Legislature(1997 - 1998)
05/02/1998 04:50 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 2, 1998
4:50 P.M.
TAPE HFC 98 - 144, Side 1
TAPE HFC 98 - 144, Side 2
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 4:50 p.m.
PRESENT
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Grussendorf Representative Mulder
Representative Kelly
Co-Chair Hanley and Representative Foster were absent from
the vote.
ALSO PRESENT
Representative Joe Green; Jeff Logan, Staff, Representative
Green; Alison Elgee, Deputy Commissioner, Department of
Administration; Keith Gerken, Division of General Services,
Department of Administration; Jack Kreinheder, Senior Policy
Analyst, Office of Management and Budget, Office of the
Governor.
SUMMARY
HB 452 "An Act relating to registration, disclosures, and
reports by certain nonprofit corporations."
CSHB 452 (JUD) was REPORTED out of Committee with
"no recommendation" and with a zero fiscal note by
the House Judiciary Committee.
HB 463 "An Act establishing the Alaska public building
fund; and providing for an effective date."
HB 463 was REPORTED out of Committee with a "no
recommendation" and with Office of the Governor,
3/19/98.
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.
HOUSE BILL NO. 463
"An Act establishing the Alaska public building fund;
and providing for an effective date."
ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION spoke in support of HB 463. She explained
that the Department has been working to create a methodology
that would allow them to charge agencies that occupy state
owned buildings rent on the program level. The legislation
would create the Alaska Public Building Fund. Collected
rents would be deposited in the Fund. Operations and
maintenance of state facilities would be appropriated by the
legislature from the Fund. Monies in the Alaska Public
Building Fund would not lapse at the end of the year.
Renewal and replacement costs would be collected through the
depreciation of the facility. This would allow a rent
structure that can be collected over a period of years and
spent in a capital fashion for items such as roof
replacements. She stressed that rent on a program level
will encourage accountability and allow other fund sources
to be utilized. The federal government would need to
approve the rent methodology for federal agencies through
the Department of Health and Human Services. The Department
would phase in the program. She explained that more money
would be collected if federal programs were billed on the
program level as a direct cost of operation.
Co-Chair Therriault questioned if funding would be diverted
from programs to pay the rent in cases where federal funding
is capped. Ms. Elgee stated that it is a policy question
that has not been resolved.
(Tape Change, HFC 98 - 144, Side 2)
Ms. Elgee stated that the Information Services Fund, which
charges back computer operations, runs on a similar manner.
Co-Chair Therriault expressed concern that the funds would
be raided for other uses. Ms. Elgee stated that the problem
has not occurred with the Information Services Fund. The
Information Services Fund is set up with a three-year life
expectancy. If money is not expended within the three-year
period the Department is required to reduce charges in the
subsequent year. The Alaska Public Building Fund would be
setup in a similar manner. She estimated that the Fund
would be created with a five-year turnaround. She explained
that a rental charge would be budgeted for at the program
level in the operating budget. Operation and maintenance
costs would be shown under the Department of Transportation
and Public Facilities or Department of Administration;
depending on whom is managing the space. The funding source
for these appropriations would be the Alaska Public Building
Fund as the fund source. Capital projects would be proposed
in the capital budget with the Alaska Public Building Fund
as the fund source. These funds would fall under the other
funds category.
In response to a question by Representative G. Davis, Ms.
Elgee explained that rent has three components. Operations
and maintenance are annual expenditures. Renewal and
replacement is collected in a rent structure by depreciating
the building. There is also a component for administrative
costs. The three components are combined into a rental
rate. The agency would be billed based on their space
allocation. Charges to the agencies would be deposited in
the Alaska Public Building Fund. The legislature has to
authorize appropriations from the Fund. The first
expenditure that would be authorized is for rent. Then
expenditures would be authorized for operations and
maintenance in the operating budget. Authorization for
capital replacement of building components would be shown in
the capital budget.
KEITH GERKEN, DIVISION OF GENERAL SERVICES, DEPARTMENT OF
ADMINISTRATION observed that the legislation was modeled on
other internal service funds in the state of Alaska. He
observed that the Deferred Maintenance Task Force
recommended program rent as a way to stabilize the fund
source. He observed that other western states utilize the
same concept.
Co-Chair Therriault observed that Ms. McConnell indicated,
in her letter dated 4/30/98, that the only time the State
Equipment Fleet Fund was tapped by the legislature was in
the mid 1980's when the price of oil crashed. There has not
been a problem with raiding since the establishment of the
Constitutional Budget Reserve Fund.
Representative G. Davis MOVED to report HB 463 out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
HB 463 was REPORTED out of Committee with a "no
recommendation" and with Office of the Governor, 3/19/98.
ADJOURNMENT
The meeting adjourned at 5:45 p.m.
House Finance Committee 5
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