Legislature(1993 - 1994)
03/31/1993 08:00 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 239: RAFFLE OR AUCTION OF BIG GAME PERMITS Number 351 REPRESENTATIVE CON BUNDE, PRIME SPONSOR OF HB 239, explained the purpose of the bill was to allow non-profit organizations to raffle or auction off big game permits as a revenue source for game management. He referred to information in members' packets which described similar programs in other states. He noted that the non-profit which auctions the permit retains 10% for administrative costs, while the remaining amount returns to the state for fish and game activities. Number 381 REPRESENTATIVE FINKELSTEIN called HB 239 a good idea, but expressed concern with provisions of the state's Constitution that says the resources of the state are set aside for the common use of the people. His fear was that it could be unconstitutional to auction off permits because only the highest bidder would have access to the resource, while those without sufficient funds would have less access. Number 398 REPRESENTATIVE BUNDE suggested that another way to interpret the common use provision was having the resource accessible to the general public and providing the funding to encourage development and enhancement of the resources. Most states, he said, have a common use provision, and many of those states have programs similar to the one proposed in HB 239. Number 410 REPRESENTATIVE PAT CARNEY referred to the "qualified organization" designated in HB 239. He asked Representative Bunde to describe what criteria would be used to determine these organizations. REPRESENTATIVE BUNDE explained that the most prominent organization of this type was the North American Sheep Foundation, which promotes the sound management of the wild sheep of North America. Others he mentioned were the Rocky Mountain Elk Foundation and Ducks Unlimited. REPRESENTATIVE CARNEY asked what was the purpose of their involvement in the process. Number 427 REPRESENTATIVE BUNDE responded that these organizations offered access to their national and international memberships, in addition to taking the state out of the role of auctioneer. VICE CHAIRMAN HUDSON addressed the constitutional question previously raised. He noted that this program would be similar to other limited access fish and game programs, such as drawings for moose permits and other hunts where small quotas are established. He also pointed out that in the auction or raffles provided for in HB 239, permits would be issued for only two animals of each species. Number 448 REPRESENTATIVE BUNDE also pointed out that Alaska already allows the raffle of bison permits. REPRESENTATIVE JOE GREEN asked Representative Bunde to explain the graduated increases in the fiscal note, and also asked whether increasing competition for the permits was anticipated. REPRESENTATIVE BUNDE explained that there would be more activity and increasing revenues from the program as people become more aware of it. REPRESENTATIVE GREEN referred to page 2, line 15, where HB 239 provides for the Department of Fish and Game to end up with what is left after the organization retains 10% and administrative costs. He expressed concern that if the response was low, the program might not generate revenues at all. He asked if there was a minimum response level needed to make the program viable. REPRESENTATIVE BUNDE replied that the program could not end up costing the department money; if the response was low the tag might not be issued and there would be no cost. REPRESENTATIVE GREEN proposed a situation where the tag might be auctioned, but the amount might be so low that after the auctioning organization retains its 10% and administration costs, the profit might be nonexistent or so low that it is not of benefit to the state. Number 506 DAVE KELLEYHOUSE, DIRECTOR, DIVISION OF WILDLIFE CONSERVATION, ALASKA DEPARTMENT OF FISH AND GAME (ADF&G), suggested there would be little chance of the program running a deficit. He remarked on a recent auction by the Safari Club International which raised $3.5 million for conservation agencies. He said the organizations involved in these fund raising efforts have questioned why Alaska does not have such a program. He said Alaska's mystique and reputation for big game hunting would assure success, and added that Alaska is one of the last Western states to implement such a program. MR. KELLEYHOUSE, addressing the constitutionality question raised by Representative Finkelstein, said that this plan fits the category of common use because of its goal to contribute to the management of the total resource. He explained that legislatures in other states have raised millions of dollars by tapping into the number of wealthy conservationists looking for a vehicle through which to make donations. Number 543 MR. KELLEYHOUSE remarked on budget cuts in the ADF&G, Division of Wildlife Conservation, which have over the past several years resulted in staffing reductions from 190 employees in the mid-1980's to 160 in 1993. He noted that the proposed program in HB 239 would, along with other user- pay revenue sources, provide a stable funding source for the division's ability to manage resources. MR. KELLEYHOUSE also pointed out that the auction/raffle program will not diminish opportunities for resident hunting. The permits, for two of each species, would be issued in addition to the number of permits regularly allocated. If problems with scarcity of species arose, he said, the division would have the option of holding back permits for any species in any area as deemed necessary. He suggested that the first issued so-called "Governor's Permits" will be prestigious and would bring in a great deal of money. He noted that the fiscal note was conservative, while the potential for revenues was actually much higher. Number 580 MR. KELLEYHOUSE mentioned that Alaska would be the only state offering permits for some unique species. Another advantage of the program, he said, was that a number of Alaskan guides would donate their services as part of the package. The bid price would then include not just the permit, but the value of a hunting guide package. He was unaware of any substantive arguments against the program proposed in HB 239. REPRESENTATIVE DAVIES agreed that the overall idea was good, but had concerns with the overall gross to net revenues. He suggested the ADF&G set up appropriate regulations and auditing so the organizations cannot run expenses, reducing the net revenues to Alaska. MR. KELLEYHOUSE confirmed that if HB 239 passes, the ADF&G would establish regulatory guidelines. He added that the main purpose of existence for conservation organizations was to raise money to put directly into state game management programs. He added that they have a long history of turning money over to state management agencies. Number 618 VICE CHAIRMAN HUDSON asked Mr. Kelleyhouse to confirm that the distribution of revenues was set up so the organization managing the auction would get their administrative costs plus 10%, and that the state receipts in most cases would go directly to enhance wildlife habitat. Number 640 MR. KELLEYHOUSE noted that he had talked with directors from other states with similar programs, and discovered that they regularly receive 85% or more of the proceeds from auctions and raffles. The Rocky Mountain Elk Foundation, Safari Club International and the Foundation for North American Wild Sheep, he added, solicit research proposals and management proposals from the ADF&G, and have given the ADF&G money almost every year. He pointed out that the public does not normally give the government money willingly. REPRESENTATIVE BUNDE pointed out the fact sheet in members' files from the Foundation for North American Wild Sheep, which he said showed that as of June, 1991, they have given the state of Alaska $341,000 for conservation. (A copy of the fact sheet may be found in the House Resources Committee Room, Capitol Room 124, and after the adjournment of the second session of the 18th Alaska State Legislature, in the Legislative Reference Library.) Number 649 REPRESENTATIVE FINKELSTEIN expressed concern that the groups described as playing a part in implementing HB 239 are not clearly specified in the bill. He noted that nothing requires the participating organization to be educational, non-advocacy, non-lobbying groups, or that the money be used for specific purposes. He read the language from the bill that required groups to be non-profit organizations established to promote the management of big game species. He cautioned that other types of groups could be involved and that the money they retain could be used for other purposes. REPRESENTATIVE FINKELSTEIN agreed with the intent but recommended the bill assure that it happens as intended. Number 668 REPRESENTATIVE BUNDE pointed out that the groups discussed are advocacy groups for wildlife conservation. He understood Representative Finkelstein's concerns that scam organizations should be kept from participating, but noted that the ADF&G would select participating groups very carefully to assure they share the goals of the ADF&G. Number 689 REPRESENTATIVE FINKELSTEIN said it was still important that HB 239 spell out how the money must be used for the specific purposes described by Representative Bunde. His concern was that organizations that do lobbying might use revenues derived from the auction of Alaska game permits to lobby Alaska's legislature. REPRESENTATIVE DAVIES commented that if a group is concerned with wildlife management from a non-consumptive stand, they might be precluded from participating. TAPE 93-40, SIDE B Number 000 MR. KELLEYHOUSE replied that it would be unlikely that kind of group would be able to sell a hunting permit. He suggested that eventually the program might be adapted to include them by offering permits for areas like the McNeil River Bear Sanctuary or the Round Island Walrus area. He mentioned that he does not support the antagonism and paranoia that seems to be distinguishing Alaskans as either consumptive or non-consumptive users. Most Alaskans fall into both categories, he said. REPRESENTATIVE DAVIES said that was the direction he had in mind, raising money from another set of constituents. Number 055 REPRESENTATIVE ELDON MULDER felt comfortable with the definition of groups contained in HB 239. REPRESENTATIVE FINKELSTEIN agreed that the language was adequate for defining groups, but reiterated the need to specify the limitations on use of the monies raised. He said the current administration may understand the intention of HB 239, but there was no guarantee that future administrations might not interpret it differently. He suggested language be added to designate that "qualified organizations shall use the amount received and account for it for ethical research and game management purposes." Number 111 VICE CHAIRMAN HUDSON did not want language added that would tie the hands of the participating organizations. He agreed that HB 239 should bar the use of funds for political contributions or lobbying. He noted that it was not uncommon to include that sort of language when dealing with non-profits, and suggested an amendment to read: "None of the proceeds of these funds shall be used to lobby the legislature or donated for political contributions." This, he said, would preclude these activities, no matter who heads the administration of the state at any time in the future. REPRESENTATIVE FINKELSTEIN agreed with Representative Hudson. MR. KELLEYHOUSE explained that as written, HB 239 would dedicate monies into the fish and game fund. Alaska Statute 16.05.100 spells out specifically what the uses of those funds are, he said. VICE CHAIRMAN HUDSON clarified that it was not the portion of funds returning to the department that was a concern, but rather the portion retained by the organization. Number 147 REPRESENTATIVE JEANNETTE JAMES registered her concern that in telling the organizations how they are to use funds, the state would put itself in a position of having to audit those organizations in order to assure compliance with the requirements. REPRESENTATIVE BUNDE remarked that if the legislature limits the use of funds, they would have to define lobbying and advocacy, because a primary function of some of the groups may be advocacy for conservation. This could be considered lobbying, he said. He agreed with the language suggested that would bar political contributions. VICE CHAIRMAN HUDSON asked if barring only political contributions would meet the intent of the committee members. Number 176 REPRESENTATIVE FINKELSTEIN said they would not be precluded from lobbying with the rest of their budgets, just with the portion obtained from their partnership with the ADF&G. Other non-profits are similarly barred from using state- derived money for lobbying. Number 180 REPRESENTATIVE CARNEY referred to Representative James' comments on the need to monitor or audit the budgets of the non-profit organizations. He said that it was assumed that these organizations were honest and that if the law said they could not use funds for the purpose of lobbying, they would honor that. CHAIRMAN WILLIAMS asked if there was a formal amendment to be offered. REPRESENTATIVE BUNDE commented that there was no way to keep track of how a specific portion of money is spent within an organization if the proceeds go directly into a general budget. Number 210 REPRESENTATIVE FINKELSTEIN said it would depend on the accounting system of a particular organization, and added that non-profits often have limitations on how money is spent and so they account for the spending to ensure funds go to designated purposes. REPRESENTATIVE BUNDE asked Mr. Kelleyhouse to comment on the proposed amendment. MR. KELLEYHOUSE remarked that if too many strings are attached to the program, it could deter organizations from conducting operations and promoting the auctions. He agreed that basically the organizations are honest and said many have been in existence for decades and have firmly established reputations. CHAIRMAN WILLIAMS agreed that the organizations were generally honest in tracking and reporting how funds are used. Generally, he said, funds are moved within an organization's accounting system. REPRESENTATIVE FINKELSTEIN followed up Mr. Kelleyhouse's comments by saying that he didn't see any problem with specifically stating that funds could not be used for political purposes. Number 260 VICE CHAIRMAN HUDSON offered an AMENDMENT to add, on line 27, after the word "subsection" or wherever applicable in the (b) section, "none of the proceeds of these funds shall be used for political contributions." He explained that this would leave the lobbying and advocacy language out, but would meet the intent to keep funds from political purposes. REPRESENTATIVE BUNDE said he would accept that as a friendly amendment. Number 283 REPRESENTATIVE GREEN voiced concern that some legitimate organizations who do, as a part of their activities, make political contributions, might be seen as violating the intent of the program. Number 294 REPRESENTATIVE FINKELSTEIN clarified that most non-profits get grants and are required under the terms of a grant to account for how the money is spent. There is not a problem of intermixing funds, he explained, and the expenditures toward authorized purposes are accounted for as a routine part of business. It would be common to put a requirement on it. One restriction would not mean that the organization's other funding sources could not be used for political purposes. CHAIRMAN WILLIAMS commented that this might drive away people by putting restrictions on how they spend their money. REPRESENTATIVE FINKELSTEIN again stated that lobbying would be allowed under the suggested amendment. CHAIRMAN WILLIAMS noted that the legislature would have to look at what the organization is that is lobbying, and how the organization would view the restrictions. REPRESENTATIVE FINKELSTEIN noted again that it is routine for non-profits to have restrictions on spending certain revenues and to have to account for that spending. CHAIRMAN WILLIAMS asked the committee to take action on the amendment on the table. REPRESENTATIVE FINKELSTEIN repeated his amendment, "qualified organizations shall not use the proceeds for lobbying or political purposes." CHAIRMAN WILLIAMS asked members to indicate whether they were in favor of the motion. There were objections and the MOTION WAS DEFEATED. Number 364 VICE CHAIRMAN HUDSON offered an AMENDMENT to line 27, after the period, to read: "None of the proceeds of these funds shall be used for political contributions." REPRESENTATIVE FINKELSTEIN suggested that language be changed to say "political activities" rather than contributions. VICE CHAIRMAN HUDSON declined the friendly amendment and said it would not work to bar all political activities. He explained that the organizations should still be entitled to do their advocacy work, but should be barred specifically from contributing to political candidates' campaigns. Number 374 CHAIRMAN WILLIAMS called for a roll call vote on Vice Chairman Hudson's amendment. Voting YEA were Representatives Hudson, Bunde, Carney, Davies, Finkelstein and Williams. Voting NO were Representatives James, Green and Mulder. The MOTION PASSED. Number 380 VICE CHAIRMAN HUDSON made a MOTION to pass HB 239 as amended with the fiscal note out of committee with individual recommendations. He asked unanimous consent. CHAIRMAN WILLIAMS asked if there were objections. Hearing none, the MOTION PASSED. Number 397 REPRESENTATIVE DAVIES was uncomfortable with the procedure of the committee in not calling for a roll call vote on Representative Finkelstein's amendment. ANNOUNCEMENTS CHAIRMAN WILLIAMS announced the committee would not meet on Friday, April 2, 1993. The next meeting, he said, would be on Monday, April 5. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 9:20 a.m.