04/30/2002 09:46 AM Senate FIN

                                                                                                                                
     SENATE BILL NO. 355                                                                                                        
     "An Act establishing an account in the general fund to receive                                                             
     general gifts, donations, and bequests to the State of                                                                     
     Alaska."                                                                                                                   
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
JERRY  BURNETT,   Staff  to  Senator  Green,  testified   this  bill                                                            
establishes  a new account  in the  general fund  titled the  Let Me                                                            
Help Account  to allow  those who  want to pay  taxes, or  otherwise                                                            
increase State  revenues, to contribute. He noted  the funds donated                                                            
to the State of Alaska  would be treated as a charity and deductible                                                            
from federal taxes.                                                                                                             
                                                                                                                                
Senator  Ward asked if  the bill  contains a provision  to allow  an                                                            
applicant  for a  permanent  fund dividend  to donate  the  dividend                                                            
directly to the State treasury  by an indication on the application.                                                            
                                                                                                                                
Mr. Burnett replied  that currently there is not,  that the dividend                                                            
check  must  be  received  then donated.  He  noted  this  has  been                                                            
discussed, as  well as a provision that would transfer  funds to the                                                            
Let  Me Help  Account  in  the  amount  of the  dividends  of  those                                                            
qualifying residents who do not apply for a dividend.                                                                           
                                                                                                                                
Senator  Leman liked  the idea. He  relayed a  conversation at  West                                                            
High School whereby students  expressed to him that they would forgo                                                            
dividends  for the benefit  of the  school and  their education.  He                                                            
stated  that he produced  a basket  to collect  dividend checks  and                                                            
announced he would  forward the funds to the Department  of Revenue.                                                            
He informed that at the  end of this gathering, the basket contained                                                            
no checks.  He opined, however, that  he is supportive of  providing                                                            
an opportunity for those who wish to contribute.                                                                                
                                                                                                                                
Senator  Leman  asked  if  these  funds  when  appropriated  by  the                                                            
legislature would  be considered general funds or  receipt supported                                                            
services.                                                                                                                       
                                                                                                                                
Mr. Burnett replied  the funds would be transferred  from the Let Me                                                            
Help  Account  to the  general  fund. He  pointed  out  that if  the                                                            
legislature  appropriated the funds  before this transfer  occurred,                                                            
they could be accounted as non-general funds.                                                                                   
                                                                                                                                
Senator Green  explained the reason she sponsored  this legislation.                                                            
She told of  varying correspondence  she receives requesting  either                                                            
significant  taxation  no taxation,  and she  realized  there is  no                                                            
consensus  on the  issue.  She asserted  that  if donators  wish  to                                                            
designate  the contribution  for education,  medical care,  or other                                                            
specific services, this option should be available.                                                                             
                                                                                                                                
Senator  Olson  asked if  there  is a  limit of  how  much could  be                                                            
donated.                                                                                                                        
                                                                                                                                
Senator Green thought the amount would be limitless.                                                                            
                                                                                                                                
Mr. Burnett clarified there  are limits to the amount that qualifies                                                            
for federal tax  credit. He understood this amount  to be 50 percent                                                            
of gross annual  income. However,  he assured that any amount  could                                                            
actually be contributed.                                                                                                        
                                                                                                                                
Senator Olson clarified the donators could designate the funds.                                                                 
                                                                                                                                
Mr. Burnett corrected  that the bill does not currently  provide for                                                            
this.                                                                                                                           
                                                                                                                                
Senator  Green offered  a motion  to "move  Senate Bill  355 out  of                                                            
Committee with individual recommendations."                                                                                     
                                                                                                                                
Without  objection SB  355 with  Department of  Administration  zero                                                            
fiscal note, dated 4/10/02, MOVED from Committee.