HB 114-OPT-OUT CHARITABLE GIVING PROGRAM    3:18:14 PM CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 114, "An Act relating to an opt-out charitable giving program offered by an electric or telephone cooperative." 3:18:36 PM JANE PIERSON, Staff, Representative Steve Thompson, Alaska State Legislature, on behalf of the prime sponsor, recapped HB 114, which was previously heard by the committee. She explained that HB 114 would create an opt-out charitable giving program. The program would "roundup" to the next dollar on an electric cooperative billing. The fractional amount would be distributed to organizations and individuals in need of charitable donations. Individuals or organizations would apply by application. Most cooperatives establish a separate "501 (c) (3)" organization to oversee these monies. One issue that arose at an earlier hearing on HB 114 was the necessity of placing some restrictions on the opt-out charitable giving program. 3:19:28 PM REPRESENTATIVE THOMPSON made a motion to adopt Amendment 2, labeled, 27-LS0424\A.4, Kane, 2/11/11, as follows: Page 3, lines 13 - 14: Delete "charitable donations and for no other purpose" Insert "the relief of poverty, distress, or other conditions of general public concern but not for religious organizations, political organizations, organized labor unions, or unorganized labor unions, or for any political purpose" CHAIR OLSON objected for purpose of discussion. 3:19:56 PM MS. PIERSON explained that proposed Amendment 2 would "place some sideboards" on what the charitable funds uses. She said the funds could be used for the relief of poverty, distress, or other conditions of general public concern but not for religious organizations, political organizations, organized labor unions, or unorganized labor unions, or for any political purpose. In response to Representative Johnson, she answered that she did not have a definitive answer since the term "charitable" has many definitions. She offered to work on a definition for consideration at the next committee of referral. REPRESENTATIVE JOHNSON said he would also like "general public concern" defined but his concern was not significant enough to impede the progress of HB 114. However, he thought the term was too general. 3:21:19 PM REPRESENTATIVE SEATON asked for the definition of an "unorganized labor union." MS. PIERSON said she was uncertain but she thought some labor organizations have programs and this language would extend to these programs. 3:22:05 PM REPRESENTATIVE SEATON described a scenario in which house repairs were being donated. He asked whether employees of companies would be prevented from using the funds or working on a house if the employees were part of organized labor. MS. PIERSON offered her belief that the intent of the bill would be for the, the person who needs the repairs done, the recipient, to hire anyone he/she chose to do the repairs. She indicated this could include any member of organized or unorganized labor since the labor organization would not be receiving the funds. Instead, the individual or nonprofit organization would be receiving the charity, she stated. 3:23:23 PM CLYDE (ED) SNIFFEN, JR., Senior Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Anchorage), Department of Law (DOL), revisited the question as whether an individual recipient could contract with an organized labor union or an unorganized labor union to repair the roof. He agreed with Ms. Pierson, that the intent would be for the recipient of the donation is the focus of this language. He offered his belief that some restrictions would be placed on paying labor directly but a carpenter who happened to be part of a labor union would not likely have any restriction. 3:24:29 PM REPRESENTATIVE SEATON referred to page 3, lines 13-14 of HB 114, and said he thought the language referred to the purpose of the charitable funds and not who receives the funds. He read: "...the relief of poverty, distress, or other conditions of general public concern but not for religious organizations, political organizations, organization labor unions, or unorganized labor unions, or for any political purpose." He asked for further clarification. MR. SNIFFEN referred to an earlier question on whether the term "general public concern" could be defined. He offered to work on this definition. The language was derived from AS 45.68, which relates to charitable solicitation in Alaska. The statute defines a charitable organization to mean an organization that is formed for the relief of poverty, distress, or other conditions of general public concern. He recalled other statutes use that phrase. Unfortunately, the phrase is not defined in any of those other statutes either. He said, "It's kind of a moving target and we'll see if we can do better." MR. SNIFFIN turned to the specific question as to whether Amendment 2 would refer to the purpose of the donation or the individual. He said he was uncertain whether it matters too much, but he understood the concern. He related a scenario in which GVEA wanted make a donation to the International Brotherhood of Electrical Workers (IBEW) for the purpose of opposing an attempt to de-unionize a particular shop. The GVEA would be restricted from doing so as long as the purpose of the grant is not to benefit the labor, political or religious organization. This language would allow that to happen but he suggested that there may be a way to focus on the purpose rather than on the individual. REPRESENTATIVE SEATON offered that he was having difficulty with the "purpose" and the "recipient" on the "same line". He was uncertain how that would work. 3:27:31 PM REPRESENTATIVE JOHNSON recalled Mr. Sniffen used the term "unorganized labor organizations" several times but the specific language in Amendment 2 uses the term "unorganized labor unions." He asked whether the committee should consider altering the language. MR. SNIFFEN related his understanding that union suggests an organized entity. He offered his belief it might make more sense to say "organized labor unions" or "other unorganized labor organization" would perhaps resolve that issue. He suggested that clarification could be worked on in the House Judiciary Standing Committee, as well. 3:28:33 PM REPRESENTATIVE JOHNSON referred to an organization such as the Associated General Contractors (AGC), which is not a union but is an organized labor association. He reiterated such an organization is not really a union but it is an organization. He commented that he struggles with the meaning of that phrase. REPRESENTATIVE SEATON related a scenario in which AGC needed to replace 20 roofs that blew off in a wind storm. He asked whether AGC could replace the roofs under the charitable giving program in HB 114. MR. SNIFFEN responded that AGC is a contractor's association so it would not likely fit the definition of a labor organization. He identified the AGC as an affiliation of entities that have labor organization interests. The purpose and intent of HB 114 is to allow donations for charitable giving projects for projects such as replacing a roof on a disabled person's home. He remarked that would not be prohibited to have the donation go through a labor organization of some kind so long as the grant was not to the labor organization. He offered his belief that the funds would have to be earmarked for a specific purpose. He related that it may make more sense to put parameters on the definition in order to better focus on the purpose of the fund. Then if the funds are channeled to entities it would likely be fine so long as the purpose of the donation was met. He offered to continue to work to improve the language. REPRESENTATIVE JOHNSON said he thought the funds should be remitted directly to the recipient rather than to the person receiving the repair. He reiterated that he would prefer the process to be structured so any charitable funds would be paid to the recipient and the person would then hire the repair person to do the work. MR. SNIFFEN said he did not disagree. He offered his belief that they both have same idea. 3:32:37 PM REPRESENTATIVE MILLER remarked that he reviewed the list of examples of recipients and thought one solution might be to insert language, such as nonprofit businesses. He recalled the sponsor's staff mentioning the difficulty in inserting "charitable organization" since it may have "tentacles" but all of the examples on the list seemed to be individual or nonprofit organizations. MS. PIERSON said she thought that was a good idea and offered to work with Mr. Sniffen on specific language to address his concern. REPRESENTATIVE MILLER referred to line 4 of proposed Amendment 2, and suggested the committee may wish to delete "unorganized labor unions" and replace it with "other labor organizations." MR. SNIFFEN said he thought that change makes sense. He also thought a similar restriction to non-profit organizations was previously considered. He said he thought the language in Amendment to that imposes restrictions to "not for religious organizations and political organizations" helps to clarify who is eligible since religious organizations and political organizations are also nonprofit organizations. He offered his belief that the committee has given the sponsor good direction to move forward to address the concerns. 3:35:13 PM REPRESENTATIVE HOLMES asked whether proposed Amendment 2 should be adopted or if it still needs tinkering. She said it seemed like committee is interested in moving the bill along. REPRESENTATIVE JOHNSON said he was not opposed to moving the bill with this amendment included since the committee is building a public record. He said would be uncomfortable sending this bill out without adopting Amendment 1, even though the language was imperfect. REPRESENTATIVE SEATON said he was unsure which entities are being discussed under "other labor organizations" that are not "labor unions," especially as it pertains to rural Alaska. He was uncertain whether the language may capture entities the committee may not want included in the charitable giving provisions. REPRESENTATIVE JOHNSON asked the sponsor to clarify whether deleting the language after "labor unions" and using "or unorganized labor unions" would serve the sponsor's purpose and may also address Representative Seaton's concern. MS. PIERSON answered yes. 3:38:36 PM REPRESENTATIVE JOHNSON made a motion to conceptually amend Amendment 2, on line 4, of HB 114, after "organized labor unions" to delete "or unorganized labor unions." REPRESENTATIVE HOLMES objected for purpose of discussion. REPRESENTATIVE THOMPSON considered the suggested language change in the conceptual amendment to Amendment 2 as "a friendly amendment." MR. SNIFFEN agreed that he could not come up with a solid clear example of an unorganized labor union either. He said he did not think the conceptual amendment to Amendment 2 would detract from the intent of the sponsors, although he left it up to the sponsors to decide. 3:39:51 PM REPRESENTATIVE HOLMES removed her objection to the conceptual amendment to Amendment 2. There being no further objection, the conceptual amendment to Amendment 2 was adopted. CHAIR OLSON lifted his objection. There being no objection, Conceptual Amendment 2, as amended was adopted. CHAIR OLSON, after first determining no one else wished to testify, closed public testimony on HB 114. 3:41:03 PM REPRESENTATIVE SADDLER made a motion to adopt Conceptual Amendment 3, on page 3, line 2, to delete "but does not" and insert "by an amount not to". He explained the bill would then read: "program that rounds the monthly bill of a member to the next whole dollar amount by an amount not to exceed 99 cents a month." REPRESENTATIVE HOLMES objected for the purpose of discussion. REPRESENTATIVE SADDLER clarified that it was "a grammar thing" since the subject is "a program that" "rounds the monthly bill" "but does not exceed." He suspected a monthly bill would exceed 99 cents a month. 3:42:39 PM REPRESENTATIVE SADDLER explained that Conceptual Amendment 3 would also have to add "up" to read, "rounds up" instead of "rounds". He restated the bill would then read: "program that "rounds up" the monthly bill of a member to the next whole dollar amount by an amount not to exceed 99 cents a month." He then restated Conceptual Amendment 3, after "member" insert "up" then delete "but does not" and insert "by an amount not to". REPRESENTATIVE HOLMES removed her objection. There being no further objection, Conceptual Amendment 3 adopted. REPRESENTATIVE THOMPSON acknowledged Conceptual Amendment 3 as a "friendly amendment." 3:44:09 PM REPRESENTATIVE JOHNSON moved to report HB 114, as amended, out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, CSHB 114(L&C) was reported from the House Labor and Commerce Standing Committee.