Legislature(2017 - 2018)HOUSE FINANCE 519

04/28/2017 01:30 PM FINANCE

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+ teleconferenced
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-- Recessed to a Call of the Chair --
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Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 83(HSS) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 28, 2017                                                                                            
                         2:04 p.m.                                                                                              
2:04:25 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 2:04 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Steve Thompson; Representative Jason Grenn.                                                                      
ALSO PRESENT                                                                                                                  
Teresa  Holt,  Long  Term Care  Ombudsman  -  Alaska  Mental                                                                    
Health  Trust  Authority,  Department  of  Revenue,  Juneau;                                                                    
Senator Click Bishop, Sponsor;  Pete Fellman, Staff, Senator                                                                    
Click   Bishop;   Nina   Kempel,   CEO,   Alaska   Community                                                                    
Foundation,  Anchorage; Sara  Race, Director  - Division  of                                                                    
Administration,     Department    of     Revenue,    Juneau;                                                                    
Representative  Andy   Josephson,  Sponsor;   Rick  Steiner,                                                                    
Professor, University of Alaska;  Sean McGuire, Alaskans for                                                                    
Wildlife, Fairbanks.                                                                                                            
PRESENT VIA TELECONFERENCE                                                                                                    
Deborah  Bitney,  Vice  President and  Chief  Administrative                                                                    
Officer, Rasmuson  Foundation, Anchorage;  Elizabeth Ripley,                                                                    
President of  the Foraker group, Atlanta,  GA; Daniel Lynch,                                                                    
Self, Soldotna;  Joy Steward, Self, Homer;  Tammy Smith, NEA                                                                    
Alaska,  Anchorage;  Bill  Wright,   United  Way  of  Tanana                                                                    
Valley, Fairbanks;  Mike Coons,  Self, Palmer;  Al Barrette,                                                                    
Self, Fairbanks; Tim Lescmer, Self, Anchorage.                                                                                  
HB 105    DENALI WOLF SPECIAL MANAGEMENT AREA                                                                                   
          HB 105 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
SB 78     PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY                                                                              
          SB 73 was HEARD and HELD in committee for further                                                                     
SB 83     PROTECT: VULNERABLE ADULTS/LONG TERM CARE                                                                             
          CSSB 87(HSS) was REPORTED OUT  of Committee with a                                                                    
          "do pass"  recommendation and with  two previously                                                                    
          published   zero   fiscal  notes:   FN1(HSS)   and                                                                    
CS FOR SENATE BILL NO. 83(HSS)                                                                                                
     "An Act relating to the protection of vulnerable                                                                           
    adults and residents of long term care facilities."                                                                         
2:06:41 PM                                                                                                                    
TERESA  HOLT,  LONG  TERM CARE  OMBUDSMAN  -  ALASKA  MENTAL                                                                    
HEALTH  TRUST  AUTHORITY,  DEPARTMENT  OF  REVENUE,  JUNEAU,                                                                    
explained the  bill would bring  the state  into conformance                                                                    
with the federal regulations.                                                                                                   
Representative   Wilson   referred    to   Section   11   AS                                                                    
47.62.030(b), which  allowed the state  to step in  when the                                                                    
state  felt  that  the decision  may  adversely  affect  the                                                                    
safety,  health,  and  welfare  of  the  older  person.  She                                                                    
wondered whether  the bill  gave the  state more  power than                                                                    
was currently in statute.                                                                                                       
Ms. Holt answered that Section  B was about the office being                                                                    
able  to make  referrals  and share  information with  other                                                                    
agencies  that  investigate  the issue.  She  remarked  that                                                                    
Section 1 only  allowed the agency to  share information, if                                                                    
that person was at risk and/or unable to give consent.                                                                          
2:10:01 PM                                                                                                                    
Representative  Wilson  provided   a  hypothetical  scenario                                                                    
regarding a  situation where a  person did have  a guardian.                                                                    
She  wondered whether  the agency  could report  a fraud  or                                                                    
request additional information.                                                                                                 
Ms. Holt responded that it  would occur, should the guardian                                                                    
not act in the best interest of the individual.                                                                                 
Representative Wilson  stressed that  she was  talking about                                                                    
someone who was  responsive, but chose to give  the power of                                                                    
attorney to  someone else. She wondered  whether the program                                                                    
gave additional powers to the department.                                                                                       
Ms. Holt replied  that the program only  addressed the power                                                                    
to give a referral to another agency.                                                                                           
Representative  Wilson  surmised  that  the  bill  gave  the                                                                    
authority to  further investigate,  based on the  feeling of                                                                    
the ombudsman.                                                                                                                  
Ms. Holt provided an example  of a situation that would give                                                                    
reason   to   utilize   the  provision   outlined   in   the                                                                    
Co-Chair Foster  asked Vice-Chair Gara to  review the fiscal                                                                    
Vice-Chair Gara discussed the fiscal notes.                                                                                     
Co-Chair  Seaton  MOVED  to  report   CSSB  83(HSS)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
CSSB 87(HSS) was REPORTED OUT  of Committee with a "do pass"                                                                    
recommendation  and  with   two  previously  published  zero                                                                    
fiscal notes: FN1(HSS) and FN2(REV).                                                                                            
CS FOR SENATE BILL NO. 78(FIN)                                                                                                
     "An Act  creating the education endowment  fund and the                                                                    
     dividend  raffle fund;  authorizing donations  from the                                                                    
     permanent  fund dividend  for educational  purposes and                                                                    
     to enter  the permanent fund dividend  raffle; relating                                                                    
     to  transfers from  the dividend  raffle  fund and  the                                                                    
     education  endowment fund;  relating to  the duties  of                                                                    
     the Department  of Revenue; relating to  the definition                                                                    
     of 'gambling'; and providing for an effective date."                                                                       
2:15:00 PM                                                                                                                    
Co-Chair   Seaton   MOVED   to  ADOPT   proposed   committee                                                                    
substitute  for CSSB  78,  Work  Draft 30-LS0534\L  (Martin,                                                                    
Representative Wilson OBJECTED for discussion.                                                                                  
Co-Chair Foster invited the testifiers  to put themselves on                                                                    
the record.                                                                                                                     
SENATOR CLICK  BISHOP, SPONSOR, introduced  the legislation.                                                                    
He  relayed  that  the  bill  was a  creative  way  to  fund                                                                    
education. He  suggested that the  bill would go a  long way                                                                    
to  funding  education. He  thought  it  was high  time  the                                                                    
legislature looked  to other funding  sources. The  fund was                                                                    
completely voluntary.  He had looked  at other ways  such as                                                                    
bring  back  the  head  tax   -  which  did  not  have  good                                                                    
Co-Chair Seaton  had just received communication  from folks                                                                    
in Homer asking about that legalizing gambling.                                                                                 
2:20:21 PM                                                                                                                    
PETE  FELLMAN, STAFF,  SENATOR  CLICK  BISHOP, amending  the                                                                    
current gambling law  to allow an additional raffle  - to be                                                                    
exempt  from  the gambling  laws  in  the state  already  in                                                                    
current law.                                                                                                                    
Vice-Chair Gara appreciated the  senator thinking outside of                                                                    
the box.  He could not tell  how much of the  bill the state                                                                    
would receive back. It was close to $5 million.                                                                                 
Mr. Fellman  responded that  it would  be difficult  to know                                                                    
what would go directly into the education fund.                                                                                 
Vice-Chair Gara thought all good  ideas should move forward.                                                                    
He expressed a  concern about people donating  part of their                                                                    
Permanent  Fund Dividend  (PFD).  There was  nothing in  the                                                                    
bill stated that  if a person donated  their money education                                                                    
would go up.                                                                                                                    
Senator Bishop  responded that he  had another  senator that                                                                    
initially did  not like  the bill  but did  end up  like the                                                                    
bill once  the name was  changed from lottery to  raffle. He                                                                    
commented  that  the  legislature  still had  the  power  to                                                                    
Representative Guttenberg had a  similar concern as Co-Chair                                                                    
Seaton. He  wondered about the  federal law even  though the                                                                    
state already had its own law.                                                                                                  
2:26:42 PM                                                                                                                    
Mr.  Fellman  was  happy  to   review  the  changes  to  the                                                                    
committee substitute.                                                                                                           
Representative Guttenberg stated that  he wanted a "nod from                                                                    
the staff" about the changes.                                                                                                   
Representative Kawasaki  surmised that there  were currently                                                                    
two  options  for  donating  within   the  PFD  program.  He                                                                    
wondered whether the legislation provided a third option.                                                                       
Mr. Fellman responded in the affirmative.                                                                                       
Representative Kawasaki  commented that the  legislature had                                                                    
recently  received  a letter  from  Pick  Click Give,  which                                                                    
stated that  there might have  an unintended  consequence of                                                                    
less money going to the charities.                                                                                              
Mr.  Fellman   responded  that  many  people   committed  to                                                                    
charitable donations for belief  in the organization and for                                                                    
the tax break.                                                                                                                  
Representative Kawasaki felt that the  gambling was a tax on                                                                    
poor  people  and  targeted  to  people  who  were  "bad  at                                                                    
statistics." He  understood that people  supported education                                                                    
and there were also people that  wanted to win a lottery. He                                                                    
asked for comment regarding that concern.                                                                                       
2:29:41 PM                                                                                                                    
Mr.  Fellman asked  Representative  Kawasaki  to repeat  his                                                                    
Representative Kawasaki repeated his question.                                                                                  
Mr. Fellman replied  that the raffle was  limited, and could                                                                    
only be  played once a year  from the PFD. He  stressed that                                                                    
the limit was the maximum amount of the PFD.                                                                                    
Representative Kawasaki asked if  it precluded a parent from                                                                    
using their child's PFD.                                                                                                        
Mr.  Fellman  added that  only  adults  18 and  older  could                                                                    
2:34:30 PM                                                                                                                    
Representative  Wilson  noted that  Pick  Click  Give had  a                                                                    
Mr. Fellman responded in the affirmative.                                                                                       
Representative Wilson felt that the  bill did the same thing                                                                    
as the sweepstakes.                                                                                                             
Mr. Fellman agreed.                                                                                                             
Representative Guttenberg  clarified that the  committee was                                                                    
referencing version L of the bill.                                                                                              
Co-Chair Foster responded in the affirmative.                                                                                   
Mr. Fellman reviewed the changes in the CS:                                                                                     
     Explanation of Changes CS CSSB78 (30-LS0534\L):                                                                            
          Proposed House Finance CS  reduces the raffle fund                                                                    
          cap from $500 million  to $300 million. The change                                                                    
          will  allow the  fund to  start funding  education                                                                    
          sooner and reduce the maximum prizes payouts.                                                                         
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          The second change proposed is to reduce the prize                                                                     
          payout percentages so more money stays in the                                                                         
          raffle fund.                                                                                                          
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Representative Wilson WITHDREW her OBJECTION.                                                                                   
There   being   NO   OBJECTION,   the   proposed   committee                                                                    
substitute, CSSB 78(FIN) was adopted.                                                                                           
Mr. Fellman shared  that there was a  concern about securing                                                                    
the raffle. Therefore, the cap  was reduced, so it would put                                                                    
money into  the endowment  fund sooner.  He stated  that the                                                                    
cap  was  now at  $300  million,  so everything  above  that                                                                    
amount  would be  put  into  the fund.  He  shared that  the                                                                    
payouts were also reduced by a few percentages.                                                                                 
2:39:47 PM                                                                                                                    
Vice-Chair  Gara wondered  whether someone  would expect  an                                                                    
increase in  education funding,  should they  participate in                                                                    
the program.                                                                                                                    
Mr. Fellman replied that education  funding was already seen                                                                    
as  being reduced,  and felt  that the  public would  expect                                                                    
more cuts in the time of  oil price. He hoped that the price                                                                    
of  oil  would increase,  so  the  budget could  secure.  He                                                                    
remarked that there were other  measures that would add more                                                                    
money to education.                                                                                                             
Vice-Chair  Gara thought  the positive  portion of  the bill                                                                    
was that more money would be put into the education fund.                                                                       
Mr. Fellman was happy to  work with the committee to develop                                                                    
a plan.                                                                                                                         
Vice-Chair Gara could be wrong as well.                                                                                         
Representative Wilson suggested that  a disclaimer would not                                                                    
necessarily because of the application for a PFD.                                                                               
Mr. Fellman answered that it  would be added to the previous                                                                    
year's funding.                                                                                                                 
2:44:48 PM                                                                                                                    
Representative  Wilson  asked  Mr. Fellman  how  much  would                                                                    
likely be gained in the first year.                                                                                             
Mr. Fellman stated that the prize would be $5 million.                                                                          
2:51:56 PM                                                                                                                    
Representative Wilson asked if the  state was starting at 50                                                                    
percent,  but  it  would  grow  up  to  65  percent  as  the                                                                    
donations increased.                                                                                                            
Mr. Fellman replied in the affirmative.                                                                                         
Co-Chair Seaton noted that the  fund started at $10 million.                                                                    
He queried the annual receiving for Pick Click Give.                                                                            
Mr. Fellman replied that it  was between $2.5 million and $3                                                                    
million. He  remarked that Pick  Click Give  distributed the                                                                    
money  to over  600  organizations. He  did  not know  their                                                                    
administration costs.                                                                                                           
Co-Chair  Seaton  remarked  that queried  an  analysis  that                                                                    
determined that  there would  be three  times the  amount of                                                                    
donations  in the  new program  than the  donations to  Pick                                                                    
Click Give.                                                                                                                     
Mr. Fellman replied  that Pick Click Give  was a complicated                                                                    
program.  He  stated  that  the  proposed  program  was  not                                                                    
connected to Pick Click Give.                                                                                                   
2:57:14 PM                                                                                                                    
Co-Chair  Seaton asked  if any  study showed  the impact  of                                                                    
Pick  Click  Give,  with  the inducement  to  pull  out  $10                                                                    
Mr. Fellman answered that the  bill had only been introduced                                                                    
40 days earlier  and a study would be  costly. He elaborated                                                                    
that their own costs had been built in.                                                                                         
Representative Ortiz  felt the kind of  people interested in                                                                    
gaming may not be the same as those interested in donating.                                                                     
Mr. Fellman  believed that when the  Permanent Fund Dividend                                                                    
had been  reduced the past  year it  had a large  impact. He                                                                    
had received many phone calls  received from individuals who                                                                    
sent money to relatives out of  state for them to play Power                                                                    
Representative Ortiz asked if Mr.  Fellman saw the bill as a                                                                    
way to augment  current obligations made to  education or as                                                                    
a supplement.                                                                                                                   
Mr.  Fellman answered  that he  could not  speak for  future                                                                    
legislatures.  The bill  would create  another pot  of money                                                                    
that could help children. The  sponsor hoped it would be the                                                                    
case, but there was not a guarantee.                                                                                            
Representative  Guttenberg agreed  that  it was  a group  of                                                                    
individuals interested  in gaming, which was  different from                                                                    
individuals interested in donating.                                                                                             
3:01:42 PM                                                                                                                    
Mr.  Fellman replied  that the  larger the  prize, the  more                                                                    
people wanted to play.                                                                                                          
Representative  Guttenberg  love Mr.  Fellman's  enthusiasm.                                                                    
The  only raffle  tickets he  typically  only bought  raffle                                                                    
tickets  he  sold himself.  He  wondered  how realistic  the                                                                    
numbers were in terms of participation.                                                                                         
Co-Chair Seaton  relayed a list of  testifiers available for                                                                    
Mr. Fellman  relayed that 95  percent of the money  would go                                                                    
towards education, and benefitted Alaska's children.                                                                            
Co-Chair Seaton invited Nina Kempel to testify.                                                                                 
3:07:00 PM                                                                                                                    
NINA  KEMPEL, CEO,  ALASKA COMMUNITY  FOUNDATION, ANCHORAGE,                                                                    
stated  that   Pick  Click  Give   was  part  of   a  larger                                                                    
partnership  with other  organizations. She  stated that  it                                                                    
was  a  natural  partnership  to  support  the  program  for                                                                    
nonprofits in the state.                                                                                                        
Co-Chair  Seaton   asked  that  her  written   testimony  be                                                                    
Vice-Chair Gara thanked the organization  for all it did for                                                                    
the state.                                                                                                                      
Representative  Wilson asked  how  much was  donated to  the                                                                    
charity and how much it received.                                                                                               
Ms. Kempel responded that that  the organization received 93                                                                    
3:13:57 PM                                                                                                                    
Representative Wilson was confused.  She remarked that there                                                                    
was an administration fee of 15 percent.                                                                                        
Ms. Kempel  clarified that 7  percent of  the administration                                                                    
fees    came   from    the   voluntary    participation   of                                                                    
organizations.  The  remaining  8   percent  came  from  the                                                                    
private  partnership  with  organizations across  the  state                                                                    
from donors.                                                                                                                    
Representative  Wilson  surmised  that $7  dollars  of  $100                                                                    
would be utilized for the  administrative fee, and the other                                                                    
$93 would go to the organization. Ms. Kempel agreed.                                                                            
Representative  Wilson  stressed  that  losing  the  private                                                                    
donations,   would  result   in  the   state  covering   the                                                                    
additional cost to cover the  15 percent. Ms. Kempel agreed,                                                                    
and  stated that  the  hope  was that  the  7 percent  would                                                                    
eventually support the program.  She stressed that the state                                                                    
did not pay any portion of the funding.                                                                                         
Co-Chair Seaton relayed the testifiers available online.                                                                        
3:16:49 PM                                                                                                                    
Representative Pruitt  asked about the  administrative costs                                                                    
to the state.                                                                                                                   
Ms. Kempel deferred to Ms. Race.                                                                                                
Representative  Pruitt  asked if  the  money  came from  the                                                                    
private donations.                                                                                                              
Co-Chair  Seaton thought  the  committee was  going too  far                                                                    
into the  weeds. He  wanted members to  refocus on  the bill                                                                    
before the committee.                                                                                                           
Representative  Pruitt was  trying to  understand the  long-                                                                    
term  impacts and  the fall  back  for the  Pick Click  Give                                                                    
Ms.  Kempel answered  that  it  was not  a  part  of the  15                                                                    
Representative  Guttenberg queried  preliminary analysis  of                                                                    
the impacts program.                                                                                                            
Ms.  Kempel responded  that the  organization  had not  been                                                                    
involved in a research and wanted to be part of the effort.                                                                     
3:24:00 PM                                                                                                                    
DEBORAH  BITNEY,  VICE  PRESIDENT AND  CHIEF  ADMINISTRATIVE                                                                    
OFFICER,     RASMUSON     FOUNDATION,     ANCHORAGE     (via                                                                    
teleconference),   stated  that   the  Rasmuson   Foundation                                                                    
invested  $3 million  in Pick  Click Give.  She shared  that                                                                    
over  ten years,  Pick Click  Give had  raised approximately                                                                    
$20  million  for  nonprofit service  providers  across  the                                                                    
state.  She felt  that the  lottery deduction  would have  a                                                                    
direct affect on the Pick  Click Give program, and felt that                                                                    
the  legislation had  not been  properly examined  to assess                                                                    
the  impact   of  the  dividend  application   process,  the                                                                    
nonprofit  sector,  or  the  people   that  it  served.  She                                                                    
stressed  that  the  addition  to  the  application  process                                                                    
required time,  resources, and  expensive testing.  She felt                                                                    
that short  notice mandated adjustments to  the applications                                                                    
can fail.  She stated  that the  failure of  the application                                                                    
had a direct negative impact  on the associated programs and                                                                    
the department.                                                                                                                 
Representative  Wilson  wondered   how  often  a  charitable                                                                    
organization was added to the Pick Click Give list.                                                                             
Ms. Bitney did not know the answer to that question.                                                                            
Ms.  Kempel  announced  that  each  organization  must  meet                                                                    
standards when  wanted to  be added to  the Pick  Click Give                                                                    
3:28:06 PM                                                                                                                    
Representative Wilson  felt that there were  already ongoing                                                                    
adjustments to the application.                                                                                                 
Ms. Kempel  responded that there  were not  constant changes                                                                    
to the  process. She stated  that there were updates  to the                                                                    
modifications to  the website  and technology.  She stressed                                                                    
that  the  process  was   understood  by  the  participating                                                                    
nonprofits, and would continue in the same historic manner.                                                                     
Representative Wilson relayed that  there was a concern that                                                                    
adding a charity or program  would be costly. She understood                                                                    
that the Pick Click Give list was already adjusting.                                                                            
Co-Chair Seaton  stated that  the issue  was about  adding a                                                                    
factor into the PFD application  process, and not related to                                                                    
the list that was assigned to Pick Click Give.                                                                                  
Ms. Bitney agreed.                                                                                                              
Co-Chair Seaton stressed  that the issue was  related to the                                                                    
addition of the PFD technical system.                                                                                           
Representative  Wilson surmised  that the  program would  be                                                                    
more affordable, if it were integrated in Pick Click Give.                                                                      
Ms. Bitney  responded that the  statement was  accurate. She                                                                    
furthered that  she was concerned  with adding a  process to                                                                    
the application.                                                                                                                
Representative  Wilson wondered  whether  there was  another                                                                    
part of  state government, besides the  University, that was                                                                    
part of Pick Click Give.                                                                                                        
Ms. Kempel  replied that only nonprofit  organizations could                                                                    
participate   in  Pick   Click  Give,   so  there   were  no                                                                    
organizations that were part of Pick Click Give.                                                                                
3:32:32 PM                                                                                                                    
Vice-Chair Gara queried the cost of running the program. He                                                                     
Ms.  Kempel responded  that she  was not  familiar with  the                                                                    
$275,000  fiscal  note. She  stated  that  she had  seen  an                                                                    
inaccurate  fiscal   note  for  $8000.  She   stressed  that                                                                    
implementing  a new  program required  a  robust system  for                                                                    
dealing with questions,  and did not see that  system in the                                                                    
plan.  She  also wanted  to  know  how  that cost  would  be                                                                    
Co-Chair  Seaton  relayed that  Ms.  Race  could answer  the                                                                    
Vice-Chair Gara felt  that the proceeds from  the cost would                                                                    
pay for the administration.                                                                                                     
Co-Chair  Seaton   was  going  to  get   the  other  invited                                                                    
testimony online.                                                                                                               
3:34:45 PM                                                                                                                    
ELIZABETH RIPLEY,  PRESIDENT OF THE FORAKER  GROUP, ATLANTA,                                                                    
GA  (via  teleconference),  shared that  the  Foraker  Group                                                                    
helped to implement Pick Click Give.                                                                                            
Representative  Wilson asked  if  Ms.  Ripley was  concerned                                                                    
with  the addition  of  the  income tax  being  part of  the                                                                    
Ms. Ripley was not familiar with what she was asking.                                                                           
Representative Wilson suggested  that advertising frequently                                                                    
"ate up costs."                                                                                                                 
Ms.  Ripley  thought  some  of   the  advertising  could  be                                                                    
Representative  Wilson  felt  that the  level  of  awareness                                                                    
would help bring more people to Pick Click Give.                                                                                
3:43:42 PM                                                                                                                    
Co-Chair Seaton  stated that some testifiers  were concerned                                                                    
with how the programs would interact.                                                                                           
Representative  Wilson thought  there was  the same  problem                                                                    
with Alaska Seafood Marketing  Institute (ASMI) and tourism.                                                                    
He felt that  there may be competition in  the programs. She                                                                    
did not know how a study  would be done to determine how the                                                                    
programs might interact.                                                                                                        
Representative  Ortiz   spoke  to  the  uniqueness   of  the                                                                    
Permanent Fund and the Pick  Click Give program. He asked if                                                                    
there  was confidence  in how  to  study the  impact of  the                                                                    
Ms.  Ripley  answered they  would  like  to have  much  more                                                                    
communication about SB 78 to work through concerns.                                                                             
Co-Chair  Seaton had  no idea  whether  there were  examples                                                                    
around  the  country  about locations  that  had  started  a                                                                    
lottery or Power Ball.                                                                                                          
3:46:19 PM                                                                                                                    
Co-Chair Seaton OPENED public testimony.                                                                                        
DANIEL   LYNCH,   SELF,   SOLDOTNA   (via   teleconference),                                                                    
complimented  the  House  to  find  real  solutions  to  the                                                                    
problems facing  the state. He  stated the bill was  no more                                                                    
than a  gimmick or diversion  to distract from  finding real                                                                    
solutions.  He  provided  further  detail  about  living  in                                                                    
another  state  in  the  past.  The  model  would  never  be                                                                    
profitable  in  Alaska;  however,  there  was  potential  in                                                                    
limited  casinos.  He  expounded   on  the  idea,  which  he                                                                    
believed  would create  employment  and diversification.  He                                                                    
thought  it  would  bring  in revenue.  He  spoke  to  empty                                                                    
buildings  in  Kenai  and  Anchorage   that  would  work  as                                                                    
casinos. He knew what manure smelled like - like SB 78.                                                                         
3:49:23 PM                                                                                                                    
JOY STEWARD, SELF, HOMER (via  teleconference), spoke to her                                                                    
concerns about  the bill. She applauded  all legislators who                                                                    
were  working hard  to find  a  way to  balance the  state's                                                                    
budget.  She  did  support  finding  increased  funding  for                                                                    
education.  She thought  the  bill  could negatively  impact                                                                    
nonprofits.  She  referred  to earlier  testimony  that  had                                                                    
cited concerns.                                                                                                                 
3:52:07 PM                                                                                                                    
TAMMY  SMITH, NEA  ALASKA,  ANCHORAGE (via  teleconference),                                                                    
spoke in  support of SB 78.  She was currently serving  as a                                                                    
director for NEA  Alaska. She suggested that  although SB 78                                                                    
was not  a total solution but  was a sort-term fix.  She had                                                                    
received  an  email  that   non-tenured  teachers  would  be                                                                    
receiving  layoff  notices,   which  ultimately  would  hurt                                                                    
Alaska's students.  She advocated for a  long-term solution.                                                                    
It  was not  the  solution  for the  large  fiscal gap.  She                                                                    
highlighted  the necessity  of passing  a total  fiscal plan                                                                    
along  with a  broad-based  tax. SB  78  was a  supplemental                                                                    
effort to a larger plan. She thanked the committee.                                                                             
3:55:33 PM                                                                                                                    
BILL  WRIGHT, UNITED  WAY OF  TANANA VALLEY,  FAIRBANKS (via                                                                    
teleconference), stated that his  agency relied on donations                                                                    
from Pick.  Click. Give. He  advocated for further  study of                                                                    
the raffle although he was not speaking against it.                                                                             
3:58:12 PM                                                                                                                    
MIKE  COONS, SELF,  PALMER  (via  teleconference), spoke  in                                                                    
opposition of  the bill.  He thought the  bill would  have a                                                                    
huge  impact   on  the  senior  programs.   He  agreed  with                                                                    
Representative  Wilson  that  giving  to  charity  would  be                                                                    
greatly  impacted with  the reduction  of  the dividend.  He                                                                    
opposed the bill  as well as an income tax.  He provided the                                                                    
example of the  lottery in the state of Ohio.  He gave kudos                                                                    
to the house Minority for standing against the income tax.                                                                      
Co-Chair Seaton CLOSED Public Testimony.                                                                                        
4:01:40 PM                                                                                                                    
Representative  Wilson wondered  if  it  was an  appropriate                                                                    
time to hear from Ms. Race.                                                                                                     
SARA   RACE,   DIRECTOR   -  DIVISION   OF   ADMINISTRATION,                                                                    
DEPARTMENT OF REVENUE, JUNEAU, introduced herself.                                                                              
Representative Wilson  wondered whether the division  set up                                                                    
Pick Click Give, and would  that same management be in place                                                                    
for the program outlined in the legislation.                                                                                    
Ms.  Race  replied  that   there  were  some  administration                                                                    
procedures with Pick Click Give.  The proposed program would                                                                    
add a  question to the  PFD application that would  allow an                                                                    
individual to participate in the  raffle, and select in $100                                                                    
increments. She  stated that it  would be the  last priority                                                                    
order item to  pay out, after approval. She  stated that the                                                                    
portion would return  to the applicant, should  there not be                                                                    
$100 available for payment.                                                                                                     
Representative  Wilson queried  the added  cost for  the PFD                                                                    
Ms.  Race  answered  that most  infrastructure  was  already                                                                    
built  into the  program, but  there  was an  addition of  a                                                                    
question to the  application and the creation  of the vender                                                                    
in the vender table.                                                                                                            
4:03:39 PM                                                                                                                    
Representative Wilson queried  the anticipated ongoing costs                                                                    
to the program.                                                                                                                 
Ms. Race replied that there  was a one-time additional cost.                                                                    
She  furthered that  the  outgoing years  would  not be  too                                                                    
great.  She stated  that  the there  needed  to be  creative                                                                    
solutions  to advertise  the program.  She  stated that  the                                                                    
following years  allowed for 2  percent available  after the                                                                    
first year for advertising.                                                                                                     
Representative Wilson  queried the accounting costs  to Pick                                                                    
Click Give.                                                                                                                     
Ms.  Race responded  that there  were accounting  costs, but                                                                    
did not  necessarily come  from the  state. She  stated that                                                                    
there was a $250 application  fee for businesses that wished                                                                    
to participate  in Pick Click  Give. She stated  that United                                                                    
Way vetted the applications.                                                                                                    
Co-Chair  Seaton wondered  who advertised  and administrated                                                                    
the program.                                                                                                                    
Ms. Race replied  that after the first year  of the program,                                                                    
2 percent was dedicated to administration and advertising.                                                                      
Co-Chair Seaton  asked wondered  whether the  division would                                                                    
absorb the work.                                                                                                                
Ms. Race  responded that there were  no additional personnel                                                                    
needed for the program, and the  2 percent would be used for                                                                    
advertising and administration costs.                                                                                           
SB  73  was   HEARD  and  HELD  in   committee  for  further                                                                    
4:08:32 PM                                                                                                                    
AT EASE                                                                                                                         
4:13:41 PM                                                                                                                    
HOUSE BILL NO. 105                                                                                                            
     "An Act establishing the Gordon Haber Denali Wolf                                                                          
     Special Management Area."                                                                                                  
4:13:47 PM                                                                                                                    
REPRESENTATIVE  ANDY   JOSEPHSON,  SPONSOR,   provided  some                                                                    
background  for the  bill. The  legislation aimed  to create                                                                    
the Gordon  Haber Denali Wolf Special  Management Area which                                                                    
would be  a buffer zone  near the border of  Denali National                                                                    
Park  where wolves  may not  be  hunted. The  area would  be                                                                    
named for  Gordon Haber, who  was a biologist that  had done                                                                    
wolf-prey research  in Denali National Park  and other areas                                                                    
of Alaska from 1966 to 2009.    While doing the work that he                                                                    
loved, Gordon  tragically died  in a  plane crash  in Denali                                                                    
National Park on  October 14, 2009.   For  many years Denali                                                                    
National Park  had been known as  one of the best  places in                                                                    
the world to  view wild wolves. In 2013,  Denali had 530,921                                                                    
visitors, who contributed  $513,355,000 to Alaska's economy.                                                                    
The opportunity to  view wolves is a big  incentive to visit                                                                    
the park.  Unfortunately, wolf viewing success  has declined                                                                    
dramatically.  A buffer zone  previously established in 2000                                                                    
on the  park's eastern  boundary to  protect the  wolves was                                                                    
removed by the Board of Game  in 2010. In 2014, less than 6%                                                                    
of  park visitors  were able  to  see wolves,  down from  45                                                                    
percent back in 2010. Wolf  population has declined from 116                                                                    
in spring  2006 to 50 in  spring 2014. House Bill  105 helps                                                                    
to correct these trends.                                                                                                        
Representative Kawasaki referred to  the map in member files                                                                    
(copy on file).  He asked why the blue area  was not part of                                                                    
the area and black.                                                                                                             
Co-Chair Seaton wanted to ensure  that invited testimony had                                                                    
a chance to get on record.                                                                                                      
4:28:54 PM                                                                                                                    
RICK STEINER, PROFESSOR, UNIVERSITY OF ALASKA, read from a                                                                      
prepared statement (copy on file):                                                                                              
     I    appreciate     the opportunity     to   provide                                                                       
     comment   in   support   of   HB   105, and  look                                                                          
          forward to     any questions you may have                                                                             
     For the record,     I    am   a    conservation                                                                            
          biologist with Oasis     Earth                                                                                        
        (www.oasisearth.com)     in Anchorage, and I                                                                            
          was a     professor with the University of                                                                            
      Alaska    from 1980 -    2010, stationed     in                                                                           
          Kotzebue, Cordova, and Anchorage.                                                                                     
      As  legislators,   you  all  face many difficult                                                                          
          decisions this session, but HB     105 is    not                                                                      
      one of    them.      This     bill should    be                                                                           
          an   easy and unanimous "YES."                                                                                        
      1. One simple      standard with which      to                                                                            
          decide bills   in   front     of   you is: does                                                                       
          it   hurt, or help the Alaska      economy?                                                                           
          And regarding HB    105, it   is   an                                                                                 
          overwhelming   economic positive.                                                                                     
      In these      challenging    economic times      the                                                                      
    state needs    to   do   everything     possible to                                                                         
          support the    Alaska    economy.                                                                                     
      One of   the  easiest   and  most cost-effective                                                                          
          measures lawmakers can take to     enhance   our                                                                      
    economy   is   to do     everything     possible to                                                                         
       enhance   the wildlife tourism     industry -                                                                            
       a    $2.7 billion/year   industry in    Alaska                                                                           
          (I   will elaborate more on   that a    bit                                                                           
      2.  Another   critical  standard  to   base your                                                                          
          decisions on   is   the principle of fairness and                                                                     
     common ownership of  all resources (including wildlife)                                                                    
     by all  Alaskans, embodied  in the  State Constitution,                                                                    
     Article 8, Section 3: "Common Use":                                                                                        
     Wherever  occurring  in   their  natural  state,  fish,                                                                    
     wildlife,  and waters  are reserved  to the  people for                                                                    
     common use.                                                                                                                
     All of  us own and have  equal access to the  wolves in                                                                    
     Denali,  including the  70,000 Alaskans  who visit  the                                                                    
     park each year -- not just the 2 or 3 individuals who                                                                      
     hunt and trap them along the NE boundary.                                                                                  
     and this month marks the 100th anniversary of Alaska's                                                                     
     most iconic tourism destination. The would be the                                                                          
     perfect   time                                                                                                             
    to   finally   resolve   the century-old     problem                                                                        
          of conserving park wildlife along       the                                                                           
          park's  eastern     boundary.      HB   105 goes                                                                      
       a    long way toward     doing     just that.                                                                            
      [The     only friendly amendment I     would                                                                              
     respectfully suggest     is   to   include, in                                                                             
          addition to    wolves, a prohibition    on   take                                                                     
          of   all park predator species        -     bears,                                                                    
          lynx,     wolverine,     coyote,   etc.,     as                                                                       
     these     are valuable watchable wildlife for the                                                                          
          park as   well.]                                                                                                      
      Wolf     Townships History        In   1906,     when                                                                     
          east coast     hunter-naturalist   Charles                                                                            
      Sheldon   explored the   Denali    area,     he                                                                           
          noted     that commercial hunters selling    Dall                                                                     
          sheep     meat to   railroad workers    and                                                                           
          miners    were decimating     local       wildlife                                                                    
          populations.        Sheldon   went to                                                                                 
          Washington     D.C. and, along     with the                                                                           
          Boone     and Crockett Club,             advocated                                                                    
          establishment of    Mt. McKinley National Park                                                                        
          as   a    "game     refuge."       President                                                                          
          Woodrow  Wilson signed the original 2                                                                                 
          million   acre park into law  on   Feb. 26,                                                                           
        1917.          But the precise  boundaries                                                                              
     necessary to   protect   park wildlife were unclear,                                                                       
     imperfect,     and continued to    be   debated.                                                                           
          In particular, lands     northeast of   the                                                                           
          original park       boundary, where     park                                                                          
          wildlife migrate    seasonally,               were                                                                    
          considered     by   many to   need park                                                                               
          protection as well.                                                                                                   
    According     to   Fairbanks historian Ed   Davis,                                                                          
     since the initial   establishment of    the park,                                                                          
          there have     been many unsuccessful   attempts                                                                      
          to   add lands along     the northeast boundary,                                                                      
          now known      as   the "Wolf Townships"     and                                                                      
      "Stampede Trail,"   into the park to    protect                                                                           
          park wildlife:                                                                                                        
    1922     -    AK   Railroad proposes to     include                                                                         
      Wolf Townships in   McKinley Park to    protect                                                                           
          Park wildlife. 1965 -    State     selects   Wolf                                                                     
          Townships,     but cites need to   expand    Park                                                                     
          to   protect   caribou, and that existing Park                                                                        
          boundary is    "an arbitrary line."     1969     -                                                                    
          Johnson   administration considers,     but                                                                           
          declines, to   add Wolf Townships into Park 1978                                                                      
          -    Wolf Townships found     worthy    for                                                                           
          inclusion in   Denali    National Monument, but                                                                       
          lands     had been selected by     State.     1980                                                                    
          -    The original version     of   ANILCA                                                                             
          included the   Wolf Townships within    the new                                                                       
          park boundaries because this area provides                                                                            
          critical habitat    for park wildlife. Although                                                                       
          this area was removed    from the    final   bill,                                                                    
      the Senate     report    accompanying   ANILCA                                                                            
          made it   clear     the expectation     was for                                                                       
          the wolf townships to    become    part of                                                                            
        Denali:        The prime resource for which                                                                             
          the north      addition is established is    the                                                                      
      critical       range     necessary to   support                                                                           
          populations    of   moose,    wolf,     and                                                                           
          caribou   as   part of        an   integral                                                                           
          ecosystem. Public   enjoyment of   these                                                                              
          outstanding    wildlife  values would thus be                                                                         
4:38:07 PM                                                                                                                    
Representative Ortiz  noted that  the buffer  was eliminated                                                                    
in 2010. He queried the reason for that decision.                                                                               
Mr. Steiner  replied that it  derived from the  Park Service                                                                    
ideology  from various  interest  groups.  He remarked  that                                                                    
there  were  several  proposals  asking  that  the  existing                                                                    
buffer be  expanded, because it  was too small.  He remarked                                                                    
that there  were as  many as  19 park  wolves in  that small                                                                    
buffer. He remarked that 15 to  20 percent of the total park                                                                    
population was killed after the wolves crossed the buffer.                                                                      
Representative Ortiz  came from  Southeast Alaska  and could                                                                    
certainly understand  the benefits of an  area with wildlife                                                                    
viewing,  and  felt that  tourism  to  view wildlife  had  a                                                                    
greater effect on the economy than hunting.                                                                                     
Representative Guttenberg  suggested that the area  had been                                                                    
his  previously in  his district.  He felt  that the  buffer                                                                    
change did not have to do with biological certainty.                                                                            
Mr. Steiner  agreed. He  stated that the  Denali wolf  was a                                                                    
political pawn in the process.                                                                                                  
Vice-Chair  Gara  noted  that the  opposition  letters  were                                                                    
focused on the impact of subsistence and other hunting.                                                                         
Mr.  Steiner  responded that  the  trapping  and hunting  of                                                                    
wolves in the area was  non-subsistence, rather it was sport                                                                    
Vice-Chair  Gara commented  that the  letters probably  were                                                                    
referring to more wolves and less moose.                                                                                        
Mr.  Steiner stated  that there  were  complaints about  the                                                                    
high  number of  moose in  the  area. He  remarked that  the                                                                    
closed area  would be 340,000  acres. He stressed  that most                                                                    
of the moose hunting took place  to the east of the area. He                                                                    
stressed that  there would be  millions of dollars  from the                                                                    
tourism industry as a result of the legislation.                                                                                
4:43:40 PM                                                                                                                    
SEAN MCGUIRE, ALASKANS FOR  WILDLIFE, FAIRBANKS, agreed with                                                                    
the previous  speaker's statement that Denali  was the crown                                                                    
jewel  for  the area.  People  went  to  Denali to  see  the                                                                    
mountain and  wildlife including  wolves. He  suggested that                                                                    
the land  management for the  skinny He relayed  that people                                                                    
were baiting wolves to go outside of the boundary.                                                                              
Mr.  McGuire objected  profusely people  baiting wolves  and                                                                    
removing  the opportunity  for tourists  to  see wolves.  He                                                                    
recalled Cecil the  lion that was lured out of  the park and                                                                    
gunned down.  He thought  the state  was allowing  people to                                                                    
bait the wolves out of the park.                                                                                                
4:49:40 PM                                                                                                                    
AL BARRETTE, SELF, FAIRBANKS  (via teleconference), spoke in                                                                    
favor of the legislation.                                                                                                       
Co-Chair  Seaton noted  committee  members  had his  written                                                                    
testimony in their packets.                                                                                                     
Representative Wilson asked  about page 3, lines  20 and 21.                                                                    
She  surmised   that  the   interpretation  would   be  that                                                                    
accidentally shooting a wolf could result in a misdemeanor.                                                                     
Mr.  Barrette  responded  that  the  issue  was  related  to                                                                    
trapping, not hunting.                                                                                                          
4:55:36 PM                                                                                                                    
Representative Guttenberg noted that  the area west of Healy                                                                    
was the  bus from "Into  the Wild." He stressed  that people                                                                    
should never go in that area.                                                                                                   
Mr. Barrette asked if it was a question.                                                                                        
Representative   Guttenberg   stated    that   it   was   an                                                                    
TIM  LESCMER, SELF,  ANCHORAGE (via  teleconference), worked                                                                    
with grey wolves  and took care of them at  the zoo in town.                                                                    
He  spent more  time around  wolves than  90 percent  of the                                                                    
population.  He  thought  what  was  getting  lost  was  the                                                                    
intelligent of the  animals and the centurion  nature of the                                                                    
animals.  He  invited  members   to  come  meet  the  wolves                                                                    
personally. He applauded  Representative Josephson. He spoke                                                                    
in support of HB 73.                                                                                                            
Co-Chair Seaton CLOSED Public Testimony for HB 105.                                                                             
Co-Chair  Seaton  remarked  that he  wanted  some  questions                                                                    
about  subsistence  addressed at  the  next  hearing on  the                                                                    
4:59:23 PM                                                                                                                    
Representative Wilson asked that  the department address the                                                                    
indeterminate fiscal note.                                                                                                      
Representative  Josephson  responded  that the  fiscal  note                                                                    
related to the original version of the bill.                                                                                    
Representative  Wilson responded  that there  were 3  fiscal                                                                    
notes  and  it was  possible  that  some  of them  were  not                                                                    
related to the current version of the bill.                                                                                     
Co-Chair Seaton clarified the version before the committee.                                                                     
Representative    Wilson   requested    the   fiscal    note                                                                    
clarification at the next hearing.                                                                                              
Vice-Chair  Gara asked  about the  misdemeanor issue  in the                                                                    
Co-Chair  Seaton asked  to put  the question  off until  the                                                                    
next bill hearing.                                                                                                              
Co-Chair  Seaton  announced  that  amendments  were  due  by                                                                    
Thursday, May 6, 2017 at 5:00 p.m.                                                                                              
HB  105  was  HEARD  and   HELD  in  committee  for  further                                                                    
5:03:34 PM                                                                                                                    
Representative Ortiz asked about amendments for SB 78.                                                                          
Co-Chair  Seaton conveyed  that  that amendments  for SB  78                                                                    
were  also due  by Thursday,  May 6,  2017 at  5:00 p.m.  He                                                                    
relayed the  agenda for the following  meeting. He indicated                                                                    
the  following  week  would be  focused  on  general  fiscal                                                                    
Co-Chair  Seaton  recessed the  meeting  to  a call  of  the                                                                    
chair.  He recessed  the  meeting  to a  call  of the  chair                                                                    
[Note: the meeting never reconvened].                                                                                           
5:05:18 PM                                                                                                                    
The meeting was adjourned at 5:05 p.m.                                                                                          

Document Name Date/Time Subjects
HB 105 R. Steiner testimony 2-10-17.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
HB105 Sponsor Statement.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
HB105 Summary of Changes.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
HB 105 Supporting Docs - BoG prop. 142 letters.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
Map of Area in CS.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
JM Drawing.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Letterhead SB78 games of chance.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Letterhead SB78 Payout example.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Letterhead SB78 sectional.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Letterhead SB78 summery of changes.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Letterhead SB78 The Idea.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
sb78 legal2.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB78 model 4-7 modifications (2).pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB78 model 4-7 modifications.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Sponsor Statement Alaska Permanent Fund Education Lottery - final.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB78 Oped-jwm.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Supporting Doc. Dividend Summary.PDF HFIN 4/28/2017 1:30:00 PM
SB 78
Supporting Doc. Gaming report.PDF HFIN 4/28/2017 1:30:00 PM
SB 78
Supporting Doc. Pick,Click,Give.PDF HFIN 4/28/2017 1:30:00 PM
SB 78
HB105_Support_042417.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
HB105_Oppose_042417.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
SB 78 HFIN CS WorkDraft 30-LS0534L.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB 78 Explanation of Changes CS v. L.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB 83 Rsponse to F and D letter about SB83.pdf HFIN 4/28/2017 1:30:00 PM
SB 83
SB 83 Opposition Faith Myers.pdf HFIN 4/28/2017 1:30:00 PM
SB 83
SB 83 - Ombud Response to opposition.pdf HFIN 4/28/2017 1:30:00 PM
SB 83
HB105_Support_042817.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
HB105_Oppose_042817.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
SB78_Oppose_042817.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB 83 Response to Rep. Wilson.pdf HFIN 4/28/2017 1:30:00 PM
SB 83
HB 105 Supporting Document Photo of Wolves.pdf HFIN 4/28/2017 1:30:00 PM
HB 105
SB 78 Pick.Click.Give. Participating Organization Requirements.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
Senate Bill 78 Kemppel testimony to House Finance Committee April 28 2017.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
SB 78 Legal Opinion re Indian Gaming.pdf HFIN 4/28/2017 1:30:00 PM
SB 78
HB 105 Response Rep. Josephson.pdf HFIN 4/28/2017 1:30:00 PM
HB 105