Legislature(2017 - 2018)SENATE FINANCE 532

02/20/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 8 PFD CONTRIBUTIONS TO TRIBAL GOVERNMENTS TELECONFERENCED
Heard & Held
+ SB 154 PFD CONTRIBUTIONS TO GENERAL FUND TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 8                                                                                                             
                                                                                                                                
     "An   Act   allowing    federally   recognized   tribal                                                                    
     governments to receive contributions from permanent                                                                        
     fund dividends."                                                                                                           
                                                                                                                                
9:04:58 AM                                                                                                                    
                                                                                                                                
SENATOR STEVENS,  SPONSOR, spoke  to SB  8. He  relayed that                                                                    
the bill was "remarkably simple."  He reported that the bill                                                                    
allowed federally  recognized tribal governments  to receive                                                                    
contributions  from  the   Permanent  Fund  Dividends  (PFD)                                                                    
through the popular Pick.Click.Give. program.                                                                                   
                                                                                                                                
DOUG  LETCH,  STAFF,  SENATOR GARY  STEVENS,  addressed  the                                                                    
bill.  He related  that the  bill granted  native non-profit                                                                    
organizations   the  opportunity   to  participate   in  the                                                                    
Pick.Click.Give.   program.  Currently,   the  program   was                                                                    
reserved  for  501(c)(3)  non-profit  organizations.  Tribal                                                                    
governments  were  tax  exempt organizations  but  were  not                                                                    
designated as  501(c)(3). He elaborated  that SB  8 required                                                                    
the  Department   of  Revenue   (DOR)  to   allow  federally                                                                    
recognized   tribal    governments   to   appear    on   the                                                                    
Pick.Click.Give.  eligible  recipients  list.  Subsequently,                                                                    
the   tribal  entities   would  be   subject  to   the  same                                                                    
regulations  and   $250  fees   currently  applied   to  the                                                                    
program's  participants. The  idea was  derived from  native                                                                    
organizations in Kodiak. He noted  letters of support in the                                                                    
members  bill packet.  The sponsor  had not  encountered any                                                                    
opposition  to  the bill.  He  reminded  the committee  that                                                                    
Since 2009, Pick.Click.Give. offered  Alaskans an easier way                                                                    
to  help  hundreds  of  nonprofits  fulfill  their  missions                                                                    
through  direct contributions  from their  PFDs. The  result                                                                    
was millions  of dollars  donated to  eligible organizations                                                                    
over the years. The  addition of federally recognized tribal                                                                    
governments  to  the  list  of  Pick.Click.Give.  recipients                                                                    
extended the  program's reach, while opening  another avenue                                                                    
of fundraising for these important organizations.                                                                               
9:07:25 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon requested that Mr. Letch proved a                                                                            
sectional analysis.                                                                                                             
                                                                                                                                
Mr. Letch addressed the Sectional Analysis:                                                                                     
                                                                                                                                
     Section   I.    Adds   federally    recognized   tribal                                                                    
     governments  to  AS  43.23.062(a),  allowing  federally                                                                    
     recognized tribal governments  to receive contributions                                                                    
     from permanent fund dividends.                                                                                             
                                                                                                                                
     Section  2.  Amends   AS  43.23.062(b),  requiring  the                                                                    
     department   to  place   federally  recognized   tribal                                                                    
     governments on the contribution  list.                                                                                     
                                                                                                                                
     Section  3. Amends  AS 43.23.062(c)  to state  that the                                                                    
     department may  not add  a federally  recognized tribal                                                                    
     government to the contribution  list unless the purpose                                                                    
     of  the federally  recognized  tribal government  meets                                                                    
     one of the purposes  listed.                                                                                               
                                                                                                                                
     Section 4.  Amends AS 43.23.062(d) to  exempt federally                                                                    
     recognized    tribal     governments    from    various                                                                    
     requirements  that  other  educational  and  charitable                                                                    
     organizations  must meet under the section.                                                                                
                                                                                                                                
     Section   5.    Adds   federally    recognized   tribal                                                                    
     governments  to  AS  43.23.062(t),  which  requires  an                                                                    
     application  fee to  be placed  on  the permanent  fund                                                                    
     dividend contribution list.                                                                                                
                                                                                                                                
     Section   6.    Adds   federally    recognized   tribal                                                                    
     governments  to  AS   43.23.062(m),  which  allows  the                                                                    
     department  to withhold  a coordination  tee from  each                                                                    
     entity  that  receives  contributions   from  permanent                                                                    
     fund dividends.                                                                                                            
                                                                                                                                
     Section  7. Adds  new subsection  (o)  to AS  43.23.062                                                                    
     stating that a  person who claims a  dividend on behalf                                                                    
     of an  unemancipated minor  under AS  43.23.00S(c) when                                                                    
     the   minor  is   the  subject   of   an  adoption   or                                                                    
     guardianship proceeding  pending in a tribal  court may                                                                    
     not elect to contribute from  the minor's dividend to a                                                                    
     federally  recognized tribal  government  under (a)  of                                                                    
     this section.                                                                                                              
                                                                                                                                
9:09:35 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
LAURIE WOLF, PRESIDENT, FORAKER  GROUP, testified in support                                                                    
of the  bill. She articulated  that the Foraker Group  was a                                                                    
statewide  nonprofit   organization  with  the   purpose  to                                                                    
strengthening   nonprofits   including  tribal   governments                                                                    
across  the  state.  The  group  worked  with  thousands  of                                                                    
nonprofits  statewide,  which  included small  remote  rural                                                                    
communities.  The  group provided  education,  facilitation,                                                                    
and  planning services.  She emphasized  that the  group was                                                                    
non-partisan. She  had been involved in  the Pick.Click.Give                                                                    
program since its inception. The  program was implemented by                                                                    
the  Foraker  Group,  Rasmussen Foundation,  United  Way  of                                                                    
Anchorage, and  DOR. Currently  the program  was run  by the                                                                    
Alaska Community  Foundation. The  unique program  had three                                                                    
goals; to grow the number  of donors, to increase the amount                                                                    
of donations  to nonprofits, and  to raise awareness  of the                                                                    
power of individual philanthropy.                                                                                               
                                                                                                                                
9:13:01 AM                                                                                                                    
                                                                                                                                
Ms.  Wolf continued  her testimony.  She  reported that  the                                                                    
"implementation  partners"  of  the program  had  wanted  to                                                                    
include   tribal  entities   lacking  501(c)(3)   status  as                                                                    
eligible  participants. She  understood the  impetus of  the                                                                    
legislation was to assist tribes  provide services for youth                                                                    
development,  workforce development,  arts and  culture, and                                                                    
services  for the  elderly and  low income  individuals. She                                                                    
emphasized that the group was  not opposed to clarifying the                                                                    
statutes to  allow the  participation of  tribal governments                                                                    
in the program.                                                                                                                 
                                                                                                                                
Senator  von  Imhof asked  about  the  difference between  a                                                                    
501(c)(3)  nonprofit,  which  was  not  politically  active;                                                                    
versus  the 501(c)(4),  that had  the liberty  to engage  in                                                                    
political   action.   She   asked   about   the   designated                                                                    
differences  and what  the  status  of tribal  organizations                                                                    
were. Ms.  Wolf qualified that  she was not an  attorney and                                                                    
could not  provide a  precise definition  of the  terms. She                                                                    
acknowledged   that   Alaskan    tribes   were   independent                                                                    
governments,  and many  had filed  for 501(c)(3)  status and                                                                    
some  carried  501(c)(4)  status.  She  indicated  that  the                                                                    
tribal  organization  was  required  to  meet  the  criteria                                                                    
established by  the program  for 501(c)(3)  organizations to                                                                    
provide human  resource and service  needs across  the state                                                                    
to  qualify. Regardless  of their  tax status  the program's                                                                    
criteria must  be met to qualify  for Pick.Click.Give. under                                                                    
the  bill.  Senator von  Imhof  understood  that the  tribal                                                                    
organization was  required to meet the  fundamental criteria                                                                    
of a 501(c)(3)  to qualify under the bill.  She relayed that                                                                    
currently one  could access the annual  financial income for                                                                    
any  501(c)(3)  nonprofit  with  the  Form  990.  She  asked                                                                    
whether the same ability would  exist with the non-501(c)(3)                                                                    
tribal governments that  qualified for Pick.Click.Give under                                                                    
the  bill to  determine if  they were  good stewards  of the                                                                    
money. Ms.  Wolf was  uncertain of the  answer. She  did not                                                                    
know   what  the   filing  requirements   were  for   tribal                                                                    
governments. She offered to provide the information later.                                                                      
                                                                                                                                
Co-Chair  MacKinnon   asked  for   the  information   to  be                                                                    
delivered to her office for committee distribution.                                                                             
                                                                                                                                
9:17:35 AM                                                                                                                    
                                                                                                                                
MARY BISHOP, SELF, FAIRBANKS  (via teleconference), spoke in                                                                    
opposition to  the bill. She  stated that while  tribes were                                                                    
endeavoring  to  carry  out worthwhile  programs  for  their                                                                    
members, tribal  governments had immunity from  lawsuits for                                                                    
activities  like  misuse  of   funds,  unless  a  waiver  of                                                                    
sovereign  immunity  was  signed. She  mentioned  a  lawsuit                                                                    
between  two tribes  in Southeast  Alaska. She  believed the                                                                    
issue  was   problematic  in  relation  to   the  bill.  She                                                                    
purported   that  tribes   in  the   Lower  48   were  often                                                                    
politically  active,  and  she  saw  no  reason  why  tribal                                                                    
governments in  Alaska would not act  similarly. She thought                                                                    
the  funds  could  be  used   for  political  purposes.  She                                                                    
encouraged  the sponsor  to amend  the legislation  to avoid                                                                    
the stated issues.                                                                                                              
                                                                                                                                
9:19:45 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Co-Chair  MacKinnon asked  if there  was a  reason that  the                                                                    
bill  was  not limited  to  federally  recognized tribes  in                                                                    
Alaska rather than all  federally recognized tribes. Senator                                                                    
Stevens  answered in  the negative.  He  furthered that  the                                                                    
purpose of the bill was  specifically for Alaskan tribes. He                                                                    
reminded the  committee that the  donated funds  in question                                                                    
were from  individuals that received  PFDs who  could choose                                                                    
how to distribute the funds however they desired.                                                                               
                                                                                                                                
Co-Chair MacKinnon did  not see the distinction  in the bill                                                                    
and  worried  that  lower  48 tribes  could  apply  for  the                                                                    
program. Senator Stevens stated that  he had no objection to                                                                    
limiting the bill to Alaskan tribal governments only.                                                                           
                                                                                                                                
Senator Olsen voiced his support of the bill.                                                                                   
                                                                                                                                
9:21:46 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Bishop addressed  the  fiscal  impact note,  FN1                                                                    
(REV), from  DOR, allocated to  the Permanent  Fund Dividend                                                                    
Division which  was in  the amount  of $9,000  in FY  19. He                                                                    
read from page 2 of the analysis:                                                                                               
                                                                                                                                
     Additional  programming will  be  required  on the  PFD                                                                    
     application  as well  as the  participation application                                                                    
     as   tribal   governments   do  not   have   the   same                                                                    
     requirements as  the other participants, nor  are there                                                                    
     search  options that  fit their  criteria. As  fees are                                                                    
     collected,  continued  administrative   costs  will  be                                                                    
     covered.  However, since  AS  43.23.062(e) states  that                                                                    
     "the  department may  not use  money from  the dividend                                                                    
     fund for administrative  costs incurred in implementing                                                                    
     this  section, even  if it  has  been appropriated  for                                                                    
     costs of administering the  dividend program" a onetime                                                                    
     amount  of  $9,000  will  be   necessary.  This  is  an                                                                    
     estimate of 75  hours of programming at a  rate of $120                                                                    
     per hour.                                                                                                                  
                                                                                                                                
Senator von  Imhof believed  that non-profits  that received                                                                    
funds   from  Pick.Click.Give   pay  a   7  percent   annual                                                                    
administrative fee. She asked whether she was correct.                                                                          
                                                                                                                                
SARA  RACE,  DIRECTOR,  PERMANENT  FUND  DIVIDEND  DIVISION,                                                                    
DEPARTMENT  OF REVENUE,  answered  in  the affirmative.  She                                                                    
informed committee members that  participants in the program                                                                    
pay  an initial  $250  application fee  and subsequently,  7                                                                    
percent  annually   was  withheld  from   contributions  for                                                                    
administering the program. She asked  if it would make sense                                                                    
to extend the  annual fee to any native  entities that enter                                                                    
the program  via the bill.  Ms. Race believed that  the bill                                                                    
contained a  provision to collect the  7 percent assessment.                                                                    
Senator  von  Imhof  asked  if the  one-time  fee  was  also                                                                    
included  in  the  bill.  Ms.  Race  stated  that  the  $250                                                                    
application fee was included in the legislation.                                                                                
                                                                                                                                
Co-Chair MacKinnon appreciated the clarity.                                                                                     
9:25:03 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon asked whether  Ms. Race wanted to provide                                                                    
comments  on   the  bill.  She  referenced   testimony  that                                                                    
suggested tribes should currently  qualify, and the bill was                                                                    
a clarification rather than a  new provision. She also noted                                                                    
the  testimony about  tribal sovereignty  and the  potential                                                                    
difficulty  in  tracking  how funds  were  spent.  Ms.  Race                                                                    
understood  that not  all tribal  governments had  501(c)(3)                                                                    
status.  She clarified  that the  tribal organizations  were                                                                    
subject to  the same fees  and requirements under  the bill.                                                                    
Therefore,  from the  administrative  and agency  standpoint                                                                    
the   tribal  organizations   would   be   like  the   other                                                                    
organizations  the program  currently worked  with. Co-Chair                                                                    
MacKinnon  asked  if the  bill  should  require that  tribal                                                                    
organizations   gain   501(c)(3)    status   in   order   to                                                                    
participate in  the program. Ms.  Race felt that  she should                                                                    
not speak to the question.                                                                                                      
                                                                                                                                
Senator Micciche inquired why  Co-Chair MacKinnon was asking                                                                    
the question. He favored the  ability to check the financial                                                                    
records  of  the  tribal  participants.  Co-Chair  MacKinnon                                                                    
stated she  was referencing  the two previous  speakers, one                                                                    
of  which had  suggested  that the  bill  address the  legal                                                                    
immunity  issue.   She  referred  to  Senator   von  Imhof's                                                                    
comments    about    the    Form   990    disclosure    that                                                                    
501(c)(3)nonprofits were subject to.  She commented that she                                                                    
had asked  the question to  determine whether the  state had                                                                    
legal recourse  if the  contributions were  misused. Senator                                                                    
Micciche  requested information  regarding  how many  tribal                                                                    
organizations  that  could  potentially participate  in  the                                                                    
program were 501(c)(3)nonprofits and how many were not.                                                                         
                                                                                                                                
Co-Chair MacKinnon asked the sponsor to find the answer.                                                                        
                                                                                                                                
9:28:38 AM                                                                                                                    
                                                                                                                                
Senator von  Imhof stated  that the  Pick.Click.Give program                                                                    
was the "brain child of  the Rasmussen Foundation," of which                                                                    
she was  a member. She  emphasized that the  original intent                                                                    
of   the  program   was  to   provide  money   to  nonprofit                                                                    
organizations designated by its 501(c)(3) status.                                                                               
                                                                                                                                
Co-Chair MacKinnon  asked whether  the administration  had a                                                                    
position  on  the  bill  and  whether  participation  should                                                                    
extend to all federal  tribes or exclusively Alaskan tribes.                                                                    
Ms. Race  answered that the  agency was neutral on  the bill                                                                    
but believed the tribes should be Alaskan.                                                                                      
                                                                                                                                
Co-Chair MacKinnon  stated that amendments to  the bill were                                                                    
due to her office by the following Thursday at 5:00 p.m.                                                                        
                                                                                                                                
SB  8   was  HEARD  and   HELD  in  committee   for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
SB 8 Sectional Analysis.pdf SFIN 2/20/2018 9:00:00 AM
SB 8
SB 8 Summary of Changes.pdf SFIN 2/20/2018 9:00:00 AM
SB 8
SB 8 Sponsor Statement.pdf SFIN 2/20/2018 9:00:00 AM
SB 8
SB 8 support letters.pdf SFIN 2/20/2018 9:00:00 AM
SB 8
SB 154 pick click give flow chart.pdf SFIN 2/20/2018 9:00:00 AM
SB 154
SB 154 Pick Click Give Program overview.pdf SFIN 2/20/2018 9:00:00 AM
SB 154
SB 154 Sectional Analysis, ver D.pdf SFIN 2/20/2018 9:00:00 AM
SB 154
SB 154 Sponsor Statement.pdf SFIN 2/20/2018 9:00:00 AM
SB 154
SB 8 - Opposition Bishop.pdf SFIN 2/20/2018 9:00:00 AM
SB 8