05/02/1995 03:36 PM Senate STA

                                                                               
       SB 118 TAX CREDIT: GIFTS TO PUBLIC BROADCASTING                       
                                                                               
 SENATOR SHARP brings up SB 118 as the next order of business before           
 the Senate State Affairs Committee and calls the first witness.               
                                                                               
 Number 579                                                                    
                                                                               
 SENATOR JOHN TORGERSON, prime sponsor of SB 118, compares the                 
 original version of SB 118 to version O.  Version O adds an                   
 endowment for educational radio and tv as a recipient of the                  
 credits, increases the amount to a maximum of $350,000, precludes             
 claims for contributions as both credits and deductions against               
 taxes, establishes tax credits against the insurance premium tax,             
 title insurance premiums, the fisheries resource landing tax, and             
 sunsets after five years.  The main difference between version O              
 and the house version of this bill is that version O eliminates               
 taking 50-50 from the state and the municipalities.                           
                                                                               
 TAPE 95-22, SIDE B                                                            
                                                                               
 Number 589                                                                    
                                                                               
 SENATOR LEMAN comments the state pays for everything over $100,000            
 in contributions.  He states he cannot support a 100% credit.  The            
 state might as well just budget it.                                           
                                                                               
 CHAIRMAN SHARP comments he resents that large corporations have the           
 privilege of directing where their taxes will be spent, but                   
 individuals cannot do that.  The chairman states he really has a              
 problem with that.                                                            
                                                                               
 Number 569                                                                    
                                                                               
 SENATOR RANDY PHILLIPS directs the chairman's attention to page 2,            
 line 4, which would allow individuals to take a tax credit towards            
 state income taxes, if and when state income taxes are                        
 reimplemented.                                                                
                                                                               
 CHAIRMAN SHARP states he is uncomfortable with the fact that only             
 the state participates in giving a tax credit.  He would not want             
 to mandate local participation, but giving 100% tax credits                   
 basically circumvents legislative oversight of the use of taxes.              
                                                                               
 Number 547                                                                    
                                                                               
 SENATOR LEMAN states he also has a proposed committee substitute              
 for SB 118, version M.  Tax credits could also be taken for                   
 contributions to K-12 education in Alaska.  Tax credits taken could           
 not exceed $200,000.                                                          
                                                                               
 Number 515                                                                    
                                                                               
 BOB BARTHOLOMEW, Deputy Director, Division of Income & Excise                 
 Audit, Department of Revenue, informs the committee that some of              
 the taxes do apply to the insurance provision.  It is his                     
 understanding that the education credit does.  Work draft version             
 O does include the insurance provision.                                       
                                                                               
 CHAIRMAN SHARP asks Mr. Bartholomew if he has any estimate on what            
 the maximum exposure would be for taking tax credits.                         
                                                                               
 MR. BARTHOLOMEW responds that in the original version of SB 118,              
 the fiscal note showed an impact to revenue of about $845,000.                
                                                                               
 Number 497                                                                    
                                                                               
 SENATOR LEMAN states he would like to amend the bill to include the           
 insurance premium tax, just to be consistent.                                 
                                                                               
 Number 463                                                                    
                                                                               
 MR. BARTHOLOMEW comments that the Attorney General's Office                   
 recommends, in regards to version M, that the fish landing tax be             
 included.  The reason for this is there is a challenge to that tax            
 in the court system asking that all taxes be treated the same.                
                                                                               
 Number 445                                                                    
                                                                               
 SENATOR LEMAN states he would be willing to add that amendment to             
 the version he is supporting.                                                 
                                                                               
 SENATOR RANDY PHILLIPS makes a motion to adopt version O.                     
                                                                               
 Objection is heard and the roll is called.                                    
                                                                               
 The motion fails 2 yeas, 2 nays, and 1 absent.  Voting in favor of            
 adopting version O are Senators Phillips and Duncan.  Voting in               
 opposition are Senators Sharp and Leman.  Senator Donley is not               
 present.                                                                      
                                                                               
 SENATOR LEMAN makes a motion to adopt version M with a conceptual             
 amendment to add a tax credit against the insurance premium tax.              
 SENATOR DUNCAN objects.                                                       
                                                                               
 CHAIRMAN SHARP asks Senator Duncan if he is objecting to the                  
 conceptual amendment regarding the insurance premium tax, or                  
 objecting to the whole motion.                                                
                                                                               
 SENATOR DUNCAN states he objects to the whole thing.                          
                                                                               
 SENATOR LEMAN asks Senator Duncan if he is objecting to tax credits           
 for donations to education.                                                   
                                                                               
 SENATOR DUNCAN replies he is objecting to education.                          
                                                                               
 CHAIRMAN SHARP notes this vote will determine whether or not SB 118           
 lives to fight another day.  Hearing no further discussion on the             
 motion, the chairman asks the secretary to call the roll.                     
                                                                               
 The roll is taken with the following result, and the motion fails             
 2 yeas, 2 nays, and 1 absent.  Voting in favor of adopting version            
 M are Senators Sharp and Leman.  Voting in opposition are Senators            
 Phillips and Duncan.  Senator Donley is not present.