Legislature(2007 - 2008)
03/14/2007 07:08 AM House W&M
| Audio | Topic |
|---|---|
| Start | |
| HB61 | |
| Overview: Mining Tax, Department of Revenue | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 61-TAX CREDIT FOR CONTRIBUTIONS TO VOC ED 7:09:16 AM CHAIR HAWKER announced that the first order of business would be HOUSE BILL NO. 61,"An Act relating to tax credits for cash contributions by taxpayers that are accepted for certain educational purposes, including vocational education programs and courses at the secondary school level; and providing for an effective date." REPRESENTATIVE MARK NEUMAN, Alaska State Legislature, speaking as the prime sponsor of HB 61, explained that much of the bill currently exists in statute because current law allows tax credits for donations to post-secondary schools. The bill's provisions would also allow taxpayers to take a tax credit for their donations to secondary schools. He explained that the credit allowed is the lesser of: an amount equal to 50 percent of contributions of not more than $100,000 and 100 percent of the next $100,000; or 50 percent of the taxpayer's net liability under Title 43. He explained that a taxpayer who contributes $200,000 to vocational education could take a tax credit of $150,000. He noted that major corporations can pay upwards of $2 million in taxes annually. He went on to say that a credit of $150,000 is not a huge reduction in the amount of taxes the state receives, but that a donation of $200,000 would be a tremendous benefit to a vocational education program. He said that he believes vocational education programs are an important component of education, particularly in rural Alaska. 7:12:58 AM CHAIR HAWKER clarified that existing statutes allow for certain tax credits, and that this bill allows for taxpayers to avail themselves of an additional tax credit for donations to high schools, secondary schools, and vocational education programs. REPRESENTATIVE NEUMAN agreed that most of the provisions in the bill are already in statute, but this bill expands the ability of taxpayers to receive a tax credit for donations at the secondary level, which he opined could have a positive effect on graduation rates at the high school level. He assured the committee that the amounts of credits currently authorized by statute have not been changed. REPRESENTATIVE SEATON, in response to a question about the bill's effective date, reminded the committee that an effective date other than 90 days after a bill has passed requires a two- thirds vote of each house. 7:15:44 AM REPRESENTATIVE FAIRCLOUGH moved to adopt the proposed committee substitute (CS) for HB 61, Version 25-LSO302\C, Bullock, 3/12/07. There being no objection, Version C was before the committee. 7:16:30 AM REX SHATTUCK, Staff to Representative Mark Neuman, Alaska State Legislature, explained that Version C is intended to clear up some areas by standardizing language throughout the sections and clarifying the descriptions contained in the first section. CHAIR HAWKER clarified that the bill contains tax credits that already exist which various taxpayer can apply to their state tax liabilities. 7:17:45 AM REPRESENTATIVE WILSON expressed her support of vocational education programs. 7:18:27 AM REPRESENTATIVE NEUMAN said that industry has stated it would like to support vocational education efforts. 7:19:15 AM REPRESENTATIVE SEATON noted that the tax credit applies to the state's corporate income tax and asked whether it would also apply if the state enacted a personal income tax. PAUL DICK, Chief of Operations-Juneau, Tax Division, Department of Revenue (DOR), agreed that the bill's credit provisions apply to corporate income taxes. He went on to say that application to a personal income tax would have to be determined after any change to the tax laws. In response to a question, he explained that the property tax education credit in Section 4 applies only to oil and gas property taxes paid to the state, not to municipal property taxes. 7:22:20 AM CHAIR HAWKER noted that the bill allows a taxpayer to take a credit against certain taxes should the taxpayer decide to make a contribution to vocational education. 7:22:30 AM MR. DICK said that in fiscal year (FY) 2005, there were $5 million in contributions made to educational institutions, which resulted in tax credits of $2.5 million claimed against the various tax types, such as corporate, mining and fisheries business taxes. 7:23:50 AM LAMONT C. ALBERTSON, Executive Director, People's Learning Center, explained that the People's Learning Center ("center") combines post-high school secondary vocational education and is heavily involved in work force development. He said that the bill would allow his center to accept corporate contributions. He emphasized that rural Alaska needs work force development and training to help sustain communities, families, and the region. He said that any steps that would encourage corporate involvement would be positive. 7:25:43 AM REPRESENTATIVE SEATON asked whether any funds received will qualify the center for matching grant funds. MR. ALBERTSON replied that there could be matching funds and he would certainly pursue any opportunity to obtain them. 7:26:21 AM REPRESENTATIVE CISSNA asked how much was currently invested in the center. MR. ALBERTSON replied that he anticipates the project will cost about $25 million, including in-kind contributions. Thus far, about $18 million has been raised. He explained that the center provides a broad range of vocational training opportunities. 7:28:00 AM CHAIR HAWKER asked about the possible tax effects of this bill on the state treasury. MR. DICK replied that it is hard to predict how many taxpayers will use this tax credit. He said that over the last few years, the credit program has remained fairly static with about $5 million in contributions that resulted in $2.5 million in credits. He responded to a question by noting that the bill does not cover the particulars of whether a donor can dictate how their donated funds are spent. 7:31:11 AM REPRESENTATIVE SEATON asked if a single contributor can donate $1.5 million to the allowable entities. MR. DICK replied that a donor can contribute $1.5 million, but the tax credit would be $150,000. He said that currently some corporate contributors make large contributions, but only claim $150,000 in tax credits. 7:31:46 AM REPRESENTATIVE WILSON moved to report CSHB 61, Version 25- LSO0302\C, Bullock, 3/12/07 out of committee with individual recommendations and the accompanying indeterminate fiscal note. There being no objection, CSHB 61(W&M) was reported from the House Special Committee on Ways and Means.
| Document Name | Date/Time | Subjects |
|---|