02/06/1998 09:00 AM Senate HES

                                                                               
            SB 241 - POSTSECONDARY SCHOOL TAX CREDIT                           
                                                                               
CHAIRMAN WILKEN stated he reviewed SB 140, relating to tax credits             
for contributions to education, after Senator Ellis commented on               
it, and his recollections were correct.  SB 140 has a $2 million               
fiscal note, and raises concerns about how one would direct money              
to a particular school.  He thought trying to combine SB 241 and SB
 would slow down Senator Leman's efforts, therefore he planned              
to hold SB 140 at this time.                                                   
                                                                               
SENATOR LEMAN said he had no problem addressing the other issue as             
it has validity, but agreed with Chairman Wilken's assessment that             
incorporating SB 140 would create a much larger issue than the                 
narrow issue addressed in SB 241.  He noted he would like to see a             
version of both bills pass as they both benefit education and offer            
various choices to students and parents, but he agreed with                    
Chairman Wilken's conclusion.                                                  
                                                                               
SENATOR ELLIS informed committee members Mr. Rasmussen would like              
both bills to pass, because they would benefit his philanthropy                
efforts toward the Alaska Bible College and the University of                  
Alaska.   Senator Ellis hoped the committee would consider                     
expanding this whole concept.  He asked Senator Leman if he gave               
any consideration to a two-tiered system of tax credits when                   
drafting the bill.  SENATOR LEMAN thought the Legislature should               
revisit the tax credit legislation, however he thought current                 
recipients of the program might be concerned.                                  
                                                                               
Number 415                                                                     
                                                                               
SENATOR ELLIS expressed concern that at some point in the future               
the argument that general fund obligations to the University of                
Alaska, Sheldon Jackson College, and Alaska Pacific University                 
should be reduced will gain credibility and be used as an excuse to            
cut public funds for higher education for both private and public              
institutions, because of the tax advantages granted by the                     
Legislature.                                                                   
                                                                               
CHAIRMAN WILKEN said he served on the Mapco Alaska Advisory Board              
for a number of years.  That board passed out money Mapco wanted to            
donate in the State.  Mapco Alaska has been a major benefactor of              
the University and has benefited from the tax credits.  Concern                
about the same argument expressed by Senator Ellis surfaced in                 
Fairbanks.  He said it is not his intent to lower general fund                 
obligations to the University just because legislation enhances                
Alaska's educational institutions' ability to get private                      
donations.                                                                     
                                                                               
SENATOR LEMAN stated that was not his intent either; his intent was            
to encourage philanthropy.  He emphasized he did not want to get               
into a long discourse on tax credits and changing that structure in            
SB 241, because that will be a lengthy process that should and can             
be done in the future.                                                         
                                                                               
SENATOR LEMAN moved SB 241 out of committee with individual                    
recommendations.  There being no objection, the motion carried.