02/25/2020 03:00 PM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB239 | |
| HB190 | |
| SB80 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 239 | TELECONFERENCED | |
| *+ | HB 190 | TELECONFERENCED | |
| + | SB 80 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 25, 2020
3:02 p.m.
MEMBERS PRESENT
Representative Zack Fields, Co-Chair
Representative Jonathan Kreiss-Tomkins, Co-Chair
Representative Grier Hopkins
Representative Andi Story
Representative Steve Thompson
Representative Sarah Vance
Representative Laddie Shaw
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 239
"An Act establishing a state lottery; providing for
participation in multi-state lotteries; establishing the Alaska
State Lottery Board in the Department of Revenue; relating to
confidentiality of information regarding lottery winners;
requiring background investigations by the Department of Public
Safety; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 190
"An Act relating to allowable absences for a permanent fund
dividend; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 80 AM
"An Act relating to proposing and enacting laws by initiative;
and prohibiting the state and its agencies and corporations from
spending funds to influence the outcome of certain ballot
propositions and questions."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 239
SHORT TITLE: ESTABLISH STATE LOTTERY BOARD/LOTTERIES
SPONSOR(s): REPRESENTATIVE(s) THOMPSON
02/05/20 (H) READ THE FIRST TIME - REFERRALS
02/05/20 (H) STA, FIN
02/18/20 (H) STA AT 3:00 PM GRUENBERG 120
02/18/20 (H) Heard & Held
02/18/20 (H) MINUTE(STA)
02/25/20 (H) STA AT 3:00 PM GRUENBERG 120
BILL: HB 190
SHORT TITLE: PFD ALLOWABLE ABSENCES
SPONSOR(s): REPRESENTATIVE(s) TALERICO
01/21/20 (H) PREFILE RELEASED 1/10/20
01/21/20 (H) READ THE FIRST TIME - REFERRALS
01/21/20 (H) STA, FIN
02/25/20 (H) STA AT 3:00 PM GRUENBERG 120
BILL: SB 80
SHORT TITLE: INITIATIVE SEVERABILITY
SPONSOR(s): SENATOR(s) BIRCH
03/06/19 (S) READ THE FIRST TIME - REFERRALS
03/06/19 (S) STA, JUD
04/11/19 (S) STA AT 3:30 PM BUTROVICH 205
04/11/19 (S) Moved SB 80 Out of Committee
04/11/19 (S) MINUTE(STA)
04/12/19 (S) STA RPT 2DP 1DNP 2NR
04/12/19 (S) NR: SHOWER, REINBOLD
04/12/19 (S) DP: MICCICHE, COGHILL
04/12/19 (S) DNP: KAWASAKI
04/23/19 (S) JUD AT 6:00 PM BELTZ 105 (TSBldg)
04/23/19 (S) Heard & Held
04/23/19 (S) MINUTE(JUD)
04/24/19 (S) JUD AT 1:30 PM BELTZ 105 (TSBldg)
04/24/19 (S) Moved SB 80 Out of Committee
04/24/19 (S) MINUTE(JUD)
04/26/19 (S) JUD RPT 3DP 1NR
04/26/19 (S) DP: HUGHES, MICCICHE, REINBOLD
04/26/19 (S) NR: KIEHL
04/30/19 (S) TABLED Y13 N6 A1
05/02/19 (S) TAKE FROM TABLE UC
05/02/19 (S) TRANSMITTED TO (H)
05/02/19 (S) VERSION: SB 80 AM
05/03/19 (H) READ THE FIRST TIME - REFERRALS
05/03/19 (H) STA, JUD
02/25/20 (H) STA AT 3:00 PM GRUENBERG 120
WITNESS REGISTER
SETH WHITTEN, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions on behalf of
Representative Thompson, prime sponsor of HB 239.
JONATHAN CLONTZ, Chief Executive Officer (CEO)
Wyoming Lottery Corporation
Cheyenne, Wyoming
POSITION STATEMENT: Provided information and answered questions
during the hearing on HB 239.
BISHOP WOOSLEY, President
North American Association of State and Provincial Lotteries
(NASPL);
Director, Arkansas Lottery
Little Rock, Arkansas
POSITION STATEMENT: Provided information and answered questions
during the hearing on HB 239.
DAN STICKEL, Chief Economist
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
239.
KEITH WHYTE, Executive Director
National Council on Problem Gambling (NCPG)
Washington, D.C.
POSITION STATEMENT: Provided information and answered questions
during the hearing on HB 239.
REPRESENTATIVE DAVE TALERICO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 190, as prime sponsor.
ANNE WESKE, Director
Permanent Fund Dividend (PFD) Division
Department of Revenue (DOR)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
190.
SENATOR JOSH REVAK
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 80 on behalf of Senator Birch,
prime sponsor.
KIM SKIPPER, Staff
Senator Josh Revak
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
80 on behalf of Senator Revak.
ACTION NARRATIVE
3:02:00 PM
CO-CHAIR JONATHAN KREISS-TOMKINS called the House State Affairs
Standing Committee meeting to order at 3:02 p.m.
Representatives Shaw, Hopkins, Thompson, Vance, Fields, and
Kreiss-Tomkins were present at the call to order.
Representative Story arrived as the meeting was in progress.
HB 239-ESTABLISH STATE LOTTERY BOARD/LOTTERIES
3:02:41 PM
CO-CHAIR KREISS-TOMKINS announced that the first order of
business would be HOUSE BILL NO. 239, "An Act establishing a
state lottery; providing for participation in multi-state
lotteries; establishing the Alaska State Lottery Board in the
Department of Revenue; relating to confidentiality of
information regarding lottery winners; requiring background
investigations by the Department of Public Safety; and providing
for an effective date."
3:03:05 PM
REPRESENTATIVE THOMPSON relayed that the lottery that would be
established under HB 239 would generate a much-needed source of
revenue for the state. He said that he recognizes the concerns
about the expansion of gambling and the effects that it would
have on the lives of Alaskans. He maintained that he shares the
concerns; he has worked hard to craft legislation that considers
the factors most closely associated with behavioral addiction;
and the proposed legislation would prohibit the type of activity
that exploits those factors. He referred to the invited
testimony of several experts familiar with the lottery industry
and problem gambling issues to address committee members'
questions.
3:04:20 PM
SETH WHITTEN, Staff, Representative Steve Thompson, Alaska State
Legislature, referred to documents in the committee packet: an
email dated 2/5/20 listing lottery sales in states with
populations similar to Alaska's; and a Gallup, Inc. poll report
[7/22/16], entitled "About Half of Americans Play State
Lotteries," which offers a demographic breakdown of the buyers
of lottery tickets along with information on problem gambling.
3:05:41 PM
JONATHAN CLONTZ, Chief Executive Officer (CEO), Wyoming Lottery
Corporation, relayed that Wyoming passed a law authorizing a
state lottery in 2013; the lottery was launched August 2014. He
stated that it was a small lottery due to Wyoming's low
population - about 375,000 adult residents. He described
Wyoming's lottery: one in-state game - "Cowboy Draw" - which is
a cash lottery game; and multi-state games - "Powerball," "Mega
Millions," and "Lucky for Life." Wyoming's lottery does not
include instant-win games or video lottery terminals; it does
not allow the use of debit cards or credit cards for purchases;
and there is a limit on the number of tickets which can be
bought at one location. As required by statute, the Wyoming
Council on Problem Gambling (WCPG) was established in
partnership with the Wyoming Department of Health.
MR. CLONTZ related that Wyoming borrowed money from a local bank
so as not to expend state general fund resources; the loan was
paid back several months early, at which time revenue began to
come into the state. There is a nine-member board of directors
appointed by the governor, and it operates as a quasi-
governmental instrument of the state. The state is continuing
to make the lottery a well-rounded full portfolio lottery.
3:08:33 PM
REPRESENTATIVE SHAW asked what Wyoming's net profit per year was
for the past three years from the lottery.
MR. CLONTZ responded that last year [2019] over $6 million was
transferred to the state; about $4 million was transferred in
2018; and about $2.5 million was transferred in 2017. The total
for the three years was about $12.5 million.
CO-CHAIR FIELDS asked for data on the distribution of lottery
users over economic demographics. He asked, "Are poor people
participating at a higher rate than other groups?"
MR. CLONTZ answered that the Wyoming Lottery Corporation
performs trigger studies on various issues to assess player
behavior and impacts on society. He stated that staff look at
the demographics of players - age and income; sometimes that
information is difficult to get. The results of two trigger
studies revealed that the most prominent player category was
ages 45-60 and middle-income.
CO-CHAIR KREISS-TOMKINS asked for an explanation of "trigger
study."
MR. CLONTZ explained that a trigger study is an internal study
"triggered" by an issue that warrants study, such as researching
the interest in a new game or examining problem gambling in a
certain community. It is performed in-house or through
contract.
3:12:51 PM
REPRESENTATIVE HOPKINS asked whether Wyoming participates in
multi-state lotteries and how the revenue-sharing is handled.
MR. CLONTZ replied that Wyoming's lottery was launched with
Powerball and Mega Millions; once it received permission from
[the Multi-State Lottery Association (MUSL)] it began to sell
Powerball and Mega Millions products. He explained that the
member states pay a percentage into the jackpots according to
their sales; participating in the multi-state games relieved
Wyoming of the pressure of paying out a full jackpot. He
relayed that Wyoming could not launch an in-state game until it
had a reserve account built up to pay out full jackpots.
REPRESENTATIVE HOPKINS asked whether the multi-state lottery
tickets bring in as much revenue per ticket as the in-state
lottery tickets, considering they are taxed the same.
MR. CLONTZ responded that there are set pay-out percentages -
about 50 percent for the multi-state games as determined by
MUSL; Wyoming makes 21-22 percent from those games. For
Wyoming's in-state game, the pay-out percentage is set at 68
percent. The game is "branded" to suit the state; therefore,
the state wants people to win that game more; it wants to
encourage player loyalty to the brand. Wyoming does not make as
much in profit - 13 percent - compared with the multi-state
games; however, the volume of play is consistently higher.
3:16:39 PM
REPRESENTATIVE HOPKINS asked for the cost of administrative
overhead for the state lottery and hired staff.
MR. CLONTZ answered that the nine-member board borrowed $3
million for start-up; it hired staff; it contracted for
marketing, legal counsel, and information technology (IT); and
it paid for background investigations for retailers. He
explained that most of the services for the Wyoming lottery had
to be outsourced.
REPRESENTATIVE THOMPSON asked how long it took to pay back $3
million.
MR. CLONTZ said that the board estimated it would take 24
months, but it only took 16 months. The board made the decision
to pay off the debt before transferring revenue to the state.
3:20:09 PM
CO-CHAIR KREISS-TOMKINS asked what the projections are for net
revenue to Wyoming from the lottery, and whether revenue is
expected to plateau.
MR. CLONTZ answered that Wyoming is already seeing a leveling
off. There is always a spike in sales when jackpots are very
high; however, since the billion-dollar jackpots [came into
being], it takes a much higher jackpot to generate the same
level of excitement. He said that when jackpots are low, sales
are low; the Wyoming Lottery Corporation utilizes promotions to
stimulate sales and interest. He expressed that the lottery
needs another game in its portfolio that is a non-jackpot
reliant game. He reiterated that instant games are prohibited;
and too many draw games "start to cannibalize each other." He
maintained that the corporation must strike a careful balance.
He estimated that revenue will most likely level off to $4-5
million per year; adding another game may increase the revenue
$1.5-3 million.
3:24:02 PM
REPRESENTATIVE STORY asked whether scratch games are not allowed
because of charitable gaming in Wyoming.
MR. CLONTZ answered no, that is not the primary reason. He
explained that Wyoming is a conservative state; passing
legislation for a lottery was difficult; there were promises
made to not allow instant games because of a great concern for
problem gambling among residents. He said that he has not seen
evidence that the traditional draw games lead to gambling
problems; it occurs in connection with video lottery, casino
table games, and instant-win games. He offered that it is
likely that the prohibition may be removed in the future.
REPRESENTATIVE STORY asked about the WCPG and the issues it
addresses.
MR. CLONTZ reiterated that state statute required the council to
be established in partnership with the Department of Health.
The council found that Wyoming had many addiction treatment
specialists, but none specifically trained in problem gambling.
In the statute there is a requirement that up to $200,000 per
year be considered by the board of directors to be placed into
the problem gambling fund; the funds come from expired unclaimed
tickets. Money is set aside every year to be used in
association with problem gambling. The Department of Health
addiction treatment specialists identified gambling addiction
treatment training and sent staff to be trained. The
corporation contracted with a research company to study the
issue of problem gambling in Wyoming. The findings revealed
that it was not a significant issue, and in areas where there
were problem gambling issues, they were secondary and tertiary
to other addictions. The Wyoming Lottery Corporation
established a problem gambling hotline; the hotline received six
calls and four were due to the callers not being able to read
the print on their tickets. The council meets regularly,
conducts governance work, and attends conferences, but generally
there is not much for them to do. He stated that the
corporation has restricted the number of tickets a person can
buy in one transaction to 125, as a deterrent [to excessive
gambling]; and it does not allow the use of debit and credit
cards. The corporation partnered with the Department of Family
Services to integrate with its child support registry so that
lottery winners owing back child support could be identified and
the money transferred to that agency.
3:30:56 PM
REPRESENTATIVE STORY mentioned that she would like to see a copy
of any council reports to the Department of Health.
MR. CLONTZ agreed to provide them.
3:32:18 PM
BISHOP WOOSLEY, President, North American Association of State
and Provincial Lotteries (NASPL) and Director, Arkansas Lottery,
summarized his experience with the Arkansas Lottery and his
position on NASPL. He said that NASPL is an active organization
representing 53 lotteries across North America; its function is
to disseminate information benefitting the state and provincial
lottery organizations through education and communication. When
appropriate, NASPL advocates for positions of the association in
matters of general policy on lotteries.
REPRESENTATIVE THOMPSON asked for a description of the Arkansas
Lottery and whether it has draw tickets only or expanded gaming.
MR. WOOSLEY answered that the Arkansas Lottery launched in
September 2009; it began with instant ticket games - which
constitute 80 percent of sales; it then added draw games - 20
percent of sales - which included Powerball, Mega Millions, two
daily draw games, the regional game, Lucky for Life, and an in-
state lotto game called the "Natural State Jackpot." He
clarified for Representative Story that instant tickets
constituted 80 percent of sales and draw games 20 percent.
REPRESENTATIVE HOPKINS asked whether the other states in the
association support their nonprofits through charitable gaming.
MR. WOOSLEY answered that it varies from state to state; it
depends on the geographic location and the needs of the state.
The Arkansas Lottery supports scholarships for higher education;
other states support state general revenue, veterans, highways,
or a variety of charitable causes. He said that the newer
lotteries focus more on education.
REPRESENTATIVE HOPKINS stated that in Alaska, scratch tickets
are held by a permit holder; the permit holder can give a
certain percentage of the revenue from the scratch tickets to
the charitable and nonprofit sector. He asked whether Mr.
Woosley was familiar with any other states having a similar
arrangement for draw tickets.
MR. WOOSLEY answered negatively.
3:37:50 PM
MR. WHITTEN referred to an article on the Alaska Charitable
Gaming Alliance (ACGA) website, not included in the committee
packet, entitled "Governor Dunleavy's Senate Bill 188 expands
multiple levels of gambling," which read in part:
Rep. Steven Thompson, (R-Fairbanks), also has newly
proposed gaming legislation in the form House Bill
239, that would establish a lottery under a State
Lottery Board. In Thompson's case, there is neither
significant and costly new government infrastructure,
nor an alarming expansion of gaming. The best part of
his effort has been he included the Alaska Charitable
Gaming Alliance. Rep. Thompson communicated his
interest in meeting with our president, Sandy Powers,
to seek counsel on how his proposed legislation would
affect charitable gaming. He has been transparent and
thoughtful.
REPRESENTATIVE STORY asked whether Arkansas has a problem gaming
council or similar organization overseeing issues related to
lotteries.
MR. WOOSLEY answered, not specifically. He maintained that when
the Arkansas Lottery was started, it was required to submit
$200,000 per year toward problem gambling; after six years, the
Arkansas legislature eliminated that requirement. Arkansas now
commits to supporting a problem gambling helpline and receives
National Council on Problem Gambling (NCPG) certification
through NASPL for all games. He added that the legislature has
its own separate committee overseeing the Arkansas Lottery.
REPRESENTATIVE STORY asked Mr. Woosley to provide any
information he has about the [problem gambling] issues and
supports in place in Arkansas.
CO-CHAIR FIELDS asked for the annual cost of administering
charitable gaming in Alaska.
3:41:04 PM
DAN STICKEL, Chief Economist, Tax Division, Department of
Revenue (DOR), responded that he will provide that information
to the committee.
MR. WHITTEN stated that in fiscal year 2018 (FY18) the gross
sales for charitable gaming were $375 million; of that amount,
$35 million went to nonprofit organizations and $55 million to
administration. He offered to verify those numbers for the
committee.
3:42:53 PM
KEITH WHYTE, Executive Director, National Council on Problem
Gambling (NCPG), relayed that NCPG was founded in 1972 and is
the national advocate for programs and services to assist
problem gamblers and their families. He stated that NCPG is
neutral on legalized gambling. He mentioned NCPG's membership:
gaming corporations and agencies, regulators, tribal
governments, healthcare, banks and other financial institutions,
and individuals - many of whom are in recovery from gambling
problems.
MR. WHYTE continued by saying that NCPG provides services to
help problem gamblers and their families: a national helpline
number; training and education of counselors; and a variety of
education, prevention, and treatment programs. He mentioned
that NCPG works with the lottery, casino, and charitable
industries to develop programs and policies helping them to
minimize harm.
MR. WHYTE maintained that he has 25 years of experience in the
gambling industry, both as executive director of NCPG and the
director of research for the American Gaming Association.
CO-CHAIR FIELDS asked whether the gaming industry funds NCPG.
MR. WHYTE answered, partly. He said that since it is a
membership organization, it is funded from dues. He added that
half of its revenues come from membership dues - the majority of
which are from gambling entities such as state lotteries,
casinos, and tribal governments. The other half is from its
annual conference, sales of education materials, and a few
grants. He maintained that there is no federal funding for
problem gambling programs. He reiterated that NCPG is neutral
on legalized gambling, does not accept restrictions on funds it
receives, and is very open and transparent in working with the
industry. Through membership, gambling entities make a just
contribution to helping mitigate the social costs that they help
generate.
REPRESENTATIVE THOMPSON mentioned his understanding that problem
gamblers are enticed to gamble more when there are instant
winners through scratch-off or video games, compared with once-
a-week draw games. He asked if that understanding was correct.
MR. WHYTE answered yes. He said that in general, the structural
characteristics of each form of gambling has a complex
relationship with gambling addiction; frequency is one of those
characteristics and is associated with increased development of
gambling problems. He offered additional structural
characteristics - speed of play and size of jackpot. He stated
that the construct is multi-dimensional.
REPRESENTATIVE STORY asked for more information on the social
costs of gambling.
MR. WHYTE replied that it is inevitable that some people who
gamble will develop problems. The costs of gambling problems
are not just borne by individuals, but by their families, their
communities, businesses, and ultimately the taxpayers. Based on
national data, it is estimated that the number of people with
gambling problems in Alaska is about 12,000. A very
conservative social cost estimate would assign $1,700 per severe
problem gambler per year for a total of about $20 million in
social costs. Social costs are primarily in criminal justice
and healthcare: about 70 percent of people with severe gambling
problems commit white collar crimes to finance their gambling;
people with gambling problems are more likely to visit emergency
departments, have poor physical and mental health, and have
other consequences of addiction. People who have one addiction
are more likely to have another. He stated that most private
insurers do not routinely reimburse for a diagnosis of problem
gambling; most social costs fall directly to the state. He
emphasized that every dollar spent on prevention and treatment
saves two or more dollars in social costs. He mentioned that to
date, the citizens of Alaska are not funding any problem
gambling programs.
3:50:54 PM
REPRESENTATIVE STORY asked for examples of NCPG working with the
gambling industry to minimize harm.
MR. WHYTE answered that staff developed a responsible gambling
verification program for the lottery industry, which includes
employee training, retailer training, advertising, and funds for
problem gambling. He stated that the program consists of
policies and procedures that will attempt to minimize the risk
of addiction for lottery products that are being sold. He
maintained that NCPG can never eliminate gambling addiction but
can attempt to mitigate and treat it. He said that both Wyoming
and Arkansas faced tremendous challenges, which Alaska would
face as well: no funds were spent on problem gambling prior to
the onset of a lottery and no problem gambling services were
available; this exacerbates social costs. He mentioned written
testimony, not included in the committee packet, that outlines
the lowest possible standards for Alaska to address the social
costs as it establishes its lottery. He stressed that research
demonstrates that the expansion of gambling increases both
participation and gambling problems. He maintained that putting
countermeasures in place - responsible gambling programs - and
integrating them into Alaska's behavioral health services is the
only ethical and economical way to approach this public health
issue.
MR. WHITTEN offered that he would submit Mr. Whyte's written
testimony to the committee.
[HB 239 was held over.]
HB 190-PFD ALLOWABLE ABSENCES
3:54:57 PM
CO-CHAIR KREISS-TOMKINS announced that the next order of
business would be HOUSE BILL NO. 190, "An Act relating to
allowable absences for a permanent fund dividend; and providing
for an effective date."
3:55:20 PM
REPRESENTATIVE DAVE TALERICO, Alaska State Legislature,
presented HB 190, as prime sponsor, by paraphrasing from the
sponsor statement, which read:
HB 190: Provides for an exemption for an absence of or
beyond 180 days for an otherwise eligible resident.
The main provision of HB 190 ensures that an otherwise
eligible resident can be absent when they are
providing continuous medical treatment or providing
care for a family member as described in sections (5)
and (6) of AS 43.23.008.
HB 190 puts into statute this additional protection,
which is not currently addressed by the statutes or
policy.
REPRESENTATIVE TALERICO explained that statute already provides
an exemption for the medical leave described; the proposed
legislation clarifies that when circumstances cause the
accumulative time of an absence to exceed 180 days, the person
would be still eligible for a permanent fund dividend (PFD). He
offered that the number of people affected by this provision
would be low.
3:59:20 PM
REPRESENTATIVE THOMPSON asked for confirmation that a person who
is out of state for an extended period for medical treatment
does not lose his/her eligibility for a PFD.
REPRESENTATIVE TALERICO answered yes, if the person has a
referral.
REPRESENTATIVE THOMPSON asked for clarification that the
proposed legislation would ensure that a caregiver accompanying
the person receiving medical treatment would also be eligible
for a PFD and is currently denied.
REPRESENTATIVE TALERICO answered that the caregiver is not
necessarily denied. The situation that HB 190 would address is
when a person, who has been out of state for an extended period,
suddenly finds himself/herself in the position of needing to
provide the care and consequently goes well beyond the
accumulative period allowed - 180 days.
CO-CHAIR KREISS-TOMKINS restated the answer: AS 43.23.008(a) -
the statue covering allowable absences - currently provides an
exemption for someone who is sick out of state or someone who is
providing care for someone who is sick. The proposed
legislation would allow for "stacking of exemptions"; the time
spent out of state caring for someone who is sick would not be
counted in the 180 days allowed.
4:01:58 PM
REPRESENTATIVE VANCE referred to page 3, lines 9-10, of HB 190,
which read "... the spouse, minor dependent, or disabled
dependent of the eligible resident... " and asked about an only
adult child who leaves the state to care for parents, and the
absence results in an extended period. She questioned whether
the sponsor considered other categories of caregivers.
REPRESENTATIVE TALERICO answered that it is his hope that HB 190
would cover the situation she presented.
REPRESENTATIVE HOPKINS asked what changes would be needed for
the dividend application under HB 190.
REPRESENTATIVE TALERICO offered that the PFD Division
[Department of Revenue (DOR)] would need to answer that
question.
REPRESENTATIVE STORY asked whether the proposed legislation
states "designated caregiver" for the extended absence
exemption.
REPRESENTATIVE TALERICO replied no. He acknowledged that it is
the responsibility of the legislature, not the PFD Division, to
ensure clarity in statute.
4:06:40 PM
ANNE WESKE, Director, Permanent Fund Dividend (PFD) Division,
Department of Revenue (DOR), in response to the question from
Representative Hopkins, stated that the PFD application form
would not change under HB 190; the only change would be in
processing the application; and there would be no extra cost for
processing applications in this manner.
REPRESENTATIVE HOPKINS asked whether the application would have
additional checkboxes or whether the applicant would need to
appeal a denial.
MS. WESKE responded that because the change under the proposed
legislation would apply to such a small population, the division
would resolve the issue at the eligibility level. She
maintained that currently people explain the reason for an
absence on the application; therefore, personnel know the reason
for the absence already; it would just be a matter of them
following the new statute.
REPRESENTATIVE HOPKINS asked whether the applicant would need to
know that this exemption was available.
MS. WESKE replied that the division already accounts for a
medical absence as being allowable; the other absence would be
considered vacation, which the applicant is already indicating
on the current application. She said currently staff see a
combination of "other" [which includes business or vacation] and
"health." She stated that if the "other vacation" exceeds 45
days, the applicant is denied status. Under HB 190, the
application would look the same, but staff would be able to
consider the applicant for a PFD if the absence is between 45
and 180 days.
4:09:30 PM
CO-CHAIR FIELDS referred to the Paul Hall [Center for Maritime
Training and Education] apprenticeship program and the recent
denials by the state for PFDs for participants in the program
who have long received PFDs. He asked that the PFD Division
give his office guidance on providing appropriate clarifying
language to ensure that the program participants would no longer
experience discrimination. He offered that the state enacted
regulations in 2014 that conflicted with statute and should be
repealed. He mentioned proposing an amendment to HB 190 to
ensure that the state does not discriminate against industry-
funded programs.
MS. WESKE responded that the division has provided wording to
the Department of Law (DOL) to remedy that issue. She
maintained that there was no regulation change in 2014; she was
provided a list of names [of participants of the program] and
none had ever applied for a PFD in the history of the program.
She maintained that she is researching the situation. She
offered to provide guidance to Representative Fields as
requested.
4:11:41 PM
REPRESENTATIVE VANCE asked for an approximate number of
applications that the proposed legislation would address.
MS. WESKE estimated about 100.
REPRESENTATIVE VANCE asked whether clarifying language on
"designated caregiver" would be helpful to the division.
MS. WESKE answered that the division would probably need
guidance from DOL on the specification of the role of the
individual.
CO-CHAIR KREISS-TOMKINS referred to the allowable absence under
AS 43.23.008(a)(17), which read in part:
(17) for any reason consistent with the individual's
intent to remain a state resident, provided the
absence or cumulative absences do not exceed
(A) 180 days in addition to any absence or
cumulative absences claimed under (3) of this
subsection if the individual is not claiming an
absence under (1), (2), or (4) (16) of this
subsection;
CO-CHAIR KREISS-TOMKINS asked for an approximate number of
Alaskans who qualify under subparagraph (A) or the net outlay of
PFDs to individuals qualifying under this exemption.
MS. WESKE restated the question: How many individuals were
absent from Alaska between 90 and 180 days for an "other"
reason; that is, they did not qualify for any of the allowable
absences [listed under AS 43.23.008(a)(1)-(16)]?
CO-CHAIR KREISS-TOMKINS clarified by saying that for someone on
vacation for 89 days and in Alaska every other day of the year,
the application is handled under the normal approval process.
MS. WESKE agreed.
CO-CHAIR KREISS-TOMKINS asked for the approval process when
someone is on vacation from 91-179 days and in Alaska every
other day of the year.
MS. WESKE replied that the PFD Division would request flight
records from the applicant and check for any indicators of
residency ties in the area visited. The Legislature has
determined - by statute - that any length of time above 90 days
is worth further scrutiny.
CO-CHAIR KREISS-TOMKINS asked for confirmation of his
understanding that under this "other" category, someone could be
gone from Alaska for 179 days and continue to receive a PFD if
the checks don't identify any indicators of residency in another
state.
MS. WESKE answered, that's correct.
CO-CHAIR KREISS-TOMKINS asked to be provided with the number of
Alaskans who qualify for the exemption [under AS
43.23.008(a)(17)(A)] and the total amount dispersed through
those PFDs.
4:16:44 PM
CO-CHAIR KREISS-TOMKINS also asked for the number of individuals
who would qualify for the exemption under HB 190.
MS. WESKE offered to provide that information.
REPRESENTATIVE STORY asked for the number of denials in the last
few years due to caregivers being out of state to care for
significant others.
CO-CHAIR KREISS-TOMKINS stated that he has heard that a U.S.
Coast Guard (USCG) member and his/her family, who live in Alaska
and collect PFDs, could continue to collect PFDs for the
duration of the service member's tenure in the USCG even after
they have left the state. He asked whether that was true or
urban legend.
MS. WESKE answered that it is urban legend. The family would
still need to show ties to Alaska; they could have no residency
ties to any other area; and they must return to Alaska within
five years for 30 consecutive days and return to the state every
other year for 72 hours.
CO-CHAIR FIELDS asked for any indicators of residency ties
besides buying a house, having a homestead exemption, and
voting.
MS. WESKE added enrollment of children in school, securing a
lease, employment, and obtaining a driver's license or
identification.
MS. WESKE clarified that the items she listed are how a person
in Alaska could establish a tie; a job in another state does not
always indicate a residency tie.
REPRESENTATIVE STORY asked for the reference for the
requirements of "72 hours" and "30 days" and asked why 72 hours
was chosen.
MS. WESKE agreed to provide that information.
[HB 190 was held over.]
SB 80-INITIATIVE SEVERABILITY
4:21:17 PM
CO-CHAIR KREISS-TOMKINS announced that the final order of
business would be SENATE BILL NO. 80 am, "An Act relating to
proposing and enacting laws by initiative; and prohibiting the
state and its agencies and corporations from spending funds to
influence the outcome of certain ballot propositions and
questions."
4:21:47 PM
SENATOR JOSH REVAK, Alaska State Legislature, presented SB 80 by
paraphrasing from his written statement, which read:
• Good Afternoon, Mr. Chair and members of the House
State Affairs Committee, thank you for hearing SB 80.
For the record, Sen. Josh Revak, District M in South
Anchorage.
• SB 80 seeks to protect the integrity of the ballot
initiative process by ensuring ballot initiative
language that appears before voters at the ballot box
is the same as the language circulated during the
signature-gathering phase and to restore the
legislaturs important role in the initiative
process.
• Alaska's constitution details a very important right
of our residents - the right to enact legislation
through the voter initiative process. The legislature
also has the right to enact legislation substantially
the same as the proposed initiative thus removing it
from the ballot.
• Per our constitution, some issues are off-limits for
ballot initiatives and initiatives can only cover one
subject. But while a cursory legal review of language
occurs before the Lieutenant Governor's certification,
it has sometimes been the case that further review
finds constitutional concerns with proposed language.
In those cases, a party can file a lawsuit to force
the issue through the court system. This can happen
simultaneous to the circulation of signature booklets.
• Under current law, if a court determines that language
in a proposed initiative is unconstitutional and/or
severed, an amended version of the language can appear
before voters. This results in voters seeing a
different initiative than the one they supported with
their signature. Furthermore, if the courts
revise/sever the language after the legislative review
process, they deny the legislature its right to review
the initiative as revised. The net effect of a courts
severance is that an initiative can move forward to
the voters that is substantially different than the
initial version reviewed by the legislature.
• SB 80 restores a "check" in the checks and balances
the constitutional framers envisioned for the
initiative process. Voters should be assured that
language on the ballot has not changed from the
language in the petition booklets supported with voter
signatures and further, it restores the legislature's
right to review and enact substantially similar
legislation to stop an initiative from moving forward.
• SB 80, amended on the Senate floor, affirms that a
state entity may not be used to influence an election
concerning an initiative, referendum, constitutional
amendment, constitutional convention, or recall,
unless the money was specifically appropriated for
that purpose. However, exceptions apply to usual and
customary legislative activity.
• Mr. Chair, again thank you for the opportunity to
present SB 80 and I would appreciate the committees
support.
4:25:43 PM
CO-CHAIR FIELDS asked for the number of initiatives in the
state's history that have been severed versus the number that
have not.
4:26:02 PM
KIM SKIPPER, Staff, Senator Josh Revak, Alaska State
Legislature, indicated that there have been two initiatives
severed.
CO-CHAIR FIELDS asked Ms. Skipper to identify the two
initiatives and describe the differences in language.
MS. SKIPPER stated that the most recent initiative was Ballot
Measure 1 [the Salmon Habitat Protections and Permits
Initiative, 2018]. She offered to provide the committee with
information on any other severed initiatives.
CO-CHAIR FIELDS asked for the substantive difference regarding
Ballot Measure 1.
MS. SKIPPER offered to provide that information.
CO-CHAIR KREISS-TOMKINS asked Ms. Skipper to identify the second
initiative that was severed.
MS. SKIPPER agreed to provide that information.
CO-CHAIR FIELDS asked, "Was the main policy debate ... around
this issue - of whether we can have non-severability of
initiatives - with severability of legislative bills, and
whether that's a constitutional problem?"
MS. SKIPPER answered that there are issues surrounding the
potential unconstitutionality of SB 80; however, the proposed
legislation also addresses that the constitution provides the
legislature the right to review [the initiative] and provides
the public the right to sign a petition based on ballot language
- not of a concept but of an actual bill. She maintained that
when a court severs that initiative, the public is faced with
something different than what they signed. She said that there
is a pending advisory opinion on the constitutionality of [SB
80] based on elimination of the severability clause but added
that there is a vetting process in the legislature that does not
occur with the public.
4:29:09 PM
CO-CHAIR KREISS-TOMKINS asked for the chronology of events
surrounding Ballot Measure 1 and stated his understanding that
it consisted of: the initiative qualifying for the ballot;
litigation; the Alaska Supreme Court ruling that some provisions
of the initiative were unconstitutional; and the court amending
the substance of the initiative. He stated that if a component
of a bill is found unconstitutional, it is severed and
eliminated as opposed to changed. He asked for comment on that
distinction, on the court's role, and what severability means in
the context of initiatives.
SENATOR REVAK mentioned that a legal opinion may be warranted;
however, supporters of the bill believe that what happened with
the initiative for Ballot Measure 1 "opened the door for a bait-
and-switch" type of policy surrounding initiatives. He offered
that putting enticing language in a ballot initiative - maybe
even unconstitutional language - to get the public to sign it,
knowing that it would be struck down [by the court]
simultaneously while the legislature is reviewing it, would a)
take away from the legislature's ability to review the final
language on a ballot initiative, and b) result in substantially
different language [than signed on to in the initiative
process]. He maintained that the concern is that people will
use [the initiative process] as a tool against the legislature
and the voters, and the proposed legislation attempts to address
that concern.
CO-CHAIR KREISS-TOMKINS asked for more information on the
distinction between severing or eliminating a provision of an
initiative versus modifying through the court review process.
REPRESENTATIVE HOPKINS referred to page 2, line 5, of SB 80,
which read, "An initiative petition may not contain a
severability clause." He asked whether currently a ballot
initiative has a severability clause and how the clause reads.
MS. SKIPPER responded that the severability clause tries to
mimic what the legislature allows in its [bill-making] process;
if a bill passes and the court deems part of the bill
unconstitutional, then the court can strip that part of the bill
and leave the remainder of the bill to become law. She said
that the ballot initiative process allows for that same process.
The concern is that when the court severs [an initiative] so
that it changes dramatically from what the public saw at the
onset of the petition process, the change is on the ballot and
the legislature cannot rereview the initiative, because the
legislature's review process is over and the court has made the
change prior to the election cycle.
CO-CHAIR KREISS-TOMKINS commented that from his experience with
legislative review of initiatives, the substantial similarity
between legislation passed by the legislature that might preempt
a ballot initiative is extremely liberally construed.
REPRESENTATIVE VANCE asked for the number of states that allow
for a citizens' initiative like Alaska's.
SENATOR REVAK offered to provide that information to the
committee.
REPRESENTATIVE STORY acknowledged that the citizens' initiative
is important to Alaskans. She expressed her belief that
citizens are adequately informed of changes to the initiatives.
She asked whether the thinking behind the proposed legislation
is that the ballot measure would be so different from what is on
the petition that citizens would not be informed about the
changes.
SENATOR REVAK answered yes. He maintained that in recent
history, the ballot measure was substantially different. He
stated that there are several issues involved - legislative
review and a bait-and-switch policy in which the public does not
know the substantial change in the initiative. He offered his
hope that through SB 80, people who draft ballot initiatives
would be more vigilant regarding the initiative language; it's
good for the public, for the legislature, and for the civic
process.
4:35:58 PM
CO-CHAIR KREISS-TOMKINS asked for information on which of the
states allowing a constitutional ballot initiative process
prohibit severability clauses versus allow them.
CO-CHAIR FIELDS asked whether any of the states among those
identified have analogous language saying that every initiative
appearing on the ballot that is altered by the court must be
substantially like what voters originally signed. He asked
whether in the Senate there was discussion about "severability"
versus "substantially similar."
MS. SKIPPER replied that issue did not come up in the Senate.
The discussions in the Senate revolved around the legislative
review process, restoring the rights of the legislature,
bringing integrity back to the process, and making sure the
public sees the ballot initiative as originally intended.
[SB 80 was held over.]
4:38:10 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 4:38
p.m.