SB 66 - AN ACT RELATING TO SLED DOG RACE CLASSICS Discussion was had with Senator Lyda Green. Testimony in support given by Stan Houley and Joann Potts of Matsu. The bill was replaced with CSSB 66 (FIN) and entitled: "An Act relating to an Iditarod Sweepstakes sled dog race classic" and REPORTED OUT of committee with individual recommendation and a zero fiscal note from the from the Department of Revenue. CONFIRMATION HEARING - Testimony by Wil Condon, Commissioner, Department of Revenue. A standard letter of confirmation was signed by committee members and forwarded to Senate President Drue Pearce. SB-66 - AN ACT RELATING TO SLED DOG RACE CLASSICS Co-chair Halford invited Senator Lyda Green, sponsor of the bill, to address the committee in support of her legislation. She noted that the Iditarod sled dog race is an Alaskan tradition which is now in jeopardy due to lack of sponsors and associated funding. The purpose of the proposed bill is to establish a sled dog classic to generate income to enable the Iditarod to help itself. The proposed Iditarod sweepstakes is intended to provide needed financial assistance for the race. Senator Zharoff questioned Senator Green's intention as to the year this would become effective, how the prizes would be awarded, and is there a percentage breakdown? Senator Green responded that it is planned to begin in 1996. In response to a question regarding the awarding of prizes, she deferred the question to Stan Houley, Executive Director of the Iditarod. Co-chair Halford stated that the Committee Report changed the title of the bill to "An Act relating to an Iditarod Sweepstakes sled dog race classic". He pointed out that legislation on the Iditarod failed last year due to a series of amendments regarding the permanent fund check-off. Co-chair Halford turned the attention of the committee to the teleconference speakers. Stan Houley, Executive Director of the Iditarod, testified that the primary goal in seeking passage of the bill is to put a mechanism in place which would allow the Iditarod Trail Committee to further diversify its funding base. The passage of this bill would allow for capture of substantial revenues which would, in turn, allow the organization to continue to stage the race. Alaska has a need to be weaned from the seductive "outside" dollar that has been so vulnerable to attack by special interest groups. This bill will resolve this problem. Joann Potts, Race Director for Iditarod, spoke to the committee in support of passage of the bill, echoing Senator Green and Stan Houley's comments. Senator Zharoff asked Mr. Houley how the proceeds are split between the winner and the committee? Mr. Houley replied that a percentage has not yet been determined. There will be close association with the Department of Revenue and Department of Gaming to ensure that the guidelines are followed. The first step is to see passage of this legislation and commit to working closely with the department in putting a sweepstakes in place that is attractive to out-of-state visitors and Alaskans. Co-chair Halford stated that Senator Phillips has an interest in a potential amendment to the bill regarding a name change to incorporate the "arctic winter games". He suggested that the amendment broadens the title, which could endanger the bill in the House. Co-chair Halford expressed his concerns in passing the bill, and suggested that Senator Phillips introduce a new bill with a new title if he wanted a title change. He said he would do all he could to expedite it. Senator Phillips yielded to Co-chair Halford. Co-chair Frank asked Senator Green if there had been thought surrounding the potential growth in popularity of the arctic winter games? He asked about the possibility of a race participant regulating their speed? Senator Green did not foresee any problem in this area. Co-chair Halford called for additional testimony on the bill. None was forthcoming. Co-chair Frank MOVED to adopt CSSB 66 (FIN) with individual recommendations . No objection having been raised, CSSB 66 (FIN) was REPORTED OUT of committee with a zero fiscal note from the Department of Revenue. Co-chairs Halford and Frank along with Senator Rieger signed the committee report with a "do pass" recommendation. Senators Phillips, Zharoff and Sharp signed "no recommendation". CONFIRMATION HEARING: WIL CONDON, COMMISSIONER, DEPARTMENT OF REVENUE Co-chair Halford invited Wil Condon to the table for the confirmation hearing. Mr. Condon addressed the committee by pledging to do his best if confirmed. Co-chair Halford stated that he did not know of anyone more qualified, with the experience of the taxing authority, than Mr. Condon. Senator Rieger stated that in addition to running the Department of Revenue, one of Mr. Condon's key responsibilities is the automatic seat on the Board of Trustees of the Alaska Permanent Fund. He questioned what level of direction would be received from the Governor's office on how to vote, or make proposals to the Board of Trustees versus his own initiative in Permanent Fund matters? Mr. Condon replied that he has only had one meeting since becoming the Commissioner designate. That meeting dealt with the question of selecting an executive director. He anticipates that the Governor's office will be concerned that the Board is doing the best job possible, not that of directing matters that come before it. Senator Rieger inquired as to that first meeting which dealt with the selection of the executive director. Specifically, he asked Mr. Condon if he received direction from the Governor's office regarding a nominee he should select? Mr. Condon replied that he contacted the Governor's office to determine if there were recommendations on who should be selected as executive director. In response to his inquiry, his instructions were to select the best person. Mr.Condon stated that he initiated the inquiry and didn't believe he was instructed in any way to select a particular person. Senator Rieger asked if the preference expressed by the Governor was Byron Mallott? Mr. Condon answered, "That is correct." Senator Rieger expressed concern regarding the interpretation of statutes as they exist now, which puts a fiduciary responsibility on the trustees to act in the best interest of the fund. He asked Mr. Condon, would he ignore any type of suggestion from the executive branch and go in another direction if it was in the best interest of the fund? Mr. Condon affirmed that in his view, he is legally bound as a fiduciary to make a judgement in the best interest of the fund. Senator Rieger asked if the trustees are clearly fiduciaries of the fund? Mr. Condon responded that in his judgement, yes. Co-chair Frank asked if Mr. Condon was the lead council in some of the oil and gas cases. Mr. Condon answered affirmatively. Co-chair Frank asked what the repercussions would be in his leaving that post for the post of Commissioner of Department of Revenue? Mr. Condon responded that his lead for the North Slope litigation, has almost concluded, with a trial scheduled for the remaining issues to begin in April. Mr. Condon stated that from the Department of Revenue's view, much has been accomplished, but there is still much to be done. A year ago there were outstanding assessments of roughly $5.5 billion, which is now down to about $2 billion. The objective is to lower the figure to zero, with a set of regulations in place to prevent high outstanding assessments from happening again. Mr. Condon stressed his interest in his participation. He believes it is important to the state in creating a strong business climate, so that Alaska continues to have a vital oil and gas industry. Co-chair Halford asked if there were further questions. There being no further questions, Senator Phillips motioned to send the standard correspondence to the Senate. (Senator Sharp arrived at the meeting.) Co-chair Halford announced that they were requested to be in the President's office. The other bills will be held for Wednesday, February 15th. ADJOURNMENT The meeting was adjourned at approximately 9:35 a.m.