Legislature(2017 - 2018)BUTROVICH 205

03/24/2017 08:00 AM EDUCATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 78 PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= SB 96 EDUCATION:SCHOOLS/TEACHERS/FUNDING TELECONFERENCED
<Bill Hearing Canceled>
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
= SB 87 SCHOOL CONSTRUCTION ENERGY EFFICIENCY STD
Heard & Held
         SB 78-PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY                                                                     
                                                                                                                                
8:28:59 AM                                                                                                                    
CHAIR HUGHES announced the considerations of SB 78.                                                                             
                                                                                                                                
SENATOR  CLICK BISHOP,  Alaska State  Legislature, sponsor  of SB                                                               
78.  He introduced  SB  78 by  saying  that the  bill  sets up  a                                                               
foundation  for an  innovative way  to  raise funding  to help  a                                                               
great cause  - funding the  future for Alaska's greatest  asset -                                                               
its  children. He  said he  has long  been in  favor of  economic                                                               
diversification  and  using  renewable  resources,  such  as  the                                                               
earning of the permanent fund.                                                                                                  
                                                                                                                                
He  shared  a  personal  story  about an  education  tax  on  his                                                               
paycheck when  he was first  starting to  work. In the  1980s the                                                               
education head tax  was struck down. He said he  has been seeking                                                               
support for a way to fund education for the last four years.                                                                    
He called his  bill a voluntary limited income tax.  He said over                                                               
60  percent  of  his  district supports  education.  He  gave  an                                                               
example  of a  constituent  who  returned his  PFD  the last  two                                                               
years.                                                                                                                          
                                                                                                                                
SENATOR BISHOP said  the purpose of the bill is  to look way into                                                               
the  future, post  oil, to  help partially  fund education  using                                                               
Alaska's  renewal  resource,  the  power of  its  permanent  fund                                                               
earnings.                                                                                                                       
                                                                                                                                
8:33:17 AM                                                                                                                    
SENATOR STEVENS asked if he will use Pick, Click, Give.                                                                         
                                                                                                                                
SENATOR BISHOP said yes.                                                                                                        
                                                                                                                                
PETE  FELLMAN,   Staff,  Senator   Click  Bishop,   Alaska  State                                                               
Legislature,  explained  SB  78  on behalf  of  the  sponsor.  He                                                               
explained  that SB  78  provides that  everyone  could donate  to                                                               
education   in   $100   increments  on   their   permanent   fund                                                               
application. He  said that half of  the money goes to  the public                                                               
education fund;  a quarter  goes to  an education  endowment fund                                                               
which  will reach  a  cap and  then roll  money  into the  public                                                               
education fund; and one quarter  goes into the lottery fund which                                                               
has a  $500 million cap. After  the lottery has reached  the cap,                                                               
all future  donations will  go to education.  Out of  the lottery                                                               
fund, 20  percent will go to  lotter prizes, and 80  percent will                                                               
stay in the  lottery fund. Every year the lottery  fund will grow                                                               
and will be managed in a conservative manner.                                                                                   
                                                                                                                                
8:36:47 AM                                                                                                                    
MR.  FELLMAN   showed  a  table   of  hypothetical   fund  result                                                               
possibilities  year  by  year: number  of  participants,  average                                                               
donations, deposits to  fund types, and prize  amounts. He termed                                                               
it a bucket  lottery. He hoped the fund  would be self-sustaining                                                               
in the future.                                                                                                                  
                                                                                                                                
He  noted Alaska  already has  sixteen  variations of  charitable                                                               
gaming and  he provided  examples, such as  the Ice  Classic. The                                                               
lottery will  not need  administrative money  from the  state, it                                                               
comes from the donations.                                                                                                       
                                                                                                                                
8:40:05 AM                                                                                                                    
MR. FELLMAN explained the changes  in the proposed CS, version R.                                                               
One change  would cap the  amount of  money needed to  manage the                                                               
lottery to  $500,000. The  other change was  so that  the 125,000                                                               
people who do  not file their permanent fund on  a computer could                                                               
participate in the lottery. It  removes the word "electronic" and                                                               
"who files electronically" from the bill.                                                                                       
                                                                                                                                
8:40:48 AM                                                                                                                    
SENATOR COGHILL  moved to  adopt the  CS for  SB 78,  labeled 30-                                                               
LS0534\R, as the working document before the committee.                                                                         
                                                                                                                                
CHAIR HUGHES objected for discussion purposes.                                                                                  
                                                                                                                                
8:41:43 AM                                                                                                                    
CHAIR HUGHES noted there are state  lotteries in the U.S., but SB                                                               
78 is more  like a raffle. She asked what  the difference between                                                               
a lottery and a raffle is.                                                                                                      
                                                                                                                                
MR.  FELLMAN  clarified that  it  is  a limited  lottery  because                                                               
participants must  be residents  of the state  who receive  a PFD                                                               
and  the  donation can  come  only  once  a  year from  the  PFD.                                                               
Participants  cannot spend  their  children's PFD  or their  rent                                                               
money. It is different than any other game of chance.                                                                           
                                                                                                                                
CHAIR  HUGHES   asked  why  they  chose   "lottery"  rather  than                                                               
"raffle."                                                                                                                       
                                                                                                                                
MR. FELLMAN  said they  were excited  about it  and lottery  is a                                                               
catch  word for  big winnings,  not a  small raffle.  The sponsor                                                               
pictured  the  Governor announcing  the  permanent  fund and  the                                                               
winners  of this  lottery. He  concluded that  95 percent  of the                                                               
money stays secure for education.                                                                                               
                                                                                                                                
CHAIR HUGHES removed her objection and version R was adopted.                                                                   
                                                                                                                                
She held SB 78 in committee.                                                                                                    

Document Name Date/Time Subjects
SB 78 - Sponsor Statement Alaska Permanent Fund Education Lottery - final.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Legislation Ver. U.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Proposed Blank CS Ver. R.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Sectional Summary.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Summary of Changes by CS SB78.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Fiscal Note - DOR-PFD-03-17-17.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Fiscal Note - LAW-CRIM-03-17-17.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Fiscal Note - DOR-TRS-03-17-17.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. Dividend Summary.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. Gaming report.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. PickClickGive.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. Statutes Reference SB78.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc.Alaska Permanent Fund Education Lotter2.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting DOC.Games of Chance listed in Section.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc.SB78 Final chart.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 87 - Opposing Documents - Architects Alaska Inc. Letter of Opposition.pdf SEDC 3/24/2017 8:00:00 AM
SB 87