Legislature(2007 - 2008)HOUSE FINANCE 519
04/03/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB198 | |
| HB61 | |
| HB92 | |
| HB166 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 92 | TELECONFERENCED | |
| + | HB 166 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 198 | TELECONFERENCED | |
| += | HB 61 | TELECONFERENCED | |
HOUSE BILL NO. 166
"An Act relating to contributions from permanent fund
dividends to community foundations, to certain
educational organizations, and to certain other
charitable organizations that provide a positive youth
development program, workforce development, aid to the
arts, or aid and services to the elderly, low-income
individuals, individuals in emergency situations,
disabled individuals, or individuals with mental
illness; and providing for an effective date."
Representative Thomas spoke in support of HB 166, which
would attempt to increase private philanthropy in Alaska by
giving people an option of donating a portion of their PFD
to their favorite charity. Alaskans who make $100,000 or
more, rank among the lowest in the nation as far as
percentage of income donated to charities. The legislation
allows a PFD check off, which should allow charities to
benefit.
Representative Thomas related that HB 166 also requires that
the charity meet certain criteria before it can be place on
the list. The Rasmuson Foundation has pledged to fully fund
the administrative costs of the program for the first three
years of the program, creating a zero fiscal impact on the
state in these crucial beginning years. He pointed out that
the bill would sunset in 2010.
Representative Thomas noted that they have had several
requests for charities to be included on the list. There
are approximately 5,000 non-profit charities.
Representative Thomas urged the committee to support this
bill.
3:10:35 PM
ROSEMARY HAGEVIG, CATHOLIC COMMUNITY SERVICES, stated
support for last year's version of the bill, as well as for
the current legislation. She thanked Representative Thomas
and the Rasmuson Foundation. She reported that addressing
the needs of the needy in our population is a shared
responsibility, not only by the agencies and government, but
also by society as a whole. The bill would provide a
convenient way for the general population to help.
3:12:13 PM
BRENDA HEWITT, UNITED WAY, SOUTHEAST ALSAKA, testified in
favor of the bill. She pointed out the zero fiscal note.
JEFF CLARKE, VICE PRESIDENT, RASMUSON FOUNDATION, testified
in support of the legislation.
Representative Hawker asked if the commitment is for the
Rasmuson Foundation to underwrite the first three years of
the program. Mr. Clarke said yes.
Co-Chair Meyer asked if it is the same legislation as last
year. Mr. Clarke replied that it is the same except the
eligibility for participating organizations has been
broadened.
Vice Chair Stoltze wondered about anticipated costs. Mr.
Clarke asked which costs he is referring to. Vice Chair
Stoltze wanted information about continuing costs after
three years. Mr. Clarke said he could not answer the
question at this time.
3:17:59 PM
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, brought attention to a
couple of issues. The biggest concern is the possibility of
not being able to implement the program by the FY 08
dividend season due to technical problems. The department
does not want to have a problem with incorrectly paying
dividends due to this legislation. He suggested having the
legislation take effect for the FY 09 dividend season. The
second issue is that the legislation allows for dollar
amount payments as well as percentage amounts. He
maintained that there are problems with allowing a
percentage amount.
3:20:31 PM
Mr. Burnett addressed the fiscal note by the Department of
Revenue for $320,300. It assumes that the Rasmussen
Foundation would pay the costs of program implementation of
$45,000 in FY 07, and about $91,000 a year the next two
years. The bill has a sunset date of 2010. On-going costs
beyond the three years would be expected to be picked up as
administrative costs against the charities receiving
contributions. If the bill moves, refinements can be made
to the fiscal note in the future.
Representative Gara asked if the bill, as written, allows
for passing future costs, beyond three years, on to the
charities. Mr. Burnett replied that there is a sunset, and
it also does not allow PFD funds to pay for the program.
Representative Gara asked if the bill continues, if the
administrative charge would go to the individual agency.
Mr. Burnett thought the bill did not have a provision for
that at this point.
Representative Gara suggested reminding people how much they
gave each year to promote further giving. Mr. Burnett said
that a 1099 would have information as to where the money
went. Mr. Burnett thought the suggestion was feasible as
part of the program.
3:24:34 PM
Representative Hawker asked about limiting the mechanism to
fixed dollar amounts rather than percentages. He wondered
where that idea came from. Mr. Burnett thought it came up
in State Affairs. Representative Hawker agreed with the
idea.
Vice Chair Stoltze asked why "for profit" organizations are
not included. Mr. Burnett reported that that discussion
also took place in State Affairs. He said that is a policy
decision, not the Department of Revenue's call.
Representative Crawford asked what happens if one does not
itemize on income tax. He wondered how this contribution
would be treated. Mr. Burnett said it would be allowable as
a deduction and would not show up as income.
3:28:43 PM
Representative Thomas MOVED to ADOPT Conceptual Amendment
#1, on page 1, line 12, add "more" after "$100 or" and
delete all reference to percentages. Co-Chair Meyer
OBJECTED.
Representative Gara asked for clarification regarding if
more than $100 could be donated. Representative Thomas said
yes.
Co-Chair Meyer WITHDREW his OBJECTION.
Representative Hawker OBJECTED. He thought "or more" should
be further defined.
Representative Gara suggested "any amount up to the value of
the dividend."
3:31:31 PM
Co-Chair Meyer asked for Mr. Burnett's opinion. Mr. Burnett
thought it should be in clear increments, the simpler the
better, up to the value of the dividend. He said he could
live with the conceptual amendment.
Representative Hawker restated that the intent of the
conceptual amendment is to provide a fixed increment up to
the amount of the dividend. The sponsor and the department
can work together to determine the appropriate increment.
Representative Hawker WITHDREW his OBJECTION to adopt
Conceptual Amendment #1.
Representative Kelly suggested having a minimum amount.
Representative Thomas said $25 is the minimum.
Representative Kelly asked what happens if a mathematical
mistake is made.
Representative Hawker noted that the $25 floor was already
fixed in statute. There are specific provisions already in
the bill to address mathematical mistakes.
There being NO further OBJECTION, Conceptual Amendment #1
was adopted.
3:35:06 PM
Co-Chair Meyer MOVED to ADOPT Conceptual Amendment #2 to
change the date to begin in FY 09.
Representative Thomas OBJECTED. He argued that the
legislation should begin as soon as possible.
Mr. Burnett reiterated that there are some technical
concerns with implementing the bill due to the ongoing
rewrite of the PFD system. This bill cannot take priority
over getting an online application that works. He noted
that the department is working with the Rasmussen Foundation
to make the bill work.
Representative Thomas requested to be updated on the
problems at the Department of Revenue. Mr. Burnett related
that PFD problems in the past have nothing to do with the
technical rewrite problems of the online application system.
He described a capital project regarding rewriting the
system.
3:39:35 PM
Representative Hawker shared the anxieties of the department
over putting the bill into action. He suggested extending
the date.
Representative Thomas suggested adding some intent language.
Representative Hawker suggested withdrawing Conceptual
Amendment #2.
Co-Chair Meyer WITHDREW Conceptual Amendment #2.
3:41:38 PM
Representative Hawker MOVED to ADOPT Conceptual Amendment
#3:
"It is the intent of the legislature that the
department does its absolute best to accomplish the
requirements of the bill for the 2008 dividend
distribution. However, the legislature recognizes that
if there are insurmountable technical impediments to
achieving that date that the effective (applicability)
dates would shift back one year: 2009, 2010, and 2011."
(In the event that the applicability date is shifted,
the sunset date should also be shifted.)
There being NO OBJECTION, it was so ordered.
3:43:06 PM
Representative Foster thanked the Rasmuson Foundation for
their contributions.
Representative Foster MOVED to REPORT CSHB 166 (FIN), as
amended, out of Committee, with individual recommendations
and the accompanying fiscal note.
CSHB 166 (FIN) was reported out of Committee with a "do
pass" recommendation and with a new fiscal note by the
Department of Revenue.
There being NO OBJECTION, it was so ordered.
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