04/02/2010 01:30 PM House FINANCE

SENATE BILL NO. 171                                                                                                           
                                                                                                                                
     "An Act relating  to the permanent fund  dividend of an                                                                    
     otherwise  qualified  individual  who dies  during  the                                                                    
     qualifying year; and providing for an effective date."                                                                     
                                                                                                                                
CHRISTINE MARASIGAN,  STAFF, SENATOR KEVIN  MEYER, presented                                                                    
the overview of the bill.  The bill provides for an issuance                                                                    
of  a permanent  fund  dividend (PFD)  check  to a  personal                                                                    
representative  of  an  estate  or  successor  claiming  the                                                                    
personal  property  of  the deceased,  should  an  otherwise                                                                    
eligible individual die during the qualifying year.                                                                             
                                                                                                                                
Co-Chair Stoltze added that  the bill includes modifications                                                                    
to  "Pick, Click  and Give".  He inquired  if Ms.  Marasigan                                                                    
agreed with those additions to the bill. She said she did.                                                                      
                                                                                                                                
1:44:48 PM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas MOVED to adopt Amendment 1:                                                                                   
                                                                                                                                
     Page 4, following line 31:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*Sec.6 AS 43.23.062(f) is amended to read:                                                                                
     (f)   The   department   may  charge   [ESTABLISH]   an                                                                
     application fee  of $250 [NOT  TO EXCEED $50]  for each                                                                
     educational  organization,   community  foundation,  or                                                                    
     charitable  organization  that   files  an  application                                                                    
     under (d)  of this section. The  application fees shall                                                                    
     be  separately accounted  for under  AS 37.05.142.  The                                                                    
     annual  estimated  balance  in the  account  maintained                                                                    
     under  AS  37.05.142  for  application  fees  collected                                                                    
     under this subsection may be  appropriated for costs of                                                                    
     administering this section."                                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, line 16:                                                                                                           
     Delete "Sections 1 - 7"                                                                                                    
     Insert "Sections 1 - 8"                                                                                                    
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Vice-Chair Thomas explained that  the amendment would charge                                                                    
an   application   fee   of  $250   for   each   educational                                                                    
organization,    community    foundation,   or    charitable                                                                    
organization  that files  an  application  under the  "Pick,                                                                    
Click, and  Give" program. He  reported that there  has been                                                                    
$815,000 committed  to the program  at this time. This  is a                                                                    
46  percent  increase over  last  year.  The amendment  will                                                                    
raise roughly $62,750.                                                                                                          
                                                                                                                                
Co-Chair  Stoltze concluded  that  the fee  would  not be  a                                                                    
barrier for the organizations. Vice-Chair Thomas agreed.                                                                        
                                                                                                                                
1:47:26 PM                                                                                                                    
                                                                                                                                
Representative Fairclough asked  about uncollected remaining                                                                    
costs of  providing the  service. She  wondered if  the $250                                                                    
charge covered  all costs of the  program. Vice-Chair Thomas                                                                    
noted  the  attempt to  match  50  percent of  the  required                                                                    
fiscal note.                                                                                                                    
                                                                                                                                
Representative  Fairclough   inquired  if  50   percent  was                                                                    
unmatched. Vice-Chair  Thomas responded that $65,000  is the                                                                    
unmatched  amount.  Representative Fairclough  wondered  why                                                                    
the  amount  of  $500  is not  being  requested.  Vice-Chair                                                                    
Thomas said it was because non-profits were paying for it.                                                                      
                                                                                                                                
Representative Fairclough  noted she  was sensitive  to non-                                                                    
profits,  but   she  was  also  sensitive   to  the  state's                                                                    
position. She  suggested that it seemed  reasonable to reach                                                                    
for 100 percent coverage.                                                                                                       
                                                                                                                                
Representative Foster asked if it  was an annual or one-time                                                                    
fee. Vice-Chair Thomas said it was an annual fee.                                                                               
                                                                                                                                
1:49:43 PM                                                                                                                    
                                                                                                                                
Representative Austerman inquired if it was the only fee.                                                                       
                                                                                                                                
DEBORAH   BITNEY,   DIRECTOR,   PERMANENT   FUND   DIVIDEND,                                                                    
DEPARTMENT  OF REVENUE,  stated  that it  was  the only  fee                                                                    
charged to the non-profits choosing to participate.                                                                             
                                                                                                                                
Representative   Foster    asked   if   there    were   many                                                                    
organizations that don't receive  $250 in contributions. Ms.                                                                    
Bitney  responded  that  there were  378  total  non-profits                                                                    
receiving  pledges,   and  61  received  $250   or  less  in                                                                    
contributions.                                                                                                                  
                                                                                                                                
1:51:16 PM                                                                                                                    
                                                                                                                                
Representative Doogan questioned the  fiscal note of $86,700                                                                    
a year. He wondered if it  was the only fiscal note attached                                                                    
to the  bill. Co-Chair  Stoltze thought  there should  be an                                                                    
updated fiscal note.                                                                                                            
                                                                                                                                
Representative Foster  requested more statistics  related to                                                                    
how much non-profits received.                                                                                                  
                                                                                                                                
Ms. Bitney  related that  43 organizations  received between                                                                    
$275  and $500  in  pledges. That  leaves 274  organizations                                                                    
that received  $500 or  more. It  is anticipated  that there                                                                    
will be about $68,500 from application fees.                                                                                    
                                                                                                                                
1:53:12 PM                                                                                                                    
                                                                                                                                
Representative Fairclough  did not wish to  advocate for the                                                                    
$500 fee this  year due to the newness of  "Pick, Click, and                                                                    
Give".  She spoke  of other  organizations which  benefit by                                                                    
the elimination of  the middle man. She pointed  out that it                                                                    
creates  technical challenges  and additional  paperwork for                                                                    
the  Department of  Revenue. She  agreed that  $250 was  the                                                                    
right number  for this year, but  in the future it  might be                                                                    
revised.                                                                                                                        
                                                                                                                                
Co-Chair  Stoltze  gave  his opinion  about  another  "check                                                                    
off".  He thought  there ought  to  be a  cut-off point  for                                                                    
organizations that don't profit  by this avenue. He expected                                                                    
to revisit the issue again.                                                                                                     
                                                                                                                                
1:56:24 PM          AT EASE                                                                                                   
2:08:52 PM          RECONVENED                                                                                                
                                                                                                                                
Vice-Chair Thomas WITHDREW Amendment 1.                                                                                         
                                                                                                                                
Vice-Chair  Thomas MOVED  to ADOPT  HCS  for CSSB  171(FIN),                                                                    
labeled 26-LS0804\C,  Cook, 2/5/10, as the  working document                                                                    
before the committee.                                                                                                           
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Vice-Chair Thomas MOVED to ADOPT Amendment 2:                                                                                   
                                                                                                                                
     Page 4, following line 31:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "*Sec.6 AS 43.23.062(f) is amended to read:                                                                                
     (f)   The  department   shall  charge   [ESTABLISH]  an                                                                
     application fee  of $250 [NOT  TO EXCEED $50]  for each                                                                
     educational  organization,   community  foundation,  or                                                                    
     charitable  organization  that   files  an  application                                                                    
     under (d)  of this section. The  application fees shall                                                                    
     be  separately accounted  for under  AS 37.05.142.  The                                                                    
     annual  estimated  balance  in the  account  maintained                                                                    
     under  AS  37.05.142  for  application  fees  collected                                                                    
     under this subsection may be  appropriated for costs of                                                                    
     administering this section."                                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, line 16:                                                                                                           
     Delete "Sections 1 - 7"                                                                                                    
     Insert "Sections 1 - 8"                                                                                                    
                                                                                                                                
Co-Chair Stoltze OBJECTED.                                                                                                      
                                                                                                                                
2:10:15 PM                                                                                                                    
                                                                                                                                
Representative   Austerman  commented   on  the   number  of                                                                    
organizations on the  list that would not profit  if the fee                                                                    
were to be $500. The  concept behind "Pick, Click, and Give"                                                                    
is  to  enable the  organizations  to  raise money.  He  was                                                                    
opposed to having the higher fee.                                                                                               
                                                                                                                                
Ms. Bitney  noted there were 274  organizations that receive                                                                    
more than $500 in pledges.                                                                                                      
                                                                                                                                
Representative  Fairclough spoke  of a  time when  community                                                                    
members  selected  charities  to  support.  She  shared  the                                                                    
history  of   a  United  Way  campaign   in  Anchorage.  She                                                                    
maintained  that individual  Alaskans  show  value for  each                                                                    
organization with  their donation. Increasing the  cost does                                                                    
not  disenfranchising  charities.   She  shared  a  personal                                                                    
experience  with donations  and concluded  that the  program                                                                    
does not  make it  harder for  charities, but  increases the                                                                    
load for the  departments. She thought that  the list should                                                                    
contain a threshold. She spoke in support of the amendment.                                                                     
                                                                                                                                
2:15:14 PM                                                                                                                    
                                                                                                                                
Representative   Kelly  pointed   out  that   the  cost   of                                                                    
fundraising for  organizations was pretty high  and $250 was                                                                    
a bargain.  He thought it was  a great program and  would be                                                                    
self-selecting.                                                                                                                 
                                                                                                                                
Representative  Fairclough  related  that the  advantage  is                                                                    
that it appears donations have gone up substantially.                                                                           
                                                                                                                                
Representative Foster  believed that the seven-page  of list                                                                    
of organizations was comprehensive.                                                                                             
                                                                                                                                
2:17:17 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Doogan, Fairclough, Foster,  Joule, Kelly, Thomas,                                                                    
Stoltz, Gara                                                                                                                    
                                                                                                                                
OPPOSED: Austerman                                                                                                              
                                                                                                                                
The MOTION PASSED (8-1)                                                                                                         
                                                                                                                                
BEN MULLIGAN,  STAFF, CO-CHAIR STOLTZE, pointed  out that in                                                                    
the  fund source  section  of the  fiscal  note the  program                                                                    
receipts  total should  be $68,500,  not $18,800.  This will                                                                    
bring the  total to  $64,000, which  will reduce  the fiscal                                                                    
impact by half.                                                                                                                 
                                                                                                                                
Vice-Chair Thomas MOVED  to report HCS CSSB  171(FIN) out of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
HCS CS SB 171(FIN) was REPORTED  out of Committee with a "do                                                                    
pass"  recommendation  and  with  a  new  fiscal  note  from                                                                    
Department of Revenue and  previously published fiscal note:                                                                    
FN2 (REV)                                                                                                                       
                                                                                                                                
2:20:25 PM