Legislature(2011 - 2012)BUTROVICH 205
03/01/2011 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB93 | |
| SB2 | |
| SB16 | |
| SCR1 | |
| SB36 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 93 | TELECONFERENCED | |
| += | SB 2 | TELECONFERENCED | |
| += | SB 16 | TELECONFERENCED | |
| *+ | SB 36 | TELECONFERENCED | |
| *+ | SCR 1 | TELECONFERENCED | |
SB 36-OPT-OUT CHARITABLE GIVING PROGRAM
9:24:07 AM
CHAIR WIELECHOWSKI announced the next order of business would be
SB 36.
GRIER HOPKINS, staff to Senator Joe Thomas, sponsor of SB 36,
said this bill was brought to their attention by Golden Valley
Electric Association (GVEA). Opt-out charitable giving programs
have been around for many years, and more than 250 utility
cooperatives across the U.S. have adopted similar programs.
These allow individuals to contribute small amounts that add up
quickly and help build a stronger community. Opt-out charitable
giving programs must be approved by co-op members. This program
rounds up a monthly bill to the nearest dollar, so the maximum
amount withheld per month would be anywhere between .01 cent and
.99 cents. These small amounts add up quickly, and the average
payment for a GVEA member would be approximately six dollars a
year. Collected funds are dispersed to qualified organizations
and individuals within the service district. Each co-op crafts
its own by-laws on this. Most distribute the funds to the board
of a separately created 501(c)(3) organization that they have
established. Among the more than 250 cooperatives with
charitable giving programs, most have adopted opt-out rather
than opt-in programs. These programs have 90 percent member
participation. Members may choose to opt out of the program at
any time. Donations may be refunded up to a full three years. SB
36 will remove any possible conflict with AS 45.45.930, dealing
with opt-out marketing plans. Opt-out charitable giving programs
in Alaska would require membership approval; disclosure of the
amount added would be identified on the member's bill; extended
refunds, if requested, could stretch back as far as three years.
Donations are tax deductible and must benefit the service area
of the cooperative.
9:28:05 AM
BRIAN NEWTON, CEO, Golden Valley Electric Association (GVEA),
Fairbanks, testified in support of SB 36. He said their members
have already approved initiating the program. GVEA became aware
of a possible conflict with AS 45.45.930, so this bill is
intended to remove any possible conflict. GVEA is proud of being
able to give back to the community. Collecting small amounts and
then returning them to the community is a way of giving to the
community. GVEA will rotate the money as quickly as possible.
9:30:37 AM
CHAIR WIELECHOWSKI asked how GVEA decides what charities to give
to.
MR. NEWTON said the board of directors of their 501(c)(3) will
review the applications. They will look at the need and purpose.
The board has specifically prohibited religious campaigns and
political donations. So the board will choose who receives the
funds, based upon criteria they have established.
SENATOR GIESSEL asked if GVEA had already started the program.
MR. NEWTON responded that GVEA has started the program, and
legal counsel advises they are not prohibited from doing this.
SB 36 is a clean-up bill to make sure there is no conflict with
existing statutes.
9:32:35 AM
ED SNIFFEN, Assistant Attorney General, Consumer Protection
Unit, Civil Division, Department of Law, Anchorage, said that AS
45.45.930 creates a potential conflict with the program as
outlined. There is some question about whether this program
would be prohibited under current statute. This bill would make
a specific exemption from AS 45.45.930 for electric and
telephone cooperatives. This bill provides good protection for
consumers.
9:33:33 AM
SENATOR PASKVAN joined the meeting.
9:34:55 AM
SENATOR GIESSEL asked about information in the committees'
packets referring to an amendment discussing the definition of
charitable purpose.
MR. SNIFFEN said in HB 114, the companion bill, there was
discussion in the House Labor & Commerce Committee about
restricting the ability of cooperatives to provide donations to
religious organizations. After doing research on how to define
charitable purpose, the committee came up with an amendment.
9:36:47 AM
MR. SNIFFEN noted that language in statutes and cases helps
define "charitable purpose." Alaska Statutes require charitable
solicitors to register and operate within certain guidelines.
Combining these resources led to a definition of charitable
purpose. GVEA is a model program, but the bill doesn't require
other electric associations to do the same thing. The definition
of charitable donations in the original bill is too broad.
SENATOR GIESSEL asked how the amendment narrowed the definition
of charitable donations.
MR. SNIFFEN said the definition was dealing with language that
does not exist in the bill, and would not apply to this bill.
The proposed amendment to the companion bill did not use that
language, but rather mirrored existing language which says that
they can make donations for the public welfare, charitable, and
educational purposes. They have narrowed the definition to
charitable purposes only. Entities other than 501(c) (3)s also
do charitable work.
SENATOR GIESSEL asked about the constitutional equal protection
issue. She mentioned the Salvation Army and Brother Francis
Shelter, and asked if organizations like these are included or
excluded.
MR. SNIFFEN said they would be included under this definition.
Religious based organizations can do charitable work. If there
is not a religious purpose, to promote a particular religion,
then they are eligible to receive donations.
9:42:18 AM
CHAIR WIELECHOWSKI suggested the bill sponsor's suggested
amendment could be included in a CS for the next meeting.
MR. HOPKINS explained the purpose of the amendment. This is an
amendment that Mr. Sniffen wrote to limit or more closely define
charitable purposes. The intent is to assure there is no
pecuniary profit, but it does not exclude specific types of
organizations or donations. This could also be addressed in the
by-laws of the utility co-op.
SENATOR PASKVAN asked about refunds going back three years.
9:45:25 AM
MR. HOPKINS said it was to give members the benefit of the doubt
in case they did not read their bill.
SENATOR PASKVAN asked if there was discussion about that length
of time.
MR. HOPKINS said GVEA took the recommendation from its members.
MR. NEWTON said that the board of GVEA was emphatic about the 3
years, because people vote with their dollars. GVEA will publish
the list of organizations donated to, and consumers get a three
year look at how money is given to the community. If they don't
like the board's choices, they can request a refund.
SENATOR MEYER noted that opt-out programs on credit card bills
required 60 days written notice for opting out. He stated he is
not concerned with this program, but he is concerned about the
length of three years, and asked where GVEA would get the refund
money.
9:48:22 AM
CHAIR WIELECHOWSKI noted the committee is setting policy for the
whole state. Other organizations might be affected.
MR. NEWTON said the committee could change the refund length to
one or two years. He stated the fund would have to maintain a
reserve for possible refunds. Other states have not had a
problem with this. If the committee wants to shorten the time,
that would be fine.
SENATOR MEYER said if there is an adequate reserve then three
years is probably okay. He does support the bill. In general he
favors opt in vs. opt out, but this program seems okay. He had a
bad experience with a credit card company and an opt-out
program, but is not concerned with this bill.
CHAIR WIELECHOWSKI asked if Mr. Sniffen could address opt in vs.
opt out programs.
MR. SNIFFEN said generally the DOL doesn't like opt out
programs. But for this particular program the statute has good
features to help protect consumers. The cooperative membership
has to vote on the program. The three year refund is a feature
that DOL likes, and would encourage keeping in the bill. If the
program is run correctly they will have a reserve. DOL also
likes the mandatory disclosures on monthly utility bills. He
stated SB 36 contains many protections to resolve potential
problems, it does benefit the community, and he supports the
bill.
MR. NEWTON stated that GVEA would support an amendment or CS as
proposed, with the changes proposed in the House version.
9:54:13 AM
CHAIR WIELECHOWSKI closed public testimony and announced he
would hold SB 36 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 36 - Sectional Analysis.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SB 36 - GVEA Goodcents Website.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SB 36 - GVEA Explanation.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SB 36 - Utility Support Letters.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SB 36 - Bill Version M.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SB 36 - Sponsor Statement.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SB 36 - Utility Membership.pdf |
SSTA 3/1/2011 9:00:00 AM |
SB 36 |
| SCR 1 Committee Substitute.pdf |
SSTA 3/1/2011 9:00:00 AM |
SCR 1 |
| SCR 1 Legislative Counsel.pdf |
SSTA 3/1/2011 9:00:00 AM |
SCR 1 |