04/14/1994 02:05 PM House FIN

  SB 225    An  Act   relating  to  credits   against  certain                 
            insurance  taxes  for  contributions   to  certain                 
                                                                               
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            educational  institutions;  and  providing for  an                 
            effective date.                                                    
                                                                               
            CS SB 225 (HES) was reported out of Committee with                 
            a fiscal note  by the  Department of Commerce  and                 
            Economic  Development  dated  2/04/94 and  a  zero                 
            fiscal  note  by the  Department of  Revenue dated                 
            2/04/94.                                                           
  SENATE BILL 225                                                              
                                                                               
       "An Act  relating to credits against  certain insurance                 
       taxes   for   contributions   to  certain   educational                 
       institutions; and providing for an effective date."                     
                                                                               
  CAROL CARROLL, STAFF,  SENATOR JAY KERTTULA, stated  that SB
  would  extend  the  already   existing  tax  credit  to                 
  authorized   insurance   and   title  insurance   companies.                 
  Presently, corporate  taxpayers, oil and gas  producers, and                 
  mining and  fishing companies are  able to credit  their tax                 
  liability for up  to $150,000  dollars if they  donate to  a                 
  qualified educational institution.  She added that insurance                 
  and title insurance  companies are unable to  take advantage                 
  of this tax credit because they pay a premium tax instead of                 
  a corporate income tax.                                                      
                                                                               
  Ms.  Carroll  explained  that  SB  225  would  provide  that                 
  authorized insurance companies  could take  a tax credit  of                 
  50%  of  the first  $100,000 dollars  and  100% of  the next                 
  $100,000  and donate  it to  a qualified  institution.   The                 
  maximum  credit  available is  $150,000  or 50%  of  the tax                 
                                                                               
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  liability, whichever is less.                                                
                                                                               
  Representative Brown asked  the amount  of lost revenue  the                 
  State would experience  through the  credit extension.   Ms.                 
  Carroll  responded  that  the   Division  of  Insurance  has                 
  submitted two fiscal  notes.   The first note  was for  $900                 
  thousand  dollars  which  would  assume that  six  insurance                 
  companies would  take the full  credit.  She  continued that                 
  the second fiscal note for $1 million dollars would indicate                 
  the potential  if all  fourteen hundred  insurance companies                 
  took the credit.                                                             
                                                                               
  Representative Martin thought the  legislation would provide                 
  a "gain" for  education rather  than a loss  for the  State.                 
  Ms. Carroll noted that in FY92 a tax credit of $533 thousand                 
  dollars was taken and  in FY93 a tax credit of $803 thousand                 
  dollars  was  taken.   Ms.  Carroll  commented  that Senator                 
  Kerttula hopes to get six insurance companies to use the tax                 
  credit provided by the legislation.                                          
  DR. THOMAS  TROLTER, PRESIDENT,  ALASKA PACIFIC  UNIVERSITY,                 
  ANCHORAGE, encouraged the Committee to  support the proposed                 
  legislation adding the he  knew several insurance  companies                 
  who would participate in the program.  The legislation would                 
  encourage  the  development  of  corporate  philanthropy  in                 
  Alaska and would ease the burden for higher education.                       
                                                                               
  WENDY  REDMAN,  VICE  PRESIDENT  FOR  UNIVERSITY  RELATIONS,                 
  UNIVERSITY OF ALASKA, ANCHORAGE, commented that corporations                 
  have not rushed to donate to the universities as a result of                 
  the  tax  credits.    She  added  that philanthropy  in  the                 
  corporate sector depends on public relations and accounting.                 
  Ms.  Redman  added  that  the   University  has  found  that                 
  corporations  more often  give to  higher education  because                 
  they have a commitment  to higher education and  not because                 
  of the tax  credit available.   She emphasized that the  tax                 
  credit  would provide  additional  opportunities outside  of                 
  normal general fund revenues.                                                
                                                                               
  Co-Chair MacLean  MOVED to  report CS  SB 225  (HES) out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CS SB  225 (HES) was  reported out  of Committee with  a "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department  of  Commerce  and   Economic  Development  dated                 
  2/04/94 and a zero fiscal note  by the Department of Revenue                 
  dated 2/04/94.                                                               
                                                                               
  (Tape Change, HFC 94-125, Side 2).