05/02/1998 04:50 PM House FIN

HOUSE BILL NO. 452                                                             
                                                                               
"An Act relating to registration, disclosures, and                             
reports by certain nonprofit corporations."                                    
                                                                               
JEFF LOGAN, STAFF, REPRESENTATIVE GREEN stated that HB 452                     
would require foreign or domestic public benefit                               
corporations that receives an aggregate of $5.0 thousand                       
dollars from other corporations to list all payments                           
received.  This information would be on a form provided by                     
the Department of Commerce and Economic Development.  It                       
would include the amount and purpose of the contributions.                     
If a corporation fails to comply the commissioner can                          
dissolve the corporation, or revoke their certificate of                       
authority to conduct business in the state of Alaska.  He                      
maintained that a large amount of money is coming into the                     
state of Alaska and that it is targeted for participation in                   
public policy decisions.  The form would only be a couple of                   
lines or boxes.                                                                
                                                                               
REPRESENTATIVE JOE GREEN explained that organizations that                     
receive less than $5.0 thousand dollars a year would have to                   
file.                                                                          
                                                                               
Representative Martin questioned if the legislation would                      
distinguish between charities and nonprofit groups.  Mr.                       
Logan stated that the legislation does differentiate between                   
public benefit corporations and mutual benefit corporations.                   
Representative Martin expressed concern that reporting                         
requirements would negatively impact charities.  Mr. Logan                     
observed that only corporations that receive contributions                     
from another corporation are required to report.                               
                                                                               
Representative Grussendorf expressed concern that the                          
legislation impacts first amendment rights.  Representative                    
Green emphasized that the legislation would make more                          
readily available information that would be available to the                   
public in a few years.  He maintained that the legislation                     
would not be an invasion of the right of privacy.  Mr. Logan                   
pointed out that the legislative drafter did not raise                         
concerns regarding the legislation's constitutionality.                        
                                                                               
Representative Kelly did not think that the legislation was                    
onerous.                                                                       
                                                                               
In response to a question by Representative Martin, Mr.                        
Logan clarified that not all 501C3 corporations will have to                   
file the form developed by the Department.  The legislation                    
defines a public benefit corporation on page 3, line 4.                        
                                                                               
Mr. Logan discussed page 3.  He observed that "a public                        
benefit corporation that is a domestic corporation or that                     
is a foreign corporation transacting business in the state,                    
and that received an aggregate of $5,000 or more during the                    
18 calendar year of the corporation from other corporations                    
shall file with the department."  He clarified that the                        
Department of Commerce and Economic Development, Division of                   
Corporations will handle the information.  The Division of                     
Corporations worked on the legislation.                                        
                                                                               
Co-Chair Therriault observed that the legislation states:                      
"The report required under this section that is due the same                   
year as the public benefit corporation's biennial report may                   
be included in the biennial report."  He questioned if a                       
mailing would be done in preparation for the biennial                          
report.  Mr. Logan noted that the nonprofit corporations are                   
divided into two portions.  Half of the corporations get a                     
mailing one-year and the other half would receive a mailing                    
the next year.  He estimated that it would cost $1,172.74                      
dollars to mail notifications.                                                 
                                                                               
Representative Martin suggested that the Department of                         
Revenue review the legislation.  Mr. Logan noted that 4,756                    
nonprofit corporations have filed with the Division.  He                       
estimated that only 10 percent of this number would have to                    
file with the legislation.                                                     
                                                                               
Representative Kohring questioned the need for the                             
legislation.  Mr. Logan maintained that there is a large                       
amount of cash flowing into the state of Alaska from outside                   
private nonprofit foundations.                                                 
                                                                               
Representative Kohring expressed concern with the affect of                    
the legislation on business.                                                   
                                                                               
Representative Kelly stressed that outside environmental                       
groups have influenced regulations that affect Alaskan                         
businesses.                                                                    
                                                                               
Representative G. Davis emphasized that the legislation is                     
narrowly written.                                                              
                                                                               
Co-Chair Therriault stated that if there are groups that are                   
influencing or shaping Alaska policy that it is legitimate                     
that Alaskans know where the funding is coming from.                           
                                                                               
Representative Kelly MOVED to report CSHB 452 (JUD) out of                     
Committee with the accompanying fiscal note.  There being NO                   
OBJECTION, it was so ordered.                                                  
                                                                               
CSHB 452 (JUD) was REPORTED out of Committee with "no                          
recommendation" and with a zero fiscal note by the House                       
Judiciary Committee.