SB 118 TAX CREDIT: GIFTS TO PUBLIC BROADCASTING SENATOR SHARP brings up SB 118 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 579 SENATOR JOHN TORGERSON, prime sponsor of SB 118, compares the original version of SB 118 to version O. Version O adds an endowment for educational radio and tv as a recipient of the credits, increases the amount to a maximum of $350,000, precludes claims for contributions as both credits and deductions against taxes, establishes tax credits against the insurance premium tax, title insurance premiums, the fisheries resource landing tax, and sunsets after five years. The main difference between version O and the house version of this bill is that version O eliminates taking 50-50 from the state and the municipalities. TAPE 95-22, SIDE B Number 589 SENATOR LEMAN comments the state pays for everything over $100,000 in contributions. He states he cannot support a 100% credit. The state might as well just budget it. CHAIRMAN SHARP comments he resents that large corporations have the privilege of directing where their taxes will be spent, but individuals cannot do that. The chairman states he really has a problem with that. Number 569 SENATOR RANDY PHILLIPS directs the chairman's attention to page 2, line 4, which would allow individuals to take a tax credit towards state income taxes, if and when state income taxes are reimplemented. CHAIRMAN SHARP states he is uncomfortable with the fact that only the state participates in giving a tax credit. He would not want to mandate local participation, but giving 100% tax credits basically circumvents legislative oversight of the use of taxes. Number 547 SENATOR LEMAN states he also has a proposed committee substitute for SB 118, version M. Tax credits could also be taken for contributions to K-12 education in Alaska. Tax credits taken could not exceed $200,000. Number 515 BOB BARTHOLOMEW, Deputy Director, Division of Income & Excise Audit, Department of Revenue, informs the committee that some of the taxes do apply to the insurance provision. It is his understanding that the education credit does. Work draft version O does include the insurance provision. CHAIRMAN SHARP asks Mr. Bartholomew if he has any estimate on what the maximum exposure would be for taking tax credits. MR. BARTHOLOMEW responds that in the original version of SB 118, the fiscal note showed an impact to revenue of about $845,000. Number 497 SENATOR LEMAN states he would like to amend the bill to include the insurance premium tax, just to be consistent. Number 463 MR. BARTHOLOMEW comments that the Attorney General's Office recommends, in regards to version M, that the fish landing tax be included. The reason for this is there is a challenge to that tax in the court system asking that all taxes be treated the same. Number 445 SENATOR LEMAN states he would be willing to add that amendment to the version he is supporting. SENATOR RANDY PHILLIPS makes a motion to adopt version O. Objection is heard and the roll is called. The motion fails 2 yeas, 2 nays, and 1 absent. Voting in favor of adopting version O are Senators Phillips and Duncan. Voting in opposition are Senators Sharp and Leman. Senator Donley is not present. SENATOR LEMAN makes a motion to adopt version M with a conceptual amendment to add a tax credit against the insurance premium tax. SENATOR DUNCAN objects. CHAIRMAN SHARP asks Senator Duncan if he is objecting to the conceptual amendment regarding the insurance premium tax, or objecting to the whole motion. SENATOR DUNCAN states he objects to the whole thing. SENATOR LEMAN asks Senator Duncan if he is objecting to tax credits for donations to education. SENATOR DUNCAN replies he is objecting to education. CHAIRMAN SHARP notes this vote will determine whether or not SB 118 lives to fight another day. Hearing no further discussion on the motion, the chairman asks the secretary to call the roll. The roll is taken with the following result, and the motion fails 2 yeas, 2 nays, and 1 absent. Voting in favor of adopting version M are Senators Sharp and Leman. Voting in opposition are Senators Phillips and Duncan. Senator Donley is not present.