Legislature(2015 - 2016)BUTROVICH 205
03/24/2015 08:30 AM Senate STATE AFFAIRS
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SB 75-PFD CONTRIBUTIONS TO TRIBAL GOVERNMENTS 8:46:16 AM CHAIR STOLTZE announced that the first order of business would be SB 75. 8:46:19 AM SENATOR GARY STEVENS, Alaska State Legislature, Juneau, Alaska, sponsor of SB 75 sponsor, provided an overview as follows: SB 75 is legislation that attempts to expand the popular Permanent Fund Dividend's "Pick.Click.Give." program. The idea is to include federally recognized tribal governments and it also subjects those tribal governments to those same rules, same regulations that apply to all other entities, $250 enrollment is currently applied to each of those participants. 8:47:06 AM DOUG LETCH, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, reiterated that SB 75 is straight forward legislation that would add tribal governments to the list of eligible recipients. He explained that "Pick.Click.Give." was currently reserved for 501(c) nonprofit organizations. He detailed that while tribes are considered tax exempt organizations that are eligible to receive tax deductible donations under Internal Revenue Code (IRC) Section 7871 and are listed in Revenue Procedure 2008-55, the tribes do not meet the current designation to participate in "Pick.Click.Give." without a change in statute. He explained that SB 75 would impact potentially the 229 federally recognized tribes in Alaska, organizations that offer a variety of services to tribal members and residents of their villages. He noted that the tribes are often the largest and many times the sole service providers in villages that offer services and activities designed for the benefit of their community. He detailed that activities are generally geared towards youth development, low income families, the elderly, and victims of violence. He said having the ability to be listed in Pick-Click-Give would make it easier for tribes to access local contributions and could help the public understand the importance of the tribal programs. He noted that one of the benefits from the "Pick.Click.Give." program is that people make donations before seeing their Permanent Fund Dividend (PFD) check. He opined that making a donation is easier when applying for a PFD where the money is not missed on the other end. He said when the "Pick.Click.Give." bill was enacted in 2008, the program has made millions of dollars available to eligible organizations over the years. He pointed out that $2.8 million from some 27,000 Alaskans was donated the previous year. He said the Department of Revenue has projected that approximately $3 million will be donated to eligible organizations through the "Pick.Click.Give." and the PFD program later this year. He summarized that tribal governments would like the opportunity to participate as well. 8:47:35 AM SENATOR WIELECHOWSKI joined the committee meeting. 8:49:51 AM SENATOR STEVENS explained that the idea came from the native village of Afognak and noted their letter of support submission. He noted that a letter of support was received from the Chickaloon Village Traditional Council. He added that several other tribal governments are expected to support the bill. CHAIR STOLTZE stated that he would like to have the Department of Revenue's position on the record prior to sending the bill on its way. SENATOR STEVENS replied that he understood Chair Stoltze's request. He said Mr. Burnett, Deputy Commissioner for the Department of Revenue, will be available later in the meeting. CHAIR STOLTZE said the bill will be held until Mr. Burnett addresses the committee. 8:52:24 AM MELISSA BORTON, Tribal Administrator, Native Village of Afognak, Kodiak, Alaska, explained the village's support for the bill as follows: We are one of ten federally recognized tribes located on the island. My tribe, like many other tribes in Alaska, hosts several different youth activities that we fundraise for annually. In addition to youth activities, we also provide social service programs, tutoring programs, language revitalization programs, substance abuse prevention, domestic violence prevention, and child abuse and neglect prevention programs. All of our tribe's programs are geared toward the betterment of our community and the development of our youth; sometimes that is specific to our tribal members and sometimes it's for the greater community, it's not always geared towards our tribal members. We regularly get asked if we participate in the "Pick.Click.Give." program because Alaska residents are now appreciating how easy it is to give portions of their PFD towards non-profits. However, as you know, the current legislation restricts our eligibility. Tribes under IRS Code Section 7871 are afforded the same rights as states and are eligible to accept charitable contributions. However, because we aren't a 501(c)(3) organization, this often times limits our ability to apply for certain foundation grants and also limits our fundraising through certain crowdfunding websites. Tribes having the ability to be listed as eligible organizations under "Pick.Click.Give." would give us another avenue to fund our various programs, bring awareness to the greater Alaskan community about the importance of tribal programs, and further strengthen the relationship between the state government and Alaska tribes. MS. BORTON summarized that the Native Village of Afognak had discussions with the Rasmuson Foundation as well as a scheduled meeting with the Alaska Federation of Natives to solicit support for the bill. SENATOR WIELECHOWSKI asked if contributions to a federally recognized tribe are tax deductible. MS. BORTON answered yes. She noted that donations are accepted from private and corporate contributors. She said she has verified with the Internal Revenue Service's tribal liaison in Anchorage that contributions to a federally recognized tribe are tax deductible. 8:55:25 AM CHAIR STOLTZE closed public testimony and announced that he would set SB 75 aside until the Department of Revenue testifies to get their position on record. SB 75-PFD CONTRIBUTIONS TO TRIBAL GOVERNMENTS 9:54:48 AM VICE CHAIR HUGGINS called the committee back to order and announced that SB 75 was back before the committee. 9:55:29 AM DOUG LETCH, Staff, Senator Stevens, Alaska State Legislature, Juneau, Alaska, stated that Mr. Barnett from the Department of Revenue was present to answer questions that to be entered into the record. JERRY BURNETT, Deputy Commissioner, Alaska Department of Revenue, Juneau, Alaska. MR. LETCH explained that Chair Stoltze wanted to hear the department's position on SB 75. He said there was the indeterminate fiscal note, which explained that the new entrants to the program would pay the $250 fee and be subjected to the same terms as the current participants. VICE CHAIR HUGGINS pointed out that particular emphasis was on the fiscal note. MR. BURNETT explained that the fiscal note was indeterminate because the Department of Revenue has no idea how many new entities may come into the program. He specified that there will be some costs associated with the bill, but each entrant will pay a set $250 fee with 7 percent of the pledges withheld for a management contract. He stated that who the department is taking pledges on behalf of does not matter. 9:57:01 AM VICE CHAIR HUGGINS asked Mr. Burnet to restate what the fiscal note impact will be. MR. BURNETT answered that depending on the number of new entities, each entrant would pay a $250 fee. He said the department will potentially have some additional costs depending on how many entrants there are, but the fiscal impact is covered. VICE CHAIR HUGGINS asked hundreds, thousands, or tens of thousands. MR. BURNETT answered that the department is looking at probably low thousands of dollars; but, it would be paid for by the new entrants. He added that each year there are different numbers of participants in the "Pick.Click.Give." program because charitable organizations can come and go. He summarized that the new entrants would just be handled the same as any other entity that is covered in the program. VICE CHAIR HUGGINS asked if Mr. Letch had any additional comments. MR. LETCH thanked the Native Village of Afognak for bringing the idea forward. SENATOR MCGUIRE thanked the bill sponsors for bringing the bill forward. She commented that she has personal experience seeing small community tribes providing social services and educational services. She opined that small community tribes are more in touch with community. She added that the donations are tax deductible. SENATOR MCGUIRE moved to report SB 75 from committee with individual recommendations and attached fiscal note(s). 9:58:58 AM VICE CHAIR HUGGINS announced that seeing no objection, SB 75 is reported from the Senate State Affairs Standing Committee.