Legislature(2011 - 2012)HOUSE FINANCE 519
02/27/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HJR16 | |
| HB250 | |
| SB30 | |
| HB224 | |
| HB302 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HJR 16 | TELECONFERENCED | |
| + | HB 250 | TELECONFERENCED | |
| += | HB 224 | TELECONFERENCED | |
| += | SB 30 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 302 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
February 27, 2012
1:32 p.m.
1:32:26 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:32 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Tammie Wilson
MEMBERS ABSENT
Representative Mark Neuman
ALSO PRESENT
Representative Wes Keller, Sponsor; Kaci Schroeder-Hotch,
Staff, Representative Bill Thomas; Sarah Fisher-Goad,
Executive Director, Alaska Energy Authority, Department of
Commerce, Community and Economic Development; Peter Crimp,
Deputy Director, Alternative Energy and Energy Efficiency,
Department of Commerce, Community and Economic Development;
Chuck Kopp, Chief of Staff, Senator Fred Dyson;
Representative Paul Seaton, Sponsor; Joe Michel, Staff,
Representative Bill Stoltze; Mary Jane Shows, Staff,
Representative Paul Seaton, Sponsor; Representative Fred
Dyson.
PRESENT VIA TELECONFERENCE
Richard Kromer, Senior Attorney, Institute for Justice,
Arlington, Virginia; Andrew Walker, Owner, Computer
Renaissance, Soldotna; Victor Kester, Executive Director,
Alaska Office of Victims' Rights, Legislative Branch;
Andrew Harrington, Attorney, Commercial/Fair Business
Section, Department of Law; Jordan Marshall, Special
Projects Manager, Rasmuson Foundation, Anchorage; Mike
Walsh, Vice President, Foraker Group, Fairbanks.
SUMMARY
HJR 16 CONST. AM: EDUCATION FUNDING
HJR 16 was HEARD and HELD in Committee for
further consideration.
HB 224 SALES OF NICOTINE PRODUCTS TO MINOR
CSHB 224(FIN) was REPORTED out of committee with
a "do pass" recommendation and with one zero
fiscal note from the Department of Health and
Social Services and one zero fiscal note from the
Department of Law.
HB 250 EXTEND RENEWABLE ENERGY GRANT FUND
HB 250 was HEARD and HELD in committee for
further consideration.
HB 302 REPEAL PICK-CLICK-GIVE AUDIT REQUIREMENT
CSHB 302(FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new zero
fiscal note from the Department of Revenue.
CSSB 30(2nd Jud)
RETURN OF SEIZED PROPERTY
CSSB 30(2nd Jud) was REPORTED out of committee
with a "do pass" recommendation and with three
previously published fiscal notes including, one
indeterminate note: FN4 (LAW); and two zero
notes: FN3 (DPS) and FN5 (LEG).
HOUSE JOINT RESOLUTION NO. 16
Proposing amendments to the Constitution of the State
of Alaska relating to state aid for education.
1:34:01 PM
REPRESENTATIVE WES KELLER, SPONSOR, thanked the committee
for hearing the legislation. He discussed that Richard
Kromer with the Institute of Justice had been involved in
various private education school scholarship cases. He
opined that the bill represented a step forward in the
education system. He explained that the purpose of the bill
was to expand education choice options by allowing public
money to follow children to private schools based on
parental choice. The bill provided a legislative response
to past Alaska Supreme Court decisions (Matthews v. Quinlan
and Sheldon Jackson v. State of Alaska) that broadly
interpreted the restriction of state funds paying for
private education. He communicated that the Alaska Supreme
Court had determined that the state constitution did not
allow state money to pay for private religious schools.
Representative Keller believed that there were some
exciting private sector options available such as ITunes U
and Khan Academy. He relayed that the bill allowed the
private sector to be more involved. He had introduced the
bill because he believed that Alaskans solidly supported
the idea; he had received a number of calls and
encouragement on the issue. He explained that a "credible"
survey had been done that showed "solid support" related to
the Blaine Amendment. He relayed that the Alaska Federation
of Natives (AFN) had passed a resolution in support of
school choice. Tom Fink, former legislator and mayor of
Anchorage had worked "tirelessly" on the issue and was
available for questions. He observed that charter schools
had waitlists and homeschools were not a viable option for
many working parents. He stated that private schools cost
less, but were prohibitive to many parents who could not
afford to pay private school tuition on top of other
expenses such as property tax. He relayed that 2.5 percent
of Alaskan students were in private schools. He thought
that private schools could be used to help the current
situation.
1:38:23 PM
Representative Keller opined that the issue was large
enough that the public should be able to make the decision.
He stated that the constitutional amendment would be
"simple in size" to allow for school choice and money to
follow students into private schools.
Co-Chair Stoltze discussed that the committee would hear
the bill multiple times. He explained that the immediate
fiscal impact would be the cost of printing an extra page
in the ballot book; there were other potential financial
implications that were currently not known.
Co-Chair Thomas pointed out that AFN had passed a
resolution in support of the legislation (copy on file).
Representative Keller was excited about the opportunity the
bill presented. He believed AFN and rural communities would
come up with innovative options if given the ability to do
so.
Co-Chair Stoltze relayed that public testimony would be
held at a future meeting.
1:41:46 PM
Representative Keller discussed that Richard "Dick"
[Kromer] was an attorney for the Institute of Justice who
litigated school choice cases in federal and state courts.
Several of his current cases involved the constitutionality
of including religious schools among the private schools
that could participate in school choice programs. He
relayed that Mr. Kromer was a resident expert on Blaine
Amendments. Mr. Kromer had worked as a federal civil rights
attorney and had worked for the U.S. Departments of
Education and Justice, and for the Equal Employment
Opportunity Commission.
Representative Gara asked whether the sponsor had compiled
transcripts from the Constitutional Convention that
included the provision banning public funds for private
schools.
Representative Keller replied that he had compiled the
transcripts, but not in a way that was ready for
distribution. He remarked that he found the history of the
constitution process fascinating. He discussed that the
Blaine Amendment had originally been an attempt to amend
the U.S. Constitution by Congressman Blaine; the amendment
had failed by one vote. He detailed that laws had been
passed that required new states, which included all of the
western states and others, to have a Blaine Amendment. He
furthered that several of the states had amendments
specifying that no money should be directly or indirectly
made available to private schools. He noted that the
transcripts were in the context of the Blaine Amendment
history.
Representative Doogan asked for a background on the
Institute of Justice.
1:46:14 PM
RICHARD KROMER, SENIOR ATTORNEY, INSTITUTE FOR JUSTICE,
ARLINGTON, VIRGINIA (via teleconference), described the
organization as a public interest law firm located in
Arlington, Virginia. The firm litigated in four different
areas including school choice, private property practice
(e.g. the Kelo imminent domain case), economic liberty in
efforts to open up entry level occupations that were over-
regulated by state agencies (e.g. African hair braiding and
shoeshine provisions, licensure to sell caskets and other),
and first amendment free speech issues (e.g. campaign
finance reform). The firm had been involved in all school
choice cases including the U.S. Supreme Court case Zelman
v. Simmons-Harris, which upheld the Cleveland scholarship
program against the challenge of a violation of the Ohio
state constitution and the federal establishment clause.
The prior year the firm had been involved in a case
involving Arizona's tax credit for donations to private
scholarship funds that provided scholarships to individuals
planning to use private education. He relayed that both
school choice cases had been victories for the firm, but it
had lost several other cases.
Mr. Kromer relayed that the firm was approximately 20 years
old; it advised people working on drafting school choice
legislation and helped defend the legislation if it passed
and was challenged. He relayed that most school choice
programs were challenged by teachers' unions and allies,
but the firm had been successful in defending most of the
cases. He explained that in the firm's cases the state was
the primary defendant and the firm represented parents who
intervened in the litigation. The institute had been
involved in the Milwaukee Program, which was the paradigm
for the urban programs that existed in Milwaukee,
Cleveland, Washington D.C., and New Orleans. Other types of
school choice programs had been developed in the past 20
years; there were seven or eight that were specific to
children with disabilities, which typically had not been
challenged.
1:50:36 PM
Mr. Kromer communicated that the institute had typically
encouraged states with "bad law" under the state Blaine
Amendment to create school choice programs via private
contributions that the states encouraged through tax credit
legislation. There were over 20 different school choice
programs that involved private schools, which had resulted
in the firm gaining expertise in state Blaine Amendments
because the opponents of school choice programs always
preferred to strike a law down under the state constitution
versus the U.S. Constitution. He furthered that opponents
were afraid that the U.S. Supreme Court would determine
that school choice programs did not violate the federal
establishment clause as long as they were religiously
neutral and did not encourage the use of religious schools
over other schools.
Mr. Kromer discussed that Blaine Amendments were a
"peculiar" development of the 1800s. Public schools had
originally been conceived and designed to be generically
Protestant schools, but not to reflect the ideology of a
particular sect. He expounded that as an increased number
of Catholics moved to the U.S. the Protestants saw the
schools as a way to "wean" Catholics away from their faith.
The Catholic Church resisted the efforts and the required
reading of the Protestant bible in public school, the
singing of Protestant hymns, and the use of Protestant
oriented text books that "derogated" the Catholic faith. He
explained that as a result Catholics requested an equal
share of public education dollars directly for their
parochial schools. The Catholics were met in the Know
Nothing Movement in the 1850s, by the federal government
and the Republican Party in particular, with a rejection of
their demands. The result was that some state constitutions
(including Alaska's) contained language specifying that no
appropriation "shall be made" to any sectarian school,
which had been code for Catholic. He expounded that five
current U.S. Supreme Court judges had recognized in various
cases that the federal Blaine Amendment was an anti-
Catholic proposed enactment.
Mr. Kromer continued to provide a history of the Blaine
Amendment. He delineated that in the 1870s there was a
Republican effort to disenfranchise Democrats (who were
typically Catholic). Republicans had proposed a federal
constitutional amendment that would have required all
states to abide by the language of state constitutions that
specified there would be no appropriations for religious
sectarian schools.
1:55:24 PM
Mr. Kromer detailed that the amendment had failed to get
the two-thirds majority required by a narrow margin in the
U.S. Senate, but it had passed "overwhelmingly" in the U.S.
House, which meant that the backers had to vote to impose
the law through enabling legislation on any new states;
therefore, all new states after the 1876 Blaine Amendment
failure had Blaine Amendments in their state constitutions.
Alaska's constitution specified that no money shall be paid
from public funds for the direct benefit of any religious
or other private educational institution; the language was
narrower than was typical and was intended to distinguish
between direct aid to religious schools and indirect aid
that benefitted private school students. He relayed that
the exception had been accepted in the Zelman case in 2002.
He viewed the legislation as an effort to bring the
interpretation of Alaska's constitutional language in line
with the interpretation of the federal religion clauses.
Mr. Kromer pointed out that Alaska's constitution had its
own general religion clauses under Article 1, Section 4
titled: "Freedom of Religion." The language was essentially
a verbatim copy of the federal religion clauses in the
First Amendment that read "no law shall be made respecting
establishment of religion or prohibiting the free exercise
thereof." He interpreted that the language had been
included as an effort to convey that Alaska would use a
standard similar to the U.S. Constitution. He detailed that
there was a three part test for an establishment clause
violation under the First Amendment that required religious
neutrality and no excessive entanglement of the state and
religion (Lemon v. Kurtzman). He stated that language in
Alaska's constitution implied that the state's supreme
court should use a similar test when it addressed issues of
a violation of establishment of religion principle.
1:59:04 PM
Mr. Kromer believed the impetus for the legislation was a
result of bad decisions made by the state supreme court. He
explained that the court had interpreted the language of
the two provisions proposed for amendment very broadly and
in a way that had been rejected at Alaska's 1955 and 1956
constitutional conventions; a movement had been made to
expand the language to include direct and indirect benefit
for any religious or private institution, but it had been
rejected. In the Matthews v. Quinton and the Sheldon
Jackson cases the Alaska Supreme Court had essentially
included indirect in its interpretation and had stated that
aid to students indirectly benefited colleges or elementary
schools that were chosen. The court had decided that the
state was aiding the private religious schools if aid was
provided to students for transport to the schools. He
opined that the aid was indirect. He relayed that the U.S.
Supreme Court had determined that providing aid to students
who chose a private religious school was not the same as
providing a direct grant to the school (Zelman and other
cases); the court recognized a difference between
incidental and direct aid. He noted that under certain
circumstances direct aid could run "afoul" of the
establishment clause; however, indirect aid to students had
been accepted for at least 10 years in the K-12 context and
had never been challenged in the post-secondary context.
Mr. Kromer believed that the problem with supreme court
decisions was that the courts had the final word unless
overruled by the people or a subsequent decision made by
the same court. The resolution proposed to amend the
language of the particular provisions to change the outcome
with respect to student assistance programs in order to
bring state constitution in line with the principles of the
federal religion clauses.
2:03:30 PM
Mr. Kromer explained that in 1968 the New York State
Supreme Court had reversed an earlier decision because its
state constitution included "direct" and "indirect"
language; therefore it was determined that student
assistance programs representing incidental aid were not in
violation of the provision; any benefit to schools selected
by students who received aid was incidental. He detailed
that South Carolina previously had similar language to New
York that prohibited appropriations that provided direct or
indirect benefits to private religious schools. The state
had struck down a higher education student assistance
program based on the indirect language; subsequently the
legislature and the population had removed the indirect
language and a new assistance program had been enacted. The
New York and South Carolina cases were examples of states
that had removed language prohibiting "beneficial"
programs.
Co-Chair Stoltze remarked that the testifier would be
invited to speak to the committee again during the wrap up
portion of the bill at a later date. He asked
Representative Keller to provide the committee with a copy
of the state decisions discussed by Mr. Kromer.
Representative Keller opined that the Alaska Supreme Court
had allowed Alaska's Blaine Amendment to tie the hands of
the legislature in its ability to enact school choice
reform initiatives. He cited the Sheldon Jackson case as an
example; the legislature had tried to assist with tuition
in the past. The passage of the bill would allow Alaskans
to decide whether to free the legislature's hands to
encourage school choice in the state.
Co-Chair Stoltze requested Representative Keller to be
available for questions from legislators. Representative
Keller agreed.
HJR 16 was HEARD and HELD in Committee for further
consideration.
2:07:03 PM
AT EASE
2:08:33 PM
RECONVENED
HOUSE BILL NO. 250
"An Act relating to the renewable energy grant fund
and recommendation program; and providing for an
effective date."
2:08:46 PM
CO-CHAIR BILL THOMAS, SPONSOR introduced his staff who
would discuss the bill.
KACI SCHROEDER-HOTCH, STAFF, REPRESENTATIVE BILL THOMAS,
explained that the bill reauthorized the Renewable Energy
Grant Fund for an additional five years. The fund was
established in 2008 and had funded approximately 200
projects statewide; 21 projects had come on line in 2011
due to the fund. The bill included intent language that
would fund the program at $50 million per year, which was a
continuation of the intent language from the enacting
legislation. She relayed that department staff were
available to answer specific questions.
Co-Chair Thomas pointed out that the proposed legislation
would bring in $100 million in federal matching funds. One
community that had used the funds to retire debt had taken
its cost from $0.80 down to $0.20 once its hydro facility
had come on line. He noted that the displacement of diesel
was huge and that an increasing amount would be displaced
as renewable energy projects continued.
SARAH FISHER-GOAD, EXECUTIVE DIRECTOR, ALASKA ENERGY
AUTHORITY (AEA), DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT, was available for questions.
Representative Doogan wondered why the proposal was to
authorize the program for $50 million when it had only used
$25 million for all but its inception year. Ms. Schroeder-
Hotch explained that the bill extended the existing law.
She added that the bill included intent language that could
be changed by the legislature.
Representative Doogan surmised that the bill did not make
any changes to the current program. Ms. Schroeder-Hotch
responded in the affirmative.
Co-Chair Thomas noted that the legislature had the power of
appropriation.
2:12:55 PM
Representative Edgmon supported the legislation. He did not
believe that the program should be considered the panacea
for the energy situation in Alaska. He believed that while
successful, the program was narrow in scope in terms of
renewable energy project options. The program was helpful,
but there were numerous areas in the state that did not
have renewable energy options available. He believed the
program should be recognized for "what it is and what it
isn't."
Co-Chair Thomas referenced that when he had first
introduced the bill it had included nuclear energy, which
had kept it from passing. He explained that at the time
"renewable" had been a "hippie" word and that it had been a
significant leap forward. He relayed that the Palin
Administration pressed for the bill, which had been stuck
in the Senate Finance Committee; as a result it had passed
out of committee with an appropriation.
Representative Edgmon remembered that many people had
equated renewable energy with cheaper energy; however, in
some cases renewable energy was more expensive and was not
affordable. He asked the department to discuss the issue.
Co-Chair Stoltze provided a hypothetical example of a wind
project that may be successful in Kodiak, but could fail in
Anchorage.
2:17:18 PM
Ms. Fisher-Goad explained that there had been an earlier
request from the House Finance Committee for one year's
worth of data related to the payback period for several of
the projects. She noted that she would characterize
Representative Edgmon's comments slightly differently, but
it was important to recognize that there were fuel cost
savings that in current dollars may not necessarily be
comparable or cheaper; however, fuel costs were expected to
rise significantly for the next 20 years. The expectation
was that the imported fuel would be traded to communities
in rural Alaska for projects that were using local
resources for the generation, which would stabilize fuel
costs. She agreed that not all communities had renewable
resources available for development. She believed there
were challenges as well as opportunities for the program.
Through the rural energy planning process (including the
railbelt plan and southeast integrated resource plan) there
was a community and region-wide approach to plan for
energy. It was necessary to begin with a good rural power
system in order to successfully integrate wind into the
smaller systems. She opined that there was value and
benefit in the process, but that work remained to be done.
The agency was working to ensure that there was appropriate
technical assistance for the projects to move forward. She
relayed that a good diesel displacement metric had been
shown related to the projects. There were currently 14
projects that had one full year of data. She expressed that
her colleague would provide more detail on some of the
projects that had not shown the payback in 2011 fuel costs,
but had begun to show positive results.
Representative Edgmon discussed that a significant amount
of renewable energy projects came forward that did not make
the cut for various reasons including lack of
affordability. He had not meant to insinuate that AEA
approved renewable energy projects that were not beneficial
to consumers.
Co-Chair Stoltze commented that the decisions were social
as opposed to energy decisions.
2:21:26 PM
Vice-chair Fairclough asked about the geographic spread of
the 14 projects and whether the kilowatts produced had met
expectations.
PETER CRIMP, DEPUTY DIRECTOR, ALTERNATIVE ENERGY AND ENERGY
EFFICIENCY, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT, responded that the 14 projects were evenly
spread throughout the state including hydro in Southeast,
biomass in the Interior and Southcentral, and wind in the
Southwest.
Vice-chair Fairclough asked whether the total kilowatts
produced in the 14 projects had met expectations. Mr. Crimp
explained that the assessed projects were at approximately
84 percent of their goal for 2011. He noted that the heat
versus power projects had not been broken out by per
kilowatt hour.
Vice-chair Fairclough asked whether the state was looking
to partner with federal and/or private sector partners.
Ms. Fisher-Goad replied that AEA was always looking for
federal partners that would provide matching funds.
Additionally, the Denali Commission was currently very
active with the programs. Independent power producers were
also eligible program applicants; any additional private
sector investments in the program were welcome. There had
been increasing discussion related to the development of a
loan program; there was a power project loan program that
allowed entities to borrow in order to help them gain
increased matching funds.
Vice-chair Fairclough asked whether AEA was looking at
power generation regionally to allow areas to develop plans
and transmission proposals in order to provide sustainable
and affordable energy into local communities. She wondered
whether AEA was working to ensure that there were
beneficiaries of the program award process throughout the
state.
Ms. Fisher-Goad answered that the renewable energy fund
program had helped to focus the issues and dovetailed
nicely with the regional planning approach. The agency had
been building on its pathway document that had been
published the prior year and was moving towards regional
planning; Sandra Moller, Deputy Director of Rural Energy
was heading up the efforts. The entity had a contract with
Nuvista Light and Power in the Calista region to spearhead
the approach. The agency was looking for regional entities
that could do most of the coordination; AEA would help fund
the work and would provide technical resource and support
for the regional development. She added that any type of
transmission system and interconnection between communities
should be coming together.
2:27:00 PM
Representative Guttenberg wondered whether there was a
chart that showed the displacement of diesel by the
alternative energy over time and expectations on how to
continue the savings into the future. He discussed
alternative ways for coming up with power in the past. At
one time Representative Joule had illustrated that coal
would be a reliable energy source for some rural areas. He
referred to a letter from the Alaska Power Authority (copy
on file) stating that fuel displacement was 3.4 million
gallons in 2013 and that by the end of 2016 it would be
11.6 million. He noted that the data showed a tripling of
the displacement savings and believed that the use of oil
would be eliminated if savings continued to increase.
Mr. Crimp responded that AEA had provided legislators with
a CD that included a program status report and a chart that
showed fuel displacement based on rounds 1 through 4.
Representative Guttenberg wondered whether the disk
included information on what it would take to increase the
displacement going forward.
Mr. Crimp replied that AEA had projections based on
projects that had been funded to date. He relayed the
agency would add data to the projections for round 5 if
funds were appropriated for the continuation of the
program.
Representative Gara wondered whether the current renewable
energy fund allowed the state to pay for transmission if it
would result in a more efficient renewable energy project.
He discussed the efficiency of large projects that could
transmit energy to numerous villages.
2:30:44 PM
Ms. Fisher-Goad replied that a transmission line connecting
to a renewable resource was an eligible project.
Representative Gara queried whether AEA had worked to
maximize the state's ability to train people locally who
could maintain the energy projects.
Ms. Fisher-Goad replied that AEA had a training program
that included hydro training; it was currently expanding to
include training on wind diesel systems. The agency also
had technical assistance to work with local power house
operators on the integration of the diesel systems.
Representative Gara asked about a wind power project in
Anchorage. He believed the cost of the wind energy produced
at Fire Island would have been lower if the city had
participated. Mr. Crimp did not have enough information to
answer the question.
Ms. Fisher-Goad added that AEA was working with Chugach
Electric Association and the other railbelt utilities
including Golden Valley Electric Association on a
regulation wind study to help integrate the Eva Creek and
Fire Island projects into the system. She detailed that
some of the work would help any future wind development
projects in the railbelt system and potentially with the
expansion of the Fire Island project.
Representative Gara advocated for any expansion of the Fire
Island project.
Co-Chair Stoltze wanted to make sure consumers were not
tagged with an expensive project.
2:33:31 PM
Ms. Fisher-Goad responded that the agency was participating
in a regulation study in order to address the issues.
Representative Wilson asked why Delta had not been
mentioned in the wind project study. Ms. Fisher-Goad
responded that Delta project had been included, but was
much smaller than the Eva Creek and Fire Island projects
that were coming online.
Representative Wilson noted that the Delta project had the
potential to be larger. She discussed studies that had been
done and items that the company had learned that could be
utilized. Ms. Fisher-Goad answered that the intent of the
regulation study was to help put some guidance around how
larger wind systems could be integrated into the railbelt
system.
2:34:50 PM
Co-Chair Thomas pointed out that the hydro in Metlakatla
was over 100-years-old. He stressed that the facilities did
not wear out and would last for many years. He communicated
that the bill provided a balance of funding for regions
across the state. He remarked that regional capital budget
funding requests could be entered into the Capital Project
Submission Information System (CAPSIS). He discussed that
some projects AEA mentioned were further along because an
energy consultant/ardor had been put in Southeast
Conference. He recommended that communities with ardors
should make sure the ardor was capable to help obtain
funding for projects.
HB 250 was HEARD and HELD in committee for further
consideration.
2:38:28 PM
AT EASE
RECONVENED
2:39:00 PM
CS FOR SENATE BILL NO. 30(2d JUD)
"An Act providing for the release of certain property
in the custody of a law enforcement agency to a crime
victim under certain conditions and relating to
requests for that release by the office of victims'
rights."
2:39:00 PM
REPRESENTATIVE TAMMIE WILSON, CO-SPONSOR, provided opening
remarks on SB 30:
Senate Bill 30 is about restorative justice.
When a victim of a crime has their property held as
evidence by law enforcement agencies, it could be
months or even years before they are able to have
their possessions returned.
By holding a victim's property as evidence for a
prolonged period of time, extra burden is placed on
the property owner to replace what has been taken as
evidence. The consequences are even higher for small
business owners who may face bankruptcy if their
property loss is a crucial component of their daily
operations.
SB 30 will introduce a process for victims of property
crime to petition the court for relief in recovering
property held as evidence.
Representative Wilson elaborated that the bill was about a
process that would enable victims to receive their property
more quickly.
CHUCK KOPP, CHIEF OF STAFF, SENATOR FRED DYSON, addressed
the sectional analysis (copy on file). He explained that
currently the return of property was discretionary at the
advocate attorney level; the return of property could take
quite a bit of time if the attorneys did not agree. Often
crime victims were businesses and were therefore unable to
complete a sale or were underinsured on a property, which
could be very problematic. He referred to letters of
support in member's packets (copy on file). The bill
allowed a neutral decision maker the opportunity to weigh
in on the decision and provided the victims with direct
access to courts in order to ask the judge to determine
whether the interests of the victim outweighed those of the
other party. He read Section 1 of the sectional analysis:
1. Provides that a crime victim who is the owner of
property in the custody of a law enforcement agency
may request the agency for the return of their
property through the Office of Victims' Rights (OVR).
2. OVR will file the request with the agency after
conducting an investigation into the request to make
an initial determination if the crime victim is
entitled to return of the property being claimed under
the requirements of proposed 12.36.070(c): the crime
victim provides satisfactory proof of ownership, and
the party that objects to the return of the property
fails to prove that the property must be retained by
the agency for evidentiary purposes.
3. Once OVR makes such a determination, they will request
on behalf of the crime victim that the agency return
the property.
4. Within 10 days after receipt of request and following
reasonable notice to prosecution, defense and other
interested parties, the agency will request a hearing
before the court to determine if the property shall be
released to the crime victim.
5. The court of jurisdiction is identified in cases
involving a pending criminal case and in situations
where no criminal case is pending.
6. Establishes the burden of proof to be a preponderance
of the evidence, for both the crime victim showing
ownership and the objecting party proving the property
must be retained by the agency.
2:43:21 PM
Mr. Kopp continued to read from Section 1 of the sectional
analysis:
7. Establishes that if the court orders the return of the
property to the crime victim, the court may impose
reasonable conditions on the return to maintain the
evidentiary integrity of the property.
8. Identifies the term crime victim as having the meaning
given to victim in AS 12.55.185, the Code of Criminal
Procedure.
Mr. Kopp concluded with Section 2 of the sectional
analysis:
1. Establishes within Title 24, Chapter 65 Office of
Victims' Rights the authority of OVR to request a law
enforcement agency for return of property on behalf of
a crime victim claiming property after conducting an
investigation as proscribed in AS 12.36.070(c).
2. Provides that the victims' advocate may use any of the
powers granted to the advocate under Title 24, Chapter
65.
Representative Guttenberg wondered about the preponderance
of evidence in the situations presented in the bill. He
discussed multiple agencies involved. He wondered what
would happen if there was a lien or judgment on property
that an individual was trying to get back.
Mr. Kopp replied that the language "may order the return"
was included on line 7, page 2 of the bill, which allowed
flexibility on contested claims that the court could rule
on. The preponderance of evidence language had been
recommended by the Department of Law; it was more probable
that a party deserved to have their property returned
despite claims to the contrary by other parties. He
delineated that the court could make a determination based
on the provision in the bill or any other law that dictated
when property could be released. He pointed to language "if
the court orders the return of the property, the court may
impose reasonable conditions on the return" (lines 14 and
15, page 2); the specific language was for situations where
a person needed the property back quickly, but conditions
were applied. Conditions could include: a returned item
could not be sold or the condition of the item needed to be
maintained. He used a heavy piece of equipment as an
example of an item that could be photographed and
documented and returned to a business owner to allow them
to commence business activities, but the court may ask the
owner not to sell the item until the case was closed. The
sponsor felt that the language was permissive and broad
enough to allow the court the discretionary authority it
needed in the situations.
2:47:22 PM
Co-Chair Thomas referred to a letter in the packet from Hal
Ingalls (copy on file) who had a vehicle and equipment
confiscated. He discussed deterioration that could result
from leaving a vehicle to sit for too long. He wondered
whether the bill required the state to return property in
the same condition.
Mr. Kopp replied that the bill did not guarantee the
condition of returned property. He explained that the
legislation provided crime victims with an avenue to
directly appeal to the court in circumstances when they
could not get a party to agree to release their property.
Co-Chair Thomas read from the sectional analysis:
"establishes that if the court orders the return of the
property to the crime victim, the court may impose
reasonable conditions on the return to maintain the
evidentiary integrity of the property" (Section 1, line 7).
He thought the court should return the property in its
original condition. He wondered what the point would be to
return a vehicle in a deteriorated condition.
Co-Chair Stoltze understood that the bill addressed a small
portion of the problems experienced by property victims. He
believed the process to a solution was incremental and
recognized the hard work of the sponsor. He pointed out
that small business owners could not absorb a loss of their
only working vehicle or set of tools. He had heard
anecdotal remarks by trade union members who were forced to
take a loss because it was too cumbersome to deal with the
legal system.
Mr. Kopp appreciated the comments and noted that it had
taken three years to develop the current bill.
Vice-chair Fairclough referred the committee to letters of
support from the Alaska Homebuilder's Association and the
National Federation of Independent Businesses; both letters
cited battles between the government and smaller
businesses. She read an excerpt from a letter from Hal
Ingalls, CEO, Denali Drilling, Inc., Anchorage:
It has been 13 months since that accident with no
police report or indication that we will be able to
get our equipment back any time soon, nor are we able
to make a settlement with the insurance company. If we
were a smaller business than we are, we would be out
of business by not having access to our equipment to
continue to operate. Renting equipment to replace what
is in impound until the case is settled would be a
financial burden we would have to incur until the
troopers complete their paperwork.
Vice-chair Fairclough noted that at present it had been 14
months since the accident had taken place. She observed
that it was difficult to fight the government and that the
bill provided a process to help individuals acquire their
property. She believed that the bill would help with
recourse in the event that property was damaged while in
the possession of the government.
2:52:41 PM
Representative Costello asked whether the legislation would
help Mr. Ingalls and others currently in the same position.
Mr. Kopp replied in the affirmative.
Representative Costello spoke in support of the
legislation.
ANDREW WALKER, OWNER, COMPUTER RENAISSANCE, SOLDOTNA (via
teleconference), explained that in 2010 the company had
been defrauded of a laptop with a bad check. He relayed
that the $1,100 laptop had been sitting in police custody
since the fraud had occurred. He had received his laptop
during the last week, but the item value was worth less
than half of its original value and had been damaged
cosmetically during that time. He had tried to convince the
court to remove the hard drive and to return the laptop,
but that had not occurred. He explained that he was out the
money as a business owner because of the court system and
the associated delays. He expressed that it would have been
very helpful to have had an avenue to appeal in order to
get his money back.
Co-Chair Stoltze thanked Mr. Walker for his time. Mr.
Walker replied that he was happy to be part of anything
that would help victims of crime get their property back in
an expedient manner.
2:56:55 PM
VICTOR KESTER, EXECUTIVE DIRECTOR, ALASKA OFFICE OF
VICTIMS' RIGHTS, LEGISLATIVE BRANCH (via teleconference),
spoke in "enthusiastic" support of the legislation. He
believed the bill provided a valuable tool for crime
victims to attain the return of their property held during
the course of criminal prosecution. He highlighted positive
aspects of the legislation. He opined that the bill
provided a balanced means for crime victims to seek return
of their property thereby mitigating the costs associated
with the underlying criminal activity. The legislation
would allow crime victims to seek the return of their
property in a timely manner in accord with principle
decision making through the operation of OVR, the judicial
branch of government, and other criminal justice agencies.
The bill aligned with Article 1, Section 24 of the Alaska
Constitution mandating that crime victims be treated with
dignity, respect, and fairness in a criminal prosecution.
He stated that the bill was fair and established a legal
framework that would consider the institutional
perspectives of the Department of Law, law enforcement, the
judiciary system, and OVR before property was returned to a
crime victim.
Mr. Kester discussed that the bill promoted restorative
justice by putting the victim in the position they had been
in prior to the crime and allowing them to move forward in
a positive and constructive manner. He communicated that
the bill amplified the victim's voice regarding the request
for the return of their property and added clarity and
specificity to the victim's constitutional rights. The bill
required decision makers in a criminal prosecution to hear
and consider a victim's voice regarding the return of their
property. He believed that the justice was improved when a
crime victim's voice was heard and considered in the
criminal justice process. The bill helped victims that may
lack the ability to hire a private attorney or who was
unfamiliar with the legal process. The bill allowed the
expertise of OVR to assist crime victims with attaining
their property. The office was dedicated to helping crime
victims and sought to collaborate and cooperate with others
throughout the criminal justice system. He discussed that
there was a zero impact fiscal note. He thanked the
committee for the ability to testify on the legislation.
3:01:02 PM
Co-Chair Stoltze CLOSED public testimony. He referred to
the indeterminate fiscal note from Department of Law and
zero fiscal notes from Department of Public Safety and the
Legislature.
Representative Costello MOVED to report CSSB 30(2nd Jud)
out of committee with individual recommendations and the
accompanying fiscal notes.
Co-Chair Stoltze OBJECTED for purpose of discussion.
Representative Doogan wondered whether the faster return of
property would impact a victim's insurance claims or
ability to make a civil suit.
Representative Wilson hoped that the quicker receipt of
property would help victims to take care of the issues
sooner. She believed the legislation would result in fewer
court cases because victims would have direct access to the
courts and would receive their property more quickly.
There being NO further OBJECTION, it was so ordered.
CSSB 30(2nd Jud) was REPORTED out of committee with a "do
pass" recommendation and with three previously published
fiscal notes including, one indeterminate note: FN4 (LAW);
and two zero notes: FN3 (DPS) and FN5 (LEG).
3:04:30 PM
AT EASE
3:07:33 PM
RECONVENED
HOUSE BILL NO. 224
"An Act relating to the prohibition of selling or
giving tobacco or a product containing nicotine to a
minor unless prescribed by a licensed physician."
3:07:42 PM
Co-Chair Thomas MOVED to ADOPT proposed committee
substitute for HB 224, Work Draft 27-LS0466\X (Gardner,
2/23/12).
Co-Chair Stoltze OBJECTED for discussion.
JOE MICHEL, STAFF, REPRESENTATIVE BILL STOLTZE, explained
the changes in the CS. Language on page 1, line 13 had been
changed from "under 18 years-of-age" to "under 19 years-of-
age."
Co-Chair Stoltze asked whether the change was consistent
with current tobacco statutes.
Mr. Michel replied in the affirmative. He communicated that
a list had been inserted on page 2, line 5 of the CS:
(A) prescribed by a health care professional;
(B) given to a person by the person's parent or legal
guardian;
(C) provided by a state-approved tobacco cessation
program administered by the Department of
Health and Social Services; or
(D) provided by a pharmacist to a person 18 years of
age or older without a prescription.
Co-Chair Stoltze asked whether an explanation would be
provided regarding the disparate age parameters (18 years-
of-age and 19 years-of-age) included in the legislation. He
noted that the definition of the word "is" included on page
2, line 5 did not need to be explained.
MARY JANE SHOWS, STAFF, REPRESENTATIVE PAUL SEATON,
discussed that it had come to the sponsor's attention that
there were new products containing nicotine.
Co-Chair Stoltze asked Ms. Shows to address the changes in
the CS.
Ms. Shows explained that the language had been changed to
"under 19 years-of-age" (page 1, line 13) to allow tobacco
cessation programs to be accessible to youths who were 18
years-of-age or older. Changes in the bill addressed the
concern that tobacco cessation programs had not been
included in the list of people who could provide products.
Additionally, 18 year-olds would be able to go directly to
a pharmacist for a nicotine patch in order to quit using
tobacco.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS0466\X was ADOPTED.
3:12:11 PM
Representative Gara asked whether products provided by a
pharmacist to a person 18 years-of-age or older would only
be used to help the individual quit smoking. Ms. Shows
replied in the affirmative. She explained that items (1)
and (2) in the bill referenced products that could be used
under the program that were for cessation only.
Representative Gara wondered about the necessity of the 18
years-of-age or older provision. He referenced youths under
the age of 18 that wanted to quit smoking.
Ms. Shows replied that Andrew Harrington with Department of
Law had cited concern that the prior bill version would
prohibit 18 year olds from receiving the cessation products
from a pharmacy. The language had been changed to under 19-
years-of-age to ensure that 18 year olds would have
accessibility to the products; individuals under the age of
18 could receive the products from their parents.
Representative Gara wondered whether 17 year olds could get
a pharmacist prescription to help them quit nicotine. Ms.
Shows replied in the negative; cessation programs would
only provide literature to youths under 18 years-of-age.
She expounded that the youth's parents or a physician could
access and provide the product to the youth.
3:15:47 PM
Vice-chair Fairclough wondered whether there were any other
products containing nicotine that would not be regulated.
She referenced caffeinated energy drinks. She wondered
whether research had been done on other products that may
contain nicotine and on concentration levels.
Ms. Shows replied that the issue had been brought to the
sponsor's attention because of new nicotine dissolvables
that were not regulated by the Federal Drug Administration
(FDA). The products were currently being test-marketed in
four or five states and included nicotine hand wipes,
lozenges, water, tooth picks, and orbs. The bill would
prohibit minors from purchasing the new products coming to
the market.
Vice-chair Fairclough wondered whether research had been
done to determine if other products contained nicotine. Ms.
Shows replied that she could conduct the research and
follow up with the information. She detailed that the
research had been limited to the products that would be
marketed as "non-cessation."
Co-Chair Stoltze asked how the sponsor had obtained the
list of products that Ms. Shows mentioned. Ms. Shows
replied that a Virginia youth action group had compiled an
informative packet that had included the products.
Co-Chair Stoltze wondered whether the products were
currently available. Ms. Shows responded that the products
were currently in the test marketing phase in Ohio, Oregon,
Indiana, Colorado, and North Carolina.
Representative Costello asked about a $300 fine included in
the bill and wondered whether there had been discussion
around increasing the fine in order to act as a deterrent.
Ms. Shows answered that there had been discussion of having
the fine mirror a fine related to the sale of tobacco
products; however, it was determined that the specific fine
would make it onerous for businesses selling cessation
products and would create a statutory problem. To avoid the
difficulty, the fine had been limited to $300.
3:19:55 PM
Representative Gara clarified that the language included in
the bill stated that the fine was "not less than $300." Ms.
Shows agreed.
Co-Chair Stoltze referred to the zero fiscal notes.
Representative Gara asked whether the sale or gifting of
nicotine products to a minor was a misdemeanor or a felony.
ANDREW HARRINGTON, ATTORNEY, COMMERCIAL/FAIR BUSINESS
SECTION, DEPARTMENT OF LAW, (via teleconference), replied
that the offence was a violation and did not reach the
misdemeanor level.
Representative Gara asked for verification that the store
would be committing a violation and not a crime.
Mr. Harrington responded that the individual clerk or
employee making the sale would be responsible for the
violation if they acted negligently. He detailed that under
the parallel tobacco sale statute (AS 11.76.100) there were
sanctions that could be imposed on the store if there was a
negligent sale of tobacco to a minor; there was no parallel
provision for the sale of other nicotine products because
there was no endorsement required on the business license.
Representative Gara pointed to the language related to a
fine of not less than $300. He wondered whether there was a
cap on the maximum fine. Mr. Harrington replied that the
maximum fine was $500.
Representative Gara queried whether the legislature could
increase the cap on the fine. Mr. Harrington answered that
there was no requirement for a public defender, jury trial,
or other procedure protections that would accompany a
misdemeanor or felony. The dividing line for how high the
fine might before the Alaska Supreme Court determined that
criminal protections would apply was not defined. He
furthered that it may be constitutionally permissible to
increase the $500 maximum, but at some point the fine would
hit the constitutional ceiling.
3:25:03 PM
Representative Doogan asked whether the determination that
an offense was a minor violation was related to the amount
of money that could be levied against it or whether it was
a separate function that was not connected to the amount.
Mr. Harrington replied that both items played a part. He
explained that criminal statutes classified offenses as
felonies, misdemeanors, or minor offences. Minor offenses
included violations and the maximum fine was $500; there
was no jail time available for a minor offense. The
legislature could amend the statute to change the maximum
fine, but at some point due process protections would kick
in, which would change the prosecution procedures and the
fiscal note.
Representative Doogan surmised that the crime would have to
be reclassified if the fine was increased substantially
above $500.
Mr. Harrington replied that when the amount got high enough
the crime would have to be reclassified. He did not believe
there would be any problem increasing the fine to $400 or
$500, but a conforming amendment may be necessary if the
amount was higher. He furthered that the crime may need to
be increased to a misdemeanor in order for criminal due
process protections to kick in if the fine was increased
substantially (e.g. to $1000 or $2000).
Co-Chair Stoltze noted that under the scenario the fiscal
notes would change substantially. He asked the sponsor
about the decision to set the minimum fine at $300.
REPRESENTATIVE PAUL SEATON, SPONSOR, explained that
currently it was not illegal to distribute nicotine to
minors; therefore, stores were not required to keep the
products behind the counter and were not prohibited from
selling the products to youths. The bill would help ensure
that stores would be responsible for controlling any
nicotine products they sold. He relayed that the bill
represented a preemptive move to prevent minors from
becoming addicted to nicotine; the $300 minimum fine helped
to act as a deterrent without getting into the due process
issue.
3:29:48 PM
Representative Edgmon wondered whether the $300 fine would
apply towards the individual and the business that
committed the crime.
Representative Seaton replied that the fine would be
charged to the individual who sold the product. The fine
was not a business tax and was not attached to the business
license to avoid challenges from occupational licensing and
to business licenses. He felt that the bill represented a
clean and financially reasonable way for the state to
accomplish its goals without trying to increase the offense
to a misdemeanor or felony, which would result in due
process arguments.
Representative Edgmon thought that the legal definition of
the word "person" expanded beyond a single individual.
Mr. Harrington replied that the term "person" could
encompass a business; however, there was a practical
limitation, given that in circumstances in which a product
was negligently sold it would be relatively easy to show
that an individual had been negligent because they had
failed to check an ID. He furthered that it may be
difficult to show that a business was negligent if it had
policies and procedures in place that required employees to
check for ID. He agreed that in some circumstances a case
could be made against a business if it had not implemented
procedures specifying that the sale of nicotine to minors
was illegal. He noted that the occurrence was unlikely.
Representative Gara stated that the bill provided no
incentive for businesses to train their employees because
the employee held all of the responsibility. He wondered
how the sponsor would feel about adding language that would
fine a business if they negligently allowed an employee to
sell nicotine products to minors.
Representative Seaton answered that there had been
significant concern that things became very difficult if a
violation was attached to the business license. He believed
that if businesses knew that the sale of nicotine to minors
was illegal that they would have to take measures to
prevent minors from having access to the products (e.g.
placing products behind the counter). He opined that rather
than trying to include everything, the goal could be met by
making the sale of the products illegal.
Representative Gara understood and agreed with the concern;
however, he was concerned that all of the liability rested
on employees.
3:36:10 PM
Representative Seaton replied that the products were not
being test-marketed in Alaska. He believed that marketers
would have a difficult time getting businesses to sell the
products in the state if the distribution of the products
to the target audience was illegal. He opined that the
direction of the legislation was a matter of perspective.
He had found that concern about attaching a fine to a
business license was great enough that it would have been
difficult to garner enough support for the bill. He
believed it was better to have a bill in place that showed
businesses that there would be a $300 fine to an employee
that sold the products to minors. He hoped the products
would never come to Alaska.
Co-Chair Stoltze did not want to make the bill more
complicated. He discussed that the bill was preemptive in
nature and was a simple approach towards eliminating
products that hopefully never made it to Alaska.
Representative Doogan clarified that his questions related
to the amount of the fine had been informational.
Co-Chair Stoltze was happy the questions had been asked
given that the information was informative.
Co-Chair Stoltze CLOSED public testimony. He pointed to two
zero fiscal notes from the Department of Law and the
Department of Health and Social Services.
Representative Gara would follow up with the sponsor to
discuss his concerns that there should be an incentive for
businesses to provide training to employees.
Vice-chair Fairclough discussed that Anchorage currently
provided compliance; businesses had been shut down based on
the sale of cigarettes to minors. She believed that
procedures were currently in place and the bill would
dovetail on the training requirements that were included in
current law. She opined that the bill was a good
preventative strike and hoped that the products would not
make it to Alaska for sale.
Co-Chair Stoltze shared that he was proud of a business in
Chugiak (Alice Mae's) for electing to limit the sale of
tobacco products to individuals over the age of 21.
Vice-chair Fairclough MOVED to report CSHB 224(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 224(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one zero fiscal note from the
Department of Health and Social Services and one zero
fiscal note from the Department of Law.
3:42:20 PM
AT EASE
3:43:25 PM
RECONVENED
HOUSE BILL NO. 302
"An Act repealing certain audit requirements for
entities receiving contributions from permanent fund
dividends."
3:43:43 PM
Co-Chair Thomas MOVED to ADOPT proposed committee
substitute for HB 302, Work Draft 27-LS1264\I (Kirsch,
2/23/12).
Co-Chair Stoltze OBJECTED for purpose of discussion.
KACI SCHROEDER-HOTCH, STAFF, REPRESENTATIVE BILL THOMAS,
explained that the CS added new Sections 1 and 2. Section 1
clarified that the University of Alaska was required to pay
a $250 application fee to the Pick, Click, Give program for
every program or campus that was submitted. Section 2
outlined that the university should apply for the program
in a manner described by the department.
Co-Chair Thomas noted that the university had found a way
to not pay the application fee for the Pick, Click, Give
program in the past. The bill worked to treat applicants
equally and required all applicants to pay the $250 fee. He
discussed that there was a cost associated with running the
program.
Representative Doogan asked for more detail on the term
"university program."
Co-Chair Thomas noted that there were different programs
within the university system.
Co-Chair Stoltze suspected that there were elements of the
university that had more fundraising success than
individual campuses.
Representative Doogan wondered how much it would cost the
university if the fee was applied program by program.
Co-Chair Thomas explained that non-profit organizations
included in the program all paid the fee to the Department
of Revenue (DOR) to be listed as a recipient. He reiterated
that the goal was to treat all applicants equally.
Co-Chair Stoltze discussed the minimum barrier fee
requirement that had been set at $250 to show that an
entity was a serious fund-raiser. Ms. Schroeder-Hotch
responded in the affirmative.
Vice-chair Fairclough noted her support for the
legislation. She discussed that the university was included
in the drop down list in multiple areas. She clarified that
the university would be required to pay $250 to receive the
benefit of each of its advertising opportunities. She had
received multiple solicitations from the university in her
legislative and private email inboxes; somehow it had
figured out how to avoid paying the $250 fee that non-
profits were required to pay to the program.
3:48:43 PM
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, Work Draft 27-LS126\I was ADOPTED.
REPRESENTATIVE PAUL SEATON, SPONSOR, discussed that the
bill had been introduced because he had heard from a number
of small non-profits including the Seward Senior Center.
The center had a $260,000 budget; it had been participating
[in the Pick, Click, Give program], but audit costs were
$15,000 and it had only received approximately $8,000 in
contributions. The question that arose was whether the
audit was necessary for individuals to donate to a charity
that was required to be a 501(c)(3). The program required
entities to maintain their 501(c)(3) status, which involved
the completion of the lengthy Internal Revenue Service
(IRS) 990 form. There was a federal audit requirement that
kicked in if the entity received over $500,000 in federal
funds to distribute. There were multiple non-profits
throughout the state (Juneau Arts and Humanities Council,
Seward Senior Center, Ketchikan library, etc.) that had
difficulty with the $15,000 audit requirement and people
had challenges donating to the entities when they were not
included as non-profits on the Pick, Click, Give program
lists. There had been a common misperception that if an
entity did not appear on the program list that it was no
longer a non-profit organization.
Representative Seaton explained that the bill proposed to
delete the audit requirement for entities with annual
budgets above $250,000 in order to provide equity for
entities included in the program and to avoid confusion
about an organization's non-profit status. He opined that
that the mandatory annual IRS 990 form sufficiently
satisfied all the necessary requirements.
3:52:02 PM
JORDAN MARSHALL, SPECIAL PROJECTS MANAGER, RASMUSON
FOUNDATION, ANCHORAGE (via teleconference), thanked the
committee for its support of the Pick, Click, Give program.
He reported that presently $1.59 million had been
contributed to the program since January 1, 2012 by more
than 17,000 Alaskans, which was higher than the prior
year's total; the program was on track to reach $2 million
in donations to the 400-plus organizations and university
campuses.
Mr. Marshall highlighted detail related to the program
filing fee requirement. Every organization that
participated paid an annual filing fee, which covered the
cost of basic administration of the program including
vetting the eligibility of applications, sending out
checks, managing the online donation form, and providing
technical assistance for non-profits wishing to enroll. The
campuses of the University of Alaska were the only
organization entities not paying the fee. The CS clarified
that all names on the program list for permanent fund
dividend charitable contributions were required to pay the
filing fee to help pay the costs associated with
administering the program.
Mr. Marshall clarified that the CS would allow each
individual campus program to elect to pay the filing fee to
be listed separately as a potential beneficiary. He added
that it would be a non-profit's prerogative to decide
whether to submit an application for inclusion in the
program.
Vice-chair Fairclough thanked Mr. Marshall for his work on
the program. She wondered why other non-profits might not
follow the example of the university and submit programs in
$250 increments in order to be listed more frequently on
the program list.
Mr. Marshall replied that each organization was only
entered into the database once, but they could appear in
several different categories depending on the search that
an individual conducted when making a donation. He
expounded that every organization only had one record, but
it could be found in numerous ways depending on which
search characteristics were applied. For example, a person
searching for organizations based in Fairbanks would find
each of the University of Alaska Fairbanks campuses and
rural campuses listed; the campuses would also appear if
the search was related to educational organizations.
3:57:44 PM
Vice-chair Fairclough referred to the Forget Me Not
children program that was housed within the Anchorage
Hospice program. She believed she had seen the various
campuses listed differently in the drop-down menu. She
thought the university was represented in more than just
one form. She wondered whether she needed to direct other
non-profits to start entering specific programs to the
list.
Mr. Marshall responded that each of the university campuses
were listed separately. Currently none of the programs were
listed in the Pick, Click, Give program. There were a
number of non-profits that listed a particular program as
their common name; each organization had an option to be
listed as their official name or a common name (e.g. Anchor
Arms conducted business as Safe Harbor Inn and was
typically listed as Safe Harbor).
Vice-chair Fairclough had heard several years earlier that
a $500 filing fee came closer to covering the program costs
than the current $250 fee. She wondered whether a $500 fee
would be more appropriate.
Mr. Marshall replied that when the filing fee had been
reset there had been a couple of years of data available to
establish the program's basic administration costs. The
$250 fee was a very good guess so that each organization
was making that much or more through the program while
paying for program costs. He relayed that to the best of
his knowledge $250 had been proved to be an excellent
number to enable DOR to carry out its work.
4:02:16 PM
MIKE WALSH, VICE PRESIDENT, FORAKER GROUP, FAIRBANKS (via
teleconference), thanked the committee for the opportunity
to speak on the legislation. He felt it was important to
discuss the purpose of the program audit requirement, but
the group did not have a position on the amount or removal
of the program audit requirement. He was very happy to hear
the update on the progress of the program. The initial idea
of the legislation was to help Alaskans decide where their
charitable dollars should be best spent. Another critical
piece of the bill was related to talking about the ability
of a non-profit to meet the IRS requirements of mission,
fiduciary responsibility, legal responsibility, etc.;
however, there had been no way to add an extra layer of
confidence for a donor. He furthered that the idea behind
the audit requirement was that it was an added level of
scrutiny, which allowed for an outside opinion on the
finances and general management principles of a non-profit
organization.
Dr. Walsh discussed that the reason for the audit
requirement was because donors wanted to have confidence
that an organization would spend their funds well (i.e.
being good stewards of the dollars and spending them in a
way that made the most of the money). He believed the audit
was also a very valuable tool for organizations whether or
not they took part in the Pick, Click, Give program; it was
valuable internally to help organizations track their
management and financial practices and to meet the needs of
external funders who were interested in management
practices.
4:07:31 PM
Co-Chair Stoltze CLOSED public testimony. He referenced the
zero fiscal note.
Co-Chair Thomas MOVED to report CSHB 302(FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
Co-Chair Stoltze OBJECTED for discussion. He asked whether
there were any amendments.
Vice-chair Fairclough mentioned she would work with the
sponsor to determine whether one program could have
multiple donation streams. She understood that a donation
to the university as a whole could be used throughout the
university; however, a donation to a specific university
program could only be used for the particular program. She
believed other non-profits should be provided the same
opportunity if the university was allowed to list multiple
programs in the Pick, Click, Give list.
There being NO further OBJECTION, it was so ordered.
CSHB 302(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new zero fiscal note from
the Department of Revenue.
Co-Chair Stoltze discussed the schedule for the following
day.
ADJOURNMENT
4:11:40 PM
The meeting was adjourned at 4:11 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AFN Support Resolution.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 Sponsor Statement.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 SHELDON JACKSON v. State.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 SCOTUS Voucher.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 Rethinking schools.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 DC school article.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HB 250 Sponsor Statement.pdf |
HFIN 2/27/2012 1:30:00 PM |
HB 250 |
| HB 250 -Energy Policy.pdf |
HFIN 2/27/2012 1:30:00 PM |
HB 250 |
| HB 250 - Supporting Letters.pdf |
HFIN 2/27/2012 1:30:00 PM |
HB 250 |
| HJR016-UPDATED NEW-OOG-DOE-2-27-12.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HB302 CS WORKDRAFT 27-LS126-I 2.23.12.pdf |
HFIN 2/27/2012 1:30:00 PM |
HB 302 |
| HJR 16 Response Memo to Rep Garapdf.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 AK Const Conv pages 1512 to 1525.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 Constit. Convention Proceedings pp. 1525-1529.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR16 Zelman v Simmons-Harrispdf.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR16 Sheldon Jackson College v State of Alaskapdf.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR16 Matthews v Quintonpdf.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR16-Alaska-K-12---School-Choice-Survey.pdf.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |
| HJR 16 Additional Testimony.pdf |
HFIN 2/27/2012 1:30:00 PM |
HJR 16 |