ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                       February 25, 2020                                                                                        
                           3:02 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Zack Fields, Co-Chair                                                                                            
Representative Jonathan Kreiss-Tomkins, Co-Chair                                                                                
Representative Grier Hopkins                                                                                                    
Representative Andi Story                                                                                                       
Representative Steve Thompson                                                                                                   
Representative Sarah Vance                                                                                                      
Representative Laddie Shaw                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 239                                                                                                              
"An   Act   establishing   a   state   lottery;   providing   for                                                               
participation in  multi-state lotteries; establishing  the Alaska                                                               
State Lottery  Board in  the Department  of Revenue;  relating to                                                               
confidentiality   of  information   regarding  lottery   winners;                                                               
requiring background  investigations by the Department  of Public                                                               
Safety; and providing for an effective date."                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 190                                                                                                              
"An  Act relating  to  allowable absences  for  a permanent  fund                                                               
dividend; and providing for an effective date."                                                                                 
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 80 AM                                                                                                           
"An Act  relating to proposing  and enacting laws  by initiative;                                                               
and prohibiting the state and  its agencies and corporations from                                                               
spending  funds  to  influence  the  outcome  of  certain  ballot                                                               
propositions and questions."                                                                                                    
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 239                                                                                                                  
SHORT TITLE: ESTABLISH STATE LOTTERY BOARD/LOTTERIES                                                                            
SPONSOR(s): REPRESENTATIVE(s) THOMPSON                                                                                          
                                                                                                                                
02/05/20       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/05/20       (H)       STA, FIN                                                                                               
02/18/20       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
02/18/20       (H)       Heard & Held                                                                                           
02/18/20       (H)       MINUTE(STA)                                                                                            
02/25/20       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
                                                                                                                                
BILL: HB 190                                                                                                                  
SHORT TITLE: PFD ALLOWABLE ABSENCES                                                                                             
SPONSOR(s): REPRESENTATIVE(s) TALERICO                                                                                          
                                                                                                                                
01/21/20       (H)       PREFILE RELEASED 1/10/20                                                                               
01/21/20       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/20       (H)       STA, FIN                                                                                               
02/25/20       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
                                                                                                                                
BILL: SB 80                                                                                                                   
SHORT TITLE: INITIATIVE SEVERABILITY                                                                                            
SPONSOR(s): SENATOR(s) BIRCH                                                                                                    
                                                                                                                                
03/06/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/06/19       (S)       STA, JUD                                                                                               
04/11/19       (S)       STA AT 3:30 PM BUTROVICH 205                                                                           
04/11/19       (S)       Moved SB 80 Out of Committee                                                                           
04/11/19       (S)       MINUTE(STA)                                                                                            
04/12/19       (S)       STA RPT 2DP 1DNP 2NR                                                                                   
04/12/19       (S)       NR: SHOWER, REINBOLD                                                                                   
04/12/19       (S)       DP: MICCICHE, COGHILL                                                                                  
04/12/19       (S)       DNP: KAWASAKI                                                                                          
04/23/19       (S)       JUD AT 6:00 PM BELTZ 105 (TSBldg)                                                                      
04/23/19       (S)       Heard & Held                                                                                           
04/23/19       (S)       MINUTE(JUD)                                                                                            
04/24/19       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/24/19       (S)       Moved SB 80 Out of Committee                                                                           
04/24/19       (S)       MINUTE(JUD)                                                                                            
04/26/19       (S)       JUD RPT 3DP 1NR                                                                                        
04/26/19       (S)       DP: HUGHES, MICCICHE, REINBOLD                                                                         
04/26/19       (S)       NR: KIEHL                                                                                              
04/30/19       (S)       TABLED Y13 N6 A1                                                                                       
05/02/19       (S)       TAKE FROM TABLE UC                                                                                     
05/02/19       (S)       TRANSMITTED TO (H)                                                                                     
05/02/19       (S)       VERSION: SB 80 AM                                                                                      
05/03/19       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/03/19       (H)       STA, JUD                                                                                               
02/25/20       (H)       STA AT 3:00 PM GRUENBERG 120                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SETH WHITTEN, Staff                                                                                                             
Representative Steve Thompson                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on behalf of                                                                          
Representative Thompson, prime sponsor of HB 239.                                                                               
                                                                                                                                
JONATHAN CLONTZ, Chief Executive Officer (CEO)                                                                                  
Wyoming Lottery Corporation                                                                                                     
Cheyenne, Wyoming                                                                                                               
POSITION STATEMENT:  Provided information and answered questions                                                              
during the hearing on HB 239.                                                                                                   
                                                                                                                                
BISHOP WOOSLEY, President                                                                                                       
North American Association of State and Provincial Lotteries                                                                    
(NASPL);                                                                                                                        
Director, Arkansas Lottery                                                                                                      
Little Rock, Arkansas                                                                                                           
POSITION STATEMENT:  Provided information and answered questions                                                              
during the hearing on HB 239.                                                                                                   
                                                                                                                                
DAN STICKEL, Chief Economist                                                                                                    
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the hearing on HB                                                              
239.                                                                                                                            
                                                                                                                                
KEITH WHYTE, Executive Director                                                                                                 
National Council on Problem Gambling (NCPG)                                                                                     
Washington, D.C.                                                                                                                
POSITION STATEMENT:  Provided information and answered questions                                                              
during the hearing on HB 239.                                                                                                   
                                                                                                                                
REPRESENTATIVE DAVE TALERICO                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 190, as prime sponsor.                                                                      
                                                                                                                                
ANNE WESKE, Director                                                                                                            
Permanent Fund Dividend (PFD) Division                                                                                          
Department of Revenue (DOR)                                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on HB                                                             
190.                                                                                                                            
                                                                                                                                
SENATOR JOSH REVAK                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB  80 on behalf of Senator Birch,                                                             
prime sponsor.                                                                                                                  
                                                                                                                                
KIM SKIPPER, Staff                                                                                                              
Senator Josh Revak                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on SB                                                             
80 on behalf of Senator Revak.                                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:02:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR JONATHAN  KREISS-TOMKINS called the House  State Affairs                                                             
Standing   Committee    meeting   to    order   at    3:02   p.m.                                                               
Representatives  Shaw,  Hopkins,  Thompson,  Vance,  Fields,  and                                                               
Kreiss-Tomkins   were    present   at   the   call    to   order.                                                               
Representative Story arrived as the meeting was in progress.                                                                    
                                                                                                                                
         HB 239-ESTABLISH STATE LOTTERY BOARD/LOTTERIES                                                                     
                                                                                                                              
3:02:41 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS  announced  that   the  first  order  of                                                               
business  would be  HOUSE BILL  NO. 239,  "An Act  establishing a                                                               
state  lottery;   providing  for  participation   in  multi-state                                                               
lotteries;  establishing the  Alaska State  Lottery Board  in the                                                               
Department   of   Revenue;   relating   to   confidentiality   of                                                               
information  regarding  lottery   winners;  requiring  background                                                               
investigations by the Department  of Public Safety; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
3:03:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE THOMPSON  relayed that  the lottery that  would be                                                               
established under HB  239 would generate a  much-needed source of                                                               
revenue for the  state.  He said that he  recognizes the concerns                                                               
about the  expansion of  gambling and the  effects that  it would                                                               
have on the lives of Alaskans.   He maintained that he shares the                                                               
concerns; he has worked hard  to craft legislation that considers                                                               
the factors  most closely  associated with  behavioral addiction;                                                               
and the proposed legislation would  prohibit the type of activity                                                               
that  exploits  those  factors.    He  referred  to  the  invited                                                               
testimony of  several experts familiar with  the lottery industry                                                               
and  problem  gambling  issues   to  address  committee  members'                                                               
questions.                                                                                                                      
                                                                                                                                
3:04:20 PM                                                                                                                    
                                                                                                                                
SETH WHITTEN, Staff, Representative  Steve Thompson, Alaska State                                                               
Legislature, referred to  documents in the committee  packet:  an                                                               
email  dated   2/5/20  listing  lottery  sales   in  states  with                                                               
populations similar to  Alaska's; and a Gallup,  Inc. poll report                                                               
[7/22/16],  entitled   "About  Half   of  Americans   Play  State                                                               
Lotteries," which  offers a demographic  breakdown of  the buyers                                                               
of lottery tickets along with information on problem gambling.                                                                  
                                                                                                                                
3:05:41 PM                                                                                                                    
                                                                                                                                
JONATHAN CLONTZ,  Chief Executive Officer (CEO),  Wyoming Lottery                                                               
Corporation,  relayed that  Wyoming  passed a  law authorizing  a                                                               
state lottery in 2013; the lottery  was launched August 2014.  He                                                               
stated  that  it  was  a  small  lottery  due  to  Wyoming's  low                                                               
population  -  about  375,000  adult  residents.    He  described                                                               
Wyoming's lottery:  one in-state game  - "Cowboy Draw" - which is                                                               
a cash lottery  game; and multi-state games  - "Powerball," "Mega                                                               
Millions,"  and "Lucky  for Life."   Wyoming's  lottery does  not                                                               
include  instant-win games  or video  lottery terminals;  it does                                                               
not allow the  use of debit cards or credit  cards for purchases;                                                               
and  there is  a limit  on  the number  of tickets  which can  be                                                               
bought  at one  location.   As required  by statute,  the Wyoming                                                               
Council   on  Problem   Gambling   (WCPG)   was  established   in                                                               
partnership with the Wyoming Department of Health.                                                                              
                                                                                                                                
MR. CLONTZ related that Wyoming  borrowed money from a local bank                                                               
so as  not to expend state  general fund resources; the  loan was                                                               
paid back  several months early,  at which time revenue  began to                                                               
come into the  state.  There is a nine-member  board of directors                                                               
appointed  by  the   governor,  and  it  operates   as  a  quasi-                                                               
governmental instrument  of the state.   The state  is continuing                                                               
to make the lottery a well-rounded full portfolio lottery.                                                                      
                                                                                                                                
3:08:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SHAW asked what Wyoming's  net profit per year was                                                               
for the past three years from the lottery.                                                                                      
                                                                                                                                
MR. CLONTZ  responded that last  year [2019] over $6  million was                                                               
transferred to  the state;  about $4  million was  transferred in                                                               
2018; and about $2.5 million was  transferred in 2017.  The total                                                               
for the three years was about $12.5 million.                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  asked for  data on  the distribution  of lottery                                                               
users over  economic demographics.   He  asked, "Are  poor people                                                               
participating at a higher rate than other groups?"                                                                              
                                                                                                                                
MR.  CLONTZ   answered  that  the  Wyoming   Lottery  Corporation                                                               
performs  trigger  studies on  various  issues  to assess  player                                                               
behavior and  impacts on society.   He stated that staff  look at                                                               
the  demographics of  players -  age and  income; sometimes  that                                                               
information  is difficult  to get.   The  results of  two trigger                                                               
studies  revealed that  the most  prominent  player category  was                                                               
ages 45-60 and middle-income.                                                                                                   
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS asked  for  an  explanation of  "trigger                                                               
study."                                                                                                                         
                                                                                                                                
MR. CLONTZ  explained that a  trigger study is an  internal study                                                               
"triggered" by an issue that  warrants study, such as researching                                                               
the interest  in a new  game or  examining problem gambling  in a                                                               
certain  community.     It  is  performed   in-house  or  through                                                               
contract.                                                                                                                       
                                                                                                                                
3:12:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOPKINS  asked  whether Wyoming  participates  in                                                               
multi-state lotteries and how the revenue-sharing is handled.                                                                   
                                                                                                                                
MR.  CLONTZ  replied that  Wyoming's  lottery  was launched  with                                                               
Powerball  and Mega  Millions; once  it received  permission from                                                               
[the  Multi-State Lottery  Association (MUSL)]  it began  to sell                                                               
Powerball  and Mega  Millions products.   He  explained that  the                                                               
member states  pay a  percentage into  the jackpots  according to                                                               
their  sales; participating  in  the  multi-state games  relieved                                                               
Wyoming  of the  pressure  of  paying out  a  full  jackpot.   He                                                               
relayed that Wyoming  could not launch an in-state  game until it                                                               
had a reserve account built up to pay out full jackpots.                                                                        
                                                                                                                                
REPRESENTATIVE  HOPKINS  asked  whether the  multi-state  lottery                                                               
tickets  bring in  as much  revenue  per ticket  as the  in-state                                                               
lottery tickets, considering they are taxed the same.                                                                           
                                                                                                                                
MR. CLONTZ  responded that  there are  set pay-out  percentages -                                                               
about  50 percent  for  the multi-state  games  as determined  by                                                               
MUSL;  Wyoming  makes  21-22  percent  from  those  games.    For                                                               
Wyoming's  in-state game,  the pay-out  percentage is  set at  68                                                               
percent.   The game  is "branded" to  suit the  state; therefore,                                                               
the  state wants  people  to  win that  game  more;  it wants  to                                                               
encourage player loyalty to the brand.   Wyoming does not make as                                                               
much  in profit  - 13  percent  - compared  with the  multi-state                                                               
games; however, the volume of play is consistently higher.                                                                      
                                                                                                                                
3:16:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOPKINS  asked  for the  cost  of  administrative                                                               
overhead for the state lottery and hired staff.                                                                                 
                                                                                                                                
MR.  CLONTZ  answered  that the  nine-member  board  borrowed  $3                                                               
million  for   start-up;  it  hired  staff;   it  contracted  for                                                               
marketing, legal  counsel, and  information technology  (IT); and                                                               
it  paid  for  background  investigations   for  retailers.    He                                                               
explained that most  of the services for the  Wyoming lottery had                                                               
to be outsourced.                                                                                                               
                                                                                                                                
REPRESENTATIVE THOMPSON  asked how  long it took  to pay  back $3                                                               
million.                                                                                                                        
                                                                                                                                
MR.  CLONTZ  said that  the  board  estimated  it would  take  24                                                               
months, but it only took 16  months.  The board made the decision                                                               
to pay off the debt before transferring revenue to the state.                                                                   
                                                                                                                                
3:20:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR KREISS-TOMKINS  asked what  the projections are  for net                                                               
revenue  to Wyoming  from  the lottery,  and  whether revenue  is                                                               
expected to plateau.                                                                                                            
                                                                                                                                
MR. CLONTZ  answered that  Wyoming is  already seeing  a leveling                                                               
off.   There is always  a spike in  sales when jackpots  are very                                                               
high;  however,  since  the billion-dollar  jackpots  [came  into                                                               
being],  it takes  a much  higher  jackpot to  generate the  same                                                               
level of excitement.   He said that when jackpots  are low, sales                                                               
are low;  the Wyoming Lottery Corporation  utilizes promotions to                                                               
stimulate  sales and  interest.   He expressed  that the  lottery                                                               
needs  another  game  in  its portfolio  that  is  a  non-jackpot                                                               
reliant game.   He reiterated that instant  games are prohibited;                                                               
and too  many draw games "start  to cannibalize each other."   He                                                               
maintained that  the corporation  must strike a  careful balance.                                                               
He  estimated that  revenue will  most likely  level off  to $4-5                                                               
million per  year; adding another  game may increase  the revenue                                                               
$1.5-3 million.                                                                                                                 
                                                                                                                                
3:24:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY asked whether  scratch games are not allowed                                                               
because of charitable gaming in Wyoming.                                                                                        
                                                                                                                                
MR.  CLONTZ answered  no, that  is not  the primary  reason.   He                                                               
explained  that   Wyoming  is   a  conservative   state;  passing                                                               
legislation  for a  lottery was  difficult;  there were  promises                                                               
made to  not allow instant games  because of a great  concern for                                                               
problem gambling among  residents.  He said that he  has not seen                                                               
evidence  that  the  traditional  draw  games  lead  to  gambling                                                               
problems;  it occurs  in connection  with  video lottery,  casino                                                               
table  games, and  instant-win  games.   He  offered  that it  is                                                               
likely that the prohibition may be removed in the future.                                                                       
                                                                                                                                
REPRESENTATIVE  STORY asked  about  the WCPG  and  the issues  it                                                               
addresses.                                                                                                                      
                                                                                                                                
MR. CLONTZ reiterated that state  statute required the council to                                                               
be  established in  partnership  with the  Department of  Health.                                                               
The  council  found that  Wyoming  had  many addiction  treatment                                                               
specialists, but  none specifically trained in  problem gambling.                                                               
In the  statute there is  a requirement  that up to  $200,000 per                                                               
year be  considered by the board  of directors to be  placed into                                                               
the problem gambling fund; the  funds come from expired unclaimed                                                               
tickets.    Money  is  set  aside   every  year  to  be  used  in                                                               
association  with problem  gambling.   The  Department of  Health                                                               
addiction  treatment  specialists identified  gambling  addiction                                                               
treatment  training   and  sent  staff   to  be  trained.     The                                                               
corporation  contracted  with a  research  company  to study  the                                                               
issue  of problem  gambling in  Wyoming.   The findings  revealed                                                               
that it  was not a  significant issue,  and in areas  where there                                                               
were problem  gambling issues, they  were secondary  and tertiary                                                               
to   other  addictions.      The   Wyoming  Lottery   Corporation                                                               
established a problem gambling hotline;  the hotline received six                                                               
calls and  four were due  to the callers  not being able  to read                                                               
the  print  on  their  tickets.   The  council  meets  regularly,                                                               
conducts governance work, and  attends conferences, but generally                                                               
there  is  not  much  for  them  to  do.    He  stated  that  the                                                               
corporation has  restricted the  number of  tickets a  person can                                                               
buy  in one  transaction to  125,  as a  deterrent [to  excessive                                                               
gambling]; and  it does  not allow  the use  of debit  and credit                                                               
cards.  The  corporation partnered with the  Department of Family                                                               
Services to  integrate with  its child  support registry  so that                                                               
lottery winners owing back child  support could be identified and                                                               
the money transferred to that agency.                                                                                           
                                                                                                                                
3:30:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY mentioned that she  would like to see a copy                                                               
of any council reports to the Department of Health.                                                                             
                                                                                                                                
MR. CLONTZ agreed to provide them.                                                                                              
                                                                                                                                
3:32:18 PM                                                                                                                    
                                                                                                                                
BISHOP WOOSLEY,  President, North  American Association  of State                                                               
and Provincial Lotteries (NASPL)  and Director, Arkansas Lottery,                                                               
summarized  his  experience with  the  Arkansas  Lottery and  his                                                               
position on NASPL.  He said  that NASPL is an active organization                                                               
representing 53  lotteries across North America;  its function is                                                               
to disseminate  information benefitting the state  and provincial                                                               
lottery organizations through education  and communication.  When                                                               
appropriate, NASPL advocates for  positions of the association in                                                               
matters of general policy on lotteries.                                                                                         
                                                                                                                                
REPRESENTATIVE THOMPSON  asked for a description  of the Arkansas                                                               
Lottery and whether it has draw tickets only or expanded gaming.                                                                
                                                                                                                                
MR.  WOOSLEY  answered  that the  Arkansas  Lottery  launched  in                                                               
September  2009;  it began  with  instant  ticket games  -  which                                                               
constitute 80  percent of sales;  it then  added draw games  - 20                                                               
percent of sales  - which included Powerball,  Mega Millions, two                                                               
daily draw games,  the regional game, Lucky for Life,  and an in-                                                               
state  lotto  game  called  the  "Natural  State  Jackpot."    He                                                               
clarified   for  Representative   Story   that  instant   tickets                                                               
constituted 80 percent of sales and draw games 20 percent.                                                                      
                                                                                                                                
REPRESENTATIVE  HOPKINS asked  whether  the other  states in  the                                                               
association support their nonprofits through charitable gaming.                                                                 
                                                                                                                                
MR.  WOOSLEY answered  that it  varies  from state  to state;  it                                                               
depends on  the geographic location  and the needs of  the state.                                                               
The Arkansas Lottery supports  scholarships for higher education;                                                               
other states  support state general revenue,  veterans, highways,                                                               
or  a variety  of  charitable causes.   He  said  that the  newer                                                               
lotteries focus more on education.                                                                                              
                                                                                                                                
REPRESENTATIVE  HOPKINS stated  that in  Alaska, scratch  tickets                                                               
are  held by  a  permit  holder; the  permit  holder  can give  a                                                               
certain percentage  of the  revenue from  the scratch  tickets to                                                               
the  charitable  and nonprofit  sector.    He asked  whether  Mr.                                                               
Woosley  was familiar  with  any other  states  having a  similar                                                               
arrangement for draw tickets.                                                                                                   
                                                                                                                                
MR. WOOSLEY answered negatively.                                                                                                
                                                                                                                                
3:37:50 PM                                                                                                                    
                                                                                                                                
MR.  WHITTEN referred  to  an article  on  the Alaska  Charitable                                                               
Gaming  Alliance (ACGA)  website, not  included in  the committee                                                               
packet,  entitled "Governor  Dunleavy's Senate  Bill 188  expands                                                               
multiple levels of gambling," which read in part:                                                                               
                                                                                                                                
     Rep.  Steven Thompson,  (R-Fairbanks),  also has  newly                                                                    
     proposed  gaming legislation  in  the  form House  Bill                                                                    
     239,  that  would establish  a  lottery  under a  State                                                                    
     Lottery  Board. In  Thompson's case,  there is  neither                                                                    
     significant and  costly new  government infrastructure,                                                                    
     nor an alarming  expansion of gaming. The  best part of                                                                    
     his effort  has been he included  the Alaska Charitable                                                                    
     Gaming   Alliance.  Rep.   Thompson  communicated   his                                                                    
     interest in  meeting with our president,  Sandy Powers,                                                                    
     to seek  counsel on how his  proposed legislation would                                                                    
     affect charitable  gaming. He has been  transparent and                                                                    
     thoughtful.                                                                                                                
                                                                                                                                
REPRESENTATIVE STORY asked whether  Arkansas has a problem gaming                                                               
council  or similar  organization  overseeing  issues related  to                                                               
lotteries.                                                                                                                      
                                                                                                                                
MR. WOOSLEY answered, not specifically.   He maintained that when                                                               
the  Arkansas Lottery  was  started, it  was  required to  submit                                                               
$200,000 per year  toward problem gambling; after  six years, the                                                               
Arkansas legislature  eliminated that requirement.   Arkansas now                                                               
commits to  supporting a problem  gambling helpline  and receives                                                               
National  Council   on  Problem  Gambling   (NCPG)  certification                                                               
through NASPL for  all games.  He added that  the legislature has                                                               
its own separate committee overseeing the Arkansas Lottery.                                                                     
                                                                                                                                
REPRESENTATIVE   STORY  asked   Mr.   Woosley   to  provide   any                                                               
information  he  has  about the  [problem  gambling]  issues  and                                                               
supports in place in Arkansas.                                                                                                  
                                                                                                                                
CO-CHAIR  FIELDS  asked  for the  annual  cost  of  administering                                                               
charitable gaming in Alaska.                                                                                                    
                                                                                                                                
3:41:04 PM                                                                                                                    
                                                                                                                                
DAN  STICKEL,  Chief  Economist,   Tax  Division,  Department  of                                                               
Revenue (DOR),  responded that he  will provide  that information                                                               
to the committee.                                                                                                               
                                                                                                                                
MR.  WHITTEN stated  that in  fiscal year  2018 (FY18)  the gross                                                               
sales for  charitable gaming were  $375 million; of  that amount,                                                               
$35 million  went to nonprofit  organizations and $55  million to                                                               
administration.   He  offered  to verify  those  numbers for  the                                                               
committee.                                                                                                                      
                                                                                                                                
3:42:53 PM                                                                                                                    
                                                                                                                                
KEITH  WHYTE, Executive  Director,  National  Council on  Problem                                                               
Gambling (NCPG),  relayed that  NCPG was founded  in 1972  and is                                                               
the  national  advocate  for  programs  and  services  to  assist                                                               
problem  gamblers and  their families.   He  stated that  NCPG is                                                               
neutral on  legalized gambling.  He  mentioned NCPG's membership:                                                               
gaming    corporations   and    agencies,   regulators,    tribal                                                               
governments, healthcare, banks  and other financial institutions,                                                               
and  individuals -  many of  whom are  in recovery  from gambling                                                               
problems.                                                                                                                       
                                                                                                                                
MR.  WHYTE continued  by saying  that NCPG  provides services  to                                                               
help problem  gamblers and their  families:  a  national helpline                                                               
number; training  and education of  counselors; and a  variety of                                                               
education,  prevention, and  treatment  programs.   He  mentioned                                                               
that  NCPG  works  with  the   lottery,  casino,  and  charitable                                                               
industries  to  develop programs  and  policies  helping them  to                                                               
minimize harm.                                                                                                                  
                                                                                                                                
MR. WHYTE  maintained that he has  25 years of experience  in the                                                               
gambling industry,  both as  executive director  of NCPG  and the                                                               
director of research for the American Gaming Association.                                                                       
                                                                                                                                
CO-CHAIR FIELDS asked whether the gaming industry funds NCPG.                                                                   
                                                                                                                                
MR.  WHYTE  answered,  partly.    He said  that  since  it  is  a                                                               
membership organization, it  is funded from dues.   He added that                                                               
half of its revenues come from  membership dues - the majority of                                                               
which  are  from  gambling  entities  such  as  state  lotteries,                                                               
casinos,  and tribal  governments.   The other  half is  from its                                                               
annual  conference,  sales  of education  materials,  and  a  few                                                               
grants.   He  maintained that  there  is no  federal funding  for                                                               
problem gambling  programs.  He  reiterated that NCPG  is neutral                                                               
on legalized gambling,  does not accept restrictions  on funds it                                                               
receives, and  is very open  and transparent in working  with the                                                               
industry.   Through  membership,  gambling entities  make a  just                                                               
contribution to helping mitigate the  social costs that they help                                                               
generate.                                                                                                                       
                                                                                                                                
REPRESENTATIVE THOMPSON mentioned  his understanding that problem                                                               
gamblers  are  enticed to  gamble  more  when there  are  instant                                                               
winners through  scratch-off or video games,  compared with once-                                                               
a-week draw games.  He asked if that understanding was correct.                                                                 
                                                                                                                                
MR. WHYTE answered yes.  He  said that in general, the structural                                                               
characteristics  of   each  form  of   gambling  has   a  complex                                                               
relationship with  gambling addiction; frequency is  one of those                                                               
characteristics and  is associated with increased  development of                                                               
gambling   problems.       He   offered   additional   structural                                                               
characteristics - speed  of play and size of jackpot.   He stated                                                               
that the construct is multi-dimensional.                                                                                        
                                                                                                                                
REPRESENTATIVE  STORY asked  for more  information on  the social                                                               
costs of gambling.                                                                                                              
                                                                                                                                
MR.  WHYTE replied  that it  is inevitable  that some  people who                                                               
gamble will  develop problems.   The  costs of  gambling problems                                                               
are not just  borne by individuals, but by  their families, their                                                               
communities, businesses, and ultimately  the taxpayers.  Based on                                                               
national data,  it is  estimated that the  number of  people with                                                               
gambling  problems   in  Alaska   is  about   12,000.     A  very                                                               
conservative social cost estimate  would assign $1,700 per severe                                                               
problem gambler  per year  for a  total of  about $20  million in                                                               
social costs.   Social  costs are  primarily in  criminal justice                                                               
and healthcare:  about 70  percent of people with severe gambling                                                               
problems commit  white collar crimes  to finance  their gambling;                                                               
people with gambling problems are  more likely to visit emergency                                                               
departments,  have  poor physical  and  mental  health, and  have                                                               
other consequences of  addiction.  People who  have one addiction                                                               
are more  likely to have  another.   He stated that  most private                                                               
insurers do  not routinely reimburse  for a diagnosis  of problem                                                               
gambling;  most social  costs fall  directly  to the  state.   He                                                               
emphasized that  every dollar spent  on prevention  and treatment                                                               
saves two or more dollars in  social costs.  He mentioned that to                                                               
date,  the  citizens  of  Alaska  are  not  funding  any  problem                                                               
gambling programs.                                                                                                              
                                                                                                                                
3:50:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY asked for examples  of NCPG working with the                                                               
gambling industry to minimize harm.                                                                                             
                                                                                                                                
MR. WHYTE  answered that staff  developed a  responsible gambling                                                               
verification  program for  the lottery  industry, which  includes                                                               
employee training, retailer training,  advertising, and funds for                                                               
problem  gambling.    He  stated that  the  program  consists  of                                                               
policies and  procedures that will  attempt to minimize  the risk                                                               
of  addiction for  lottery  products  that are  being  sold.   He                                                               
maintained that  NCPG can never eliminate  gambling addiction but                                                               
can attempt to mitigate and treat  it.  He said that both Wyoming                                                               
and  Arkansas faced  tremendous  challenges,  which Alaska  would                                                               
face as well:   no funds were spent on  problem gambling prior to                                                               
the  onset of  a lottery  and no  problem gambling  services were                                                               
available; this  exacerbates social costs.   He mentioned written                                                               
testimony, not  included in the  committee packet,  that outlines                                                               
the lowest  possible standards for  Alaska to address  the social                                                               
costs as it  establishes its lottery.  He  stressed that research                                                               
demonstrates  that  the  expansion  of  gambling  increases  both                                                               
participation and gambling problems.   He maintained that putting                                                               
countermeasures in  place - responsible  gambling programs  - and                                                               
integrating them into Alaska's behavioral  health services is the                                                               
only ethical  and economical way  to approach this  public health                                                               
issue.                                                                                                                          
                                                                                                                                
MR.  WHITTEN offered  that he  would submit  Mr. Whyte's  written                                                               
testimony to the committee.                                                                                                     
                                                                                                                                
[HB 239 was held over.]                                                                                                         
                                                                                                                                
                 HB 190-PFD ALLOWABLE ABSENCES                                                                              
                                                                                                                                
3:54:57 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS   announced  that  the  next   order  of                                                               
business  would  be HOUSE  BILL  NO.  190,  "An Act  relating  to                                                               
allowable absences  for a permanent fund  dividend; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
3:55:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   DAVE   TALERICO,   Alaska   State   Legislature,                                                               
presented  HB 190,  as prime  sponsor, by  paraphrasing from  the                                                               
sponsor statement, which read:                                                                                                  
                                                                                                                                
     HB 190: Provides for an exemption for an absence of or                                                                     
     beyond 180 days for an otherwise eligible resident.                                                                        
                                                                                                                                
     The main provision of HB  190 ensures that an otherwise                                                                    
     eligible  resident   can  be   absent  when   they  are                                                                    
     providing  continuous  medical treatment  or  providing                                                                    
     care for a  family member as described  in sections (5)                                                                    
     and (6) of AS 43.23.008.                                                                                                   
                                                                                                                                
      HB 190 puts into statute this additional protection,                                                                      
      which is not currently addressed by the statutes or                                                                       
     policy.                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO  explained that statute  already provides                                                               
an  exemption  for  the medical  leave  described;  the  proposed                                                               
legislation   clarifies  that   when   circumstances  cause   the                                                               
accumulative time  of an absence  to exceed 180 days,  the person                                                               
would be still eligible for a  permanent fund dividend (PFD).  He                                                               
offered  that the  number of  people affected  by this  provision                                                               
would be low.                                                                                                                   
                                                                                                                                
3:59:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE THOMPSON asked for  confirmation that a person who                                                               
is  out of  state for  an extended  period for  medical treatment                                                               
does not lose his/her eligibility for a PFD.                                                                                    
                                                                                                                                
REPRESENTATIVE  TALERICO  answered  yes,  if  the  person  has  a                                                               
referral.                                                                                                                       
                                                                                                                                
REPRESENTATIVE   THOMPSON  asked   for  clarification   that  the                                                               
proposed legislation  would ensure that a  caregiver accompanying                                                               
the  person receiving  medical treatment  would also  be eligible                                                               
for a PFD and is currently denied.                                                                                              
                                                                                                                                
REPRESENTATIVE  TALERICO  answered  that  the  caregiver  is  not                                                               
necessarily denied.   The situation that HB 190  would address is                                                               
when a person, who has been  out of state for an extended period,                                                               
suddenly  finds himself/herself  in  the position  of needing  to                                                               
provide  the   care  and  consequently   goes  well   beyond  the                                                               
accumulative period allowed - 180 days.                                                                                         
                                                                                                                                
CO-CHAIR KREISS-TOMKINS  restated the answer:   AS 43.23.008(a) -                                                               
the statue  covering allowable absences  - currently  provides an                                                               
exemption for someone who is sick  out of state or someone who is                                                               
providing  care   for  someone  who   is  sick.     The  proposed                                                               
legislation would  allow for "stacking  of exemptions";  the time                                                               
spent out  of state caring for  someone who is sick  would not be                                                               
counted in the 180 days allowed.                                                                                                
                                                                                                                                
4:01:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE referred  to page 3, lines 9-10,  of HB 190,                                                               
which  read  "...  the  spouse,   minor  dependent,  or  disabled                                                               
dependent of the  eligible resident... " and asked  about an only                                                               
adult child  who leaves the  state to  care for parents,  and the                                                               
absence results  in an extended  period.  She  questioned whether                                                               
the sponsor considered other categories of caregivers.                                                                          
                                                                                                                                
REPRESENTATIVE TALERICO answered that it  is his hope that HB 190                                                               
would cover the situation she presented.                                                                                        
                                                                                                                                
REPRESENTATIVE  HOPKINS asked  what changes  would be  needed for                                                               
the dividend application under HB 190.                                                                                          
                                                                                                                                
REPRESENTATIVE   TALERICO   offered   that   the   PFD   Division                                                               
[Department  of   Revenue  (DOR)]  would  need   to  answer  that                                                               
question.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  STORY  asked  whether  the  proposed  legislation                                                               
states   "designated   caregiver"   for  the   extended   absence                                                               
exemption.                                                                                                                      
                                                                                                                                
REPRESENTATIVE TALERICO replied  no.  He acknowledged  that it is                                                               
the responsibility of  the legislature, not the  PFD Division, to                                                               
ensure clarity in statute.                                                                                                      
                                                                                                                                
4:06:40 PM                                                                                                                    
                                                                                                                                
ANNE  WESKE, Director,  Permanent Fund  Dividend (PFD)  Division,                                                               
Department of  Revenue (DOR),  in response  to the  question from                                                               
Representative  Hopkins, stated  that  the  PFD application  form                                                               
would  not change  under  HB 190;  the only  change  would be  in                                                               
processing the application; and there  would be no extra cost for                                                               
processing applications in this manner.                                                                                         
                                                                                                                                
REPRESENTATIVE HOPKINS  asked whether the application  would have                                                               
additional  checkboxes or  whether  the applicant  would need  to                                                               
appeal a denial.                                                                                                                
                                                                                                                                
MS. WESKE  responded that because  the change under  the proposed                                                               
legislation would apply to such  a small population, the division                                                               
would  resolve  the   issue  at  the  eligibility   level.    She                                                               
maintained  that  currently  people  explain the  reason  for  an                                                               
absence on the application; therefore,  personnel know the reason                                                               
for  the absence  already;  it would  just be  a  matter of  them                                                               
following the new statute.                                                                                                      
                                                                                                                                
REPRESENTATIVE HOPKINS asked whether  the applicant would need to                                                               
know that this exemption was available.                                                                                         
                                                                                                                                
MS.  WESKE  replied that  the  division  already accounts  for  a                                                               
medical absence  as being allowable;  the other absence  would be                                                               
considered vacation,  which the  applicant is  already indicating                                                               
on  the current  application.   She  said currently  staff see  a                                                               
combination of "other" [which includes  business or vacation] and                                                               
"health."   She stated  that if the  "other vacation"  exceeds 45                                                               
days,  the  applicant  is  denied  status.   Under  HB  190,  the                                                               
application  would look  the same,  but  staff would  be able  to                                                               
consider the  applicant for a  PFD if  the absence is  between 45                                                               
and 180 days.                                                                                                                   
                                                                                                                                
4:09:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS  referred to the  Paul Hall [Center  for Maritime                                                               
Training  and Education]  apprenticeship program  and the  recent                                                               
denials by  the state  for PFDs for  participants in  the program                                                               
who have  long received  PFDs.   He asked  that the  PFD Division                                                               
give  his office  guidance  on  providing appropriate  clarifying                                                               
language to ensure that the  program participants would no longer                                                               
experience  discrimination.   He offered  that the  state enacted                                                               
regulations in  2014 that conflicted  with statute and  should be                                                               
repealed.   He  mentioned proposing  an  amendment to  HB 190  to                                                               
ensure  that the  state does  not discriminate  against industry-                                                               
funded programs.                                                                                                                
                                                                                                                                
MS. WESKE  responded that  the division  has provided  wording to                                                               
the  Department  of  Law  (DOL)   to  remedy  that  issue.    She                                                               
maintained that there  was no regulation change in  2014; she was                                                               
provided a  list of  names [of participants  of the  program] and                                                               
none had  ever applied for a  PFD in the history  of the program.                                                               
She  maintained  that she  is  researching  the situation.    She                                                               
offered  to   provide  guidance   to  Representative   Fields  as                                                               
requested.                                                                                                                      
                                                                                                                                
4:11:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  VANCE   asked  for   an  approximate   number  of                                                               
applications that the proposed legislation would address.                                                                       
                                                                                                                                
MS. WESKE estimated about 100.                                                                                                  
                                                                                                                                
REPRESENTATIVE  VANCE   asked  whether  clarifying   language  on                                                               
"designated caregiver" would be helpful to the division.                                                                        
                                                                                                                                
MS.  WESKE  answered  that  the   division  would  probably  need                                                               
guidance  from  DOL on  the  specification  of  the role  of  the                                                               
individual.                                                                                                                     
                                                                                                                                
CO-CHAIR KREISS-TOMKINS  referred to the allowable  absence under                                                               
AS 43.23.008(a)(17), which read in part:                                                                                        
                                                                                                                                
      (17) for any reason consistent with the individual's                                                                      
        intent to remain a state resident, provided the                                                                         
     absence or cumulative absences do not exceed                                                                               
          (A)  180  days  in  addition  to  any  absence  or                                                                    
     cumulative   absences  claimed   under   (3)  of   this                                                                    
     subsection  if  the  individual   is  not  claiming  an                                                                    
     absence  under  (1),  (2),  or   (4)     (16)  of  this                                                                    
     subsection;                                                                                                                
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS  asked  for  an  approximate  number  of                                                               
Alaskans who qualify under subparagraph  (A) or the net outlay of                                                               
PFDs to individuals qualifying under this exemption.                                                                            
                                                                                                                                
MS.  WESKE restated  the  question:   How  many individuals  were                                                               
absent  from  Alaska between  90  and  180  days for  an  "other"                                                               
reason; that  is, they did not  qualify for any of  the allowable                                                               
absences [listed under AS 43.23.008(a)(1)-(16)]?                                                                                
                                                                                                                                
CO-CHAIR KREISS-TOMKINS  clarified by saying that  for someone on                                                               
vacation for 89  days and in Alaska every other  day of the year,                                                               
the application is handled under the normal approval process.                                                                   
                                                                                                                                
MS. WESKE agreed.                                                                                                               
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS  asked  for the  approval  process  when                                                               
someone  is on  vacation from  91-179  days and  in Alaska  every                                                               
other day of the year.                                                                                                          
                                                                                                                                
MS.  WESKE replied  that the  PFD Division  would request  flight                                                               
records  from  the applicant  and  check  for any  indicators  of                                                               
residency  ties  in  the  area  visited.    The  Legislature  has                                                               
determined - by  statute - that any length of  time above 90 days                                                               
is worth further scrutiny.                                                                                                      
                                                                                                                                
CO-CHAIR   KREISS-TOMKINS   asked   for   confirmation   of   his                                                               
understanding that under this "other"  category, someone could be                                                               
gone from  Alaska for 179 days  and continue to receive  a PFD if                                                               
the checks don't identify any  indicators of residency in another                                                               
state.                                                                                                                          
                                                                                                                                
MS. WESKE answered, that's correct.                                                                                             
                                                                                                                                
CO-CHAIR KREISS-TOMKINS asked  to be provided with  the number of                                                               
Alaskans   who    qualify   for    the   exemption    [under   AS                                                               
43.23.008(a)(17)(A)]  and  the  total  amount  dispersed  through                                                               
those PFDs.                                                                                                                     
                                                                                                                                
4:16:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR KREISS-TOMKINS also asked  for the number of individuals                                                               
who would qualify for the exemption under HB 190.                                                                               
                                                                                                                                
MS. WESKE offered to provide that information.                                                                                  
                                                                                                                                
REPRESENTATIVE STORY asked for the  number of denials in the last                                                               
few  years due  to  caregivers being  out of  state  to care  for                                                               
significant others.                                                                                                             
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS stated  that he  has heard  that a  U.S.                                                               
Coast Guard (USCG) member and  his/her family, who live in Alaska                                                               
and  collect  PFDs,  could  continue  to  collect  PFDs  for  the                                                               
duration of  the service member's  tenure in the USCG  even after                                                               
they have  left the  state.   He asked whether  that was  true or                                                               
urban legend.                                                                                                                   
                                                                                                                                
MS. WESKE  answered that it  is urban  legend.  The  family would                                                               
still need to  show ties to Alaska; they could  have no residency                                                               
ties to  any other area;  and they  must return to  Alaska within                                                               
five years for 30 consecutive days  and return to the state every                                                               
other year for 72 hours.                                                                                                        
                                                                                                                                
CO-CHAIR  FIELDS  asked  for any  indicators  of  residency  ties                                                               
besides  buying  a  house,  having  a  homestead  exemption,  and                                                               
voting.                                                                                                                         
                                                                                                                                
MS.  WESKE added  enrollment of  children in  school, securing  a                                                               
lease,   employment,  and   obtaining  a   driver's  license   or                                                               
identification.                                                                                                                 
                                                                                                                                
MS. WESKE  clarified that the items  she listed are how  a person                                                               
in Alaska could establish a tie;  a job in another state does not                                                               
always indicate a residency tie.                                                                                                
                                                                                                                                
REPRESENTATIVE   STORY   asked   for  the   reference   for   the                                                               
requirements of "72  hours" and "30 days" and asked  why 72 hours                                                               
was chosen.                                                                                                                     
                                                                                                                                
MS. WESKE agreed to provide that information.                                                                                   
                                                                                                                                
[HB 190 was held over.]                                                                                                         
                                                                                                                                
                 SB 80-INITIATIVE SEVERABILITY                                                                              
                                                                                                                              
4:21:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS  announced  that   the  final  order  of                                                               
business would  be SENATE  BILL NO.  80 am,  "An Act  relating to                                                               
proposing and  enacting laws by  initiative; and  prohibiting the                                                               
state and  its agencies and  corporations from spending  funds to                                                               
influence  the   outcome  of  certain  ballot   propositions  and                                                               
questions."                                                                                                                     
                                                                                                                                
4:21:47 PM                                                                                                                    
                                                                                                                                
SENATOR JOSH REVAK, Alaska State Legislature, presented SB 80 by                                                                
paraphrasing from his written statement, which read:                                                                            
                                                                                                                                
   • Good Afternoon, Mr. Chair and members of the House                                                                         
     State Affairs Committee, thank you for hearing SB 80.                                                                      
     For the record, Sen. Josh Revak, District M in South                                                                       
     Anchorage.                                                                                                                 
                                                                                                                                
   • SB 80 seeks to protect the integrity of the ballot                                                                         
     initiative process by ensuring ballot initiative                                                                           
     language that appears before voters at the ballot box                                                                      
     is the same as the language circulated during the                                                                          
     signature-gathering phase and to restore the                                                                               
     legislaturs important role in the initiative                                                                               
     process.                                                                                                                   
                                                                                                                                
   • Alaska's constitution details a very important right                                                                       
     of our residents - the right to enact legislation                                                                          
     through the voter initiative process. The legislature                                                                      
     also has the right to enact legislation substantially                                                                      
     the same as the proposed initiative thus removing it                                                                       
     from the ballot.                                                                                                           
                                                                                                                                
   • Per our constitution, some issues are off-limits for                                                                       
     ballot initiatives and initiatives can only cover one                                                                      
     subject. But while a cursory legal review of language                                                                      
     occurs before the Lieutenant Governor's certification,                                                                     
     it has sometimes been the case that further review                                                                         
     finds constitutional concerns with proposed language.                                                                      
     In those cases, a party can file a lawsuit to force                                                                        
     the issue through the court system. This can happen                                                                        
     simultaneous to the circulation of signature booklets.                                                                     
                                                                                                                                
   • Under current law, if a court determines that language                                                                     
     in a proposed initiative is unconstitutional and/or                                                                        
     severed, an amended version of the language can appear                                                                     
     before voters. This results in voters seeing a                                                                             
     different initiative than the one they supported with                                                                      
     their signature. Furthermore, if the courts                                                                                
     revise/sever the language after the legislative review                                                                     
     process, they deny the legislature its right to review                                                                     
     the initiative as revised. The net effect of a courts                                                                      
     severance is that an initiative can move forward to                                                                        
     the voters that is substantially different than the                                                                        
     initial version reviewed by the legislature.                                                                               
                                                                                                                                
   • SB 80 restores a "check" in the checks and balances                                                                        
     the constitutional framers envisioned for the                                                                              
     initiative process. Voters should be assured that                                                                          
     language on the ballot has not changed from the                                                                            
     language in the petition booklets supported with voter                                                                     
     signatures and further, it restores the legislature's                                                                      
     right to review and enact substantially similar                                                                            
     legislation to stop an initiative from moving forward.                                                                     
                                                                                                                                
   • SB 80, amended on the Senate floor, affirms that a                                                                         
     state entity may not be used to influence an election                                                                      
     concerning an initiative, referendum, constitutional                                                                       
     amendment, constitutional convention, or recall,                                                                           
     unless the money was specifically appropriated for                                                                         
     that purpose. However, exceptions apply to usual and                                                                       
     customary legislative activity.                                                                                            
                                                                                                                                
   • Mr. Chair, again thank you for the opportunity to                                                                          
     present SB 80 and I would appreciate the committees                                                                        
     support.                                                                                                                   
                                                                                                                                
4:25:43 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FIELDS asked for the number of initiatives in the                                                                      
state's history that have been severed versus the number that                                                                   
have not.                                                                                                                       
                                                                                                                                
4:26:02 PM                                                                                                                    
                                                                                                                                
KIM   SKIPPER,   Staff,   Senator  Josh   Revak,   Alaska   State                                                               
Legislature,  indicated  that  there have  been  two  initiatives                                                               
severed.                                                                                                                        
                                                                                                                                
CO-CHAIR   FIELDS  asked   Ms.  Skipper   to  identify   the  two                                                               
initiatives and describe the differences in language.                                                                           
                                                                                                                                
MS. SKIPPER  stated that  the most  recent initiative  was Ballot                                                               
Measure   1  [the   Salmon   Habitat   Protections  and   Permits                                                               
Initiative, 2018].   She  offered to  provide the  committee with                                                               
information on any other severed initiatives.                                                                                   
                                                                                                                                
CO-CHAIR FIELDS  asked for  the substantive  difference regarding                                                               
Ballot Measure 1.                                                                                                               
                                                                                                                                
MS. SKIPPER offered to provide that information.                                                                                
                                                                                                                                
CO-CHAIR KREISS-TOMKINS asked Ms.  Skipper to identify the second                                                               
initiative that was severed.                                                                                                    
                                                                                                                                
MS. SKIPPER agreed to provide that information.                                                                                 
                                                                                                                                
CO-CHAIR FIELDS  asked, "Was  the main  policy debate  ... around                                                               
this  issue  -  of  whether   we  can  have  non-severability  of                                                               
initiatives  -  with  severability   of  legislative  bills,  and                                                               
whether that's a constitutional problem?"                                                                                       
                                                                                                                                
MS.  SKIPPER  answered  that there  are  issues  surrounding  the                                                               
potential  unconstitutionality of  SB 80;  however, the  proposed                                                               
legislation  also addresses  that the  constitution provides  the                                                               
legislature  the right  to review  [the initiative]  and provides                                                               
the public the right to sign  a petition based on ballot language                                                               
- not of  a concept but of  an actual bill.   She maintained that                                                               
when a  court severs  that initiative, the  public is  faced with                                                               
something different than  what they signed.  She  said that there                                                               
is a  pending advisory  opinion on  the constitutionality  of [SB                                                               
80] based  on elimination  of the  severability clause  but added                                                               
that there is a vetting process  in the legislature that does not                                                               
occur with the public.                                                                                                          
                                                                                                                                
4:29:09 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS  asked  for  the  chronology  of  events                                                               
surrounding Ballot  Measure 1 and  stated his  understanding that                                                               
it  consisted of:    the initiative  qualifying  for the  ballot;                                                               
litigation; the Alaska Supreme Court  ruling that some provisions                                                               
of the  initiative were unconstitutional; and  the court amending                                                               
the substance of  the initiative.  He stated that  if a component                                                               
of  a  bill   is  found  unconstitutional,  it   is  severed  and                                                               
eliminated as opposed  to changed.  He asked for  comment on that                                                               
distinction, on the court's role,  and what severability means in                                                               
the context of initiatives.                                                                                                     
                                                                                                                                
SENATOR REVAK  mentioned that a  legal opinion may  be warranted;                                                               
however, supporters of  the bill believe that  what happened with                                                               
the initiative for Ballot Measure 1  "opened the door for a bait-                                                               
and-switch" type  of policy surrounding initiatives.   He offered                                                               
that putting  enticing language  in a  ballot initiative  - maybe                                                               
even unconstitutional  language - to  get the public to  sign it,                                                               
knowing   that  it   would  be   struck  down   [by  the   court]                                                               
simultaneously while  the legislature  is reviewing it,  would a)                                                               
take  away from  the legislature's  ability to  review the  final                                                               
language on a  ballot initiative, and b)  result in substantially                                                               
different  language   [than  signed  on  to   in  the  initiative                                                               
process].   He maintained  that the concern  is that  people will                                                               
use [the  initiative process] as  a tool against  the legislature                                                               
and the voters, and the  proposed legislation attempts to address                                                               
that concern.                                                                                                                   
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS  asked  for   more  information  on  the                                                               
distinction  between severing  or eliminating  a provision  of an                                                               
initiative versus modifying through the court review process.                                                                   
                                                                                                                                
REPRESENTATIVE  HOPKINS referred  to page  2, line  5, of  SB 80,                                                               
which   read,  "An   initiative  petition   may  not   contain  a                                                               
severability  clause."    He asked  whether  currently  a  ballot                                                               
initiative has a severability clause and how the clause reads.                                                                  
                                                                                                                                
MS.  SKIPPER  responded that  the  severability  clause tries  to                                                               
mimic what  the legislature allows in  its [bill-making] process;                                                               
if  a  bill  passes  and  the   court  deems  part  of  the  bill                                                               
unconstitutional, then the court can  strip that part of the bill                                                               
and leave  the remainder  of the  bill to become  law.   She said                                                               
that the ballot initiative process  allows for that same process.                                                               
The  concern is  that when  the court  severs [an  initiative] so                                                               
that  it changes  dramatically from  what the  public saw  at the                                                               
onset of  the petition process, the  change is on the  ballot and                                                               
the  legislature  cannot  rereview the  initiative,  because  the                                                               
legislature's review process  is over and the court  has made the                                                               
change prior to the election cycle.                                                                                             
                                                                                                                                
CO-CHAIR KREISS-TOMKINS  commented that from his  experience with                                                               
legislative  review of  initiatives,  the substantial  similarity                                                               
between legislation passed by the  legislature that might preempt                                                               
a ballot initiative is extremely liberally construed.                                                                           
                                                                                                                                
REPRESENTATIVE VANCE  asked for the  number of states  that allow                                                               
for a citizens' initiative like Alaska's.                                                                                       
                                                                                                                                
SENATOR  REVAK  offered  to  provide   that  information  to  the                                                               
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE STORY  acknowledged that the  citizens' initiative                                                               
is  important  to  Alaskans.    She  expressed  her  belief  that                                                               
citizens are  adequately informed of changes  to the initiatives.                                                               
She asked  whether the thinking  behind the  proposed legislation                                                               
is that the ballot measure would  be so different from what is on                                                               
the  petition  that citizens  would  not  be informed  about  the                                                               
changes.                                                                                                                        
                                                                                                                                
SENATOR  REVAK  answered  yes.   He  maintained  that  in  recent                                                               
history,  the ballot  measure was  substantially  different.   He                                                               
stated  that  there are  several  issues  involved -  legislative                                                               
review and a bait-and-switch policy  in which the public does not                                                               
know the  substantial change in  the initiative.  He  offered his                                                               
hope  that through  SB 80,  people who  draft ballot  initiatives                                                               
would be  more vigilant regarding  the initiative  language; it's                                                               
good  for the  public, for  the  legislature, and  for the  civic                                                               
process.                                                                                                                        
                                                                                                                                
4:35:58 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  KREISS-TOMKINS asked  for information  on which  of the                                                               
states  allowing  a   constitutional  ballot  initiative  process                                                               
prohibit severability clauses versus allow them.                                                                                
                                                                                                                                
CO-CHAIR  FIELDS asked  whether  any of  the  states among  those                                                               
identified have  analogous language saying that  every initiative                                                               
appearing on  the ballot  that is  altered by  the court  must be                                                               
substantially  like  what voters  originally  signed.   He  asked                                                               
whether in  the Senate there was  discussion about "severability"                                                               
versus "substantially similar."                                                                                                 
                                                                                                                                
MS. SKIPPER  replied that issue  did not  come up in  the Senate.                                                               
The  discussions in  the Senate  revolved around  the legislative                                                               
review  process,   restoring  the  rights  of   the  legislature,                                                               
bringing  integrity back  to  the process,  and  making sure  the                                                               
public sees the ballot initiative as originally intended.                                                                       
                                                                                                                                
[SB 80 was held over.]                                                                                                          
                                                                                                                                
4:38:10 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
State Affairs Standing Committee meeting was adjourned at 4:38                                                                  
p.m.