SB 78-PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY
8:28:59 AM
CHAIR HUGHES announced the considerations of SB 78.
SENATOR CLICK BISHOP, Alaska State Legislature, sponsor of SB
78. He introduced SB 78 by saying that the bill sets up a
foundation for an innovative way to raise funding to help a
great cause - funding the future for Alaska's greatest asset -
its children. He said he has long been in favor of economic
diversification and using renewable resources, such as the
earning of the permanent fund.
He shared a personal story about an education tax on his
paycheck when he was first starting to work. In the 1980s the
education head tax was struck down. He said he has been seeking
support for a way to fund education for the last four years.
He called his bill a voluntary limited income tax. He said over
60 percent of his district supports education. He gave an
example of a constituent who returned his PFD the last two
years.
SENATOR BISHOP said the purpose of the bill is to look way into
the future, post oil, to help partially fund education using
Alaska's renewal resource, the power of its permanent fund
earnings.
8:33:17 AM
SENATOR STEVENS asked if he will use Pick, Click, Give.
SENATOR BISHOP said yes.
PETE FELLMAN, Staff, Senator Click Bishop, Alaska State
Legislature, explained SB 78 on behalf of the sponsor. He
explained that SB 78 provides that everyone could donate to
education in $100 increments on their permanent fund
application. He said that half of the money goes to the public
education fund; a quarter goes to an education endowment fund
which will reach a cap and then roll money into the public
education fund; and one quarter goes into the lottery fund which
has a $500 million cap. After the lottery has reached the cap,
all future donations will go to education. Out of the lottery
fund, 20 percent will go to lotter prizes, and 80 percent will
stay in the lottery fund. Every year the lottery fund will grow
and will be managed in a conservative manner.
8:36:47 AM
MR. FELLMAN showed a table of hypothetical fund result
possibilities year by year: number of participants, average
donations, deposits to fund types, and prize amounts. He termed
it a bucket lottery. He hoped the fund would be self-sustaining
in the future.
He noted Alaska already has sixteen variations of charitable
gaming and he provided examples, such as the Ice Classic. The
lottery will not need administrative money from the state, it
comes from the donations.
8:40:05 AM
MR. FELLMAN explained the changes in the proposed CS, version R.
One change would cap the amount of money needed to manage the
lottery to $500,000. The other change was so that the 125,000
people who do not file their permanent fund on a computer could
participate in the lottery. It removes the word "electronic" and
"who files electronically" from the bill.
8:40:48 AM
SENATOR COGHILL moved to adopt the CS for SB 78, labeled 30-
LS0534\R, as the working document before the committee.
CHAIR HUGHES objected for discussion purposes.
8:41:43 AM
CHAIR HUGHES noted there are state lotteries in the U.S., but SB
78 is more like a raffle. She asked what the difference between
a lottery and a raffle is.
MR. FELLMAN clarified that it is a limited lottery because
participants must be residents of the state who receive a PFD
and the donation can come only once a year from the PFD.
Participants cannot spend their children's PFD or their rent
money. It is different than any other game of chance.
CHAIR HUGHES asked why they chose "lottery" rather than
"raffle."
MR. FELLMAN said they were excited about it and lottery is a
catch word for big winnings, not a small raffle. The sponsor
pictured the Governor announcing the permanent fund and the
winners of this lottery. He concluded that 95 percent of the
money stays secure for education.
CHAIR HUGHES removed her objection and version R was adopted.
She held SB 78 in committee.