SB 89-TAX CREDITS FOR EDUCATIONAL CONTRIBUTIONS                                                                     
                                                                                                                                
8:22:00 AM                                                                                                                    
CHAIR STEVENS announced that the  next order of business would be                                                               
SB 89.                                                                                                                          
                                                                                                                                
SENATOR DUNLEAVY, sponsor, introduced SB  89. He related that the                                                               
bill amends current tax credits  for educational contributions to                                                               
allow  for  elementary  and  secondary  profit,  non-profit,  and                                                               
religious schools  in Alaska.  He referred to  a list  of current                                                               
eligible tax credits.  The purpose for the tax  credit changes is                                                               
to  allow  for tax  credits  for  educational contributions  from                                                               
parents whose children attend private  and religious schools. The                                                               
tax credit would go to the agency or organization.                                                                              
                                                                                                                                
8:24:11 AM                                                                                                                    
SENATOR GARDNER  asked if tuition  provides a tax credit  for the                                                               
school.                                                                                                                         
                                                                                                                                
SENATOR DUNLEAVY  said no. He  explained that the  businesses and                                                               
corporations  that wish  to give  money to  religious or  private                                                               
schools could receive a tax credit.                                                                                             
                                                                                                                                
SENATOR  GARDNER  asked  if  current  law  already  provides  tax                                                               
deductions for charitable giving to non-profits.                                                                                
                                                                                                                                
SENATOR  DUNLEAVY replied  that  charitable  giving is  currently                                                               
deductible at  the federal level;  the proposed tax  credit would                                                               
occur on the state level.                                                                                                       
                                                                                                                                
8:26:14 AM                                                                                                                    
SENATOR GARDNER asked about raising  the tax credit limit from $5                                                               
million to  $25 million. She  wondered how many tax  payers reach                                                               
the $25 million limit.                                                                                                          
                                                                                                                                
SENATOR DUNLEAVY replied that he did not have those figures.                                                                    
                                                                                                                                
SENATOR GARDNER inquired  if tax payers might want  to exceed the                                                               
$5 million limit.                                                                                                               
                                                                                                                                
SENATOR  DUNLEAVY said  it  is his  hope  that charitable  giving                                                               
would increase.                                                                                                                 
                                                                                                                                
CHAIR STEVENS  suggested that the  Department of  Revenue address                                                               
the question.                                                                                                                   
                                                                                                                                
8:27:11 AM                                                                                                                    
JOHANNA  BALES,  Deputy  Director, Tax  Division,  Department  of                                                               
Revenue (DOR), answered questions related  to SB 89. She said she                                                               
has not seen  a single tax payer claim the  $5 million tax credit                                                               
for charitable  giving. In 2012,  the first  full year of  the $5                                                               
million maximum tax  credit, 40 tax payers took  an education tax                                                               
credit for a total of $6.8 million.                                                                                             
                                                                                                                                
SENATOR GARDNER requested clarification about those numbers.                                                                    
                                                                                                                                
MS. BALES explained that there  are six tax programs that qualify                                                               
for the credit. She reiterated that  40 tax payers, in total, for                                                               
all six programs, took $6.8  million worth of credits, all within                                                               
the education category.                                                                                                         
                                                                                                                                
8:28:58 AM                                                                                                                    
CHAIR STEVENS held SB 89 in committee for further review.