CSHB 194(L&C)-REGIONAL DEVELOPMENT ORG TAX CREDIT  CHAIR BUNDE announced CSHB 194(L&C) to be up for consideration. REPRESENTATIVE TOM ANDERSON, sponsor, said HB 194 is the result of a partnership between the business development community and corporate Alaska and creates a tax credit of up to $10,000 to a corporation that donates to an Alaska regional development organization (ARDOR). This credit, when combined with various existing tax credits, may not exceed $150,000 and that will not change. This bill provides alternative recipients for donations. There are 13 ARDORs throughout the state, the biggest being the Anchorage Economic Development Corporation (AEDC). REPRESENTATIVE ANDERSON said a (committee substitute) CS was requested by the Division of Tax to clarify the definition of a regional development organization to definitively limit the credit to ARDORS. Another CS was introduced to remove the sunset provision. MR. LARRY CRAWFORD, President, Anchorage Economic Development Corporation, supported CSHB 194(L&C). He thought it would help AEDC build a stronger relationship with local businesses. He noted the AEDC board passed a resolution supporting this bill as well. CHAIR BUNDE said he would set the bill aside until the new information could be copied. CSHB 194(L&C)-REGIONAL DEVELOPMENT ORG TAX CREDIT  CHAIR BUNDE announced CSHB 194(L&C) to be back before the committee and that the committee was considering version Q. MS. HEATHER BEATY, staff to Representative Anderson, said Representative Anderson would be available soon. MR. MARK GRABER, Audit Manager, Tax Division, said the amendment adds confusion for the following reason: The contributions contemplated under this statute do not cover memberships and sponsorships; they would be contributions that would provide a direct business benefit to the corporation. Alaska adopted the Internal Revenue Code and in that is section 170 that allows the deduction to a charitable organization. ARDORS are not charitable organizations, therefore we don't need a reference to section 170 and a deduction in any event would not be allowed for a contribution because the contribution would provide no direct benefit to the corporation and therefore would not be an ordinary and necessary business expense. CHAIR BUNDE said he was confused and that he thought Mr. Graber asked for the amendment. MR. GRABER said that was correct and that the division doesn't need the current section (b)(2) in the previous version. The amendment is to delete lines 28 and 29. SENATOR DAVIS moved to adopt amendment 1. There were no objections and it was adopted. MR. JAMES ARMSTRONG, Municipality of Anchorage, supported HB 194. SENATOR SEEKINS said he thought the state is funding an ARDOR when a person decides to contribute to an ARDOR instead of paying a $10,000 tax bill, because that person gets a credit for it. CHAIR BUNDE said he thought a zero fiscal note was submitted because existing legislation allows that to occur. Any time a tax credit is allowed, it costs the state something. SENATOR SEEKINS said he wanted to clarify that regional development corporations are state funded organizations with no state control. MR. ARMSTRONG said he could see his point. MR. EDWARD LAMB, CEO, Alaska Regional Hospital, said the state needs to do everything it can to encourage organizations to contribute to the ARDORS whose efforts go out to bring new businesses into the state. SENATOR SEEKINS moved to pass SCS CSHB 194(L&C), version Q, from committee with attached fiscal notes and individual recommendations. SENATORS DAVIS, STEVENS, SEEKINS, FRENCH and BUNDE voted yea and the motion carried.