Legislature(1993 - 1994)

03/31/1993 08:00 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                     
  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                                                                   
  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                 
  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                       
  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                     
  REPRESENTATIVE FINKELSTEIN agreed with Representative                        
  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                   
  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                         
  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                      
  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                 
  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                       
  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                            
  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.                                      
  CHAIRMAN WILLIAMS announced the committee would not meet on                  
  Friday, April 2, 1993.  The next meeting, he said, would be                  
  on Monday, April 5.                                                          
  There being no further business to come before the House                     
  Resources Committee, Chairman Williams adjourned the meeting                 
  at 9:20 a.m.                                                                 

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