Legislature(2001 - 2002)
05/02/2002 04:22 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= 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.
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