide which read "donations to a school district or a
state-operated technical and training school for vocational
education courses, programs and facilities," and said whether a
specific entity does qualify is an answer he does not have at
this time.
REPRESENTATIVE STORY suggested adding "tribal" to the language.
9:44:37 AM
CO-CHAIR RUFFRIDGE explained that as the bill sponsor, the
purpose behind the bill was exclusively to eliminate the sunset
date. He added that some of the more detailed aspects could be
examined further if it was the will of the committee.
9:45:27 AM
CHAD HUTCHISON, Director of State Relations, University of
Alaska System, presented a PowerPoint, titled "University of
Alaska Education Tax Credits - Overview" [hard copy included in
the committee packet]. He moved to slide 2, titled "Education
Tax Credits (ETC)," and explained that the photo on the slide
depicts a $1 million check with education and industry partners
gathered around. He explained that the tax credit program is a
popular program that averages 20 to 30 participants.
9:47:50 AM
MR. HUTCHISON proceeded to slide 3, titled "Overview," which
builds off the earlier presentation on Alaska education tax
credits, focusing on a summary of calendar year 2022.
9:48:25 AM
MR. HUTCHISON concluded the presentation on slide 4, titled "A
Few Tax Paying Entities that Historically Contribute to the
University of Alaska." He added that cash and equipment is used
in many ways towards many programs. He shared the examples of
donating equipment to a mining program so students could learn
in a "very real way."
9:49:45 AM
CO-CHAIR RUFFRIDGE invited questions or comments from committee
members.
9:50:18 AM
REPRESENTATIVE PRAX reflected on an earlier comment regarding
the objective of HB 144 to extend the expiration date of the tax
credit. He stressed the importance of that objective.
9:51:45 AM
REPRESENTATIVE STORY supported the idea of extending the
education tax credit; however, she noted that there were other
entities, particularly tribal entities, that were offering good
educational programs. The language in the bill, she said,
"would not be that hard."
9:52:30 AM
[CO-CHAIR RUFFRIDGE announced that HB 144 was held over.]