Legislature(2017 - 2018)GRUENBERG 120
02/21/2017 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB44|| HCR1 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 91 | TELECONFERENCED | |
| += | HB 44 | TELECONFERENCED | |
| + | HCR 1 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 91-APOC REGISTRATION FEES; LOBBYIST TAX
3:07:00 PM
CHAIR KREISS-TOMKINS announced that the first order of business
would be HOUSE BILL NO. 91, "An Act relating to fees for certain
persons filing disclosure statements or other reports with the
Alaska Public Offices Commission; relating to a tax on
legislative lobbyists; and providing for an effective date."
3:08:01 PM
REPRESENTATIVE SAM KITO, Alaska State Legislature, as prime
sponsor of HB 91, stated that staff is exploring alternate
methods for collecting program receipts for the Alaska Public
Offices Commission (APOC). He suggested that replacing the
"income tax" in HB 91 with a "fee" would provide a more direct
path to generating program receipts. He emphasized that the
goal is to generate money for APOC to support its operations, to
satisfy the program receipt authority, and to provide savings
for the State of Alaska.
3:09:33 PM
CRYSTAL KOENEMAN, Staff, Representative Sam Kito, Alaska State
Legislature, on behalf of Representative Kito, prime sponsor of
HG 91, relayed that staff is considering a "stair-step" approach
for generating revenue for APOC: the lower the contract amount,
the fewer the filings with APOC and the less work; as the
contract amount increases, more work is associated with APOC
filings. She stated that the new proposal under HB 91 would
consist of: a $350 fee for contracts under $30,000; a $650 fee
for contracts between $30,000 and [$60,000]; and an $850 fee for
contracts [$60,000] and over. She asserted that the resulting
revenue under this proposal is estimated to be $259,150, based
on 2015 and 2016 data provided by APOC. She went on to say that
after adding in the estimated $106,600 in revenue generated
through the proposed registration fees for candidate, groups,
and non-group entities and the proposed financial disclosure
fees for legislators and public officials, the total estimated
revenue is $365,750. She maintained that this amount is much
closer to the estimated amount [of $329,750] in the sponsor
statement. She asserted that collection of these fees into the
designated general fund (DGF) would reduce the 2018 operating
budget request by approximately $120,000.
3:11:54 PM
REPRESENTATIVE LEDOUX asked why a smaller contract would be
necessarily less complicated than a larger contract, and what
would be required of APOC pertaining to a contract of less than
$30,000 compared with a contract of greater than $60,000.
REPRESENTATIVE KITO responded that one difference is the work
that the lobbyist is providing the client. He conceded that
sometimes contracts overstate or understate the amount of work.
He explained, however, that under a $10,000 contract, the
likelihood of extensive billings for lobbyist activities needing
reconciliation by APOC, such as taking clients out to dinner, is
less than for a $60,000 contract.
REPRESENTATIVE LEDOUX stated that what she has observed is that
the client, not the lobbyist, is paying for the dinners. She
added that some lobbyists entertain clients in their homes. She
pointed out that in neither of these cases do the expenses show
up in APOC reports. Representative LeDoux asked what APOC would
be looking for with a higher priced client.
3:16:23 PM
HEATHER HEBDON, Executive Director, Alaska Public Offices
Commission (APOC), responded that her understanding is that the
stair-step approach for fees, which is being considered for HB
91, is based on the volume of reports that come into APOC, and
that volume relates to the amount of a contract. She stated
that the assumption is that larger contracts require more
reporting. She explained that fees are not based necessarily on
a single registration fee for a single lobbyist, since a single
lobbyist may have a dozen different clients. She offered that
the lobbyists making more money would have more clients and,
therefore, would require more reporting.
REPRESENTATIVE LEDOUX asked if a lobbyist with one client paying
$61,000 is likely to have less reports than a lobbyist with one
client paying $10,000.
MS. HEBDON replied no, that is not her understanding. She said
that the amounts referenced by the three contract ranges, are
not based on the individual lobbyist, but rather on the amount
that the lobbyist is making from lobbying activities. She
conceded that a single lobbyist could have one client paying
$60,000, but the expectation is that the single lobbyist makes
$60,000 with ten clients, and there are separate reports for
each of the ten clients.
REPRESENTATIVE LEDOUX suggested that Representative Kito's
intention is that under HB 91 every lobbyist would pay a
registration fee, and if the contract amount for any given
client is more than $60,000, the registration fee would be $850.
She added that if the contract were $10,000 or less, the
registration fee would be $350. She expressed her belief that
the fee was not intended to be based on "the entire book of
clients" for a lobbyist.
3:20:22 PM
REPRESENTATIVE KITO responded that the fees for lobbyists are
currently assessed at $250 per client. He explained that if a
lobbyist has multiple clients, then he/she pays that fee on each
client. He added that if a client contracts with multiple
lobbyists, each lobbyist is paying a fee on that client. He
stated that the goal for restructuring APOC fees is to generate
enough revenue for APOC to be able to fulfill its duties.
REPRESENTATIVE LEDOUX conceded that a client paying $60,000 for
lobbying services can more afford the $850 fee than a client
paying $10,000 for lobbying services. She stated that she is
not sure that the $60,000 client necessarily engenders more for
any lobbyist than does the $10,000 client.
CHAIR KREISS-TOMKINS suggested that assigning fees in this way
is comparable to the Alaska Court System assessing court fees
based on the size of a tort claim, even though a smaller claim
may require more in court services than a larger claim. He
offered that the size of a claim or contract is used as a blunt
metric for assessing a fee.
3:22:37 PM
REPRESENTATIVE BIRCH referred to the sponsor statement, which
estimates revenue of $60,000 through the $50 financial
disclosure filing fees. He asked if besides the 60 legislators,
there were 1,100 other people submitting annual financial
disclosure forms.
MS. HEBDON said that AS 24.60.200 requires a significant number
of people to file financial disclosure statements. She
mentioned that the five-year average of public official
financial disclosures (POFDs) received by APOC was approximately
1,300 per year. She said that number includes those in the
executive branch and governor's office, members of boards and
commissions, and legislators. She added that municipal filers
in communities with populations greater than 15,000, who are
subject to APOC's electronic reporting requirements, are also
included in the five-year annual average. She expressed her
desire for more clarification in Section 4, on page 3 of HB 91,
to better define the group of filers from whom APOC would be
collecting fees.
REPRESENTATIVE BIRCH asked how much effort is required for APOC
to manage the financial disclosure filings.
MS. HEBDON replied that the majority of APOC's budget is for
personnel. She said the online filing system alone requires a
fulltime analyst programmer. She mentioned that direct services
to the public consume most of APOC personnel's time - answering
phone calls, answering emails, assisting filers with the online
filing system, and auditing reports. She added that currently
APOC is statutorily required to audit every report coming into
the office, but it doesn't have the staff to do so.
3:26:09 PM
REPRESENTATIVE WOOL asked for confirmation that instead of the
income tax specified in the original bill or the flat fee of
$250 currently in statute, the new version of HB 91 will include
a fee on a sliding scale that is progressive - the higher the
value of the contract, the higher the fee.
MS. KOENEMAN confirmed that the fee would be on a sliding scale
based on [lobbyist] income [from] the client.
REPRESENTATIVE WOOL offered that the [new proposed] fee was per
contract, whereas the previous 2.5 percent tax would have been
on the lobbyist's gross amount derived from all the contracts.
REPRESENTATIVE KITO responded that the mechanism for applying
the tax versus the fee would be the same. He stated that the
2.5 percent tax for each lobbyist would have applied to each
lobbyist contract. He went on to say that this would be a
change from a tax to a fee. He said that the fee is set at a
sliding scale, not a percentage; for all of those below $30,000
is one fee, between $30,000 and $60,000 is another fee, and
above $60,000 is another fee.
3:27:44 PM
REPRESENTATIVE KNOPP noted APOC's reduction in revenue, from
$1,300,000 in 2015 to $866,000 in 2016, and reduction in
fulltime staff, from 12 positions authorized in fiscal year 2017
(FY 17) to 8 positions shown in the current organization chart.
He asked if APOC is currently operating with eight full-time
employees.
MS. HEBDON responded that APOC currently has eight position
control numbers (PCNs), and the analyst programmer position and
one other position are currently vacant.
REPRESENTATIVE KNOPP asked if those two positions have been
vacant for some time.
MS. HEBDON replied yes. She said that when the former executive
director left, she became the executive director and has not yet
recruited for her former position.
REPRESENTATIVE KITO confirmed in response to Representative
Knopp that the legislature authorized receipt authority up to
$240,000, but by statute the only fee that could be collected
was $250 per client per lobbyist, which raised about $106,000.
3:30:20 PM
REPRESENTATIVE KNOPP referred to the document, titled "Multi-
year Allocation Totals with Funding - Operating Budget - FY 2017
Conf Committee Structure," included in the committee packet, and
asked if the amounts shown in the budget were amounts authorized
but not necessarily received by APOC for operations.
MS. KOENEMAN referred to the column, titled "FY 16 Actual," to
point out that the legislature had appropriated $758,500 in
unrestricted general funds (UGF), but APOC was only able to
utilize $107,500, because that was the limit of its receipt
authority. She then referred to the amounts listed under the
column, titled "FY 16 Final," and pointed out that $240,000 was
appropriated by the legislature, but it turned out to be
"hollow" authority because APOC did not have the statutory
authority to collect fees up to that amount. She added that the
legislature thought it was giving APOC additional funds;
however, the revenue generated by APOC fees was substantially
lower than the amount authorized.
REPRESENTATIVE KNOPP asked if the legislature was giving APOC
authority to spend an amount that it was not able to collect.
MS. KOENEMAN replied, "Basically, yes."
REPRESENTATIVE KNOPP referred to the $242,600 listed under the
column, titled "FY 17 Auth," and asked if APOC would be able to
collect this amount only if HB 91 passed.
MS. KOENEMAN confirmed that APOC would not be able to generate
$242,600 in funds, but only the approximately $107,000,
depending on the number of filers. She reiterated that the
intent of HB 91 is to raise the statutory fee authority allowing
APOC to collect more revenue.
3:33:15 PM
REPRESENTATIVE KNOPP commented that with the possibility of
filing fees, he believes that people appointed to boards and
commissions should be exempt from APOC filing. He relayed that
there are about 360 people who fall into these categories, and
they are not necessarily compensated. He asserted that the
exemption would alleviate APOC of some of its workload.
CHAIR KREISS-TOMKINS offered that the Department of
Administration Finance Subcommittee was considering reducing the
number of public officials who are required to file POFDs.
[HB 91 was held over.]
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