SENATE STATE AFFAIRS COMMITTEE May 9, 1994 7:00 p.m. MEMBERS PRESENT Senator Loren Leman, Chair Senator Mike Miller, Vice Chair Senator Robin Taylor Senator Jim Duncan Senator Johnny Ellis MEMBERS ABSENT All Members Present COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 364(FIN)(title am) "An Act relating to contributions to the Iditarod Trail Committee, Inc. and the Alaska Children's Trust Fund (AS 37.14.200) from permanent fund dividends; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION HB 364 - No previous senate committee action. WITNESS REGISTER Thomas Williams, Director Permanent Fund Dividend Division Department of Revenue P.O. Box 110460, Juneau, AK 99811-0460¶465-2323 POSITION STATEMENT: opposed to HB 364 Stan Hooley, Executive Director Iditarod Trail Committee, Inc. P.O. Box 870800, Wasilla, AK 99687¶376-5155 x100 POSITION STATEMENT: in favor of HB 364 ACTION NARRATIVE TAPE 94-34, SIDE A Number 001 CHAIRMAN LEMAN calls the Senate State Affairs Committee to order at 7:00 p.m. CHAIRMAN LEMAN brings up HB 364 (PFD PROGRAM/ALLOWABLE ABSENCES) as the only order of business before the Senate State Affairs Committee today. The chairman calls Mr. Williams to testify. Number 020 THOMAS WILLIAMS, Director, Permanent Fund Dividend Division, states the Department of Revenue has historically opposed check-offs on dividend applications for three principal reasons. Those reasons are, one, the principal purpose of the dividend program is to pay eligible Alaskans their dividends- it is not to promote other programs or organizations. Second, if one organization is given the opportunity to seek contributions through the dividend application, there is a great tendency to add a whole slew of others. Mr. Williams lists a number of organizations that have tried to become listed on the dividend application. Mr. Williams states the list is attached to the fiscal note that was submitted to the legislature from the department for CSHB 364(FIN). (secretary's note: the list was not published with the fiscal note. Person's wanting the list should contact the Department of Revenue.) Lastly, there are administrative costs, which are taken directly out of the contributions. There are some indirect costs which will need funding. Number 060 MR. WILLIAMS states that since the beginning of the dividend program there has only been one check-off. That was for the Olympic Committee. There currently is a check-off allowing people to direct half their dividend to the Advanced College Tuition program. However, that is more akin to a direct deposit of the dividend, than it is to a check-off. Number 067 MR. WILLIAMS states there is a fiscal note of 36,000$ attached to HB 364. The up front costs of the check-offs would need to be funded in FY95, so those funds would have to be General Fund monies. MR. WILLIAMS addresses several other points, which are outlined in the fiscal note. Number 117 SENATOR TAYLOR asks Mr. Williams whether he supports HB 364. MR. WILLIAMS responds the division has historically opposed check- offs. Number 121 CHAIRMAN LEMAN asks Mr. Williams if he would recommend that the governor veto the bill if it reaches his desk. MR. WILLIAMS replies he will defer that question to Commissioner Rexwinkel. CHAIRMAN LEMAN asks if there are further questions. Hearing none, the chairman calls Mr. Hooley to testify. Number 127 STAN HOOLEY, Executive Director, Iditarod Trail Committee, Inc., requests the legislature to consider HB 364, and apologizes that it has come up at such a late date. Mr. Hooley states the financial situation of the Iditarod Trail Committee has changed rather dramatically in the last two weeks. The committee has taken action recently with some special interest groups, and realizes that this action will cause the committee to lose approximately 600,000$ this year. That is in addition to 200,000$ that was lost last year. The Iditarod Trail Committee, Inc. is trying to find a way to insulate itself within the state from any further economic affect. MR. HOOLEY states that the Iditarod has an economic impact on the state of about 16 million dollars per year. That does not include the international visibility that comes with the Iditarod. Mr. Hooley continues with his comments on how the race impacts the state economically. Number 193 MR. HOOLEY points out that there is a three year sunset clause on the Iditarod check-off. The check-off is not intended to be a long term solution. It is a way to work out of the current crisis as the committee diversifies its' funding sources within the state. Number 202 CHAIRMAN LEMAN asks Mr. Hooley if it will be a problem if HB 364 does not pass the legislature this year, since money from the check-offs would not be available to the Iditarod Committee until the 1996 race anyway. MR. HOOLEY responds that if the Iditarod Trail Committee can demonstrate to lending institutions that it has a viable source of revenue, it would help in procuring funding. Number 226 SENATOR MILLER asks why the state should favor one race over another. Why not have a check-off for the Yukon Quest. Number 230 MR. HOOLEY states that at the present time, the Iditarod is more of an emotional issue than the other races. Number 252 CHAIRMAN LEMAN states the committee is going to have to recess. Chairman Leman asks Mr. Williams if it would create a hardship for the department if the legislation was delayed until next year. Number 254 MR. WILLIAMS replies that the check-off could not appear on the 1995 application if the legislation was not passed this year. Number 259 SENATOR TAYLOR notes for the record that he has an amendment he would like to offer making a check-off for the Alaska Public Radio Network. Number 262 CHAIRMAN LEMAN states he has an amendment to add the Arctic Winter Games. The chairman asks Mr. Purchard (sp?) if he can testify when the committee comes back to order at the next recess of the Senate. CHAIRMAN LEMAN thanks the witnesses and calls a recess of the Senate State Affairs Committee at 7:20 p.m. Number 271 CHAIRMAN LEMAN calls the Senate State Affairs Committee back to order at 9:55 p.m. Number 274 SENATOR ELLIS moves amendment #1 by Senator Taylor, adding a check- off for the Alaska Public Radio Network to HB 364. CHAIRMAN LEMAN, hearing no objection, states amendment #1 has been adopted. Number 275 CHAIRMAN LEMAN moves amendment #2, adding a check-off for the Arctic Winter Games to HB 364. The chairman asks if there is any objection to the amendment. Hearing none, the chairman states amendment #2 has been adopted. CHAIRMAN LEMAN asks the pleasure of the committee regarding HB 364. Number 277 SENATOR ELLIS makes a motion to discharge HB 364 from the Senate State Affairs Committee with individual recommendations. CHAIRMAN LEMAN, hearing no objection, orders HB 364 released from committee with individual recommendations. CHAIRMAN LEMAN adjourns the Senate State Affairs Committee meeting at 10:00 p.m.