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, sponsor, explained that HB 61 is a change in title to a current tax credit available to postsecondary schools, which now would allow the credit for secondary schools. He thanked Representative Hawker for his assistance on the CS. 2:36:51 PM REX SHATTUCK, STAFF, REPRESENTATIVE MARK NEUMAN, referred to the applicable statutes relating to the bill. He explained that the tax credit can be used against the tax due for cash contributions accepted for direct instruction, research, educational support purposes, including libraries and museums, and contributions to endowment, by an Alaskan university foundation or by a non-profit, private, or public, two-year or four-year college accredited by a regional accreditation association. A section was added to include secondary school level vocational educational courses and programs. The tax works by giving a credit depending on the amount of contribution. 2:39:09 PM Representative Thomas asked about a potential amendment. Mr. Shattuck noted a concern about leaving Seward's AVTEC out due to its unique nature. Representative Neuman thought that AVTEC was included already and the amendment was not necessary. Representative Kelly asked why the bill would exclude private secondary programs, such as one funded by a corporate sponsor. Representative Neuman replied that a state-funded tax credit should be for a state-funded program. Representative Kelly disagreed; he pointed out that private universities are eligible. He asked why accredited non-public schools are excluded. 2:42:38 PM Representative Nelson thought Representative Kelly might be referring to tribal colleges. Representative Kelly said he is referring to secondary private schools with a corporate donor. Representative Neuman said it was not his intent to exclude them. He was just trying to extend the opportunity to secondary level schools. Representative Kelly asked if an amendment could be worded to include private secondary schools. Representative Neuman pointed out that it is his intent to keep the fiscal note zero. Representative Kelly thought it would be a positive step to change the bill to include private secondary schools. 2:45:21 PM Representative Nelson wondered if the People's Learning Center in Bethel would benefit from this bill. Representative Neuman thought it would because it is a secondary school. Representative Nelson said it is not in the school district. Mr. Shattuck said that the way the bill is written the People's Learning Center would not be included. The bill does not include non-profits. Representative Neuman was open to expanding the bill to include them. Mr. Shattuck related the history of what has been received in the past. Mr. Shattuck observed that non-profits would not be included in HB 61. Representative Neuman interjected that they would be covered under HB 2. 2:50:39 PM Representative Kelly stated that he was not worried about the fiscal note. Representative Neuman explained that HB 2 makes it easier for contributions at the federal level to be considered under "defined public purpose". Mr. Shattuck explained how federal tax credits would work. The state and federal government would be responsible for their own share. 2:53:26 PM In response to a question by Co-Chair Meyer, Ms. Scavera did not believe that AVTEC would be covered by this legislation. Co-Chair Meyer concluded that the People's Learning Center would not be covered as well. Ms. Scavera agreed. Co-Chair Meyer questioned the effect on the fiscal note and revenue to the state with an expansion of the program. PAUL DICK, TAX DIVISION, DEPARTMENT OF REVENUE could not respond to the question, since it would be impossible to predict the amount of students that would switch studies, but he did not think the impact would be great. 2:55:38 PM Representative Kelly asked what would need to be done to certify a non-profit or private institution for accreditation. RICHARD LUTHER, SPECIAL ASSISTANT, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT observed that there are a number of secondary programs that are not accredited. Representative Kelly concluded that accreditation would not be required. Mr. Luther explained that accreditation covers all programs within a school. 2:59:51 PM Representative Joule thought there was only one tribal college in Alaska in Barrow. Ms. Scavera thought that school would qualify because it is accredited. Representative Nelson noted that Bethel has a center that teaches flying and wondered if it would fall under the legislation. Ms. Scavera explained that it would probably not be covered if it is not associated with a school district. 3:01:33 PM Representative Kelly suggested that there may be an opportunity to expand the legislation. Representative Hawker acknowledged the merit of expanding vocational programs, but cautioned that the "gate" not be opened too wide. He observed that school districts are a recognizable, qualified target. Representative Neuman echoed concerns of Representative Hawker. CSHB 61 (W&M) was heard and HELD in Committee for further consideration. 3:04:56 PM