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.]