Legislature(2007 - 2008)SENATE FINANCE 532
02/28/2008 09:00 AM Senate FINANCE
Audio | Topic |
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Start | |
HB273 | |
SB230 | |
HB61 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+= | HB 273 | TELECONFERENCED | |
+= | SB 230 | TELECONFERENCED | |
+= | HB 61 | TELECONFERENCED | |
+ | TELECONFERENCED |
CS FOR HOUSE BILL NO. 61(FIN) "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 to tax credits for cash contributions by tax payers that are accepted by a state-operated vocational technical education and training school; and providing for an effective date." REPRESENTATIVE MARK NEUMAN, SPONSOR, explained that HB 61 amends the current provision for educational tax credits. The provision adds to statute that contributions made to school districts for secondary school vocational education programs are eligible for a corporate tax credit. In essence, the provision allows a corporate tax credit for direct cash contribution to a school. The limitations are; a 50 percent corporate tax credit on the first $100,000 and a 100 % credit on the second $100,000. He felt it important to provide the high schools with an opportunity to receive funds from private industry and to help incent industry to do so. 10:27:02 AM Representative Neuman shared dropout rate statistics: 60percent graduation rate, 40 percent drop out rate, and 25 percent in the native population. Of the 60 percent that graduate, approximately 48 percent attempt higher education but only 28 percent actually complete degree requirements. Of the 28 percent, 12-14 percent enters four year programs. He concluded that only 7 percent pursue and complete a four year college program. He used the information to point out the high percentage of students who could benefit from a vocational education program. 10:28:38 AM Co-Chair Stedman MOVED to ADOPT Amendment #1 to CSSB 61(FIN): Page 3, lines 2 - 3: Delete "the lesser of (1) an amount equal to" Page 3, line 4: Delete "(A)" Insert "(1)" Page 3, line 5: Delete "(B)" Insert "(2)" Page 3, lines 5 - 6: Delete "; or (2) 50 percent of the taxpayer's tax liability under this title" Page 3, lines 21 - 22: Delete ", in current or emerging employment sectors" Page 7, line 28: Delete "2008" Insert "2009" Co-Chair Stedman objected. REX SHATTUCK, STAFF TO REPRESENTATIVE NEUMAN, explained that there was a drafting anomaly and the amendment is offered to address that. Mr. Shattuck reference the portion of the amendment on Page 3, lines 5-6. He explained that prior to 1991 this section was repealed from statute. The section was inadvertently put into the draft. The language in the amendment conforms to existing statute by removing the section. He added that on page 3, line 21-22 the language deletion is due to conversations with the Department of Revenue regarding the difficulties of administrating. On page 7, line 28 delete "2008", insert "2009". He explained that the bill was introduced last year and was uncertain of the time it would take to move through the legislature. Co-Chair Stedman WITHDREW his OBJECTION to adopt Amendment 1. There being NO OBJECTION, Amendment 1 was adopted. 10:31:55 AM Senator Elton informed the Committee that the partnership with the Alaska Homebuilders Association at the Juneau Douglas High School is a great example of private industry support of vocational programs. The Juneau Douglas High School students' participating in the building program won a national contest in Orlando Florida last year. Representative Neuman said the example by Senator Elton is exactly what HB 61 supports through the incentive of a tax credit for industry. 10:34:27 AM BOB HAMMER, PRESIDENT, ALASKA STATE HOME BUILDERS ASSOCIATION (Testified via teleconference), in strong support of HB 61. He said Alaska will soon be facing a critical shortage of qualified workers in many of the trade and construction related areas. Sustainable funding for vocational education is critical to the future of our state. Future Alaskans will be called upon to fill the jobs vacated by our aging workforce as well as the new jobs created by the future gas line project. "It is imperative that these Alaskans have access to quality, well-funded training programs that will teach them the skills they will need to help build Alaska's future." He further maintained that not only can students be trained, but establishing incentive for the industry, a partnership is created for all to benefit. Co-Chair Stedman noted the indeterminate fiscal notes and quoted from the analysis: We anticipate that this bill will have a negligible effect on revenue. The education tax credit is little- used. In 2005, the most recent year for which data is available, 26 companies took education tax credits amounting to approximately $2.5 million. We have no data to assess the amount of additional donations under the provision. It is anticipated that the additional amount will be a small fraction of the current credits. 10:36:57 AM Senator Thomas asked if there were any changes from the original statute regarding the removal of 50 percent of the tax liability. Mr. Shattuck replied that the percentage has not changed. The provision repeals and reenacts the existing language in statute for the university. He further clarified that at the suggestion of legislative legal, conforming language was added for continuity. Senator Thomas referred to page 3, and asked why the language regarding 50 percent is removed. He also asked if there was a list of Regional Education Accreditation facilities (REA). Mr. Shattuk reported that the reason for settling on municipal school districts and REAs was to ensure that public funds were contributed to a public purpose. He further noted that the 50 percent suggested to be removed was present in Sec. 21.89.070. When the bill was drafted it was inadvertently added in Sec. 43.20.014. The language repeals the redundancy and extends the 50 percent tax credit to contributions made to vocational education. Representative Neuman clarified that the funding would go through the Department of Education and Early Development to solely fund public education. 10:40:53 AM Co-Chair Stedman questioned if private and non-profit vocational education programs would qualify for the credit. Representative Nueman did not think that private facilities were eligible as it would be difficult to track the funds. Senator Olson asked if technical educational programs had commented on HB 61. Representative Neuman responded that the legislation was amended in the House Finance Committee to assure that technical programs would be allowed to take advantage of the provisions. Representative Neuman provided closing comments, noting the importance of providing opportunities to the high percentage of students who do not attend college. He felt that allowing private industry to assist in the effort through training and funds is the best way to help students. CSHB 61(FIN) was HEARD and HELD in Committee for further consideration.
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