Legislature(2017 - 2018)BUTROVICH 205
01/30/2018 03:30 PM Senate STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| SB8 | |
| SB154 | |
| SB130 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 8 | TELECONFERENCED | |
| *+ | SB 154 | TELECONFERENCED | |
| *+ | SB 130 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 154-PFD CONTRIBUTIONS TO GENERAL FUND
3:44:42 PM
CHAIR MEYER called the committee back to order and announced the
consideration of SB 154.
3:45:06 PM
SENATOR WILSON, Alaska State Legislature, bill sponsor,
explained that SB 154 would allow Alaskans to donate all or a
portion of their PFD directly to the state's general fund. He
said the bill would provide those Alaskans who would like to
donate to the state's general fund a method and an opportunity
to do so through the Pick.Click.Give program. He explained that
the Alaska Department of Administration has said the PFD
donation process to the state would be tax exempt and could be
used to provide tax relief, reduce the rates, and allow to "Only
tax the other portion of their items." He disclosed that any
other cash donation to the general fund would be exempt from the
7-percent coordination or would not be required to pay the $250
fee. He added that the "children protection piece" for the PFD
already exists in statute.
3:46:53 PM
GARY ZEPP, Staff, Senator Wilson, Alaska State Legislature,
Juneau, Alaska, provided a sectional analysis for SB 154 as
follows:
Section 1:
Amends AS 43.23.062(a) by adding to the general fund
and "the general fund" to allow contribution from the
electronic Alaska Permanent Fund dividend to the state
general fund.
Section 2:
Amends AS 43.23.062(b) to add "general fund" to the
list of organizations, community foundations or
charitable organizations eligible to be added to the
contributions list.
Section 3:
Amends AS 43.23.062(m) by adding "general fund" or to
the list of organizations that do not have a
coordination fee withheld.
MR. ZEPP noted that a zero fiscal note was submitted by
Centralized Administrative Services-Finance Division, Department
of Administration. He detailed the second fiscal note from the
Permanent Fund Dividend Division, Taxation and Treasury,
Department of Revenue as follows:
• FY2019: $20300 for programming to establish and administer
new process.
• FY2020 and beyond: $10000 annually to administer program.
3:51:15 PM
SENATOR WILSON emphasized that the intent of the legislation is
not to politicize the Pick.Click.Give program.
CHAIR MEYER asked if the bill should have a fiscal note showing
some revenue to the general fund.
SENATOR WILSON explained that the statute does not allow
donations to be used to help offset the cost of the program. He
said his office has met with the Department of Revenue to look
at ways to offset the ongoing cost. He noted that an amendment
could be introduced where a percentage fee from the first
donation could be used to offset some of the reoccurring cost.
CHAIR MEYER assumed that somebody could write a $1,500 check to
the State of Alaska if they wanted too.
SENATOR WILSON answered correct.
CHAIR MEYER asked if the legislation would save the taxes by
having it taken off the PFD.
SENATOR WILSON specified that the intent was to ease the process
for Alaskans. He added that the transaction would also be a tax
deduction.
3:53:13 PM
MR. ZEPP noted that Senator Wilson's office will work with The
Alaska Community Foundation to address potential concerns
regarding donor competition and work on messaging to make sure
folks understand the difference of their donations.
SENATOR GIESSEL pointed out that a PFD must be declared on an
individual's income report to the IRS. She asked if donating
directly to the general fund would bypass IRS notification.
MR. ZEPP emphasized that he is not a tax consultant but opined
that donating a PFD to the general fund would bypass IRS
notification.
SENATOR GIESSEL replied that she was surprised by Mr. Zepp's
answer.
MR. ZEPP disclosed that the executive branch classified the
donation as charitable.
SENATOR GIESSEL pointed out that the proper definition is the
donation is tax deductible but nevertheless income that an
individual will be taxed on.
MR. ZEPP answered that he believed so.
3:54:53 PM
SARA RACE, Director, Permanent Fund Dividend Division, Alaska
Department of Revenue, Juneau, Alaska, noted that she was not a
tax professional but opined that once a dividend is issued it
becomes income; however, a contribution back to the state can be
used as an itemized deduction just like a contribution to a
nonprofit.
3:55:23 PM
CHAIR MEYER opened public testimony.
SENATOR WILSON asked what happens if an individual declines
their PFD.
MS. RACE assumed that an individual would not apply for a
voluntary program; however, she noted that there is an option
available for somebody that decided to sign over their dividend
or write a check back to the state and the funds would be
deposited into the general fund. She disclosed that there are a
couple of individuals every year that call the Department of
Revenue and go through the process of returning their PFD.
CHAIR MEYER asked Ms. Race if she had any other comments on the
division's fiscal note.
MS. RACE explained that the administrative costs taken on from
SB 154 ends up being different because there is a statute that
says that the department cannot use operating funds from the
dividend fund to administer the Pick.Click.Give program, so
without the 7-percent fee being taken off for an application fee
that is why a fiscal note was included.
3:57:24 PM
NINA KEMPPEL, President & CEO, The Alaska Community Foundation,
Anchorage, Alaska, noted the success of the Pick.Click.Give
program and thanked the Legislature for developing and
continually refining the program. She disclosed that over $20
million has been raised in charitable giving for over 700
charitable organizations.
She remarked that the Pick.Click.Give program faces challenges
due to the uncertainty around the permanent fund and the state's
near-term finances. She disclosed that the program finds
attracting new donors to be harder. She explained that the
original intent of the Pick.Click.Give program was to be a tool
for the nonprofit sector to be able to increase their
unrestricted charitable donations. She added that the program
was also intended to assist charitable organizations in
cultivating new and existing relationships with their donors as
well as increasing the impact of Alaska's nonprofit sector.
4:00:08 PM
MS. KEMPPEL said The Alaska Community Foundation sees the merits
of SB 154 but noted the foundation's concerns with the
legislation where the charitable intention of Pick.Click.Give
will be "watering down" as well as causing confusion about what
is a charitable organization by bringing in a new element into
the program. She opined that the legislation opens the door to
anyone joining the program outside of charitable organizations.
She said the foundation's final concern pertains to the general
fund not having to contribute towards the program's 7-percent
administrative fee and that may lead to a public misperception
regarding the program's low-overhead-number administrative fee.
SENATOR GIESSEL asked Ms. Kemppel if charitable organizations
are defined as 501(c)(3).
MS. KEMPPEL replied yes, except for some educational
organizations such as the university.
4:02:47 PM
PAMELA LEARY, Director, Treasury Division, Alaska Department of
Revenue, Juneau, Alaska, said the only impact from the bill in
terms of processes is that there will be more money in the
general fund to go towards the state's operating cost.
SENATOR GIESSEL asked how many people routinely give their PFD
back, how much revenue is generated, and how many more might
return their PFD if SB 154 is passed.
MS. LEARY replied that she did not know. She noted that the
bill's intent will provide a process should an individual decide
to return their PFD.
CHAIR MEYER asked if a person could write a check to the
"treasury or revenue" if a person wanted to give $10000 to the
state government because Alaska does not have an income tax.
4:04:39 PM
MS. LEARY answered yes. She explained that an individual could
write a check to the "State of Alaska." She noted that the money
is sent to the general fund.
CHAIR MEYER asked if an individual can request that the money
specifically go to education.
MS. LEARY replied that she is not sure the money can go anywhere
other than the general fund.
4:06:34 PM
CHAIR MEYER closed public testimony.
SENATOR WILSON noted that he would like to offer an amendment
either in the Senate State Affairs Committee or the next
committee of referral. He explained that his intent is to lower
the fiscal note's ongoing costs and figure out ways to make sure
the process is easy without burdening additional charitable
giving.
CHAIR MEYER noted that Senate Finance is the next committee of
referral, an appropriate venue for Senator Wilson to offer his
amendment. He remarked that SB 154 is a good mechanism for those
that want to give their PFD back to the state.
4:08:11 PM
SENATOR GIESSEL moved to report SB 154, version 30-LS0081\D from
committee with individual recommendations and attached fiscal
notes.
4:08:21 PM
CHAIR MEYER said there being no objection, the motion carried.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB - 8 Sponsor Statement.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 8 |
| SB 8 - Version A.PDF |
SSTA 1/30/2018 3:30:00 PM |
SB 8 |
| SB 8 - Sectional Analysis.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 8 |
| SB 8 - Support Letter Native Village of Afognak.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 8 |
| SB 8 - Support Letter Woody Island Tribal Council.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 8 |
| SB 8 - Fiscal Note Updated 2018.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 8 |
| SB 154 - Sponsor Statement.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 154 - Version D.PDF |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 154 - Sectional Analysis, ver D.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 154 - Invited-Expert Testimony Summary.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 154 - Fiscal Note DOA.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 154 - Fiscal Note DOR PFD.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 130 Sponsor Statement .pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 130 |
| SB 130 Version A.PDF |
SSTA 1/30/2018 3:30:00 PM |
SB 130 |
| SB 130 Legal Memo 11.20.2017.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 130 |
| SB 130 Letter of Support NFIB.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 130 |
| SB 130 Fiscal Note DoE.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 130 |
| SB 154 - PickClickGive Flowchart.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |
| SB 154 - PickClickGive Program Overview.pdf |
SSTA 1/30/2018 3:30:00 PM |
SB 154 |