Legislature(2003 - 2004)

05/17/2003 10:38 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                        May 17, 2003                                                                                            
                          10:38 AM                                                                                              
                                                                                                                                
TAPE HFC 03 - 99, Side A                                                                                                        
TAPE HFC 03 - 99, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 10:38 AM.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Ethan Berkowitz                                                                                                  
Representative Mike Chenault                                                                                                    
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Beth Kerttula                                                                                                    
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Pete  Ecklund,  Staff,  Representative  Bill  Williams;  John                                                                   
MacKinnon, Deputy Commissioner,  Department of Transportation                                                                   
and  Public  Facilities; Annette  Skibinski,  Staff,  Senator                                                                   
Cowdry; Chip Wagoner, Pioneer  of Alaska; Marie Darlin, AARP;                                                                   
John Vowell, Director, Longevity Bonus Program.                                                                                 
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Kent Hartberg,  Anchorage; David Lampert,  Fairbanks; Gregory                                                                   
Peterson, Allied Charities of  Alaska; Tawny Wright, Pull-Tab                                                                   
Clerk,  North  Pole;  Roger  Shannon,   Kenai;  Brook  Miles,                                                                   
Executive Director,  Alaska Public Office  Commission (APOC);                                                                   
Lenore Joness, Kenai.                                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSSB 100(FIN)(brf sup maj fld)(efd fld)                                                                                         
          "An    Act    making     capital    appropriations,                                                                   
          supplemental appropriations,  and reappropriations;                                                                   
          capitalizing     funds;     and    making     other                                                                   
          appropriations."                                                                                                      
                                                                                                                                
          CSSB 100 (FIN) was heard  and HELD in Committee for                                                                   
          further consideration.                                                                                                
                                                                                                                                
CSSB 102(L&C) am(efd fld)                                                                                                       
          "An Act  increasing the amount of  revenue received                                                                   
          by  the state  from  charitable gaming  activities,                                                                   
          and relating to taxes on pull-tabs."                                                                                  
                                                                                                                                
          SB 102 was heard and  HELD in Committee for further                                                                   
          consideration                                                                                                         
                                                                                                                                
CSSB 117(FIN)(EFD FLD)                                                                                                          
          "An Act relating to the longevity bonus program."                                                                     
                                                                                                                                
          CSSB 117 (FIN) was heard  and HELD in Committee for                                                                   
          further consideration.                                                                                                
                                                                                                                                
CSSB 119(FIN)(efd fld)                                                                                                          
          "An  Act  authorizing  the  Alaska  Public  Offices                                                                   
          Commission  to  issue advisory  opinions;  amending                                                                   
          campaign   financial   disclosure   and   reporting                                                                   
          requirements,    campaign   contribution    limits,                                                                   
          provisions    related   to   contributions    after                                                                   
          elections,   and  provisions   related  to   unused                                                                   
          campaign  contributions;  providing  for  expedited                                                                   
          consideration  of,  and  modifying  procedures  for                                                                   
          determining, violations  of state election campaign                                                                   
          laws;  amending  the time  period  within which  to                                                                   
          file an administrative  complaint of a violation of                                                                   
          state   election   campaign  laws;   amending   the                                                                   
          definitions   of   'express    communication'   and                                                                   
          'political  party'  for state  election  campaigns;                                                                   
          amending   the  registration  fee   for  lobbyists;                                                                   
          providing  for increased  use of electronic  filing                                                                   
          for   reports   to   the  Alaska   Public   Offices                                                                   
          Commission; adding a  definition of 'commission' in                                                                   
          the  regulation  of  lobbying  laws;  amending  the                                                                   
          requirements   for  the   reporting  of   financial                                                                   
          interests by public  officials; adding a definition                                                                   
          of  'domestic partner'  in  the legislative  ethics                                                                   
          code   and  in   the   public  official   financial                                                                   
          disclosure   requirements;    allowing   classified                                                                   
          employees  to  take  an active  part  in  political                                                                   
          party    management;    and    making    conforming                                                                   
          amendments."                                                                                                          
                                                                                                                                
          CSSB 119 (FIN) was heard  and HELD in Committee for                                                                   
          further consideration.                                                                                                
                                                                                                                                
CSSB 213(FIN)(EFD FLD)                                                                                                          
          "An Act establishing the Knik Arm Bridge and Toll                                                                     
          Authority and relating to that authority."                                                                            
                                                                                                                                
          CSSB 213(FIN)(EFD FLD) was REPORTED out of                                                                            
          Committee with a "do pass" recommendation and with                                                                    
          previously published fiscal impact note: #1.                                                                          
                                                                                                                                
SB 148    "An Act relating to  allowable absences for certain                                                                   
          members of  the armed forces and their  spouses and                                                                   
          dependents   for   purposes  of   eligibility   for                                                                   
          permanent  fund  dividends;  and providing  for  an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          SB 148 was REPORTED out of Committee with                                                                             
          individual  recommendations and one fiscal impact                                                                     
          note, #1 from the Department of Revenue.                                                                              
CS FOR SENATE BILL NO. 100(FIN)(brf sup maj fld)(efd fld)                                                                     
                                                                                                                                
     "An Act making capital appropriations, supplemental                                                                        
     appropriations, and reappropriations; capitalizing                                                                         
     funds; and making other appropriations."                                                                                   
                                                                                                                                
PETE  ECKLUND,  STAFF, REPRESENTATIVE  BILL  WILLIAMS  stated                                                                   
that  a House  Finance  Committee  Substitute  would soon  be                                                                   
prepared and made available.                                                                                                    
                                                                                                                                
CSSB 100(FIN) (brf  sup maj fld) (efd fld)  HELD in Committee                                                                   
for further consideration.                                                                                                      
CS FOR SENATE BILL NO. 213(FIN)(efd fld)                                                                                      
                                                                                                                                
     "An Act establishing the Knik Arm Bridge and Toll                                                                          
     Authority and relating to that authority."                                                                                 
                                                                                                                                
Representative  Foster   MOVED  to  report  SB   213  out  of                                                                   
Committee with the accompanying fiscal note  NO OBJECTION                                                                       
                                                                                                                                
CSSB 213(FIN)(EFD  FLD) was REPORTED out of  Committee with a                                                                   
"do  pass"  recommendation  and   with  previously  published                                                                   
fiscal impact note: #1.                                                                                                         
SENATE BILL NO. 148                                                                                                           
                                                                                                                                
     "An  Act  relating  to allowable  absences  for  certain                                                                   
     members  of  the  armed forces  and  their  spouses  and                                                                   
     dependents  for purposes  of  eligibility for  permanent                                                                   
     fund dividends; and providing for an effective date."                                                                      
                                                                                                                                
ANNETTE   SKIBINSKI,    STAFF,   SENATOR    COWDRY   provided                                                                   
information on the bill.  She  explained that the legislation                                                                   
pertains to  permanent fund dividend eligibility  of National                                                                   
Guard   reserve  auxiliary   military   personnel  that   are                                                                   
activated.  Currently those  in  the National  Guard who  are                                                                   
actively on  orders are  only allowed  a 45-day absence  from                                                                   
the state,  while other residents  are allowed an  absence of                                                                   
180  days.  The  legislation   would  allow  active  military                                                                   
personnel  to be  absent from  the state  [while on  military                                                                   
leave] for the full 180 days.                                                                                                   
                                                                                                                                
Representative  Kerttula  asked   for  clarification  on  the                                                                   
length  of  the proposed  allowable  absence.  Ms.  Skibinski                                                                   
clarified that the 180-day allowable  absence would come into                                                                   
play when the  individual has been activated for  180 days or                                                                   
more.  She  noted  the  case of  an  individual  that  served                                                                   
overseas for  10 months.  Upon his return  he left  the state                                                                   
for  two months,  which  was not  allowed  under the  current                                                                   
statute.  The  current  45-day  allowable  absence  would  be                                                                   
extended to 180 days.                                                                                                           
                                                                                                                                
LARRY PERSILY,  DEPUTY COMMISSIONER,  DEPARTMENT OF  REVENUE,                                                                   
provided  information on  the legislation.  He observed  that                                                                   
active  duty days  do not  count against  the recipient.  The                                                                   
questioned is the  amount of time permissible  in addition to                                                                   
the allowable  absence. Currently  those in armed  forces are                                                                   
only allowed to  be absent [outside of their  active service]                                                                   
for 45 days; students are allowed  to be absent for up to 120                                                                   
days [outside  of the  school year].   Residents are  allowed                                                                   
180 days or military active duty  time plus 45 days.  Someone                                                                   
called  for  90  days  of active  duty,  who  took  a  60-day                                                                   
vacation [150  total days]  would be  okay. The bill  changes                                                                   
the   requirement    to   military   time    plus   180-days.                                                                   
Representative Berkowitz concluded  that active duty would be                                                                   
like  being in  the state.  Mr.  Persily agreed  that, as  it                                                                   
pertains to eligibility,  active time would be  like being in                                                                   
the state.                                                                                                                      
                                                                                                                                
Representative  Kerttula  asked  about  the  amount  of  time                                                                   
allowed  for  illness,  and why  there  were  differences  in                                                                   
allowable  absences.   Mr.  Persily acknowledged  that  there                                                                   
were  different  qualifications  in  allowable  absences.  He                                                                   
pointed out  that a 120-day  absent for students  would allow                                                                   
them  to remain  out-of-state  during  the summer.  A  45-day                                                                   
allowable absence  would require them to come  back to Alaska                                                                   
even if  they had an internship  or job on campus.  All other                                                                   
allowable absences are plus 45-days.                                                                                            
                                                                                                                                
Representative  Foster   MOVED  to  report  SB   148  out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTIONS it was so ordered.                                                                                                   
                                                                                                                                
SB  148  was  REPORTED  out  of   Committee  with  individual                                                                   
recommendations  and  one fiscal  impact  note,  #1 from  the                                                                   
Department of Revenue.                                                                                                          
CS FOR SENATE BILL NO. 102(L&C) am(efd fld)                                                                                   
                                                                                                                                
     "An Act increasing the amount of revenue received by                                                                       
     the state from charitable gaming activities, and                                                                           
     relating to taxes on pull-tabs."                                                                                           
                                                                                                                                
LARRY  PERSILY, DEPUTY  COMMISSIONER,  DEPARTMENT OF  REVENUE                                                                   
provided information  on the  legislation. He explained  that                                                                   
the Senate version  would increase the state tax  on the sale                                                                   
of  pull-tabs  through a  change  in their  calculation.  The                                                                   
current  state tax  on pull-tabs  is  3 percent  of the  net,                                                                   
which is  actual gross  minus prices.  The legislation  would                                                                   
increase the state tax on pull-tabs  (not bingo or raffle) to                                                                   
15 percent of idea  net, which is the assumption  that all of                                                                   
the pull  tabs in  the game or  box are sold.  If a  game had                                                                   
1,000 pull-tabs at a dollar each,  the ideal gross is $1,000.                                                                   
If 80 percent  were paid out  in prices, the ideal  net would                                                                   
be $200.  The legislation  would change the  state tax  to 15                                                                   
percent  of this amount.  He added  that Section  5, page  2,                                                                   
would  prohibit a  municipality  that has  a  sales tax  from                                                                   
collecting  sales  tax  on charitable  gaming.  There  is  no                                                                   
effective date, which  would reduce the FY 04  revenue amount                                                                   
[since it  would not go into  effect by July 1.  He estimated                                                                   
that the  tax change would take  effect in the middle  of the                                                                   
year.                                                                                                                           
                                                                                                                                
KENT  HARTBERG, ANCHORAGE,  testified  via teleconference  in                                                                   
opposition  to the bill.   He  noted that  he was a  licensed                                                                   
operator  and was formerly  employed with  the Department  of                                                                   
Gaming. He discussed the financial  difficulties presented by                                                                   
the bill. He emphasized that there  will be games that do not                                                                   
realize the ideal net. He also  noted that licensed operators                                                                   
are the only ones to have their  licenses revoked for failing                                                                   
to  meet state  minimums. He  encouraged  the legislature  to                                                                   
closely examine the bill for all of its impacts.                                                                                
                                                                                                                                
DAVID  LAMPERT, FAIRBANKS,  testified  via teleconference  in                                                                   
opposition to  the bill.  He  stated that he is  a fundraiser                                                                   
for 17 organizations, and maintained  that the bill would put                                                                   
them out of business  if it were enacted. He  would be forced                                                                   
to layoff 22 employees.  He explained  that the organizations                                                                   
could  not meet  the  requirements  of the  legislation.  The                                                                   
effective date  would be a problem, since  many organizations                                                                   
had  already   based  their  budgets   on  the   current  tax                                                                   
structure. The  tax would have  to be prepaid.  He maintained                                                                   
that there  had been no testimony  in favor of the  bill from                                                                   
the Department  of Revenue. He  stressed the negative  impact                                                                   
of this bill on non-profits.                                                                                                    
                                                                                                                                
GREGORY PETERSON,  ALLIED CHARITIES  OF ALASKA testified  via                                                                   
teleconference in opposition to  the bill. He stated that the                                                                   
legislation would raise the level  of taxes paid by charities                                                                   
by 500 percent,  impacting 800 - 1,000 jobs  across the state                                                                   
of Alaska,  ending programs.  He stressed  that although  the                                                                   
new version  of the  bill was  better than  the original,  it                                                                   
would still  have negative  impacts on the  needy.   He urged                                                                   
the legislators to stop the bill.                                                                                               
                                                                                                                                
TAWNY  WRIGHT,  PULL-TAB  CLERK, NORTH  POLE,  testified  via                                                                   
teleconference  in opposition  to  the bill.  She  maintained                                                                   
that the bill would have a negative  impact on charities, and                                                                   
stressed that the  increase from three to fifteen  percent in                                                                   
tax was  too steep.  She noted  that her  family of  four was                                                                   
supported  by her job  in the  pull-tab industry, because  it                                                                   
provided  flexibility.  She maintained  that  the bill  would                                                                   
negatively impact many of the lower income individuals.                                                                         
                                                                                                                                
DAVID  SANDON,  MVP,  JUNEAU  testified  in  support  of  the                                                                   
Committee  Substitute.  He  noted   that  he  works  for  two                                                                   
Montessori  programs that provide  early childhood  education                                                                   
and  Juneau  Dance  Unlimited.  He  spoke  in  favor  of  the                                                                   
exemption  from municipal  taxation. He  maintained that  the                                                                   
Senate  Labor and  Commerce  interim subcommittee  should  be                                                                   
allowed to review the issue during  the interim and suggested                                                                   
the following be reviewed:                                                                                                      
                                                                                                                                
   1. Use an adequate  percentage of  the additional  revenue                                                                   
     the state will be receiving to step up enforcement of                                                                      
     gaming regulation.                                                                                                         
                                                                                                                                
   2. License all  management (not  just operators)  involved                                                                   
     in gaming and revoke those licenses if the permits                                                                         
     they manage do not return the state mandated minimums.                                                                     
                                                                                                                                
   3. Prevent "ghost  charities"  those charities  that  only                                                                   
     exist on paper from being allowed gaming permits by                                                                        
     strengthening the requirements for qualification.                                                                          
                                                                                                                                
   4. Increase the state mandated returns to the nonprofits.                                                                    
                                                                                                                                
   5. Consider  a  revenue  sharing  scheme  with  the  local                                                                   
     municipalities based on where. the finds are                                                                               
     generated.                                                                                                                 
                                                                                                                                
                                                                                                                                
   Mr. Sandon  maintained that  there is  room for  increased                                                                   
   taxation in the industry  as a whole if it  is viewed from                                                                   
   a  statewide  perspective.  He  continued   to  read  from                                                                   
   prepared remarks:                                                                                                            
                                                                                                                                
     "We are currently paying  28% of our ideal net in taxes,                                                                   
     25% to  our municipality  and 3%  to the state.  Without                                                                   
     the local  sales tax prohibition in this  legislation we                                                                   
     would be under  a 40% tax burden. You do  the math under                                                                   
     a 40% tax burden we will  simply be literally taxed into                                                                   
     bankruptcy.  We would  like  to note  here  that in  our                                                                   
     original  testimony through  both the  Senate and  House                                                                   
     Labor  and  Commerce  Committees   we  brought  forth  a                                                                   
     revenue  sharing  strategy  between  the state  and  ~ii                                                                   
     local municipalities  based on  where the proceeds  were                                                                   
     raised.                                                                                                                    
                                                                                                                                
     This  is   your  opportunity  to  set   some  precedence                                                                   
     statewide concerning  the taxation of gaming  as we move                                                                   
     towards  our  future.  We   urge  you  to  support  this                                                                   
     legislation in its current form.                                                                                           
                                                                                                                                
     I  am certain  you are  hearing many  voices of  concern                                                                   
     regarding  this legislation.  We would  like to  address                                                                   
     some questions you might have of us as follows:                                                                            
                                                                                                                                
  Q: Why don't you pass the sales tax along to the customer?                                                                    
                                                                                                                                
  A: This was tried with disastrous results, as the pace and                                                                    
     process  of  pull-tab gaming  was  frustrated  and as  a                                                                   
     result gross revenues dropped  60%. We had no choice but                                                                   
     to absorb the tax.                                                                                                         
                                                                                                                                
     Imagine  if  you will  every  time someone  exchanges  a                                                                   
     playback  the  oil  that  runs  all  gaming  (the  small                                                                   
     winning tickets  $ 1, $2,  $5, $10 winners) they  had to                                                                   
     reach for small change in  their pocket or receive small                                                                   
     change.  These  transactions  currently  take  place  in                                                                   
     seconds.  This logistical  scenario of  passing along  a                                                                   
     tax to the consumer is frankly impossible.                                                                                 
                                                                                                                                
     Believe  me if  we could  pass  the sales  tax along  we                                                                   
     would have  been doing so since its inception.  The City                                                                   
     and Borough  of Juneau has  long since realized  this as                                                                   
     well; however,  they have also been stubbornly  aware of                                                                   
     the room  for taxation  in this industry.  We can  pay a                                                               
     justifiable tax  but we cannot pay a combined  local and                                                     
     state tax burden  of 40%. There can only be  one hand in                                                         
     the taxation  of this revenue stream. That  hand in this                                                             
     case  should be  the state.  The state  can then  decide                                                             
     whether  and  on  what  proportion  these  tax  proceeds                                                               
     should be spent between local and state interests.                                                                       
                                                                                                                                
     Please note,  that the City  and Borough of  Juneau does                                                                   
     not seem  willing to back  down on its rhetoric  either.                                                                   
     Please do  not put us at  their mercy for they  might by                                                                   
     default  simply  choose  to  tax  local  gaming  out  of                                                                   
     existence with out a vote of the local electorate.                                                                         
                                                                                                                                
  Q: Are your expenses higher than other types of business?                                                                     
                                                                                                                                
  A: No in fact I challenge you to find another business in                                                                     
     the  State   that  that   returns  30.5%  profit   while                                                                   
     absorbing our current 28%  tax burden. (25% sales tax 3%                                                                   
     state ideal net tax)                                                                                                       
                                                                                                                                
  Q: How can we create an equitable tax structure on gaming                                                                     
     statewide, while  making sure we have  proper regulation                                                                   
     and no  profiteering? Thus  insuring the permit  holders                                                                   
     receive the maximum possible return.                                                                                       
                                                                                                                                
                                                                                                                                
GEORGE  WRIGHT,   OPERATOR  84,  JUNEAU  ANB,   testified  in                                                                   
opposition  to  the  bill.  He  stated  that  they  have  100                                                                   
employees, working with 52 non-profits.  He stressed that the                                                                   
tax  is heavy,  especially in  combination  with local  sales                                                                   
tax, but  that they could live  with the current  version. He                                                                   
emphasized  concern with  the effective  date and noted  more                                                                   
time was needed for implementation.  Charities' years go from                                                                   
January  1, to December  31. He  asserted that  SB 102  would                                                                   
negatively  impact  charities.  He suggested  that  any  work                                                                   
group  should  include  individuals  from  the  industry.  He                                                                   
stated that charities  in Juneau would be finished  without a                                                                   
local  prohibition [on  municipal taxation]  or an  effective                                                                   
date.  He suggested a later effective date.                                                                                     
                                                                                                                                
ROGER  SHANNON,  KENAI,  testified   via  teleconference.  He                                                                   
discussed  the  potential  negative  impacts  of  the  gaming                                                                   
industry.                                                                                                                       
                                                                                                                                
SB 102 was HELD in Committee for further consideration.                                                                         
CS FOR SENATE BILL NO. 119(FIN)(efd fld)                                                                                      
                                                                                                                                
     "An   Act   authorizing   the  Alaska   Public   Offices                                                                   
     Commission   to   issue  advisory   opinions;   amending                                                                   
     campaign    financial     disclosure    and    reporting                                                                   
     requirements,  campaign contribution limits,  provisions                                                                   
     related   to   contributions    after   elections,   and                                                                   
     provisions  related  to unused  campaign  contributions;                                                                   
     providing for expedited consideration  of, and modifying                                                                   
     procedures   for   determining,  violations   of   state                                                                   
     election campaign laws; amending  the time period within                                                                   
     which  to   file  an   administrative  complaint   of  a                                                                   
     violation of state election  campaign laws; amending the                                                                   
     definitions  of 'express  communication' and  'political                                                                   
     party'  for  state  election   campaigns;  amending  the                                                                   
     registration fee for lobbyists;  providing for increased                                                                   
     use  of electronic  filing  for  reports  to the  Alaska                                                                   
     Public  Offices  Commission;   adding  a  definition  of                                                                   
     'commission'  in   the  regulation  of   lobbying  laws;                                                                   
     amending   the  requirements   for   the  reporting   of                                                                   
     financial  interests  by   public  officials;  adding  a                                                                   
     definition  of  'domestic  partner' in  the  legislative                                                                   
     ethics  code  and  in  the   public  official  financial                                                                   
     disclosure  requirements; allowing classified  employees                                                                   
     to take  an active part  in political party  management;                                                                   
     and making conforming amendments."                                                                                         
                                                                                                                                
BROOK  MILES,   EXECUTIVE  DIRECTOR,  ALASKA   PUBLIC  OFFICE                                                                   
COMMISSION (APOC), testified via  teleconference and provided                                                                   
information on  the bill. The  bill provides important  tools                                                                   
for  the  Commission  in  obtaining  its  mission  to  ensure                                                                   
accountability   of   candidates,   public   officials,   and                                                                   
lobbyists  to  the  public.  The   legislation  provides  the                                                                   
foundation for  mandatory electronic  filings under  all four                                                                   
laws  administered by  the Commission.  Section 17,  codifies                                                                   
the way  the Commission processes  complaints. Under  the new                                                                   
procedures,  most   complaints,  should  reach   their  final                                                                   
disposition  no more  than  90 days  after  the complaint  is                                                                   
filed.   An expedited complaint  process would  be initiated.                                                                   
Verified  complaints   could  endanger  the  results   of  an                                                                   
election.  The bill gives the  Commission authority for cease                                                                   
and  desist  orders  and  allows   the  Commission  to  issue                                                                   
advisory  opinions (a  process the  Commission has  practiced                                                                   
since the  mid 1980's). The  Commission's authority  to issue                                                                   
advisory opinions  has been in  question. This  tool provides                                                                   
requestors   clarification   and   allows   them   to   avoid                                                                   
complaints. The  legislation increases limits  under campaign                                                                   
disclosure, changes  reporting under campaign  disclosure and                                                                   
increases  the   reporting  threshold  under   the  financial                                                                   
disclosure   law.   Under  the   changes,   individuals   may                                                                   
contribute  up to $1,000  to candidates  or political  action                                                                   
committees and up to $10,000 to a political party.                                                                              
                                                                                                                                
TAPE HFC 03 - 99, Side B                                                                                                      
                                                                                                                                
Ms.  Miles  added  that  the   bill  changes  the  method  of                                                                   
reporting.   She  discussed  current reporting  methods,  and                                                                   
indicating   that  the   original   intent   was  for   total                                                                   
disclosure. Under  the current SFIN version,  campaigns would                                                                   
report the aggregate figure for  those contributors that give                                                                   
less  than  $100  dollars. She  observed  that  the  original                                                                   
proposal  was  for full  disclosure,  with  all  contributors                                                                   
identified  by  their  names  and  addresses  (regardless  of                                                                   
amount), unless the contribution  was the result of an exempt                                                                   
fund  raising  activity.    Names   and  addresses  would  be                                                                   
reported  for   contributions  over  $100  but   under  $250.                                                                   
Contributions  of over  $250 would require  a detail  report:                                                                   
name,  address,  occupation  and  employer.  The  amount  for                                                                   
exempt campaigns  would change  from $2,500 to  $5,000; fewer                                                                   
people would be required to disclose  at the municipal level.                                                                   
The  requirement for  candidates  to file  10-days after  the                                                                   
election  was  deleted.  The reporting  period  for  year-end                                                                   
disclosure was  expanded.  Candidate filings  on February 15,                                                                   
the  year after  the  election,  would include  all  campaign                                                                   
costs.  Under the  current provisions  the  public must  wait                                                                   
another calendar year for this information.                                                                                     
                                                                                                                                
Ms.   Miles   noted   that  the   legislation   removes   the                                                                   
restriction, which prevents candidates  that are unopposed on                                                                   
the general  election  from raising money  45-days after  the                                                                   
primary election.  These candidates would be  allowed, as all                                                                   
other  candidates, to  raise funds  until  45-days after  the                                                                   
general  election   ballot.  She   noted  that  the   current                                                                   
provision  proved  unworkable.  She  noted  that  Section  18                                                                   
redefined express  communication, enabling issue  advocacy to                                                                   
be dealt with differently. Issue  advocacy that is clearly to                                                                   
support  or  oppose  a  candidate would  be  subject  to  the                                                                   
campaign disclosure  law and would  be an important  tool for                                                                   
the Commission.   She added  that lobbyist registration  fees                                                                   
had been  increased from  $100 to $250  per client  per year.                                                                   
This is the  first increase since they were  enacted in 1990.                                                                   
The reporting threshold for legislators  and public officials                                                                   
to  disclose sources  of  income was  raised  from $1,000  to                                                                   
$10,000.   Disclosing  stock   holdings  is  streamlined   by                                                                   
exempting stock interest  of less than $10,000  per public or                                                                   
trading company.                                                                                                                
                                                                                                                                
ROGER  SHANNON,  KENAI,  testified   via  teleconference  and                                                                   
emphasized the public importance  of APOC.  He suggested that                                                                   
the APOC should receive proper funding.                                                                                         
                                                                                                                                
AUDREE MCCLOUD, testified via  teleconference against raising                                                                   
the  contribution limit.  She  maintained  that the  increase                                                                   
would limit  competition  and bar entry,  and questioned  the                                                                   
need for the increase.                                                                                                          
                                                                                                                                
Co-Chair Williams concluded public testimony.                                                                                   
                                                                                                                                
CSSB 119 (FIN) HELD in Committee for further consideration.                                                                     
CS FOR SENATE BILL NO. 117(FIN)                                                                                               
                                                                                                                                
     "An Act relating to the longevity bonus program; and                                                                       
     providing for an effective date."                                                                                          
                                                                                                                                
JOHN VOWELL,  DIRECTOR, LONGEVITY BONUS PROGRAMS,  DEPARTMENT                                                                   
OF   ADMINISTRATION  provided   information   on  the   bill.                                                                   
Beginning in 2004, the bill would  reduce the longevity bonus                                                                   
by 20  percent each year until  2007, until it  is eliminated                                                                   
(2008).                                                                                                                         
                                                                                                                                
MARIE  DARLIN,   AMERICAN  ASSOCIATION  OF   RETIRED  PERSONS                                                                   
(AARP), JUNEAU  TESTIFIED provided information  regarding the                                                                   
legislation.  She  stated  that  she is  a  third  generation                                                                   
Juneau resident  and pointed out the Alaskan  seniors provide                                                                   
support to the state's economy.  She noted that the Pioneer's                                                                   
of Alaska  worked  on the current  version  of the bill.  She                                                                   
stated  that  their  preference   was  to  have  the  program                                                                   
continue, but noted that Section  6 was a proposal arrived at                                                                   
to give  people an opportunity  to plan for the  consequences                                                                   
of an elimination  of the longevity bonus program.  She noted                                                                   
that  the  bill  provides  for  adult  public  assistance  as                                                                   
proposed.  She stated  that if  the bill were  the best  that                                                                   
could  be provided  for  the seniors  of  Alaska, they  would                                                                   
support it. She  stressed the need for "safety  nets" to help                                                                   
seniors meet  their needs. She  emphasized that  most seniors                                                                   
did not  foresee a way to  meet their needs,  particularly in                                                                   
the medical area.  She stated  the $250 per month for seniors                                                                   
85 years  old or  older made  a major  impact. She  concluded                                                                   
that this  was a proposal  at the  request of the  Governor's                                                                   
office, and that they awaited a response.                                                                                       
                                                                                                                                
CHIP  WAGONER,  PIONEERS  OF   ALASKA,  testified  about  the                                                                   
proposed compromise devised by  Pioneers and AARP in response                                                                   
to  the  Governor's original  elimination  of  the  longevity                                                                   
bonus  program.   He  noted  that   the  program   was  being                                                                   
eliminated  24 years  earlier  than projected.  He  commended                                                                   
these  organizations  for  taking  all  state  programs  into                                                                   
account in  crafting a proposal  to provide a  "soft landing"                                                                   
for  seniors. He  stated that  to  immediately eliminate  the                                                                   
program  would  be  cruel  to seniors.  He  stated  that  the                                                                   
average age of  a recipient was 78 years old.  He stated that                                                                   
the  basing the  program on  assets was  not adequate,  since                                                                   
seniors faced  a variety of  medical expenses not  related to                                                                   
their income.  They do not support a needs based program.                                                                       
                                                                                                                                
Co-Chair Harris spoke  to the history and origination  of the                                                                   
program, and its natural phasing  out. He asked what services                                                                   
are not  provided in Alaska that  are provided to  seniors in                                                                   
other  states.  Ms.  Darlin  referred  to  public  assistance                                                                   
programs,  property tax  assistance  provided  to seniors  in                                                                   
other states.                                                                                                                   
                                                                                                                                
Co-Chair Williams  referred to  potential changes  and stated                                                                   
that that  the Administration was  not supportive of  a five-                                                                   
year phase out. He observed that  the Governor might agree to                                                                   
a two-year  phase  out. He  stated that  the Committee  would                                                                   
likely pass [a five year phase  out], with the knowledge that                                                                   
the  Governor may  ultimately  zero the  program  out of  the                                                                   
budget.                                                                                                                         
                                                                                                                                
Co-Chair Williams  clarified that a two-year  phase out would                                                                   
reduce payments by  50 percent ($22 million),  and then cease                                                                   
payments in the following year.   He stated that the payments                                                                   
would  continue  at  some level  for  FY  04  and FY  05.  He                                                                   
reiterated that  the Governor would support a  two-year phase                                                                   
out.                                                                                                                            
                                                                                                                                
LENORE  JONESS,   KENAI,  testified  via   teleconference  in                                                                   
opposition  to the legislation.  She noted  that the  program                                                                   
could  be funded from  the tax  break that  the Governor  has                                                                   
proposed for the  oil industry. She also opposed  changing to                                                                   
a  needs  based program.  She  questioned  the  legislature's                                                                   
concern for seniors  in this regard and also in  terms of the                                                                   
sales  tax.  She   maintained  that  the  State   was  taking                                                                   
advantage  of seniors  since they  did  not generate  income.                                                                   
She noted that senior retirement  income and medical payments                                                                   
had an  impact on  the state's  economy.   She referred  to a                                                                   
study [not  cited], which concluded  that Alaska  seniors are                                                                   
one of the largest  single sources of money  flowing into the                                                                   
state. Senior  retirement income and medical  payments have a                                                                   
significant beneficial effect  on the state's economy. At the                                                                   
same time more than half of Alaskan  seniors live vicariously                                                                   
on the edge  of solvency. For some, financial  considerations                                                                   
may determine whether  they continue to reside  in the state.                                                                   
For  many  others,   a  combination  of   financial  benefits                                                                   
available from state and municipal  government is critical to                                                                   
their  wellbeing.  Seniors  also provide  the  equivalent  of                                                                   
2,400 full time  jobs as volunteers, worth  approximately $60                                                                   
million a  year. Seniors over  60 provide unpaid  care giving                                                                   
services that  are the  equivalent of  6,300 full time  jobs.                                                                   
Seniors over 60 make up 8 percent  of the state's population.                                                                   
Seniors are  estimated to make  up 20 percent of  the state's                                                                   
population by 2025.                                                                                                             
                                                                                                                                
CSSB 117 (FIN) HELD in Committee for further consideration.                                                                     
CS FOR SENATE BILL NO. 102(L&C) am(efd fld)                                                                                   
                                                                                                                                
     "An Act increasing the amount of revenue received by                                                                       
     the state from charitable gaming activities, and                                                                           
     relating to taxes on pull-tabs."                                                                                           
                                                                                                                                
Vice-Chair Meyer noted that the  Senate added an amendment to                                                                   
prohibit municipal taxation: A  city that levies and collects                                                                   
sales and  use taxes under (a)  of this section may  not levy                                                                   
and  collect  a  sales  or  use  tax  on  pull-tabs  used  in                                                                   
charitable gaming.  He questioned if it would  be possible to                                                                   
allow  communities that  currently collect  the tax  (Juneau,                                                                   
Nome and Bethel) to continue to  do so, while prohibiting new                                                                   
communities (Anchorage) from collections.                                                                                       
                                                                                                                                
LARRY PERSILY,  DEPUTY COMMISSIONER,  DEPARTMENT OF  REVENUE,                                                                   
provided information  on the legislation. In  response to the                                                                   
question  by  Vice-Chair  Meyer,  he  observed  that  similar                                                                   
exemptions have  been allowed under the taxation  of alcohol.                                                                   
Vice-Chair  Meyer  speculated  that  the  amendment  was  not                                                                   
intended to  negatively impact  municipalities.   Mr. Persily                                                                   
indicated  that legislative  legal could  be consulted  about                                                                   
how the provision could be change.                                                                                              
                                                                                                                                
Vice-Chair  Meyer speculated  that  the maker  of the  senate                                                                   
amendment  had intended  to exclude  Anchorage,  but did  not                                                                   
intend  to adversely  affect the  communities collecting  the                                                                   
tax.                                                                                                                            
                                                                                                                                
Mr. Persily discussed  the fiscal notes accompanying  SB 102.                                                                   
He assumed  that the bill  would be signed  in June  and take                                                                   
affect in the  fall, which would reduce the  state's revenue.                                                                   
The Governor's legislation would  have also limited the prize                                                                   
payback. He stressed  that all of the fiscal  notes are based                                                                   
on the  assumption that  there would be  no change  in gaming                                                                   
activity in Alaska.                                                                                                             
                                                                                                                                
CSSB 102 HELD in Committee for further consideration.                                                                           
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 12:21 PM                                                                                           

Document Name Date/Time Subjects