Legislature(2007 - 2008)BELTZ 211
02/20/2007 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing, Commissioner, Department of Administration | |
| Confirmation Hearing, Commissioner, Department of Corrections | |
| Confirmation Hearing, Commissioner, Department of Public Safety | |
| SB75 | |
| SB43 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 75 | TELECONFERENCED | |
| *+ | SB 43 | TELECONFERENCED | |
| + | HB 21 | TELECONFERENCED | |
SB 43-CONTRIBUTIONS FROM PERM. FUND DIVIDENDS
9:58:10 AM
CHAIR MCGUIRE announced the consideration of SB 43.
SENATOR GENE THERRIAULT, Alaska State Legislature, said SB 43
will encourage Alaskans to give more to charity. The Rasmuson
Foundation offered to underwrite the expense of operating the
system by which Alaskans can donate a portion of their permanent
fund dividend to qualified organizations. The foundation will
cover the expenses for three years, and the fiscal note is the
estimation of the cost of running the program. The ultimate goal
is to increase private philanthropy in Alaska. Alaskans who earn
$100,000 or more rank 49th or 50th in the nation in terms of
giving. Alaskans with lower income give more than those with
middle or high income. Senator Therriault believes that SB 43
will help encourage those Alaskans to give more by making
contributing easier. There is a zero fiscal note, so for the
first three years, 100 percent of the donations will go to the
charities. The Rasmuson Foundation would be an agent to operate
the program. Participating charities would need to meet the
criteria set out in the bill. The donation would be noted on the
electronic application for the dividend. There would be a drop
down menu for who to give to and how much. The gift could be
made to a general category or to a specific group.
10:02:26 AM
SENATOR THERRIAULT said the process would be easy, and he listed
the criteria for participating charities. The Rasmuson
Foundation is very familiar with the organizations around the
state. He said he worked with the Department of Administration
to make sure the program would be easy to administer. The bill
has been written to steer contributions toward youth and
workforce development, the arts, elderly services, low income
individuals, individuals in emergency situations, disabled and
mentally ill individuals, and community foundations. Anchorage
and Kenai have community foundations, which build up trusts from
estate gifts to support community entities, he explained.
10:04:45 AM
SENATOR THERRIAULT said organizations would have to prove they
meet the criteria, including having a voluntary board of
directors who are all Alaska citizens. At least five percent of
their annual receipts must come from contributions, and if they
have a total annual budget of more $250,000, an unqualified
audit must be performed. The legislation sets up a trial program
that will sunset in 2010, and if it is successful, the
legislature can move or eliminate the sunset date.
10:06:49 AM
SENATOR GREEN asked if an elementary school would qualify.
SENATOR THERRIAULT said there has been debate about including
every school and the complexity of that.
HEATHER BRAKES, staff to Senator Therriault, said elementary
schools would not be eligible.
SENATOR FRENCH asked how Senator Therriault came up with the
charitable programs that would be included.
SENATOR THERRIAULT said he stayed away from any groups that are
in politically-sensitive areas. "So we just tried to draw the
line with organizations that we believe…have general support in
the public; did not stray into the political arena; their
function is readily understandable, identifiable; trying to
steer clear of the groups that would potentially get the effort
into trouble."
10:09:31 AM
SENATOR STEVENS said the university has a foundation, and he
asked how to give to a particular campus. He questioned whether
smaller campuses are 501C3 organizations.
SENATOR THERRIAULT said he is not sure, but any group could take
steps to create an organization to fit the criteria. He
suggested speaking with the university.
10:11:04 AM
SENATOR GREEN asked about Rasmuson Foundation's involvement.
SENATOR THERRIAULT said they have agreed to pick up the expense
of operating the program, and it is outlined on the fiscal note,
including software and reprogramming. After three years, the
foundation will step out of the program, and it will become self
supporting. A portion of the donations would then be used for
the operating expenses.
10:12:18 AM
SENATOR GREEN asked who would do that work if the Rasmuson
Foundation didn't do it.
SENATOR THERRIAULT said it could come out of the contributions
themselves. The drafters wanted to make it clear that a portion
of the giving will underwrite the administrative expense after
the three years that Rasmuson covers it.
SENATOR GREEN said she is nervous about the connection with the
Rasmuson Foundation. "As it and the Denali Commission came into
being years ago, at different times, it was sort of our
assumption, certainly mine, that there would not be a connection
between the state budget and what they did as foundations or as
a commission. And that seems to be kind of diminishing, that
clear line between it. And it kind of bothers me; and I
understand the reason, but it kind of bothers me because, would
they then be inclined, in the sunset year, to become a lobbyist
for the program to the government?" She said there needs to be a
clear line between foundations and the state budget.
10:14:42 AM
SENATOR THERRIAULT said he doesn't fully understand the concern.
The Rasmuson Foundation is just pledging money over the start-up
years to get the program up and running. He said it is not money
like the mental health trust that started a state program. There
will never be any crossover between the state treasury and the
money going to the charities, he explained.
CHAIR MCGUIRE said she understands Senator Green, but Senator
Therriault explained the distinction well. Seed money from a
foundation that puts a program into place can create a
constituency and a dependency. She said it reminds her of
federal matching funds, "for only ten percent, you, too, get all
of these things, but then once they're gone, we're left to pick
up the tab." But this is different, because the foundation just
pays the set-up costs, and general funds are not used. If the
program continues, the contributors will pay for it. By 2010,
the state can see if people are using it. She said she likes the
bill and it amazes her "that sometimes you have to motivate
humans in a direction." There is no law that keeps people from
giving some of their dividend to charity, but this will create a
reminder and encouragement. Senator Therriault has done a good
job making sure money doesn't come out of state coffers.
10:17:55 AM
SENATOR THERRIAULT said he understands that some programs need
state funds, but this program doesn't. If contributions are not
enough to pay for it, it will sunset.
10:18:49 AM
SENATOR THERRIAULT said the next year's dividend may be
$1,500.00, and he hopes Alaskans will feel generous because the
money "just accrues to them for drawing breath in the State of
Alaska for a 12-month period."
SENATOR FRENCH noted that the first few years his full donation
will go to the charity, and he asked what percentage will go to
administrative overhead after that. Alaskans could believe that
they are giving the full amount, he said.
SENATOR THERRIAULT said the major expense is the upfront
programming, and then it drops down to $91,000. So the
individual Alaskan can decide to check a box or write a check.
10:21:37 AM
CHAIR MCGUIRE said there are always overhead costs, and citizens
should know how much of their donation goes to the charity.
SENATOR FRENCH said there will be an additional layer of
overhead, and it is somewhat masked by the foundation's
participation in the first couple of years. It may turn out to
be negligible if a lot of people participate.
SENATOR THERRIAULT said that when he writes a check to a
charity, part of the money goes to the mailing expense. He noted
that people can find out what charities have low overhead.
10:23:21 AM
SENATOR GREEN asked how to declare the dividend income and if a
person's tax liability goes down.
SENATOR THERRIAULT said the income would be the same but then
there would be the charitable deduction.
MICHELLE BROWN, United Way of Anchorage, said she supports SB
43. Alaskans have a wonderful tradition of being good neighbors,
but that tradition needs to grow into a tradition of giving
dollars, which is a great way to invest money back into
communities. Government cannot do everything, she said. Much of
Alaska's quality of life comes from nonprofits and volunteers.
Many organizations care for kids and connect people with
healthcare. They ensure that people are housed and fed, so they
can pay attention to education and work. Many issues that seem
to be personal, like domestic violence, really have enormous
financial and societal implications. She said SB 43 is a way for
people to invest in the quality of their communities, and it is
very cost effective because nonprofits are efficient. Nonprofits
employ about one in ten employed Alaskans with a payroll of over
$1.1 billion, so they help Alaska's economy. She said the United
Way of Anchorage will help implement the legislation and has a
long history of managing donor-designated fundraising. She
stated that the United Way would implement the legislation as it
is written, and it could be up and running very quickly.
10:27:31 AM
SAMMYE POKRYFKI, Program Officer, Rasmuson Foundation, said SB
43 provides an easy way to make charitable donations to favorite
nonprofits. The Rasmuson Foundation is a private family
foundation funding nonprofits in every corner of the state. She
said it has offered to pay for all startup costs because Alaska
has more nonprofits per capita than any other state-one for
every 110 Alaskans. The nonprofits are famous for doing more
with less. Alaska depends on them to provide essential services,
but the demand on those services far outstrips the funding
available. The legislature and other major funders have
indicated that nonprofits must become more sustainable. One way
to do that is to augment public funding with donated charitable
dollars, she stated. Supporting nonprofits makes a lot of sense
socially and economically. In 2006, a study found that the
nonprofit sector was a major part of Alaska's economy. There are
19 public charities among the 100 largest private employers in
Alaska. They make significant expenditures in the state. Alaska
nonprofits are overly dependent on federal dollars, at almost $1
billion last year alone. A big part of becoming more sustainable
is increasing the amount of individual charitable giving, and SB
43 will help do that for an even bigger economic impact.
10:30:50 AM
CHAIR MCGUIRE said she likes the bill and hopes to move it out
on Thursday. She requested an amendment that would limit the
overhead or disclose it after the Rasmuson Foundation departs.
She said she would like to hear from the Alaska Permanent Fund,
and it is a great bill. SB 43 was held over.
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