Legislature(2017 - 2018)ADAMS ROOM 519

04/09/2018 09:00 AM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
<Bill Hearing Canceled>
-- Public Testimony --
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSSHB 216(FIN) Out of Committee
-- Public Testimony --
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 9, 2018                                                                                            
                         9:07 a.m.                                                                                              
9:07:08 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 9:07 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Senator Click Bishop, Sponsor;  Pete Fellman, Staff, Senator                                                                    
Click  Bishop;  Representative  Chuck  Kopp,  Sponsor;  Eric                                                                    
Cordero-Giorgana,  Staff,  Representative Chuck  Kopp;  Kate                                                                    
Hudson,  Executive  Director,  Violent  Crimes  Compensation                                                                    
Board, Department  of Administration; David  Teal, Director,                                                                    
Legislative Finance Division.                                                                                                   
PRESENT VIA TELECONFERENCE                                                                                                    
Bruce  Dale, Director,  Division  of Wildlife  Conservation,                                                                    
Department of  Fish and Game;  Steve Hall,  Director, Alaska                                                                    
Wildlife  Troopers,  Department   of  Public  Safety;  Aaron                                                                    
Peterson, Attorney IV, Criminal  Division, Office of Special                                                                    
Prosecution, Department of Law.                                                                                                 
HB 129    FISH & GAME: OFFENSES;LICENSES;PENALTIES                                                                              
          HB  129  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
HB 216    TRANSFERS FROM DIVIDEND FUND; CRIMES                                                                                  
          CSHB 216(FIN)  was REPORTED out of  committee with                                                                    
          a "do  pass" recommendation and with  one new zero                                                                    
          fiscal note  from the Department  of Law;  one new                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Administration;  one new  fiscal impact  note from                                                                    
          the   Department   of  Administration   for   Fund                                                                    
          Capitalization;  one new  fiscal impact  note from                                                                    
          the   Department    of   Corrections;    one   new                                                                    
          indeterminate  note   from  the   Alaska  Judicial                                                                    
          System;  two  previously   published  zero  fiscal                                                                    
          notes  from the  Department of  Health and  Social                                                                    
          Services:  FN2  (DHS)  and   FN3  (DHS);  and  one                                                                    
          previously published  fiscal impact note  from the                                                                    
          Department of Revenue: FN7 (REV).                                                                                     
SB 78     PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY                                                                              
          SB 78 was HEARD and  HELD in committee for further                                                                    
Co-Chair Foster discussed housekeeping.                                                                                         
CS FOR SENATE BILL NO. 78(FIN)                                                                                                
     "An Act  creating the education endowment  fund and the                                                                    
     dividend  raffle fund;  authorizing donations  from the                                                                    
     permanent  fund dividend  for educational  purposes and                                                                    
     to enter  the permanent fund dividend  raffle; relating                                                                    
     to  transfers from  the dividend  raffle  fund and  the                                                                    
     education  endowment fund;  relating to  the duties  of                                                                    
     the Department  of Revenue; relating to  the definition                                                                    
     of 'gambling'; and providing for an effective date."                                                                       
9:08:16 AM                                                                                                                    
SENATOR  CLICK BISHOP,  SPONSOR, thanked  the committee  for                                                                    
hearing the bill. He shared that  his heart and soul were in                                                                    
education  and workforce  development. He  relayed that  120                                                                    
testifiers had stressed that need  for education funding and                                                                    
the  lack of  the  raise in  the  average daily  memberships                                                                    
(ADM). He hoped  one day the bill would be  fully funded and                                                                    
would  be injecting  new  money  into education;  supporting                                                                    
Pre-K, workforce development, STEM  programs, and others. He                                                                    
believed that the bill was a  vehicle that used the power of                                                                    
earnings as a  renewable resource to help  fund education in                                                                    
the state.                                                                                                                      
Representative Grenn asked about  the number of participants                                                                    
and  the  average donation.  He  referenced  a sheet  titled                                                                    
"Random  Sample at  50,000  Participants  giving $200  each"                                                                    
(copy on  file). He  wondered what  data the  expectation of                                                                    
participation was based on.                                                                                                     
PETE FELLMAN,  STAFF, SENATOR CLICK BISHOP,  he replied that                                                                    
the Legislative Finance Division  had created the models for                                                                    
the  legislation. He  said that  another  model used  10,000                                                                    
participants. There was no way  to know the number of people                                                                    
would choose  to participate in  the raffle. He  stated that                                                                    
roughly  400,000 adults  received  permanent fund  dividends                                                                    
but  that it  was unknown  how many  people would  choose to                                                                    
donate to education.                                                                                                            
Representative Grenn  wondered about  a marketing  number or                                                                    
promotions amount to generate interest in the lottery.                                                                          
Mr.   Fellman  pointed   to  administration   cost  on   the                                                                    
spreadsheet, which  were solely from the  lottery portion of                                                                    
the donations;  the program was  self-funded. He  said there                                                                    
would  be  minimal start  up  costs.  He stressed  that  the                                                                    
program would be self-sustaining after the first year.                                                                          
9:14:12 AM                                                                                                                    
Representative Grenn  was looking  for a promotion  cost. He                                                                    
noted that  the Department of Revenue  fiscal note reflected                                                                    
a  cost  of   $10,000  for  FY  19,   under  "services."  He                                                                    
reiterated  his desire  to understand  the costs  associated                                                                    
with promotions and advertising.                                                                                                
Mr.  Fellman answered  there  would  be a  cost  to put  the                                                                    
raffle on the  webpage, but the cost was not  expected to be                                                                    
9:15:33 AM                                                                                                                    
AT EASE                                                                                                                         
9:16:33 AM                                                                                                                    
Mr.  Fellman would  follow up  with the  startup advertising                                                                    
cost.  He  noted there  had  been  a  fiscal note  from  the                                                                    
previous year that had been updated.                                                                                            
Representative Guttenberg  understood that the  raffle would                                                                    
be created  under the assumption  that the payouts  would be                                                                    
don automatically.  He asked what  part of the  raffle money                                                                    
was subject to legislative appropriation.                                                                                       
Mr. Fellman  replied that a  legal opinion had  been drafted                                                                    
that addressed the issue of  appropriation. The opinion said                                                                    
that  because  they were  private  donations  donated for  a                                                                    
private purpose,  a court could  say that the  donations had                                                                    
to  be  used for  the  purpose  donated  - education  and  a                                                                    
raffle. According  to a  March 31,  2017 legal  opinion from                                                                    
Legislative  legal Services  (copy on  file) donations  made                                                                    
for a  specific purpose had to  be used for the  purpose for                                                                    
which  they were  donated. He  said that  this did  not mean                                                                    
that the  legislature could not  attempt to  appropriate the                                                                    
funds, but that doing so would  be a bold step that could be                                                                    
challenged in court.                                                                                                            
9:20:26 AM                                                                                                                    
Representative  Guttenberg  maintained discomfort  with  the                                                                    
Co-Chair Foster asked  Mr. Fellman to review  the changes in                                                                    
the CS.                                                                                                                         
Mr. Fellman  complied. The first  change reduced the  cap on                                                                    
the lottery in  order for money to be more  quickly put into                                                                    
education.  The changes  were  on Page  5  and deleted  $500                                                                    
million and  inserted $300 million. The  Education Endowment                                                                    
Fund at  $300 million  in order  for the fund  to grow  at a                                                                    
quicker  rate. The  second change,  on Page  6, reduced  the                                                                    
payout percentage for  prizes to allow more money  to be put                                                                    
forward  for education.  The change  on Line  5 of  the page                                                                    
deleted  10  percent and  inserted  8  percent; on  line  7,                                                                    
deleted  5  percent  and  inserted 4  percent;  on  Line  9,                                                                    
deleted  3  percent  and  inserted 2  percent;  on  Line  11                                                                    
deleted 2 percent  and inserted 1 percent.  He stressed that                                                                    
the  bill  was an  effort  to  set  up  a system  for  extra                                                                    
education funding.  The effective  date had been  changed on                                                                    
page 6, line 14.                                                                                                                
9:23:43 AM                                                                                                                    
Representative  Guttenberg  queried   the  assumptions  that                                                                    
showed how  long it would  take for  the fund to  reach $300                                                                    
Mr. Fellman replied there was no  way to know how much money                                                                    
would move  until it hit the  cap and they did  not know how                                                                    
long it  would take to  hit the  cap. When the  $300 million                                                                    
was hit, everything above that  amount in the raffle balance                                                                    
would flow into the education endowment fund.                                                                                   
Representative  Ortiz  asked  whether  the  changes  in  the                                                                    
reduction of the percentage of  payouts the were based on an                                                                    
intuition   that  they   could  reduce   the  incentive   to                                                                    
participate.   He  asked   if  the   sponsor  assumed   that                                                                    
participants would be people who  really wanted to donate to                                                                    
education or  people who were attracted  to participating in                                                                    
a game of chance.                                                                                                               
Mr. Fellman  responded that in  modeling the program  over a                                                                    
ten-year timespan, there  came a point once the  cap was hit                                                                    
of the  possibility that more  money could be paid  out than                                                                    
was  being  put in  or  that  little  would remaine  in  the                                                                    
endowment.  He  said that  the  reduction  would leave  more                                                                    
money in  the raffle  fund. He  thought that  the motivation                                                                    
for  playing the  raffle was  a moot  point since  the money                                                                    
ultimately  went to  fund education.  He reiterated  that as                                                                    
the  program  matured, money  would  be  put into  education                                                                    
every year and  a small percentage of the  raffle fund would                                                                    
be used  to pay  out prizes. He  elaborated on  the powerful                                                                    
way  that the  multiplication of  earnings on  the endowment                                                                    
would benefit education funding in the state.                                                                                   
9:28:34 AM                                                                                                                    
Representative  Ortiz supported  the bill.  He thought  that                                                                    
the  level of  participation  based on  the reduced  pay-out                                                                    
should be considered.                                                                                                           
Representative Wilson  understood that participation  in the                                                                    
raffle was limited to the once a year dividend application.                                                                     
Mr. Fellman  answered in the affirmative.  A participant had                                                                    
to  be  18  years  of  age and  they  could  not  use  their                                                                    
children's  money to  donate to  the raffle.  He added  that                                                                    
playing could only  be done with PFD money and  a person had                                                                    
to   be  a   resident.  They   could  participate   in  $100                                                                    
increments. Every  $100 got  a person  one raffle  ticket in                                                                    
the  bucket.  They  could  use  their  entire  PFD  in  $100                                                                    
Representative  Wilson  recalled   that  the  University  of                                                                    
Alaska had a raffle program.                                                                                                    
Mr. Fellman  answered that  with the  college fund  a person                                                                    
could  donate and  get a  scholarship;  another program  put                                                                    
their  name  in  a  raffle  for a  chance  to  double  their                                                                    
dividend.  He  agreed  that   there  were  similar  programs                                                                    
working in the state.                                                                                                           
9:31:22 AM                                                                                                                    
Representative Wilson asked for  examples in other locations                                                                    
where lotteries had positively impacted education.                                                                              
Mr.  Fellman answered  that many  states were  using lottery                                                                    
money to help fund education.  He said that the success rate                                                                    
varied  for  different  programs  in  different  states.  He                                                                    
stated that  some states  used 70  percent of  lottery money                                                                    
for  education  funding,  while  other  states  supplemented                                                                    
education funding with  lottery monies. He said  that it was                                                                    
not a  guarantee that the  lottery money would  not supplant                                                                    
other general fund  money, but some states had  been able to                                                                    
reduce  the  amount  of  state   money  that  was  put  into                                                                    
education because of lottery funding.                                                                                           
Co-Chair  Seaton  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute  for  SB  78,  Work  Draft  30-LS0534\Y  (Martin,                                                                    
3/14/18). There being NO OBJECTION, it was so ordered.                                                                          
9:33:34 AM                                                                                                                    
Vice-Chair Gara  believed Senator  Bishop wanted  more money                                                                    
for education and job training.  He had two concerns that he                                                                    
believed could  be addressed.  If they  wanted the  money to                                                                    
supplement  education funding  he  thought it  needed to  be                                                                    
addressed  in  the bill.  He  worried  that the  fund  would                                                                    
supplement  general funds  dollars,  rather than  increasing                                                                    
education funding.  He stressed  the importance  that donors                                                                    
receive assurances  that the  money they  donate will  go to                                                                    
increase  education spending.  He understood  that no  money                                                                    
would  go into  education until  the endowment  reached $300                                                                    
9:35:52 AM                                                                                                                    
Mr.  Fellman  replied in  the  negative.  He explained  that                                                                    
every year 50 percent of  the raffle funds would go directly                                                                    
to education; 25 percent of  all donations would go into the                                                                    
endowment  fund and  25  percent would  go  into the  raffle                                                                    
fund.  Everything  above  the  $300  million  cap  would  go                                                                    
directly to the endowment.                                                                                                      
Vice-Chair  Gara  reiterated  his desire  that  language  be                                                                    
written into  the bill that  defined whether the  fund would                                                                    
be used as additional funding or supplemental funding.                                                                          
Mr. Fellman answered  that the money would  go to education.                                                                    
He  said that  he had  no control  over how  the legislature                                                                    
would appropriate to education  in future operating budgets.                                                                    
He  said that  the level  of  funding for  education in  the                                                                    
future would be  established by formulas in  statute and the                                                                    
choices made by the legislature.  He stressed that the money                                                                    
would help the state. He  was not sure how guarunte4es could                                                                    
be  written into  the language  that  funding for  education                                                                    
would increase as a result of the legislation.                                                                                  
Vice-Chair  Gara agreed  that it  was not  possible to  bind                                                                    
future legislatures.  He thought  that the  legislature used                                                                    
"may spend"  language often  and that  a provision  could be                                                                    
written  into  the bill  that  distributed  the raffle  fuds                                                                    
through the  foundation formula. A future  legislature could                                                                    
decide to honor or not honor  the decision. He wanted to let                                                                    
people know that  their money may only be  going to supplant                                                                    
other funding to education.                                                                                                     
Mr.  Fellman   thought  that  the  issue   garnered  further                                                                    
discussion and believed that language  could be crafted that                                                                    
addressed the concern.                                                                                                          
9:39:57 AM                                                                                                                    
Co-Chair Foster  asked Mr. Fellman  to review  the sectional                                                                    
Mr.  Fellman  complied,  stating   that  Section  1  amended                                                                    
gambling laws. Section  2 gave priority over  donations - if                                                                    
people were donating  to other things the raffle  was at the                                                                    
bottom  of   the  priority  list.  Section   3  created  the                                                                    
endowment fund  and the dividend raffle  fund. The effective                                                                    
date was January 1, 2019.                                                                                                       
SB  78  was   HEARD  and  HELD  in   committee  for  further                                                                    
HOUSE BILL NO. 216                                                                                                            
     "An Act  relating to transfers from  the dividend fund;                                                                    
     creating the  restorative justice account;  relating to                                                                    
     appropriations  from  the restorative  justice  account                                                                    
     for  payments  for  and   services  to  crime  victims,                                                                    
     operating  costs  of  the Violent  Crimes  Compensation                                                                    
     Board,  operation  of   domestic  violence  and  sexual                                                                    
     assault programs, mental  health services and substance                                                                    
     abuse  treatment   for  offenders,   and  incarceration                                                                    
     costs; and providing for an effective date."                                                                               
9:42:47 AM                                                                                                                    
REPRESENTATIVE  CHUCK KOPP,  SPONSOR, thanked  the committee                                                                    
and introduced himself.                                                                                                         
ERIC  CORDERO-GIORGANA,  STAFF, REPRESENTATIVE  CHUCK  KOPP,                                                                    
introduced himself.                                                                                                             
Representative Kopp stated that the  bill would reset in law                                                                    
the   legislative  purpose   for   making  certain   persons                                                                    
ineligible  to  receive  a dividend;  those  who  have  been                                                                    
incarcerated  on  a  felony during  their  qualifying  year,                                                                    
those  that have  been convicted  of a  felony during  their                                                                    
qualifying  year, or  those that  have been  convicted of  a                                                                    
misdemeanor   but  have   a  prior   felony  or   two  prior                                                                    
misdemeanors.  He   said  that  the  dividends   that  would                                                                    
otherwise be paid to those  Alaskans would provide funds for                                                                    
services and  payments to crime victims  and operating costs                                                                    
through he Violent Crimes  Compensation Board. Secondly, the                                                                    
funds  would  be  used  to pay  restitution  owed  to  crime                                                                    
victims. Thirdly, the fund would  provide for grants to non-                                                                    
profits for  crime victims, for  mental health  services and                                                                    
substance abuse  treatment for  offenders, to  provide funds                                                                    
to the  Office of  Victims Rights (OVR)  to help  people get                                                                    
restitution payments, and to provide  fund to the Council on                                                                    
Domestic Violence  and Sexual Assault (CDVSA)  for grants to                                                                    
victims.  He   added  that   the  bill   included  obtaining                                                                    
reimbursement   for  some   costs  to   the  Department   of                                                                    
Corrections related to probation  and incarceration. He said                                                                    
that  the  bill  would  establish  the  Restorative  Justice                                                                    
Account as a  separate account within the  dividend fund and                                                                    
allowed the commissioner  to make a transfer  each year from                                                                    
the  dividend fund  to the  Restorative Justice  Fund in  an                                                                    
amount equal to the amount  that would have been paid during                                                                    
the previous fiscal year to  individuals who were ineligible                                                                    
for  dividends. The  bill established  a priority  order and                                                                    
percentages of  payment. He believed  that the  bill brought                                                                    
back  the original  purpose of  the fund.  He said  that the                                                                    
fund was  not considered dedicated and  that the legislature                                                                    
could still make appropriations at they deemed fit.                                                                             
9:47:20 AM                                                                                                                    
Co-Chair Foster listed individuals available for questions.                                                                     
Representative  Kawasaki noted  that a  previous version  of                                                                    
the  bill  looked  at  priority order  of  payment  and  the                                                                    
current bill  looked at percentages  of payment.  He thought                                                                    
that the  dedicated fund issue  had become murky  and quoted                                                                    
the  legal opinion  from the  legislative Division  of Legal                                                                    
and Research Services from April 7, 2018:                                                                                       
     However,   you  should   be  aware   that  creating   a                                                                    
     requirement  that a  certain  percentage  go towards  a                                                                    
     specific purpose  can make  the fund  look more  like a                                                                    
     dedicated fund,  carrying a greater  risk that  a court                                                                    
     could  find the  appropriation  is not  intended to  be                                                                    
Representative   Kawasaki  asked   Representative  Kopp   to                                                                    
address the point raised in the memo.                                                                                           
Representative Kopp  thought that  there was a  long history                                                                    
of  similar  practice  through  the  state's  technical  and                                                                    
vocational  programs; percentages  were set  in statute  for                                                                    
varying technical  programs in  the state.  He said  that it                                                                    
had never been challenged.                                                                                                      
9:49:55 AM                                                                                                                    
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
Representative  Grenn  MOVED  to   ADOPT  Amendment  1,  30-                                                                    
LS0572\L.1 (Martin, 3/28/18) (copy on file):                                                                                    
     Page 1, lines 6 - 7:                                                                                                       
    Delete ''relating to contributions from dividends;"                                                                       
     Page 8, line 7, through page 9, line 20:                                                                                   
     Delete all material.                                                                                                       
     Renumber the following bill sections accordingly.                                                                          
Representative Wilson OBJECTED for discussion.                                                                                  
Representative  Grenn   explained  that  he   supported  the                                                                    
original intent  of the  bill. He  shared that  the original                                                                    
intent  of  the  Pick.Click.Give  program was  to  focus  on                                                                    
501(c)(3)  nonprofits  that were  the  safety  net for  many                                                                    
Alaskans. He worried that adding  programs like the on under                                                                    
the bill could divert support from those nonprofit, non-                                                                        
government  organizations.  He  expressed concern  that  the                                                                    
program did  not have  an audit  provision. He  thought that                                                                    
the  words  Pick.Click.Give  should   be  removed  from  the                                                                    
9:52:40 AM                                                                                                                    
Representative  Kopp  shared  that  the  amendment  did  not                                                                    
hinder  the  bill.  He  was neutral  on  the  amendment  and                                                                    
believed  it   stayed  consistent  with   the  legislation's                                                                    
Representative  Wilson   OBJECTED  to  the   amendment.  She                                                                    
explained her reasoning.                                                                                                        
Representative Grenn  replied there were over  600 statewide                                                                    
nonprofits that  Alaskans could donate  to in order  to help                                                                    
victims  of  violent  crimes.  He  listed  other  nonprofits                                                                    
focused on helping victims.                                                                                                     
Representative Wilson  said her  understanding was  that the                                                                    
organizations  did  not help  the  individual  who had  been                                                                    
victimized. She  did not believe that  Pick.Click.Give would                                                                    
be affected by the legislation as written.                                                                                      
9:56:27 AM                                                                                                                    
Representative   Kawasaki   wondered  whether   there   were                                                                    
auditing requirements  for the compensation fund  similar to                                                                    
the ones required of Pick.Click.Give organizations.                                                                             
Representative Grenn  could not speak to  the administrative                                                                    
process of  the account.  He did not  believe that  the fund                                                                    
worked  within the  parameters of  the nonprofits  under the                                                                    
Pick.Click.Give umbrella. He thought  that sticking with the                                                                    
original intent of the Pick.Click.Give  program would be the                                                                    
best practice for the state.                                                                                                    
Representative  Wilson  hoped  to clarify  the  conversation                                                                    
about how  the compensation  funds were  being spent  and to                                                                    
quell assumptions that no one  was being held accountable to                                                                    
how the funds were being spent.                                                                                                 
KATE    HUDSON,   EXECUTIVE    DIRECTOR,   VIOLENT    CRIMES                                                                    
COMPENSATION BOARD,  DEPARTMENT OF  ADMINISTRATION, answered                                                                    
that  a performance  report was  completed and  submitted to                                                                    
the  federal government  every quarter,  in  addition to  an                                                                    
annual  performance  report.  She  said that  there  was  no                                                                    
requirement to  perform a  state audit  on a  regular basis,                                                                    
but that  one had been  performed roughly 12 years  ago. She                                                                    
said that  the records could  be easily audited  should that                                                                    
ben  requested.  She  stated   that  several  agencies  were                                                                    
covered by the legislation,  which presented the question of                                                                    
how they were presented on the Pick.Click.Give page.                                                                            
10:00:08 AM                                                                                                                   
Representative Wilson  asked whether  the needs  for violent                                                                    
crime compensation were currently being met with funding.                                                                       
Ms. Hudson  answered that it  varied from year to  year. She                                                                    
said that some  years all the money was spent  and bled into                                                                    
the next fiscal  year, and some years not all  the money was                                                                    
spent. She said  that the issue was that the  board was very                                                                    
small, and  that funding had  remained flat for  many years;                                                                    
the board  knew for a  fact that  they were not  meeting the                                                                    
needs of  all the  crime victims in  the state  and wondered                                                                    
whether victims were  even aware of the fund.  She said that                                                                    
homicides that  involved dependent  children required  a lot                                                                    
of funds. She said  that there were eligibility restrictions                                                                    
of  the  fund  which  were offset  by  other  programs  like                                                                    
domestic violence  shelters and rape crisis  centers that to                                                                    
meet some  of the  needs that  the compensation  board could                                                                    
Representative Kawasaki wondered  how the compensation board                                                                    
would advertise itself under Pick.Click.Give.                                                                                   
Ms.  Hudson  stated that  she  was  not entirely  sure.  She                                                                    
assumed   that   advertising   would    be   done   on   the                                                                    
Pick.Clik.Give   website   and   possible   public   service                                                                    
announcements would be done.                                                                                                    
Representative Grenn  answered that one of  the requirements                                                                    
for the application for Pick.Click.Give  was a 990. He asked                                                                    
Ms.  Hudson whether  her organization  used that  particular                                                                    
tax form.                                                                                                                       
Ms. Hudson replied in the negative.                                                                                             
Representative Wilson MAINTAINED her OBJECTION.                                                                                 
A roll call vote was taken  on the motion to adopt Amendment                                                                    
IN FAVOR: Kawasaki, Ortiz, Pruitt,  Gara, Grenn, Guttenberg,                                                                    
Seaton, Foster                                                                                                                  
OPPOSED: Thompson, Tilton, Wilson                                                                                               
The MOTION  PASSED (8/3). There being  NO further OBJECTION,                                                                    
Amendment 1 was ADOPTED.                                                                                                        
Vice-Chair  Gara was  generally supportive  of the  bill but                                                                    
had questions.  He asked about  the backfill amount  for the                                                                    
various programs that  would no longer be  receiving as much                                                                    
money from  the funds. He  agreed they wanted to  move money                                                                    
to the  items specified  in the bill,  but he  was concerned                                                                    
about items that would receive less funding.                                                                                    
Representative Kopp replied that  the bill would establish a                                                                    
priority order  and not  a dollar amount.  He said  that the                                                                    
percentages were a valuable approach  because it would allow                                                                    
DOC to  receive their maximum  percentage. He said  that OVR                                                                    
would  be allowed  to facilitate  restitution orders,  which                                                                    
was the greatest  need in helping victims get  back on their                                                                    
feet. He  stated that the minimal  increase would streamline                                                                    
the restitution process.                                                                                                        
10:07:16 AM                                                                                                                   
DAVID   TEAL,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
suggested placing  the fiscal notes in  order beginning with                                                                    
the Department  of Law  note (LAW),  OMB component  2717. He                                                                    
directed committee attention to Page 2:                                                                                         
     The Department  of Law used to  collect restitution for                                                                    
     victims. This  program was defunded in  2017. The court                                                                    
     system now  collects restitution  for victims.  Because                                                                    
     the Department  of Law no longer  collects restitution,                                                                    
     the  department anticipates  no  fiscal  impact if  the                                                                    
     bill becomes law.                                                                                                          
He  noted that  Page 2  of the  bill stated  that LAW  would                                                                    
still be  involved in  the collection  of funds,  which made                                                                    
him question  the fiscal note.  He thought that  there could                                                                    
be fiscal impact in the future.                                                                                                 
10:10:10 AM                                                                                                                   
Representative  Kopp relayed  that  LAW had  in  the past  a                                                                    
Victims'  Restitution Unit,  which was  removed in  2017. He                                                                    
said that with that removal  the department was still giving                                                                    
notice to  victims about  eligibility to  receive assistance                                                                    
from the  state but  that the  court had  step in  to assist                                                                    
with  receiving payments  and  helping  to facilitate  those                                                                    
payments. He  stressed that under  the bill, OVR  would step                                                                    
up to facilitate those payments.                                                                                                
10:11:09 AM                                                                                                                   
Mr.  Teal agreed  with  the sponsor.  He  stated that  there                                                                    
could be  some confusion  because LAW could  step in  if the                                                                    
victim chose  to get  help from  the department.  He thought                                                                    
that the issue could be  addressed in the future. The second                                                                    
fiscal note was from the  Alaska Court System, OMB component                                                                    
769. He explained  that the addition of OVR  to the equation                                                                    
would require  coordination, which would have  fiscal impact                                                                    
if the office paid restitution.  He pointed to the money for                                                                    
a  data  entry person,  but  no  money  for the  payment  of                                                                    
Representative   Kopp  interjected   that   the  money   for                                                                    
restitution  was subject  to  legislative appropriation.  He                                                                    
said that the most common  restitution figure was $1000; the                                                                    
restitution order had  not traditionally been a  part of the                                                                    
OVR  budget, so  an  appropriation to  help pay  restitution                                                                    
orders  would  be  needed.  He did  not  believe  that  huge                                                                    
amounts of money would need to be appropriated.                                                                                 
10:13:50 AM                                                                                                                   
Co-Chair  Foster   listed  additional   invited  individuals                                                                    
available to testify.                                                                                                           
Representative Wilson  asked how long the  position would be                                                                    
Mr. Teal  answered that the  appropriation for  the position                                                                    
did not have  to be used for the position  but could be used                                                                    
for operating  costs, including the payment  of restitution.                                                                    
He  said  that the  position  was  intended  to set  up  the                                                                    
coordination  between the  court  and OVR  to  be sure  that                                                                    
their   databases  aligned.   He   stated   that  once   the                                                                    
coordination  occurred,  the  position   may  no  longer  be                                                                    
required.  Whether the  money  was taken  away  or used  for                                                                    
restitution in the future was up to the legislature.                                                                            
Representative Wilson  thought that it was  unusual that the                                                                    
duration of the position was ambiguous.                                                                                         
10:16:17 AM                                                                                                                   
Mr.  Teal reviewed  the Department  of Revenue  fiscal note,                                                                    
OMB  Component  981.  he relayed  that  the  department  was                                                                    
requesting $20 thousand in FY19,  and $15 thousand each year                                                                    
after  for  management fees  associated  with  the new  sub-                                                                    
account of the dividend fund.  He felt that there was little                                                                    
need  to pay  for the  fees with  general funds,  he thought                                                                    
that the new fund could  be charged for the management fees.                                                                    
The  bill  did  not  currently stipulate  that  one  of  the                                                                    
purposes  of  the fund  was  to  allow  for the  payment  of                                                                    
managing   fees.  He   said  that   the  general   fund  was                                                                    
appropriate, given  the way the  bill was drafted,  but that                                                                    
could be amended.                                                                                                               
Representative Wilson asked if  the fiscal note pertained to                                                                    
Amendment 1.                                                                                                                    
Mr. Teal answered in the negative.  He said that when a fund                                                                    
of any kind was established,  the department needed to track                                                                    
the funds.  He said that money  would be flowing in  and out                                                                    
of  the fund  continually,  which the  department needed  to                                                                    
Mr.  Teal  reviewed  the Department  of  Health  and  Social                                                                    
Services fiscal  note, OMB Component Number  2134, with zero                                                                    
10:18:38 AM                                                                                                                   
Mr.  Teal  addressed the  Department  of  Health and  Social                                                                    
Services fiscal  note, OMB Component Number  3099, with zero                                                                    
impact.   Fiscal  note   6  was   for  the   Violent  Crimes                                                                    
Compensation Board,  OMB Component 2694. The  note requested                                                                    
$178.7  thousand  to  pay the  restitution  for  victims  of                                                                    
crime.  He  said  that  the  number  was  in  the  range  of                                                                    
allowable   percentages.   He    continued   to   the   Fund                                                                    
Capitalization note,  OMB component 2936, which  matched the                                                                    
previous note. He  said the fund would  first be capitalized                                                                    
and then the  money went from the  Crime Victim Compensation                                                                    
fund, to  the board,  which in turn  made payments  from the                                                                    
10:20:46 AM                                                                                                                   
Mr. Teal reviewed the fiscal  note for the Court System, OMB                                                                    
Component  Number 769,  which showed  a  fund source  change                                                                    
with one position added. He  said that the change would take                                                                    
away  $167.6 in  general funds  and replaced  it with  money                                                                    
from  the Restorative  Justice Fund  of  $251 thousand;  the                                                                    
change resulted  in a net  gain of  $83.8 and would  pay for                                                                    
the  1-year position.  He  said that  if  more money  became                                                                    
available,  DOC   would  get   less  fund  and   would  need                                                                    
offsetting general  fund dollars.  The last fiscal  note was                                                                    
for  the Department  of  Corrections,  OMB Component  Number                                                                    
2952. He  stated that if more  of the fixed amount  of money                                                                    
was  used for  purposes  other than  behavioral or  physical                                                                    
health  within  the  department,  DOC would  need  money  to                                                                    
offset  the  fund  taken  from   them  and  used  for  other                                                                    
purposes. In  FY19, the  fiscal noted  were lower  than what                                                                    
was called  for in  the legislation,  which could  change in                                                                    
the future. He related that for  2019, the net cost would be                                                                    
$262 thousand,  primarily in  the Crime  Victim Compensation                                                                    
Fund and  then the fund  source change in OVR.  He concluded                                                                    
that $282  was the  net general  fund spend  associated with                                                                    
the bill.                                                                                                                       
10:23:41 AM                                                                                                                   
Vice-Chair  Gara  requested  further  clarification  on  the                                                                    
fiscal notes.                                                                                                                   
Mr.  Teal  explained that  more  money  would be  spent  for                                                                    
victim  compensation,  which would  result  in  less of  the                                                                    
restorative justice  funds available  to DOC. The  DOC funds                                                                    
would need  to be replaced at  the cost of $262  thousand in                                                                    
general  funds, plus  $20 thousand  in administrative  fees,                                                                    
totaling $282 thousand.                                                                                                         
Vice-Chair   Gara  asked   which  fiscal   note  was   under                                                                    
Mr.  Teal clarified  he was  speaking about  all the  fiscal                                                                    
notes combined.                                                                                                                 
Vice-Chair Gara spoke to the  fiscal note for DOC, OMB 2952.                                                                    
He understood that $430 thousand was being added for DOC.                                                                       
Mr. Teal replied  in the affirmative. He  explained that DOC                                                                    
had  $11,493.4  in restorative  funds  in  their budget  for                                                                    
physical  healthcare  costs.  He  said  that  because  those                                                                    
restorative  funds would  be used  for  other purposes,  the                                                                    
department  would receive  $11,063  from  that fund  source.                                                                    
They will  need $430 thousand undesignated  general funds to                                                                    
replace the  money being used  elsewhere. He  furthered that                                                                    
the $282  thousand versus $430  thousand was because  of the                                                                    
negatives in OVR  where general funds were  being taken away                                                                    
from the  agency; the net of  what was being taken  from the                                                                    
agency  and replaced  with restorative  funds was  $83.8 and                                                                    
added up to $282 thousand.                                                                                                      
10:27:30 AM                                                                                                                   
Vice-Chair Gara asked about an  additional $11 million being                                                                    
put in during conference committee.                                                                                             
Mr. Teal hoped that would not be the case.                                                                                      
Representative  Wilson   asked  for  verification   that  if                                                                    
nothing changed  the following year  there would still  be a                                                                    
gain of $282 thousand required.                                                                                                 
Mr. Teal answered  it was not a single  fiscal note totaling                                                                    
$282, rather the sum of all  notes. He said that in the next                                                                    
year the legislature  may decide to fund some  of the things                                                                    
that were currently  a zero fiscal impact  at present. There                                                                    
were  grants through  the Department  of  Health and  Social                                                                    
Services (DHSS)  that were a  zero in FY19. He  relayed that                                                                    
CDVSA had  not prepared a  note because they  were expecting                                                                    
money anyway. He stated that  there were some grants through                                                                    
DHSS that were zero in FY19,  and according to the bill, the                                                                    
minimum percentages for  those purposes was 1  or 2 percent.                                                                    
He said  that as those things  were funded in the  future it                                                                    
would take money form DOC, which  would mean that the UGF in                                                                    
DOC would need to be increased to make up for the loss.                                                                         
Representative Wilson  asked about a scenario  where nothing                                                                    
changed,  and everything  continued to  be funded  under the                                                                    
status  quo.  Aside  from  the  $20,000  for  administrative                                                                    
purposes - how would the fiscal impact increase.                                                                                
10:30:29 AM                                                                                                                   
Mr. Teal replied  that the $282 thousand was  the FY19 cost.                                                                    
He said  that if  nothing changed  from the  distribution in                                                                    
FY19  then there  would be  no change.  He related  that the                                                                    
money  that was  lost by  departments to  fund the  payments                                                                    
would  need to  be replaced.  He concluded  that the  future                                                                    
cost of the legislation may  be just the $179 thousand, plus                                                                    
the $20 thousand in administrative cost.                                                                                        
Co-Chair  Foster believed  there would  be forthcoming  note                                                                    
from Judiciary.                                                                                                                 
Mr. Teal replied  that the note misstated the  fund name and                                                                    
would be corrected.                                                                                                             
Co-Chair  Seaton  MOVED  to  REPORT  CSHB  216(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSHB  216(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with one  new zero fiscal note from                                                                    
the Department of  Law; one new fiscal impact  note from the                                                                    
Department  of Administration;  one new  fiscal impact  note                                                                    
from   the    Department   of   Administration    for   Fund                                                                    
Capitalization;  one   new  fiscal  impact  note   from  the                                                                    
Department of  Corrections; one new indeterminate  note from                                                                    
the Alaska  Judicial System;  two previously  published zero                                                                    
fiscal  notes  from  the Department  of  Health  and  Social                                                                    
Services:  FN2  (DHS)  and FN3  (DHS);  and  one  previously                                                                    
published  fiscal   impact  note  from  the   Department  of                                                                    
Revenue: FN7 (REV).                                                                                                             
10:32:59 AM                                                                                                                   
AT EASE                                                                                                                         
10:34:11 AM                                                                                                                   
HOUSE BILL NO. 129                                                                                                            
     "An  Act   relating  to  sport  fishing,   hunting,  or                                                                    
     trapping  licenses,  tags,   or  permits;  relating  to                                                                    
     penalties  for  certain  sport  fishing,  hunting,  and                                                                    
     trapping license  violations; relating  to restrictions                                                                    
     on  the   issuance  of  sport  fishing,   hunting,  and                                                                    
     trapping  licenses;  creating violations  and  amending                                                                    
     fines  and  restitution  for   certain  fish  and  game                                                                    
     offenses;  creating   an  exemption  from   payment  of                                                                    
     restitution for  certain unlawful  takings of  big game                                                                    
     animals;  relating  to commercial  fishing  violations;                                                                    
     allowing lost  federal matching funds from  the Pittman                                                                    
     -   Robertson,  Dingell   -  Johnson/Wallop   -  Breaux                                                                    
     programs  to be  included in  an order  of restitution;                                                                    
     adding   a  definition   of   'electronic  form';   and                                                                    
     providing for an effective date."                                                                                          
10:34:19 AM                                                                                                                   
Co-Chair Foster relayed that the bill had been heard before                                                                     
in committee and public testimony was CLOSED.                                                                                   
10:35:01 AM                                                                                                                   
AT EASE                                                                                                                         
10:35:33 AM                                                                                                                   
BRUCE DALE, DIRECTOR, DIVISION OF WILDLIFE CONSERVATION,                                                                        
DEPARTMENT OF FISH AND GAME (via teleconference), deferred                                                                      
questions to the Department of Public Safety.                                                                                   
STEVE HALL, DIRECTOR, ALASKA WILDLIFE TROOPERS, DEPARTMENT                                                                      
OF PUBLIC SAFETY (via teleconference), did not have                                                                             
additional comments.                                                                                                            
Co-Chair Foster listed additional individuals available for                                                                     
10:37:07 AM                                                                                                                   
Representative Kawasaki  noted that several sections  of the                                                                    
bill  changed   the  consequence   for  violations   from  a                                                                    
misdemeanor,  upon conviction  punishable  by a  fine, to  a                                                                    
Class A  misdemeanor and punishable  by a fine.  He wondered                                                                    
about the impact of the change in language.                                                                                     
AARON PETERSON,  ATTORNEY IV,  CRIMINAL DIVISION,  OFFICE OF                                                                    
SPECIAL    PROSECUTION,     DEPARTMENT    OF     LAW    (via                                                                    
teleconference),  responded that  the  original language  in                                                                    
the  bill   would  have   changed  all   the  non-classified                                                                    
misdemeanors  in  Title  16 to  Class  A  misdemeanors  with                                                                    
standard  Class  A  misdemeanor penalties  laid  out  in  AS                                                                    
12.55. He  said that the  amended version made them  Class A                                                                    
misdemeanors with maximum fine amounts.                                                                                         
Representative  Kawasaki understood  that under  the current                                                                    
bill a charge for violation could be appealed in court.                                                                         
Mr. Peterson answered in the affirmative.                                                                                       
10:39:43 AM                                                                                                                   
Representative Pruitt referenced Page 2, section 3:                                                                             
     (h) A peace officer presented with an electronic                                                                           
     device under (g) of this section is immune from any                                                                        
     liability resulting from damage to the device.                                                                             
Representative  Pruitt  asked  what   would  happen  if  the                                                                    
electronic device  was damaged  in the presentation  of said                                                                    
device to  a peace  officer. He  thought that  utilizing the                                                                    
electronic  device was  a good  idea  but expressed  concern                                                                    
about the meaning of "liability" in the subsection.                                                                             
Mr.  Hall  answered  that  the  provision  was  intended  to                                                                    
protect the department from liability.  If a person chose to                                                                    
store  their fishing  license on  their  phone, rather  than                                                                    
have a  paper copy the  department would not be  held liable                                                                    
for any damage to the phone or other device.                                                                                    
Representative  Pruitt offered  an anecdote  where a  person                                                                    
was asked  to show  their license even  though they  had not                                                                    
committed  a violation.  He worried  that  the public  would                                                                    
have  no  recourse  if  they were  asked  to  present  their                                                                    
license  and then  something happened  to  their device.  He                                                                    
thought that the department should  claim some liability for                                                                    
damage.  He threatened  to offer  a conceptual  amendment to                                                                    
have the language removed.                                                                                                      
10:44:28 AM                                                                                                                   
Representative Guttenberg asked  whether there was precedent                                                                    
for Representative Pruitt's concern.                                                                                            
Mr. Peterson  replied that the  reason that the  section was                                                                    
in  the bill  was based  on situations  in other  states. He                                                                    
offered an  example of  a person fishing  in the  rain using                                                                    
their phone  to show  their license to  an officer.  He said                                                                    
that  if  the device  got  wet  and  was damaged  while  the                                                                    
trooper was performing their duties,  the state would not be                                                                    
liable  for damages  to  the  device. He  said  that if  the                                                                    
officer was grossly  negligent it could be an  issue for the                                                                    
civil division of law.                                                                                                          
10:47:07 AM                                                                                                                   
Representative  Guttenberg understood  it  was  a civil  law                                                                    
Mr. Peterson  explained that there  was a duty of  care that                                                                    
law  enforcement   was  required  to  exhibit   when  taking                                                                    
possession   of  belongings,   an  impounded   vehicle,  for                                                                    
example.  He said  that  "due  care" would  be  used by  law                                                                    
enforcement and the  liability would depend on  the facts of                                                                    
the interaction.                                                                                                                
10:48:39 AM                                                                                                                   
Representative Ortiz understood  the concern; however, there                                                                    
was a  certain amount  of acceptance of  the risk  of having                                                                    
the only  copy of the  licenses in an electronic  format. He                                                                    
thought  an  individual  had to  calculate  that  risk  when                                                                    
deciding whether to carry a  paper or electronic license. He                                                                    
would oppose the conceptual amendment if offered.                                                                               
Representative Wilson  asked to  hear from someone  from the                                                                    
Civil  Division  of  the Department  of  Law.  The  language                                                                    
stated, "immune  from any damage  to a device." She  did not                                                                    
think proper  care had anything to  do with it. She  did not                                                                    
think anyone should be completely  immune to possible damage                                                                    
of property.                                                                                                                    
Co-Chair Foster held the bill until the afternoon meeting.                                                                      
Representative Wilson requested more information on the                                                                         
issue. She thought the bill could be written in a better                                                                        
HB 129 was HEARD and HELD in committee for further                                                                              
Co-Chair Foster discussed housekeeping.                                                                                         
10:52:56 AM                                                                                                                   
The meeting was adjourned at 10:52 a.m.                                                                                         

Document Name Date/Time Subjects
HB 216 Letter of Opposition.pdf HFIN 4/9/2018 9:00:00 AM
HB 216
HB 216 - Amendment #1.pdf HFIN 4/9/2018 9:00:00 AM
HB 216
HB216 Legal Opinion Dedicated Funds 4.7.18.pdf HFIN 4/9/2018 9:00:00 AM
HB 216
HB 129 - Amendment #1.pdf HFIN 4/9/2018 9:00:00 AM
HB 129
SB 78 - Letters in Opposition 3.14.2018.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 charts 10,000 people,50,000people.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 House CS sb78 Y.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
Sara Race Email response.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 - Letters in Opposition 3.14.2018.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 Letter Support NEA Alaska.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 Letter Support ALFCIO.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 Letter Support Carpenters.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 Letter Support School.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB78 model 4-7 modification final.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
HB 129 - Amendment #2.pdf HFIN 4/9/2018 9:00:00 AM
HB 129
SB 78 CS Legal Opinion 3-1-17 Donation vs Contribution.pdf HFIN 4/9/2018 9:00:00 AM
SB 78
SB 78 - Amendment #1.pdf HFIN 4/9/2018 9:00:00 AM
SB 78