04/17/2002 08:00 AM House EDU

HB 488-INS. CREDIT MATH, SCIENCE & TECH. STUDIES                                                                              
                                                                                                                                
CHAIR BUNDE  announced that the  next order of business  would be                                                               
HOUSE BILL NO.  488, "An Act relating to an  insurance tax credit                                                               
for a  gift to a  school for  math, science, and  technology; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
CHAIR BUNDE announced  that he didn't intend to move  HB 488 from                                                               
committee today.                                                                                                                
                                                                                                                                
TAPE 02-16, SIDE B                                                                                                              
                                                                                                                                
Number 4554                                                                                                                     
                                                                                                                                
SHARALYN  "SUE" WRIGHT,  Staff to  Representative Mike  Chenault,                                                               
Alaska  State  Legislature,  paraphrased  the  sponsor  statement                                                               
which reads as follows:                                                                                                         
                                                                                                                                
     House Bill  488 establishes a  tax credit for  gifts to                                                                    
     an  institution for  the study  of  math, science,  and                                                                    
     technology.   It  provides for  calculation of  the tax                                                                    
     credit and establishes limits on an allowable credit.                                                                      
                                                                                                                                
MS. WRIGHT  noted that HB  488 was  introduced at the  request of                                                               
the Challenger Learning Center of [Alaska].   The plan is to form                                                               
a  plan giving  committee  and create  something  similar to  the                                                               
endowment that the university has.                                                                                              
                                                                                                                                
Number 4435                                                                                                                     
                                                                                                                                
JOHN WILLIAMS,  President, Challenger Learning Center  of Alaska,                                                               
explained  that the  Challenger Learning  Center of  Alaska is  a                                                               
statewide  institution  of  learning   in  the  areas  of  space,                                                               
science, and technology.  The  center was funded through private,                                                               
corporate, and  federal monies.   Presently, over $6  million has                                                               
been invested  in the facility  plus an additional $3  million in                                                               
order  to double  the size  of the  facility due  to the  extreme                                                               
demand.  Over the first two  years of operation, the facility has                                                               
served nearly  10,000 students statewide  and the  expectation is                                                               
that it  will continue to grow.   At this point  the center isn't                                                               
requesting  direct  appropriations  but   is  requesting  that  a                                                               
foundation  be established  so that  the center  can operate  for                                                               
years  to come.   The  foundation  would be  patterned after  the                                                               
university foundation which  allows a tax credit to  be given for                                                               
donations.  Thus far, corporations  have willingly provided funds                                                               
to  establish  and  operate  the  center  and  have  indicated  a                                                               
continued funding  commitment if there  is some help,  which this                                                               
legislation provides.  Mr. Williams  noted that the center serves                                                               
students and teachers.                                                                                                          
                                                                                                                                
REPRESENTATIVE STEVENS asked if the  endowment proposed in HB 488                                                               
would compete with the university endowment.                                                                                    
                                                                                                                                
MR. WILLIAMS noted that the  university is aware of this proposal                                                               
and  there may  be  a  very slight  competition  between the  two                                                               
endowments.  However,  the endowment proposed in  HB 488 includes                                                               
a cap  on the  amount of money  that the center  would seek  in a                                                               
year whereas the  university endowment has no  cap.  Furthermore,                                                               
the university has  a major endowment that has  been in operation                                                               
for many years  and thus Mr. Williams said he  didn't believe the                                                               
proposed endowment would compete with the university at all.                                                                    
                                                                                                                                
MR.  WILLIAMS, in  further  response  to Representative  Stevens,                                                               
explained that the  endowment is such that if  a corporation were                                                               
to make  a donation  to the  center, half  of the  first $100,000                                                               
would be eligible for a tax  credit and the other half would come                                                               
from  the  donor.    Therefore, $50,000  would  be  considered  a                                                               
personal donation and  $50,000 would be credit against  taxes.  A                                                               
second  $100,000 donation  would  be credit  against  taxes.   He                                                               
highlighted that $200,000  is the maximum that could  be given in                                                               
any one  year.  Mr. Williams  related his belief that  many small                                                               
corporations  would  take  advantage  of the  tax  credit.    Mr.                                                               
Williams  specified  that this  would  be  a credit  against  the                                                               
federal  corporate income  tax  as well  as  the state  corporate                                                               
income tax.                                                                                                                     
                                                                                                                                
CHAIR BUNDE  highlighted that there  is no knowledge  with regard                                                               
to the  number of  corporations that  will donate,  and therefore                                                               
there is  no knowledge with  regard to the  cost to the  state in                                                               
lost taxes.                                                                                                                     
                                                                                                                                
MR.  WILLIAMS  posed a  situation  in  which the  maximum  amount                                                               
allowed  under this  legislation is  reached and  said the  state                                                               
could lose as much as $600,000 a year.                                                                                          
                                                                                                                                
Number 3836                                                                                                                     
                                                                                                                                
STEVE  HORN, Executive  Director, Challenger  Learning Center  of                                                               
Alaska,  requested  the  committee's  support for  HB  488.    He                                                               
informed  the committee  that the  Challenger Learning  Center of                                                               
Alaska's  mission  is  to  change  the  way  teachers  teach  and                                                               
students  learn through  hands-on learning  with simulated  space                                                               
missions.   The desire  is to  establish the  Challenger Learning                                                               
Center  of Alaska  as  a curriculum  that's  used throughout  the                                                               
state.    The  aforementioned  is   achieved  by  the  following:                                                               
having students  and teachers come  to the facility,  sending the                                                               
center's  teachers to  rural Alaska  schools,  holding camps  and                                                               
workshops  at  the facility,  and  offering  a distance  learning                                                               
program.  Therefore,  the board of directors  has established the                                                               
Challenger Learning Center of Alaska  Foundation and HB 488 would                                                               
be key  to enticing contributions  to the foundation so  that the                                                               
organization  would  be sustained  and  continue  to deliver  the                                                               
programs it currently delivers.                                                                                                 
                                                                                                                                
REPRESENTATIVE WILSON directed  attention to the title  of HB 488                                                               
and asked if someone could give  a donation to a public, private,                                                               
or parochial school  and earmark the donation  for math, science,                                                               
or technology in order to receive the tax credit.                                                                               
                                                                                                                                
CHAIR BUNDE related  his assumption that if the  donation met the                                                               
other  specified qualifications,  then the  donation could  go to                                                               
other schools.                                                                                                                  
                                                                                                                                
[HB 488 was held over.]