Legislature(2015 - 2016)HOUSE FINANCE 519

04/13/2015 09:00 AM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 176(FIN) Out of Committee
Moved CSHB 137(FIN) Out of Committee
Moved CSHB 155(FIN) Out of Committee
Moved HCS SB 33(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 137                                                                                                            
     "An Act raising certain  fees related to sport fishing,                                                                    
     hunting, and  trapping; raising the age  of eligibility                                                                    
     for  a  sport  fishing, hunting,  or  trapping  license                                                                    
     exemption  for  state residents  to  65  years of  age;                                                                    
     requiring state residents to purchase  big game tags to                                                                    
     take certain  species; and  providing for  an effective                                                                    
9:19:21 AM                                                                                                                    
REPRESENTATIVE  DAVE  TALERICO,   SPONSOR,  appreciated  the                                                                    
opportunity  to appear  before the  committee. He  indicated                                                                    
there  was an  updated  spreadsheet  that reflected  numbers                                                                    
from  the  current  committee substitute  of  the  bill.  He                                                                    
suggested having  Mr. Brooks review the  accompanying fiscal                                                                    
note, which included critical information.                                                                                      
KEVIN BROOKS,  DEPUTY COMMISSIONER,  DEPARTMENT OF  FISH AND                                                                    
GAME,  relayed that  the department  had  not finalized  the                                                                    
fiscal  note. However,  he had  crunched some  numbers since                                                                    
the committee previously met in  order to give the committee                                                                    
an idea of the type of  revenue that would be generated with                                                                    
the current  work draft of the  bill. In the first  year the                                                                    
estimated increased  revenue for  fishing licenses  was $3.8                                                                    
million and for hunting licenses  was $3.3 million, based on                                                                    
the  department's analysis.  The total  increase in  revenue                                                                    
would equal $7.1 million under  the current work draft of HB
137. The  effective date  of the  increase would  be delayed                                                                    
until  the bonds  for the  hatchery were  fully redeemed  at                                                                    
which  time  the  surcharge  would  retire.  The  department                                                                    
estimated the retirement  of the surcharge to be  in 2021 or                                                                    
2022, not prior.  The current revenue for  the surcharge was                                                                    
$6.3 million.  Once the surcharge  terminated a  $9 increase                                                                    
on  all licenses  would be  implemented that  would generate                                                                    
$3.8 million.  There would  actually be  a decrease  of $2.5                                                                    
million  in  surcharge  dollars attributable  to  a  sliding                                                                    
scale  used  on  the surcharge  for  non-resident  licenses.                                                                    
Currently, the  surcharge for non-residents ranged  from $10                                                                    
to $45 but  would be replaced with a  $9 surcharge. However,                                                                    
the  department anticipated  revenue in  the amount  of $3.8                                                                    
million once the surcharge retired in the year 2022.                                                                            
Representative Gara commented on  the bravery of the sponsor                                                                    
of  the  bill   to  attempt  to  raise   fees.  He  proposed                                                                    
increasing certain  non-resident fees  listed on page  6. He                                                                    
supposed  that  he  could   put  forth  separate  conceptual                                                                    
amendments for each  or he could propose  one amendment with                                                                    
multiple  changes. He  suggested changes  related to  trophy                                                                    
game or to  subsistence animals that Alaskans  relied on. He                                                                    
pointed to page 4, beginning  on Line 14 citing increases in                                                                    
black  bear fees  to $600,  brown bear  and grizzly  fees to                                                                    
$1200, bison fees to $1200,  Caribou fees to $1000, moose to                                                                    
$1000, sheep to $1000, and muskox to $2500.                                                                                     
Co-Chair Thompson voiced that  amendments would be addressed                                                                    
following public testimony.                                                                                                     
Representative  Gara had  his  conceptual  amendment on  the                                                                    
table for members to make comments.                                                                                             
Representative Wilson  made mention that in  testimony heard                                                                    
the previous  week that very  few tags were issued  for some                                                                    
categories  versus  several  for   more  popular  tags.  She                                                                    
believed  it would  be helpful  to  have additional  numbers                                                                    
from the department  in order to determine  any revenue that                                                                    
might be left on the table.                                                                                                     
9:23:43 AM                                                                                                                    
Representative  Munoz  asked if  the  payoff  amount of  the                                                                    
bonds  was  approximately $3.8  million.  She  asked if  the                                                                    
money went away or was directed for another purpose.                                                                            
Mr.  Brooks  responded that  the  surcharge  payment of  the                                                                    
bonds   currently  generated   approximately  $6.3   million                                                                    
annually. The  amount would sunset  and be replaced by  a $9                                                                    
increase  per   license  that  would  generate   about  $3.8                                                                    
million.  There was  a $2.5  million delta  between the  two                                                                    
amounts.  The revenue  generated from  a $9  increase across                                                                    
the board  was a  lower amount  than revenue  generated from                                                                    
the  assessed  surcharge  (between  $10 and  $45)  for  non-                                                                    
residents.  The  surcharge  was based  on  a  sliding  scale                                                                    
depending on the length of a license.                                                                                           
Representative Munoz wanted  to know if part  of the revenue                                                                    
generated for the  paying off of the bonds  would go towards                                                                    
conservation programs.                                                                                                          
Mr. Brooks responded affirmatively.                                                                                             
Representative  Munoz asked  when  the bonds  would be  paid                                                                    
Mr.  Brooks  estimated  in  2021  or  2022.  Each  year  the                                                                    
department  generated a  little more.  Therefore, there  was                                                                    
early redemption  dependent on the  rate in which  the state                                                                    
redeemed the bonds early. He  could not provide a definitive                                                                    
answer  but  it  appeared  that  2021 or  2022  was  a  safe                                                                    
Representative Munoz wanted  Mr. Brooks to speak  to the two                                                                    
hatcheries  projects.  She  wanted   to  know  whether  they                                                                    
remained  in operation  and whether  the state  had met  its                                                                    
project goals.                                                                                                                  
Mr. Brooks reported  that there were two  hatcheries, one in                                                                    
Anchorage and  one in Fairbanks. The  Anchorage hatchery was                                                                    
funded through general funds and  the Fairbanks hatchery was                                                                    
the project  in which  the state was  paying down  bonds. He                                                                    
added  that  both  hatcheries were  fully  operational  with                                                                    
production  levels pre-dating  when  they  were built.  They                                                                    
were  very successful  at producing  fish of  which Alaskans                                                                    
were catching.                                                                                                                  
Representative  Gara  asked  whether  the  state  was  using                                                                    
general  funds  to  pay  for  things  that  the  fees  would                                                                    
otherwise pay for because of a shortfall in fee revenues.                                                                       
Mr. Brooks answered that each  were about $48 million within                                                                    
the  Division of  Sport Fish  and the  Division of  Wildlife                                                                    
Conservation.  Primarily,  the  state received  federal  aid                                                                    
from   Pittman-Robertson  and   Dingell-Johnson  funds   and                                                                    
through  matching   fish  and  game  funds.   The  divisions                                                                    
currently  had  about  $6 million  in  unrestricted  general                                                                    
funds,  monies viewed  by the  department as  vulnerable for                                                                    
the  following few  years. The  fee increase  would help  to                                                                    
offset potential  general fund (GF) reductions.  He reported                                                                    
that, at  present, there were GF  reductions in deliberation                                                                    
for  the  FY  16  budget. Also,  he  mentioned  being  under                                                                    
matched  within the  Wildlife Division.  The increase  would                                                                    
help to match federal dollars.                                                                                                  
Representative Gara  asked if  the federal  funds had  to be                                                                    
spent towards  capital projects  or if  they could  be spent                                                                    
towards  wildlife conservation  projects outside  of capital                                                                    
Mr. Brooks responded that Representative Gara was correct.                                                                      
9:27:33 AM                                                                                                                    
Co-Chair Thompson OPENDED public testimony.                                                                                     
9:27:52 AM                                                                                                                    
DON  QUARBERG, SELF,  DELTA (via  teleconference), suggested                                                                    
that the fees be further  increased to recoup monies lost to                                                                    
inflation   since  the   last  increase   nearly  20   years                                                                    
previously.  He  also  proposed   a  resident  tag  fee.  He                                                                    
requested  that the  committee  seriously consider  removing                                                                    
the $5  license fee based  on a family household  income for                                                                    
two reasons. First, he believed  that the fee was subject to                                                                    
fraud. Secondly,  the $5 fee  was too costly  to administer.                                                                    
The Department  of Fish  and Game (DFG)  lost $64  for every                                                                    
sale of a reduce fee  license. Instead, he surmised that the                                                                    
lost  $64 could  be used  for matching  funds for  available                                                                    
Pittman-Robertson and Dingell-Johnson tax  monies on a 3-to-                                                                    
1  basis. He  calculated a  potential  loss of  $192 to  the                                                                    
state   in   matching   tax   monies   for   each   license.                                                                    
Consequently, he projected that the  total loss to the state                                                                    
for each one of the  licenses equaled $256 not including the                                                                    
King Salmon  stamp, which  cost $15.  He reviewed  the total                                                                    
losses associated  with the King  Salmon stamp.  He reported                                                                    
that  he had  contacted  the predominant  license vendor  in                                                                    
Delta  Junction.  Their estimate  of  the  percentage of  $5                                                                    
license sales  was 30  percent or more  at a  current income                                                                    
limit  of  $82 hundred.  He  suggested  that the  percentage                                                                    
would greatly  increase if  the income  limit was  raised to                                                                    
$29  thousand   or  more.  He  continued   to  provide  some                                                                    
statistics.  He  believed  that the  $5  license  should  be                                                                    
administered  within the  Department  of  Health and  Social                                                                    
Services  for the  purpose of  properly vetting  applicants.                                                                    
All  of the  fees would  be transferred  to DFG  for use  in                                                                    
managing  Alaska's  wildlife  resources.  He  concluded  his                                                                    
 9:32:19 AM                                                                                                                   
STACY  KLEINSMITH,  SELF,  ANCHORAGE  (via  teleconference),                                                                    
relayed that  she was  an avid  sportswoman. She  shared her                                                                    
experience  as a  mentor to  children. She  advocated a  $15                                                                    
increase  for residence  licenses.  She  also reasoned  that                                                                    
there  should be  no Pittman-Robertson  dollars left  on the                                                                    
table. She  opined that  an additional $10  was not  a large                                                                    
amount.  She  reiterated  her  support  of  a  $15  resident                                                                    
license fee increase.                                                                                                           
9:34:51 AM                                                                                                                    
GEORGE, PIERCE, SELF,  KASILOF (via teleconference), opposed                                                                    
HB 137. He  suggested increased fees for  guides and out-of-                                                                    
state  hunters and  fishers. He  believed  that the  sockeye                                                                    
salmon stamp should be applicable  only to non-residents. He                                                                    
opposed charging  personal use fishermen. He  suggested that                                                                    
the Kenai River Sport  Fishing Association, a guide business                                                                    
for  non-residents, proposed  the tax.  He stressed  raising                                                                    
fees for non-residents rather than  for Alaskans. He relayed                                                                    
that  the  personal  use  fishery   was  supposed  to  be  a                                                                    
subsistence  fishery  and  believed   it  should  be  a  top                                                                    
priority.  He  urged  raising  fees  for  non-residents  and                                                                    
guides rather than subsistence  users. He vehemently opposed                                                                    
the  sockeye  salmon stamp  for  residents  and opposed  any                                                                    
increases for seniors. He asserted  that residents owned the                                                                    
resources  and  were entitled  to  them.  He purported  that                                                                    
guides were making  more money than anyone  else on Alaska's                                                                    
resources by catering to non-residents.                                                                                         
Co-Chair  Thompson  stated  that  a  salmon  stamp  was  not                                                                    
associated with the bill.                                                                                                       
9:38:08 AM                                                                                                                    
RICHARD BISHOP, SELF,  FAIRBANKS (via teleconference), spoke                                                                    
in   favor   of   HB  137.   He   strongly   supported   the                                                                    
recommendations  for  higher fees  than  those  in the  most                                                                    
recent  work  draft  of  the bill  put  forward  by  several                                                                    
outdoor groups. He  agreed on the importance  of meeting the                                                                    
need  to capture  federal matching  funds and  to offset  an                                                                    
anticipated  loss  of  GF  in  order  to  continue  the  DFG                                                                    
programs that  ensured sound management. He  ascribed to the                                                                    
fee increases recommended by the  various outdoor groups and                                                                    
believed they were the best  alternatives. He encouraged the                                                                    
committee to  amend the bill  to include the  increased fees                                                                    
and to pass the bill.                                                                                                           
Co-Chair Thompson CLOSED public testimony.                                                                                      
Representative Talerico  commented that  it was  unusual for                                                                    
people  to ask  for increased  fees.  One of  the things  he                                                                    
wanted  to keep  in mind  was that  moving forward,  the fee                                                                    
levels  were  at  a  reasonable   rate  for  the  people  he                                                                    
represented in  District 6, from a  resident perspective. He                                                                    
expressed  his appreciation  for the  input provided  by all                                                                    
the  groups  that  had made  suggestions.  However,  he  was                                                                    
comfortable with the changes that  had been made to the bill                                                                    
up to the current point.  He reminded everyone that his main                                                                    
inspiration  for   the  legislation  was  not   to  generate                                                                    
substantial  general  funds,  but  to be  able  to  continue                                                                    
having the opportunities that sportsmen  enjoy. He wanted to                                                                    
ensure that people  could continue to hunt,  fish, and enjoy                                                                    
the  great  outdoors.  He  thanked  the  committee  for  the                                                                    
opportunity to present his bill.                                                                                                
9:42:40 AM                                                                                                                    
Co-Chair Thompson MOVED to ADOPT Amendment 1:                                                                                   
     Page 5, line 11:                                                                                                           
          Delete "gross income of less than $29,820"                                                                            
          Insert "or household income equal  to or less that                                                                    
          the most  recent poverty guidelines for  the state                                                                    
          set by the United  States Department of Health and                                                                    
          Human Services"                                                                                                       
Vice-Chair Saddler OBJECTED for discussion.                                                                                     
Co-Chair  Thompson explained  that Amendment  1 corrected  a                                                                    
drafting error discovered at  the previous meeting regarding                                                                    
low-income licenses. It was a conforming amendment.                                                                             
Vice-Chair  Saddler  wanted  to  clarify  that  it  was  100                                                                    
percent of the poverty level.                                                                                                   
Co-Chair Thompson responded, "Correct."                                                                                         
Vice-Chair Saddler WITHDREW his OBJECTION.                                                                                      
There being NO OBJECTION, it was so ordered.                                                                                    
Representative Pruitt did not have a copy of the amendment.                                                                     
Co-Chair Thompson clarified that the amendment was a                                                                            
conforming amendment because there were two places where                                                                        
the language should have matched.                                                                                               
Representative Wilson referred to page 5 and explained the                                                                      
Representative Pruitt appreciated the information and                                                                           
recalled discussing it with Co-Chair Thompson.                                                                                  
9:44:24 AM                                                                                                                    
Representative Gara MOVED to ADOPT conceptual Amendment 2.                                                                      
Co-Chair Thompson OBJECTED.                                                                                                     
Representative Gara explained the amendment [proposed                                                                           
deletions shown in brackets below]:                                                                                             
     page 6, line 14                                                                                                            
     (A) Bear, black, each 600[400]                                                                                             
     page 6, line 15                                                                                                            
     (B) Bear, brown or grizzly, each 1200 [875]                                                                                
     page 6, line 16                                                                                                            
     (C)Bison, each 1200 [800]                                                                                                  
     page 6, line 17                                                                                                            
     (D) Caribou, each 1000[575]                                                                                                
     page 6, line 21                                                                                                            
     (H) Moose, each 1000[700]                                                                                                  
     page 6, line 22                                                                                                            
     (I) Sheep, each 1000[750]                                                                                                  
     page 6, line 29                                                                                                            
     (L) Musk oxen, each 2500[1925]                                                                                             
     page 7, line 17                                                                                                            
     (20) Nonresident alien hunting license 600 [450]                                                                           
Representative  Gara   relayed  that  the  changes   in  the                                                                    
amendment  were associated  with  non-resident  fees, as  he                                                                    
agreed  with  the   sponsor  of  the  bill   that  the  fees                                                                    
highlighted should not be borne by residents.                                                                                   
Vice-Chair  Saddler asked  if Representative  Gara had  done                                                                    
any  kind  of analysis  on  the  effect  on demand  for  the                                                                    
licenses by the increases listed.                                                                                               
Representative  Gara responded  that he  had done  a logical                                                                    
analysis;  the  money that  non-residents  paid  to come  to                                                                    
Alaska and to  hire guides was in the  thousands of dollars.                                                                    
He asserted  that an increase  of a few hundred  dollars for                                                                    
trophy  animals would  likely not  change demand.  There was                                                                    
also  some  interest  in   protecting  the  few  subsistence                                                                    
animals listed  in the amendment. He  believed the increases                                                                    
were relatively small.                                                                                                          
9:47:48 AM                                                                                                                    
Vice-Chair  Saddler clarified  that  there  was no  specific                                                                    
analysis except that more money was more money.                                                                                 
Representative  Gara responded  in the  negative. He  stated                                                                    
what he stated.                                                                                                                 
Vice-Chair  Saddler asked  if  it was  correct  to say  that                                                                    
there had been no specific analysis done.                                                                                       
Representative Gara responded, "Just logic."                                                                                    
Vice-Chair  Saddler asked  if  Representative Gara's  answer                                                                    
was a yes or a no.                                                                                                              
Co-Chair Thompson interjected that it sounded like, "No."                                                                       
Vice-Chair Saddler agreed that it sounded like, "No."                                                                           
Representative  Gara  responded  that   he  thought  it  was                                                                    
Representative  Talerico suggested  that he  was comfortable                                                                    
with the figures  with the exception of  those suggested for                                                                    
the  caribou and  moose. He  thought  the suggested  numbers                                                                    
were  too high.  He was  happy  with the  other figures.  He                                                                    
suggested bringing  the caribou and moose  figures back down                                                                    
and increasing the goat tag fee.                                                                                                
Co-Chair Thompson  received a note that  the committee could                                                                    
not  amend  more   than  two  items  or   lines.  He  wanted                                                                    
9:49:06 AM                                                                                                                    
AT EASE                                                                                                                         
9:49:47 AM                                                                                                                    
Representative Talerico  responded again that he  would keep                                                                    
the  caribou and  moose tags  lower but  would increase  the                                                                    
goat tag.                                                                                                                       
Co-Chair  Neuman  acknowledged  that Department  of  Natural                                                                    
Resources had spent a significant  time on the bill and that                                                                    
many  groups  and  sportsmen  from   around  the  state  had                                                                    
contributed  their   input  to  the  legislation.   He  also                                                                    
commented that there had been  a large amount of testimonies                                                                    
through  email and  public  testimony. He  asked  if he  was                                                                    
Representative Talerico agreed.                                                                                                 
Co-Chair  Neuman   indicated  he   would  support   the  pay                                                                    
structure outlined  in the current  version of HB  137 based                                                                    
on the  extensive responses from  a number of  Alaskans made                                                                    
in House Resources.                                                                                                             
Representative  Edgmon surmised  that as  the bill  traveled                                                                    
through  the legislative  process there  would be  continued                                                                    
pressure  to double  all of  the fees.  He strongly  opposed                                                                    
doubling the resident  fees. Perhaps there was  a measure of                                                                    
compromise  to  the  increases.   He  agreed  with  previous                                                                    
testimony about the  need to get more  funding from Pittman-                                                                    
Johnson  and  Dingell-Johnson  and to  avoid  underutilizing                                                                    
federally  matched  funding.  He  suggested  that  he  would                                                                    
support taking  the existing amendment and  aligning it with                                                                    
what the sponsor had indicated.                                                                                                 
9:52:14 AM                                                                                                                    
Representative  Pruitt MOVED  to AMEND  conceptual Amendment                                                                    
Representative Pruitt explained  the amendment to conceptual                                                                    
Amendment 2 [proposed deletions shown in brackets below]:                                                                       
     page 6, line 16                                                                                                            
     (C)Bison, each 900[1200]                                                                                                   
     page 6, line 17                                                                                                            
     (D) Caribou, each 650[1000]                                                                                                
     page 6, line 21                                                                                                            
     (H) Moose, each 800[1000]                                                                                                  
     page 6, line 22                                                                                                            
     (I) Sheep, each 850[1000]                                                                                                  
     page 6, line 29                                                                                                            
     (L) Musk oxen, each 2200[2500]                                                                                             
He  stated that  the  recommended numbers  he was  proposing                                                                    
were the same numbers  recommended by the sportsman's group.                                                                    
He  left the  non-resident  numbers for  black bears,  brown                                                                    
bears,  and  non-resident  alien   licenses  at  the  levels                                                                    
Representative Gara recommended in conceptual Amendment 2.                                                                      
Co-Chair Neuman OBJECTED.                                                                                                       
Co-Chair  Neuman  discussed  the  fact that  the  state  was                                                                    
increasing fees  for many things  such as refined  fuels. He                                                                    
also  mentioned  the possibility  of  new  income taxes  and                                                                    
sales  taxes,  and  dipping  into  the  Permanent  Fund.  He                                                                    
expressed  his concern  with  imposing additional  increases                                                                    
for Alaskans.                                                                                                                   
Co-Chair   Thompson  reminded   Co-Chair  Neuman   that  the                                                                    
committee   was  currently   discussing  the   amendment  to                                                                    
Amendment 2, which would actually decrease the fees.                                                                            
Co-Chair  Neuman clarified  that he  would rather  stay with                                                                    
the numbers in the original bill.                                                                                               
9:55:19 AM                                                                                                                    
Representative  Gattis   understood  that  it  was   a  huge                                                                    
statement when  groups joined together  to take  a position.                                                                    
She  relayed that  she would  support the  amendment to  the                                                                    
amendment  based   on  the  groups  she   mentioned  getting                                                                    
Representative  Wilson   was  also  going  to   support  the                                                                    
amendment to the amendment.                                                                                                     
Representative  Munoz  thought  the  proposed  changes  were                                                                    
higher than  the numbers  recommended by  the subcommittees.                                                                    
She wondered whether the outdoor  groups were satisfied with                                                                    
the numbers that had been adopted.                                                                                              
Representative Pruitt  relayed that the numbers  provided by                                                                    
the  outdoor  caucus  were slightly  higher  for  bison  and                                                                    
caribou. The overall numbers they  suggested were lower than                                                                    
what Representative  Gara was recommending. He  believed the                                                                    
group was involved in previous discussions.                                                                                     
9:57:36 AM                                                                                                                    
Representative   Gara  supported   the   amendment  to   the                                                                    
Co-Chair  Neuman  WITHDREW  his OBJECTION.  There  being  NO                                                                    
OBJECTION,  the  amendment  to conceptual  Amendment  2  was                                                                    
Co-Chair Thompson  asked if there was  further discussion on                                                                    
conceptual Amendment 2.                                                                                                         
Co-Chair Neuman maintained his objection.                                                                                       
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Gara,   Guttenberg,   Pruitt,   Saddler,   Wilson,                                                                    
Edgmon, Thompson                                                                                                                
OPPOSED: Gattis, Munoz, Neuman                                                                                                  
The MOTION PASSED (7/3).                                                                                                        
9:59:15 AM                                                                                                                    
Representative  Gara asked  to  hear from  the bill  sponsor                                                                    
regarding raising fees for goat tags.                                                                                           
Representative  Talerico pointed  out that  if a  discussion                                                                    
ensued about trophy animals the  goat should be included. He                                                                    
did not  have an issue  raising the  tag fee to  some degree                                                                    
with the exception of doubling or tripling the amount.                                                                          
Co-Chair  Neuman  MOVED to  REPORT  CSHS  137 (FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
There being  NO OBJECTION, CSHS  137 (FIN) was  REPORTED out                                                                    
of committee  with five "do  pass" recommendations  and five                                                                    
"no recommendation" recommendations and  with one new fiscal                                                                    
impact note from the Department of Fish and Game.                                                                               
10:00:27 AM                                                                                                                   
AT EASE                                                                                                                         
10:03:51 AM                                                                                                                   

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