Legislature(2007 - 2008)SENATE FINANCE 532
05/12/2007 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HCR6 | |
| HB113 | |
| HB162 | |
| HB90 | |
| HB166 | |
| HB90 | |
| SB178 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 177 | TELECONFERENCED | |
| + | HCR 6 | TELECONFERENCED | |
| + | HB 113 | TELECONFERENCED | |
| + | HB 90 | TELECONFERENCED | |
| += | HB 162 | TELECONFERENCED | |
| + | HB 166 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR HOUSE BILL NO. 166(FIN)
"An Act relating to contributions from permanent fund
dividends to community foundations, to certain educational
organizations, and to certain other charitable
organizations; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Stedman stated that the intent today was to discuss the
bill, consider a new committee substitute, and hold the bill in
Committee for further consideration.
11:04:13 AM
AT EASE 11:05:12 AM \ 11:05:14 AM
Co-Chair Hoffman moved to adopt committee substitute, Version
25-LS0678\L, Cook, dated May 9, 2007, as the working document.
Without objection, the Version "L" committee substitute was
ADOPTED as the working document.
11:05:50 AM
DAVID GREISEN, Staff to Co-Chair Stedman, informed the Committee
that the changes incorporated into the Version "L" committee
substitute were intended to reduce costs and assist the
Department of Revenue in administering the program proposed in
this legislation.
Mr. Greisen advised that the change in Section 2, subsection (f)
on page 4 lines 8 through 13 would allow the Department of
Revenue to charge a $50 fee to each non-profit entity applying
for inclusion on the authorized list of charities a person could
elect to donate a portion of their Permanent Fund Dividend (PFD)
to. The expectation is that 700 of the 2,000 applicants
anticipated to apply for inclusion on this list would be
approved. The application fee would assist in covering the costs
associated with the selection process.
11:07:02 AM
Mr. Greisen identified the next change as being in Section 2
subsection (j) page 4 lines 27 through 30. This section would
continue the previous committee substitute's requirement that
the Department provide an annual report depicting each
organization and the donations they garnered the previous year
as a result of this legislation; however, the requirement that
the report be provided to the Legislature was eliminated as a
cost-saving measure. The Department would now simply be required
to notify the Legislature that the report was available.
Mr. Greisen stated that the application requirements specified
in Section 2, subsection (d)(4) and (d)(8) on page 3 line 14 and
line 24, respectively, were revised to accommodate non-profit
organizations' internal accounting and federal filing
restrictions.
Mr. Greisen noted that in order to made the administration of
the program run efficiently, language in Section 2 subsection
(a)(1) on page 2 line 14 was altered to clarify that people
could not change the non-profit entities they had chosen to
donate to once they had submitted their PFD application.
11:08:53 AM
Mr. Greisen next addressed the two changes made in the bill at
the request of the Department of Revenue. The first, in Section
1 subsection (b) page 1 line 8, was the removal of the words
"and furnish" after the word "prescribe". This would reduce the
cost of mailing out hard copy PFD application forms to residents
of the State. He noted that the "vast majority of people" now
file their PFD application online. The revised language would
read as follows.
"(b) The department shall prescribe an application
form for claiming a permanent fund dividend. …
Mr. Greisen stated that the Department would continue to mail
out PFD application forms "to rural areas that don't have
internet penetration". Thus, people living in those areas would
not experience any negative affects.
Mr. Greisen stated that not conducting a bulk mailing of the PFD
application forms would save the State a significant amount of
money.
AT EASE 11:10:27 AM / 11:11:31 AM
Mr. Greisen noted that the second change requested by the
Department is depicted in Section 3 subsection (a)(2) page 5
lines 16 through 21. This language "would allow the Department
to set up an electronic system for civilian process servers to
garnish PFDs." An electronic system would significantly reduce
the amount of paperwork involved in this process as currently
all garnishing processing is conducted on paper and mailed.
Mr. Greisen informed the Committee that the two changes
requested by the Department are anticipated to save
approximately $100,000 each year.
11:12:09 AM
KACI HOTCH, Staff to Representative Bill Thomas, the bill's
sponsor, affirmed that this bill would allow individuals
receiving a PFD to contribute a portion of their PFD to a non-
profit organization. The goal of this effort is to increase the
amount of charitable donations made by Alaskans each year,
particularly as the level of charitable contributions made by
Alaskans who earn more than $100,000 a year is amongst the
lowest in the nation.
Ms. Hotch specified that this legislation would allow the State
to compile a list of approved non-profit 501(c)(3)
organizations. That list would be provided to PFD applicants who
could, at the time they submit their application, specify an
amount, if any, they would like to contribute to one or more of
the organizations.
Ms. Hotch pointed out that in order to be approved for the list,
the organization must meet criteria specified in the bill.
Ms. Hotch specified that while the bill contained a three year
termination date, but could be re-authorized by the Legislature.
There would be no fiscal impact to the State resulting from this
legislation as the Rasmussen Foundation has agreed to administer
the program and absorb any associated expenses.
11:13:40 AM
Senator Elton asked for further discussion regarding the
proposed change to how PFD application forms would be
distributed.
Co-Chair Stedman advised that that question would be addressed
by a representative from the Department.
Mr. Greisen agreed that the Department could best respond to the
question.
11:14:31 AM
In response to a question from Senator Thomas, Mr. Greisen
reiterated that the expectation is that 700 of the 2,000
organizations expected to apply for inclusion on the list of
non-profit entities would be approved.
11:15:00 AM
Senator Olson suggested that the approach proposed in this
legislation might also be considered as an avenue through which
the State, "as a larger body", might be able to provide Alaskans
an opportunity to purchase health insurance.
Ms. Hotch acknowledged having talked to Senator Olson's staff
about this suggestion. She had not had an opportunity to explore
the suggestion and was unsure how adding such language to this
bill might impact it. The sponsor would however support "the
concept" where it proposed in a separate bill at a later time.
11:15:38 AM
JERRY BURNETT, Director, Administrative Services Division and
Legislative Liaison, Department of Revenue, addressed Senator
Elton's question by expressed that the Department of Revenue and
the Department of Law have been actively discussing whether the
State is required by law to send a PFD application packet to
every household in the State as is current practice. In addition
to its expense, it is a wasted effort as more than 70 percent of
Alaskans apply for their PFD online and thereby, do not use the
mailed out paperwork.
Mr. Burnett specified that the proposed change would allow paper
application packets to be "selectively" mailed out to anyone who
requests them and to those who have applied for their PFD on
paper in the past. The intent is to stop bulk mailing the PFD
packets as has been past practice.
11:17:22 AM
Senator Elton asked how new applicants would be contacted,
particularly since it could be extrapolated from the
Department's statistics that one-third of the prospective
applicants would apply by mail. Legislators would be inundated
by questions if access for new applicants was not adequately
addressed. While filing electronically was a viable option, he
was "uncomfortable taking away the mandate that the Department
provide an application."
11:18:19 AM
Mr. Burnett acknowledged the concern and noted that, as
Legislative Liaison for the Department, any calls Legislators
receive ultimately get routed to him.
Mr. Burnett compared the proposed application changes to current
operations of the federal Internal Revenue Service (IRS) in that
as people transition from filing their tax returns on paper to
filing online, the IRS stops mailing those individuals paper
filing material.
Mr. Burnett thought it unlikely that newcomers to the State
would be unaware of the PFD program. The prospect of receiving a
$1,600 PFD check would prompt a newcomer to contact the State
about the PFD application process.
11:19:33 AM
Senator Elton asked whether language in the current appeal
process could be revised to accommodate an individual who
claimed to have been waiting for a paper application and thus
had not applied.
Mr. Burnett stated that the Department would be willing to work
with Senator Elton to address this concern. The Department does
not desire to "disenfranchise anyone or make it difficult for
people". The goal is to discontinue mailing out PFD application
packets because they are not being used.
11:20:38 AM
Senator Huggins voiced concern that the Department might be
inundated by requests from non-profits entities to be included
on the list of approved organizations.
11:21:04 AM
Mr. Burnett acknowledged that "the Department is very concerned
about the initial effects of this bill on the workload of the
Department" in regards to the donation element. To address that
concern, an "external organization" such as the United Way would
be hired to manage the donation aspect of the program. They
would be responsible for sorting the applications. The funds for
that entity would be provided by the Rasmussen Foundation.
11:22:00 AM
Co-Chair Stedman ordered bill HELD in Committee.
RECESS TO CALL OF THE CHAIR 11:22:13 AM / 1:53:34 PM
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