Legislature(2021 - 2022)GRUENBERG 120
02/15/2022 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB158 | |
| HB245 | |
| HB234 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 158 | TELECONFERENCED | |
| += | HB 234 | TELECONFERENCED | |
| += | HB 245 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 158-PFD CONTRIBUTIONS TO GENERAL FUND
3:09:34 PM
CHAIR KREISS-TOMKINS announced that the first order of business
would be HOUSE BILL NO. 158, "An Act relating to contributions
from permanent fund dividends to the general fund."
3:09:48 PM
CHAIR KREISS-TOMKINS opened public testimony on HB 158.
3:10:15 PM
ED MARTIN stated that the Permanent Fund Dividend (PFD) had been
a success for Alaska over the years. He referenced the ability
to donate a portion of the dividend to charities via
Pick.Click.Give, adding that he had no qualms with that
option. He expressed concern that [HB 158] was just one more
avenue down the digital currency movement across the world.
Further, he found it troublesome that, as stated in the sponsor
statement, donations through Pick.Click.Give. would take
priority over donations to the general fund. He noted that he
was not directly opposed to the bill, as he supported anyone who
wanted to give money back to the state. In summary, he said he
questioned the legislation because, according to the fiscal
note, the bill would take money from the people thats really
theres.
3:13:43 PM
CHAIR KREISS-TOMKINS [closed public testimony] and proceeded to
the consideration of amendments.
3:14:04 PM
REPRESENTATIVE EASTMAN moved to adopt Amendment 1, labeled 32-
LS0746\A.1, Nauman, 2/14/22, which read as follows:
Page 1, line 13, through page 2, line 1:
Delete "The electronic application must include
notice that seven percent of the money contributed to
the state general fund will be used for administrative
costs incurred in implementing this subsection and
that money from the dividend fund will not be used for
that purpose."
Page 2, following line 8:
Insert a new subsection to read:
"(d) Money contributed to the state general fund
under this section may not be used for administrative
costs incurred in implementing this section."
REPRESENTATIVE CLAMAN objected.
REPRESENTATIVE EASTMAN explained that Amendment 1 would remove
the seven percent fee that was imposed to cover the
administrative costs incurred in implementing the legislation.
He reasoned that if someone chose to donate a portion of his/her
dividend to the general fund, that money would essentially be
staying in the states coffers; therefore, there should not be
an administrative cost associated with that transaction.
3:15:26 PM
REPRESENTATIVE TARR inquired about the seven percent fee and
asked whether Representative Eastmans assumption that there
would not be an administrative cost was correct.
3:16:21 PM
COREY BIGELOW, PFD Operations Manager, Permanent Fund Dividend
Division, Department of Revenue (DOR), clarified that there
would be an administrative cost for an Alaskan who elected to
contribute his/her dividend to the general fund, as that request
would need to be processed on some level. He added that at this
time, he was not able to convey a monetary value associated with
those tasks.
REPRESENTATIVE TARR suggested that if Amendment 1 were adopted,
any additional workload brought on by the bill would need to be
absorbed by existing staff. She said she was weary of the
proposed amendment without having a better understanding of the
divisions internal capacity.
MR. BIGELOW shared his belief that the workload could be handled
by current staff; however, if a large number of people elected
to contribute their dividends, the administrative costs could be
higher. He added that without knowing how many individuals
intended to contribute, it was difficult to provide a definitive
number.
REPRESENTATIVE TARR inquired about the divisions position on
Amendment 1.
MR. BIGELOW indicated that the division was neutral in its
stance on HB 158.
REPRESENTATIVE EASTMAN asked how many people at present had
elected to give money back to the state.
3:20:49 PM
REPRESENTATIVE MIKE PRAX, Alaska State Legislature, prime
sponsor, reported that last year [2021], 105 people returned
their PFD to the state.
3:21:10 PM
REPRESENTATIVE CLAMAN shared his understanding that if he were
to give $100 to the Foodbank via Pick.Click.Give, there would be
a $7 processing fee associated with that transaction. He sought
to confirm that under that scenario, the Foodbank would receive
$93, and the division would receive $7 to cover the
administrative costs.
MR. BIGELOW explained that the donation of $100 would go to the
Alaska Community Foundation, which is the organization that
administers the [Pick.Click.Give] program. He confirmed that of
the $100, [the Alaska Community Foundation] would receive 7
percent of it, or $7.
REPRESENTATIVE CLAMAN sought to confirm that if an individual
gave $100 back to the general fund, to the extent that there
were administrative costs, Amendment 1 would require that the
cost incurred be funded from another source.
MR. BIGELOW said that was his understanding as well.
3:23:27 PM
REPRESENTATIVE VANCE shared her understanding that as it stands,
the Alaska Community Foundation received the 7 percent fee, as
opposed to the Permanent Fund Dividend Division. She opined
that Amendment 1 would encourage more people to give back to the
state without having to pay for it.
CHAIR KREISS-TOMKINS invited closing comments on Amendment 1.
3:25:16 PM
REPRESENTATIVE CLAMAN reiterated his opposition to the proposed
amendment, as it would prohibit the administrative cost from
being recovered from the money contributed. He maintained that
his fundamental concern with HB 158 was that to exercise this
privilege, the individuals who donated would still have to pay
20 percent in taxes to the federal government. He opined that
if the legislature was serious about getting more money in the
general fund, the proposed legislation was a terrible way to
do it.
REPRESENTATIVE EASTMAN stated that Amendment 1 was offered
because the Alaska Community Foundation [wasnt] give the money
to anyone. He opined that to tax the transactions at 7 percent
seemed unnecessary.
REPRESENTATIVE CLAMAN maintained his objection.
3:27:27 PM
A roll call vote was taken. Representatives Vance, Kaufman, and
Eastman voted in favor of the adoption of Amendment 1.
Representatives Tarr, Story, Claman, and Kreiss-Tomkins voted
against it. Therefore, Amendment 1 failed by a vote of 3-4.
3:28:25 PM
REPRESENTATIVE CLAMAN moved to report HB 158 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 158 was moved out of the
House State Affairs Standing Committee.