Bill Summary – FastDemocracy

State of Alaska
                                                        Fiscal Note
                                                                                         Bill Version:                     CSSB 120(EDC)
 2023 Legislative Session
                                                                                         Fiscal Note Number:               1
                                                                                         (S) Publish Date:                 5/5/2023
 Identifier:       SB120-DOR-TAX-03-31-23                                 Department:        Department of Revenue
 Title:            EXTEND EDUCATION TAX CREDITS                           Appropriation: Taxation and Treasury
 Sponsor:          EDUCATION                                              Allocation:        Tax Division
 Requester: (S) Education                                                 OMB Component Number:                 2476
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                            (Thousands of Dollars)
                                                 Included in
                                    FY2024       Governor's
                                Appropriation      FY2024                                       Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2024        FY 2024       FY 2025                 FY 2026             FY 2027           FY 2028        FY 2029
 Personal Services
 Travel
 Services
 Commodities
 Capital Outlay
 Grants & Benefits
 Miscellaneous
 Total Operating                            0.0           0.0          0.0                       0.0                0.0               0.0             0.0
 Fund Source (Operating Only)
 None
 Total                                           0.0         0.0                 0.0             0.0                0.0               0.0             0.0
 Positions
 Full-time
 Part-time
 Temporary
 Change in Revenues
 1004 Gen Fund (UGF)                      (1,700.0)                     (5,000.0)         (6,600.0)            (6,600.0)        (6,600.0)       (6,600.0)
 Total                                    (1,700.0)          0.0        (5,000.0)         (6,600.0)            (6,600.0)        (6,600.0)       (6,600.0)
 Estimated SUPPLEMENTAL (FY2023) cost:                              0.0                (separate supplemental appropriation required)
 Estimated CAPITAL (FY2024) cost:                                   0.0                (separate capital appropriation required)
 Does the bill create or modify a new fund or account?       No
 (Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
 ASSOCIATED REGULATIONS
 Does the bill direct, or will the bill result in, regulation changes adopted by your agency?            No
 If yes, by what date are the regulations to be adopted, amended or repealed?                            N/A
 Why this fiscal note differs from previous version/comments:
 Not applicable, initial version.
 Prepared By:            Colleen M. Glover, Director                                                             Phone:        (907)269-1033
 Division:               Tax Division                                                                            Date:         03/31/2023
 Approved By:            Eric DeMoulin, Director                                                                 Date:         03/31/23
 Agency:                 Department of Revenue
Printed 5/4/2023                                                   Page 1 of 2                                                          Control Code: VRUvc
                                                                                                         CSSB 120(EDC) - Fiscal Note 1
                                                  FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                   BILL NO. SB 120
2023 LEGISLATIVE SESSION
Analysis
   Background
   The education tax credit is a credit for qualifying contributions to Alaska universities and accredited nonprofit Alaska two‐
   or four‐year colleges for facilities, direct instruction, research and educational support purposes; donations to a school
   district or a state‐operated technical and training school for vocational education courses, programs and facilities; and
   donations for Alaska Native cultural or heritage programs for public school staff and students, and a facility in the state that
   qualifies as a coastal ecosystem learning center under the Coastal American Partnership.
   The credit is available to be claimed against insurance premiums tax, title insurance premiums tax, corporate income tax,
   oil and gas production tax, oil and gas property tax, mining license tax, fisheries business tax, and fishery resource landing
   tax. The credit for any one taxpayer cannot exceed $1 million annually across all tax types. The credit is currently
   scheduled to be repealed effective January 1, 2025.
   This bill reverts back to provisions of prior legislation (House Bill 274 in 2014) which expands the amount of the credit as a
   percentage of the contribution from 50% of all contributions to the following:
                     (1) 50 percent of contributions of not more than $100,000;
                     (2) 100 percent of the next $200,000 of contributions; and
                     (3) 50 percent of the amount of contributions that exceed $300,000
   This bill also would increase the credit limit from $1 million to $5 million annually per taxpayer. The new provisions would
   take effect January 1, 2024. The bill extends the sunset provisions to January 1, 2031.
   Revenue Impact
   The revenue impacts only include those eligible tax programs administered by the Department of Revenue (Department).
   The bill's fiscal impacts can be divided into two categories: (1) increase to the tax credit percentage of contribution and
   annual limit and (2) extending the credit repeal date.
   (1) The revenue impact of the increase in the tax credit percentage of contribution and annual limit change is estimated by
   applying historical information when similar provisions and limits were allowed in statute. This analysis looked at
   information from 2014 to 2019. See the table below.
   (2) The revenue impact of the increase in the extension of the repeal date is estimated by using the average of the last
   three years of actual credits claimed as a basis going forward. See the table below.
   This assumes that usage will be similar to the past.
   Implementation Cost
   This legislation would require the Department to make minor changes to its Tax Revenue Management System ("TRMS").
   Resources required to implement this bill would include staff time to updated tax forms, TRMS, and Revenue Online, and
   other miscellaneous costs when applicable. These costs will be absorbed by the Tax Division using existing resources.
(Revised 08/26/2022 OMB/LFD)                                                                                         Page 2 of 2
SB120-DOR-TAX-03-31-23                                          Page 2 of 2                                               Control Code: VRUvc
Statutes affected: 
SB0120A, AM SB 120, introduced 03/31/2023: 21.96.070, 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045, 43.20.145
SB0120B, AM CSSB 120(EDC), introduced 05/05/2023: 21.96.070, 21.09.210, 21.66.110, 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045, 43.20.145, 37.14.750, 14.16.200, 43.55.011, U.S.C