Legislature(1997 - 1998)
05/02/1998 04:50 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.