02/08/2023 06:00 PM House WAYS & MEANS

        HB  45-PFD CONTRIBUTIONS TO GENERAL FUND AND PF                                                                     
                                                                                                                                
6:02:23 PM                                                                                                                    
                                                                                                                                
CHAIR CARPENTER announced that the  first order of business would                                                               
be  HOUSE BILL  NO. 45,  "An Act  relating to  contributions from                                                               
permanent fund dividends to the general and permanent funds."                                                                   
                                                                                                                                
6:03:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MIKE   PRAX,  Alaska  State   Legislature,  prime                                                               
sponsor,  presented HB  45.   He  proceeded to  read the  sponsor                                                               
statement  [included  in the  committee  packet],  which read  as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     House Bill 45 sets up  a mechanism to give Alaskans the                                                                    
     choice of  donating all or  portion of  their Permanent                                                                    
     Fund dividends  (PFD) directly  to the  state's general                                                                    
     fund. Participants can donate from  a minimum of $25 to                                                                    
     the full amount of their PFD in increments of $25.                                                                         
                                                                                                                                
     A donation  to the State  General fund, in  some cases,                                                                    
     can  be counted  as a  charitable donation  for federal                                                                    
     tax  purposes. It  is  advised,  however, that  Alaskan                                                                    
     consult with a tax professional  to verify how this may                                                                    
     apply to them individually.                                                                                                
                                                                                                                                
     Donations through HB 45 are  subject to a seven percent                                                                    
     administrative fee  paid t the Permanent  Fund Dividend                                                                    
     Division.  HB 158  also  clarifies  that donations  mad                                                                    
     through Pick.Click.Give.  take priority  over donations                                                                    
     to the general fund if there I a shortfall.                                                                                
                                                                                                                                
6:06:47 PM                                                                                                                    
                                                                                                                                
RILEY  NYE,   Staff,  Representative  Mike  Prax,   Alaska  State                                                               
Legislature,  on behalf  of Representative  Prax, prime  sponsor,                                                               
presented  the sectional  analysis  for HB  45  [included in  the                                                               
committee packet],  which read  as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     HB 45  allows Alaskans  to electronically  donate their                                                                    
     permanent fund  dividend (PFD)  to the  general revenue                                                                    
     fund  through  the  Pick.Click.Give program  in  $25.00                                                                    
     increments.                                                                                                                
                                                                                                                                
     The  bill  amends  AS 43.23  regarding  the  electronic                                                                    
     application:                                                                                                               
                                                                                                                                
     The addition  of section AS 43.23.135  (a) requires the                                                                    
     electronic  application  to  have  a  button  to  allow                                                                    
     residents to  donate their PFD in  $25.00 increments to                                                                    
     the  general revenue  fund.  This  enables Alaskans  to                                                                    
     donate $25.00, or greater amounts,  of their PFD to the                                                                    
     general revenue fund if they so choose.                                                                                    
                                                                                                                                
     The  next section  (b) precludes  a state  agency "that                                                                    
     can file  on the behalf  of a person" from  donating to                                                                    
     that same agency.                                                                                                          
                                                                                                                                
     The next section (c )  dictates that buttons that allow                                                                    
     donations   to  the   state  be   separated  from   the                                                                    
     charitable  group list  posted  in the  Pick.Click.Give                                                                    
     program so the state is not competing with charities.                                                                      
                                                                                                                                
     The  passage  of  this  bill  will  greatly  facilitate                                                                    
     Alaskans  ability  to donate  their  PFD  to the  state                                                                    
     general  revenue fund.  Currently, Alaskans  must apply                                                                    
     for  the  dividend,  receive  the  dividend,  and  then                                                                    
     return it through  the US mail. By putting  a button on                                                                    
     the  electronic   application  process,   Alaskans  can                                                                    
     easily  donate  $25.00  and  additional  increments  of                                                                    
     their PFD to the general revenue fund.                                                                                     
                                                                                                                                
     HB   45  was   originally   introduced   in  the   32nd                                                                    
     legislature as HB 158. It  was amended in House Finance                                                                    
     in that legislature. It enjoyed  22 co-sponsors and was                                                                    
     in  House Rules  when the  32nd legislature  ended sine                                                                    
     die. It  has been reintroduced in  the 33rd legislature                                                                    
     in the version that came out of House Finance.                                                                             
                                                                                                                                
CHAIR CARPENTER invited questions from members of the committee.                                                                
                                                                                                                                
6:08:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE  alluded  to  a  discrepancy  between  the                                                               
sponsor statement  and the bill.   The bill, he  observed, stated                                                               
that  Alaskans could  donate a  portion of  their permanent  fund                                                               
dividend (PFD) to the state's  general fund (GF) or the principal                                                               
of the Alaska Permanent Fund,  whereas the sponsor statement only                                                               
made reference to the GF.                                                                                                       
                                                                                                                                
REPRESENTATIVE PRAX confirmed that both  the GF and the principle                                                               
were allowable options.                                                                                                         
                                                                                                                                
6:09:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GROH  inquired about  the fiscal note,  asking why                                                               
it  showed  zero  after  the   initial  year  of  implementation.                                                               
Additionally,  he asked  how many  people took  advantage of  the                                                               
option to donate all or a portion of their PFD.                                                                                 
                                                                                                                                
REPRESENTATIVE PRAX pointed out that  the fiscal note reflected a                                                               
cost  of $113,800  for programming  fees  in FY  24, after  which                                                               
there were no projected costs due to the 7 percent deduction.                                                                   
                                                                                                                                
CHAIR CARPENTER restated the second  part of the question, asking                                                               
how many people would participate in the program.                                                                               
                                                                                                                                
REPRESENTATIVE  PRAX said  he did  not know  how many  people may                                                               
participate.   He reported that 105  people wrote a check  to the                                                               
state in 2020 and suggested  advertising the program if it proved                                                               
viable.                                                                                                                         
                                                                                                                                
6:12:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRAY asked whether there  was a mechanism to avoid                                                               
the 7 percent fee.                                                                                                              
                                                                                                                                
REPRESENTATIVE PRAX  directed the  question to the  Department of                                                               
Revenue (DOR).                                                                                                                  
                                                                                                                                
REPRESENTATIVE  GRAY  considered a  scenario  in  which a  person                                                               
wanted  to donate  his/her  entire dividend.    He asked  whether                                                               
there  was an  easier  way to  accomplish  that donation  without                                                               
first  receiving the  dividend, counting  it towards  income, and                                                               
paying taxes on it.                                                                                                             
                                                                                                                                
REPRESENTATIVE PRAX  concluded that  there was not  a workaround.                                                               
He noted, however, that if a  person decided not to apply for the                                                               
PFD, his/her portion of the  dividend would be distributed to all                                                               
other recipients.                                                                                                               
                                                                                                                                
6:14:19 PM                                                                                                                    
                                                                                                                                
CHAIR CARPENTER announced that HB 45 would be held over.