SB 149-TAX CREDIT FOR DONATIONS TO DOG MUSHING  2:27:04 PM CHAIR EGAN announced SB 149 to be up for consideration. SENATOR JOE THOMAS, sponsor of SB 149, said dog mushing is Alaska's state sport and has a long and storied history and background from its development by indigenous Alaskans to dog teams connecting and supplying mining and military camps to the Nome serum run to today's recreation and sports traditions. SENATOR THOMAS said he used to run dogs in Fairbanks and today dog mushing not only preserves our heritage but also brings international attention to the state. Alaska's dog mushing races inject needed money and activity into dozens of small rural Alaskan towns. There are, however, dozens of races of all different lengths and difficulties each year from the Iditarod with its nearly $4 million budget to small town sprint races run on a shoestring budget. All play a vital role in numerous towns and their economies. He said SB 149, the Support Alaska's Mushing Sport Heritage Act (SAMSHA), creates a stronger financial base of support for dog mushing by bringing together the private business sector in races organized by non-profits through modest tax credits. It allots a certain amount of tax credits to a qualified dog mushing race that then solicits private donations on a first come, first served basis. By limiting the available credits, SB 149 not only limits the fiscal impacts to the state, it also creates a competitive environment for access to credits by bringing in financial support earlier in the year, filling a hole that these races generally suffer on an annual basis. By incentivizing the small and medium sized donations, the bill will help create a more diversified base of support that is not reliant on one or more large donations (so if that donor drops out, all the money dissipates). It will also help foster Alaska's winter tourism industry in the many towns they take place in. 2:31:01 PM GRIER HOPKINS, staff to Senator Thomas, said the impetus behind this bill was to begin developing a stronger financial base for dog mushing races across the state from big too small. Dog mushers have a number of operating costs throughout the year, but their fund raising efforts do not come to fruition until the energy behind these races starts building. The expenses include the purses and salaries for people who work on the races. The idea behind SB 149 would be to create a competitive system of tax credits where businesses that would be donating to these organizations know there is a specific limited amount of tax credits available to them based on the non-profit's budget. Fundraising efforts don't come to fruition until these races start being promoted, and businesses would have to come to the races early in the year for their credits or the allotted amount could have already been used by others. He explained that a specific amount of credits would be available to all the races in the state and the amount is based on 5 percent of the race's allotted budget from the year before. 2:33:44 PM MR. HOPKINS said there are 22 different non-profit dog mushing races in the state. Most of those do not get anywhere near the $1 million budget, but if they all start doing well, a worst case scenario would be a $1.1 million impact to the state from these credits. He explained that the bill works by requiring qualified non- profit dog mushing races to have offered a minimum $5,000 purse in the previous two years (to make sure it's a legitimate organization). At that time the race would submit its budget to the department showing how much it spent last year; they would then receive a tax credit allocation in an amount based on 5 percent of their annual budget. A dog mushing non-profit with a $500,000 or less budget would receive $12,500 in credit, a budget of $1 million would receive $25,000 in credit and more than $1 million would receive $50,000 in credit. Those non- profit races would go out and solicit their own donations from the community starting at the beginning of the year spreading out the funding base, so that something like the BP Top of the World Race doesn't happen again where one big donor pulls out and it goes defunct. A step system was created where donations of $2,000-$5,000 would receive 50 percent credit, $5,000-$10,000 would receive a 33 percent donation; $10,000-$25,000 would receive a 25 percent donation and anything greater than $25,000 would be capped at $7,900. He said there are races all over the state and all of them would benefit. MR. HOPKINS noted that people from all across the state support this bill and he has recently received letters of support from the City of Huslia, the City of Alakaket and the Montana Creek Dog Mushers Association that runs the Sheep Mountain Race in Juneau. He said he would be working with the department on the fiscal note trying to find a way to remove the fiscal impact to the state. 2:37:37 PM SENATOR PASKVAN asked if the maximum credit that any one corporation may claim is $7,900. MR. HOPKINS replied yes. SENATOR PASKVAN asked if depending on the annual budget there are caps that apply to the race so that a late-comer corporately, assuming a race were to reach that limit, wouldn't be eligible for a credit. MR. HOPKINS replied that was correct. SENATOR PASKVAN asked how he got to the $1.1 million impact to the state. SENATOR THOMAS said most of these races have been in place for many years and haven't grown dramatically and that is the total of the existing 22 races having the maximum amount of credits applied times the $50,000. SENATOR MENARD suggested that the big sponsors could start advertising at certain check points in a race like golf tournaments that have sponsors for each hole. MR. HOPKINS replied creative solutions to making their ends meet do exist; for example, the Kobuk 440 uses a sponsor for a mile. 2:41:45 PM GEORGE ATTLA, representing himself, Huslia, Alaska, thanked Senator Thomas for introducing the bill. He said he had been in dog racing for over 50 years and the sport really needs help financially. It is losing lots of mushers because it is hard to raise funds. 2:43:13 PM KATHRYN FITZGERALD, Alaska Dog Mushers Association, Fairbanks, said the association was incorporated in the 1950s and hosts the Open North American Championship Sled Dog Race, which in 2012 will be in its 67th consecutive running. SB 149 would help create an environment where additional funding could be raised for their events. She said no other sled dog race in the world has run consecutively for that long. MS. FITZGERALD said it has become increasingly difficult to raise additional purse money when they host a variety of sled dog races that are world-renowned and are competing for the same piece of the pie. Each one has its own little niche in the sled dog racing world, but Alaska is fortunate enough to have the majority of the most notable races worldwide that people like to participate in and part of that is because of increased funding for the purses. Between December and March over 100 sprint races that take place across the United States and Canada with a participation level of 3,000 to 3,500 people. They want to attract most of them to Alaska to race. The Open North American has been estimated to bring in $1.8 million for the three day event in Fairbanks. Alaska has been in the forefront of mushing she said, and people no longer ask if events will take place but when. 2:46:43 PM DAVID VANDENBERG, Executive Director, Downtown Association of Fairbanks, supported SB 149. He said the Yukon Quest and the Open North American, especially, by taking place in downtown Fairbanks really promote the local businesses that are very aware of the economic impact in an otherwise slow time of the year. He said all the Interior dog races, especially the larger ones, are marketed by the Fairbanks Convention and Visitors Bureau so it's kind of a full-court press to get what they can out of these races. Better financial support for these races means a better economic profile for downtown Fairbanks and for the Interior. MR. VANDENBERG said the whole downtown turned out for the Yukon Quest that started last weekend. A list of involved business includes: the Fairbanks Community Museum, the Alaska Public Lands Information Center, the Morris Thompson Cultural and Visitors center, Big Daddies' BBQ, the Farthest North Elks Lodge, Lavelle's Bistro, Arctic Travelers' Gift Shops, Forget- Me-Not Books, Julia's Solstice Café, the Big Eye Pub and Lounge, the Fudge Pots in the Coop Plaza and the Pomegranate. CHAIR EGAN closed public testimony and opened it again for one more person who was on the list to testify. 2:49:46 PM ANDY BAKER, Chairman, Iditarod Board of Directors, supported SB 149. He said all the races, big and small, around the state depend on fund raising. Most of the races have the ticket drawing banquet three days before the race and that has to sell all the tickets to pay the prize two weeks later. There is no cushion and you can't plan very well for next year. It gets worse the smaller the race is. It's hard to get outside sponsors, but it should be about Alaskans anyhow, but that makes the pool smaller and they get hit over and over again. 2:52:19 PM MR. BAKER said he already has some $5,000 to $350,000 sponsors and those on the top end could donate more, so he suggested expanding the cap up to $500,000. Although they don't want to rely on the one sponsor, an extra $200,000 would just help them be a little more stable a little bit longer. Just the Iditarod alone the first week in March has a $10 million economic impact to the Anchorage and MatSu areas according to a 2003 study; that is not counting anywhere else along the Railbelt, Nome or the 20 million website hits that bring the 350 media up. Making each of these races bigger and stronger all over the state will help the state as a whole. SENATOR PASKVAN remarked that Mr. Baker was the first Native Alaskan to win the Iditarod and congratulated him. MR. BAKER thanked him and said breaking the record was a bonus and this year the goal is to break it again! CHAIR EGAN said that completed public testimony. [SB 149 was held in committee.]