03/26/2021 02:00 PM House FINANCE

HOUSE BILL NO. 128                                                                                                            
                                                                                                                                
     "An Act relating to charitable gaming online ticket                                                                        
     sales and activities."                                                                                                     
                                                                                                                                
2:02:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ZACK FIELDS,  SPONSOR, briefly  reintroduced                                                                    
the  bill. House  Bill 128  ensured  that charitable  gaming                                                                    
operators could sell raffle tickets  online. It would extend                                                                    
an authority established by regulation  for the pandemic and                                                                    
proved to be beneficial in all circumstances.                                                                                   
                                                                                                                                
Co-Chair Merrick indicated  Representative Edgmon had joined                                                                    
the  meeting. She  asked Connor  Bell  from the  Legislative                                                                    
Finance Division to review the fiscal note.                                                                                     
                                                                                                                                
2:03:17 PM                                                                                                                    
                                                                                                                                
CONNOR BELL,  FISCAL ANALYST, LEGISLATIVE  FINANCE DIVISION,                                                                    
reviewed the  fiscal note  associated with  the legislation.                                                                    
The  bill   would  allow   for  certain   charitable  gaming                                                                    
activities  to  be  conducted   online.  The  Department  of                                                                    
Revenue (DOR)  would need to establish  standards for online                                                                    
ticket sales  and guidelines. The department  did not expect                                                                    
any change  in revenues or operating  expenditures and would                                                                    
be  able  to  make  any  needed  changes  with  its  current                                                                    
resources.  He  indicated that  while  there  might be  some                                                                    
revenue impact,  the total  impact to  the state  for gaming                                                                    
was about $500,000 per year.  Therefore, any impact to state                                                                    
revenue would be relatively small.                                                                                              
                                                                                                                                
Co-Chair  Merrick reported  Representative  Wool had  joined                                                                    
the meeting.                                                                                                                    
                                                                                                                                
Representative Wool  asked Mr. Bell if  state gaming revenue                                                                    
totaled about $500 million. He  asked if the figure included                                                                    
all  charitable gaming.  Mr. Bell  responded positively  and                                                                    
clarified that  the figure  was net  of expenses  related to                                                                    
the administration  of the tax.  The amount did  not reflect                                                                    
gross receipts.                                                                                                                 
                                                                                                                                
Co-Chair Merrick  invited Ms. Glover  from the  Tax Division                                                                    
to comment.                                                                                                                     
                                                                                                                                
Mr. Connor added that the  total UGF revenue from charitable                                                                    
gaming was about $2.4 million  in FY 20. Representative Wool                                                                    
clarified that  the net revenue for  charitable gaming after                                                                    
expenses  was  $500,000. Mr.  Bell  thought  the number  was                                                                    
correct based on the fiscal  note. The Department of Revenue                                                                    
could provide additional information.                                                                                           
                                                                                                                                
2:05:50 PM                                                                                                                    
                                                                                                                                
COLLEEN  GLOVER,  DIRECTOR,   TAX  DIVISION,  DEPARTMENT  OF                                                                    
REVENUE  (via  teleconference),  reported  that  the  annual                                                                    
proceeds   for    all   charitable   gaming    revenue   was                                                                    
$2.4 million.  The majority  of revenue  came from  pull tab                                                                    
taxes   comprising  approximately   $2.0   million  of   the                                                                    
$2.5 million  in gaming  revenues. The  bill did  not impact                                                                    
the pull tab tax. The other  revenue to the state included a                                                                    
net  proceeds   fee  (net  proceeds  on   on  proceeds  over                                                                    
$20,000). There were  also license and permit  fees of about                                                                    
$500,000  per  year.  Those  would   be  the  only  proceeds                                                                    
impacted by the bill.                                                                                                           
                                                                                                                                
Representative   Wool  asked   whether  it   would  make   a                                                                    
significant revenue  impact if there  was a sudden  surge in                                                                    
ticket sales. Ms. Glover replied  that it would take a large                                                                    
quantity  of   additional  sales  to   generate  significant                                                                    
revenue. Representative  Wool queried about  Bingo revenues.                                                                    
Ms. Glover  responded that Bingo comprised  about 10 percent                                                                    
of the $500,000 in gaming revenues.                                                                                             
                                                                                                                                
Representative   LeBon   noted  the   non-profit   community                                                                    
participating  in Bingo  or other  gaming events  realized a                                                                    
significant benefit.  He spoke  based on  his tenure  on the                                                                    
Fairbanks  Downtown  Association.   The  association  was  a                                                                    
beneficiary of  a downtown Bingo operation.  He wondered how                                                                    
much a non-profit community would benefit.                                                                                      
                                                                                                                                
Representative Fields  had heard  that some  non-profits had                                                                    
doubled  their  income on  certain  events  even during  the                                                                    
pandemic. He  thought it was  surprising in a  positive way.                                                                    
He hoped it was the case  more broadly with the authority in                                                                    
the legislation.  Only time would  tell whether  there would                                                                    
be gains on a sustained basis.                                                                                                  
                                                                                                                                
2:09:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Merrick OPENED public testimony.                                                                                       
                                                                                                                                
2:09:42 PM                                                                                                                    
                                                                                                                                
Co-Chair Merrick CLOSED public testimony.                                                                                       
                                                                                                                                
Co-Chair Merrick  indicated amendments  were due by  noon on                                                                    
Sunday, March 28,  2021. She intended to  take up amendments                                                                    
on Monday and pass the bill out of committee if possible.                                                                       
                                                                                                                                
2:10:06 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:10:49 PM                                                                                                                    
RECONVENED