Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/29/2012 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
Audio | Topic |
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Start | |
SB223 | |
SB225 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+ | TELECONFERENCED | ||
= | SB 223 | ||
= | SB 225 | ||
SB 225-ESTABLISH ENDOW ALASKA GRANT PROGRAM 3:42:31 PM CHAIR OLSON announced the consideration of SB 225 and noted it was heard once before. 3:43:00 PM SENATOR WAGONER joined the meeting. 3:43:07 PM SYDNEY SEAY, Staff, Senator Olson, said SB 225 [creates the endow Alaska Grant program, which would establish a mechanism to allow local community foundations to leverage private donations from within a community by matching donor contributions with state funds.] The match applies to donations up to $25,000. She noted that no one had voiced opposition to the bill, and the companion bill was HB 290. SENATOR KOOKESH asked for the definition of "community foundation." 3:45:42 PM ERIN HARRINGTON, Staff, Representative Alan Austerman, Alaska State Legislature, directed attention to the definition section on page 3 of the bill. She read the following definition: "community foundation" means a tax-exempt, nonprofit, autonomous, publicly supported, philanthropic institution in the state composed primarily of permanent funds established by many separate donors for the long-term diverse, charitable benefit of the residents of a defined geographic area; She said a defined geographic area could be a single community or region. The definition is for Internal Revenue Service (IRS) purposes; it was crafted to ensure it describes community foundations working in Alaska. CHAIR OLSON asked if a community has to be incorporated in order to qualify. MS. HERRINGTON answered no. The community foundation is a stand- alone entity that is strictly defined in IRS code, and can work toward the interests of any community or region that it is set up to serve. 3:47:13 PM SENATOR KOOKESH asked if the definition was in the IRS code or a state license. MS. HERRINGTON said the bill creates a definition for "community foundation" in Sec. 44.33.190. She deferred IRS questions to Ken Castner, chair of the Homer Foundation. SENATOR KOOKESH worried that any entity could call itself a nonprofit community organization. He suggested establishing parameters. MS. HERRINGTON assured him that the IRS strictly regulates what entities can be a community foundation. SENATOR KOOKESH expressed satisfaction. CHAIR OLSON asked a representative from the Department of Commerce, Community and Economic Development (DCCED) to supplement the answer. 3:48:41 PM SCOTT RUBY, Director, Division of Community and Regional Affairs, Department of Commerce, Community and Economic Development (DCCED), explained that the foundation would first need to be formed as a nonprofit corporation within the state; then it would have to meet the requirements for a foundation under the IRS code for nonprofit corporations. SENATOR MENARD asked if the community foundation acts as an affiliate or a pass-through. MR. RUBY directed attention to the definitions on page 3 of the bill. A "community foundation" is a stand-alone entity that would manage its own funding. A "community foundation affiliate" would rely on a parent foundation. SENATOR MENARD commented that philanthropy is a noble wave of the future. She asked if a 501(c)3 nonprofit operating within the state could endow the Alaska grant fund. MR. RUBY answered that is correct. He clarified that the DCCED grant funds would not go to a project; they would go toward the endowment these entities would hold. The earnings from the endowment could then be used for projects. SENATOR MENARD noted the $25,000 cap. MR. RUBY responded that the maximum annual matching grant would be $25,000; that amount would go into the endowment. The intention is to stimulate community foundations and philanthropy within a community. 3:52:14 PM KEN CASTNER, Chair, Board of Trustees, Homer Foundation, told the committee that the Homer Foundation was established over 20 years ago and was the first community foundation in the state. He noted that the endowment now contributes about $200,000 a year to the various nonprofits and charitable purposes in the area. The defined geographic area is Ninilchik south and the small communities around Kachemak Bay. He stated support for SB 225 and relayed that much of the board's work is accounting and money management. He emphasized that the community foundation does not do projects; it funds the work of others. CHAIR OLSON asked if the investments were risky. MR. CASTNER answered that the board is fairly risk averse. Between one-third and one-half of the funds are in cash, and much of the rest is in the equity market. The portfolio holdings undergo monthly review in a public meeting. The process to get the returns is transparent and completely above board, he stated. CHAIR OLSON found no further questions or discussion. 3:55:12 PM SENATOR MENARD moved to report SB 225 from committee with individual recommendations and attached fiscal note(s). 3:55:50 PM CHAIR OLSON announced that without objection, SB 225 moved from the Senate Community and Regional Affairs Standing Committee.
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