Legislature(2003 - 2004)
02/25/2004 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 509
An Act relating to establishing the Alaska Gaming
Commission.
Co-Chair Harris MOVED to ADOPT the Work Draft for HB 509,
23-LS1768\S.
SUE STANCLIFF, STAFF TO REPRESENTATIVE PETE KOTT, explained
that HB 509 establishes the Alaska Gaming Commission. It is
intended to establish regulatory oversight of all forms of
gaming in Alaska, including current forms and future forms
that may be authorized by the legislature under AS 05.15.
Gaming currently includes bingo, lotteries, raffles, pull-
tabs, pull-tab gaming, and fishing derbies. The oversight
presently rests in the Tax Division of the Department of
Revenue.
The bill includes protections for legalized gaming. Ms.
Stancliff discussed the bill's provisions relating to the
commission. She explained that the commission may not
administer charitable gaming or any other gaming unless the
activity is authorized and enacted into law by the
legislature.
Ms. Stancliff explained the changes in the work draft
Version S from the Labor & Commerce Committee Substitute.
Version S removes the requirement that two members of the
commission are involved in charitable gaming and hold
permits under AS 05.15.
The Labor & Commerce CS changed the structure of the
commission by reducing the number from 4 to 3 of the 7
members with the same political affiliation, nonaffiliation,
or party. Version S removed "nonaffiliation" [page 2, line
12]. Version S retains the appointment of one member from
each of the four judicial districts. One member must have
law enforcement experience and one must be a certified
public accountant in Version S.
Co-Chair Harris asked for clarification of the membership
requirement. Ms. Stancliff was not able to answer how
"experience in law enforcement," was interpreted by the
drafter.
In response to a question by Co-Chair Harris, Ms. Stancliff
explained the membership could include, for example, one
member who is nonpartisan, undeclared, Libertarian or
Republican Moderate.
Ms. Stancliff stated that the staggering of terms isn't
defined in the bill because it is defined in AS 39.05.055,
Subsection 5.
Ms. Stancliff continued discussing changes in Version S. On
page 4, lines 16-17, the language emphasizes that any new
gaming must be authorized by the legislature.
Ms. Stancliff noted a change to the original bill prior to
its hearing in House Labor & Commerce. Language on Page 7,
line 4 was removed that stated an officer or employee of the
Office of the Governor could not purchase a gaming product,
receive a gaming prize or participate in a gaming activity.
Ms. Stancliff referred to Amendment 1, which reads:
Page 4, line 31:
Delete "and other employees of the commission are"
Insert "is"
Page 8, line 25,through page 9, line 4:
Delete all material and insert:
"*Sec. 7. AS 39.25.110 is amended by adding a new
paragraph to read:
(40) the executive director of the
Alaska Gaming Commission."
Ms. Stancliff explained that the first change would move the
charitable gaming administrative employees in the Department
of Revenue over to the Commission. The seven positions are
state employees without exempt status. The sponsor was
asked to remove the language from statute and retain the
status of those employees, making only the director's an
exempt position. She cited a number of commissions with
exempt employees.
Co-Chair Harris MOVED to ADOPT Amendment 1.
Representative Croft OBJECTED for purposes of discussion,
asking for clarification of the first change on page 4, line
31. Ms. Stancliff explained it's a technical change.
Representative Croft WITHDREW his OBJECTION.
There being NO OBJECTION, Amendment 1 was adopted.
In response to a question by Representative Meyer, Ms.
Stancliff explained that the correct fiscal note version is
a net zero. The first fiscal note was indeterminate, but
the fiscal note dated 2/24/04 more accurately reflects the
costs. The commissioners are not paid but their travel and
per diem expenses are estimated, as well as expenses related
to the director, at $616 thousand under Personal Services.
Vice-Chair Meyer questioned the creation of a new
commission. Ms. Stancliff explained that charitable gaming
has grown since 1996 when the division was transferred to
the Department of Revenue. This legislation looks ahead at
needed regulation of expanded gaming activities.
Vice-Chair Meyer asked about current gaming. Ms. Stancliff
noted that 23 pieces of legislation affecting charitable
gaming have passed since the Eighteenth Legislature.
In response to a question by Vice-Chair Meyer, Ms. Stancliff
affirmed that DOR would move to the new commission, with
zero cost.
Vice-Chair Meyer asked the pay range of the executive
director. Ms. Stancliff could not answer specifically, but
indicated that it would be in line with salaries of other
commission directors.
In response to a question by Representative Stoltze Ms.
Stancliff advised that generating revenues is not a major
responsibility of the commission, but it would analyze
gaming in other states and make recommendations relating to
new revenue sources.
Representative Stoltze asked the parameters of multi-state
gaming on page 4, line 12 of the bill. Ms. Stancliff stated
that multi-state gaming would only occur if authorized by
the legislature.
Representative Stoltze asked if the language under Gaming
Activities on page 6 would authorize on-line gaming. Ms.
Stancliff answered that it's one of the sections the sponsor
changed because the Labor & Commerce version contained
ambiguous language. The language, "in the state," made it
unclear if gaming could be done on-line. The new language
addresses on-line gaming, which is not authorized.
In response to a question by Representative Stoltze, Ms.
Stancliff affirmed that the new language on page 2, line 3,
prohibits persons with a liquor license, including bar-
owners, from participating in gaming.
Co-Chair Harris asked how many other states have legalized
gaming for profit. Ms. Stancliff responded 47, excluding
Utah, Hawaii, and Alaska.
Co-Chair Harris asked if this legislation is modeled after
that of other states. Ms. Stancliff affirmed, the bill is
modeled after Idaho and Colorado gaming statutes, which are
more in line with Alaska's direction, and these states have
rectified their mistakes.
Co-Chair Harris asked if the commission would be allowed to
impose taxation levels on gaming. Ms. Stancliff replied
that the legislature would have to authorize taxation, but
the commission may recommend it.
Co-Chair Harris questioned if the legislature authorizes
full casino gambling, would the commission or the
legislature recommend and set taxation levels. Ms. Stancliff
replied that this bill would give the commission authority
to do what is needed to regulate gaming, but taxation would
be addressed separately.
Through discussion, Representative Hawker noted that his
question about enforcement is answered on page 3, line 25,
which states that the authority of the commissioner is to
enforce the charitable gaming laws.
Representative Fate asked if the "Statement of Odds" on page
7 is "boilerplate" language taken from other statutes. Ms.
Stancliff affirmed. She pointed out that nothing is
authorized under AS 05.18.350.
Co-Chair Harris asked if the fiscal note dated 2/23/04
showing $548 thousand from program receipts is derived from
operators of charitable gaming. Ms. Stancliff affirmed, and
discussed the shift from the Department of Revenue,
commenting that $616 thousand reflects the department's
personal services.
GREG PETERSON, ALLIED CHARITIES, KETCHIKAN, VIA
TELECONFERENCE, expressed that the current laws are working
fine and he feels that the intent of this bill is only to
introduce video poker machines.
DAVE LAMBERT, VIA TELECONFERENCE, FAIRBANKS, expressed
concern over the change in commission membership in the work
draft, stating that there should be people in the industry
involved in the meetings and decision-making process. He
discussed multi-state gaming.
ED MOEGLEIN, ALASKA NONPROFIT CHARITABLE ORGANIZATION
(ANCO), VIA TELECONFERENCE, SOLDOTNA, listed all the groups
that his organization represents, and indicated that the
ANCO would like to meet with legislative committees to be
involved with current and future gaming legislation.
GARY SUPERMAN, CABARET HOTEL and RESTAURANT RETAILERS
(CHARR), VIA TELECONFERENCE, NIKISKI, expressed support for
the legislature's shift to look at gaming in the state. He
noted that HB 240 did not move through the process last
year. He said that passage of this bill would bring a
rational scrutiny of gaming, and would identify a revenue
stream if gaming were expanded.
TAPE HFC 04 - 30, Side B
Mr. Superman continued his testimony. He agreed with a
previous testifier that people involved in gaming should be
a part of the commission.
In response to a question by Representative Stoltze, Mr.
Superman clarified that he hopes the legislature is afforded
a wider perspective on gaming.
DALE FOX, EXECUTIVE DIRECTOR, CHARR, VIA TELECONFERENCE,
spoke in support of creating a commission in a legitimate
body to establish oversight in the same way that other
states have addressed gaming. He expressed that it seems
logical to make a cohesive package out of the many bills
that address gaming.
DARWIN BIWER, CHARR, JUNEAU, expressed that CHARR is totally
in favor of HB 509 that would create the commission. He
recommended looking first at consolidating pull-tabs, bingo,
and raffles, and the $300 million in total reported sales.
He noted the current ten bills on gaming. The CHARR regards
HB 509 as a housekeeping bill, not a pro-gambling bill. He
concluded, "run it like a business" and ensure strict
enforcement.
In response to a question by Representative Hawker, Mr.
Biwer stated that CHARR feels the commission should include
members of the industry to deal with the practicalities.
REPRESENTATIVE HARRY CRAWFORD asked whether the bill would
fix the gaming system or make the shift to new gaming. Mr.
Biwar replied that CHARR feels that the gaming industry is
not well run. Representative Crawford asked for instances of
the state or charities not receiving their share. Mr. Biwar
replied that there is no accurate reporting without
enforcement.
Representative Crawford followed up by asking if those
organizations in violation would be issued licenses for
electronic video machines. Mr. Biwar pointed out that the
commission would make that decision.
GEORGE WRIGHT, VOLUNTEER, ALASKA NATIVE BROTHERHOOD (ANB)
LEGISLATIVE COMMITTEE, spoke in favor of the commission. He
felt that the fiscal note is too low, but he supported the
idea of the commission if it has a balanced representation
and the legislature makes the decisions on new gaming.
SPEAKER KOTT commented that the bill is irrelevant to the
expansion of gaming activities. He addressed the issue of
taxation. The Commission would make recommendations if there
were options available throughout the State. Currently, the
Governor has legislation regarding the pull-tabs. Both the
voluntary unpaid members on the commission and the provision
of the quarterly reports would benefit the state. The
accounting of annual revenues currently does not exist. He
added that currently there are not many problems in the
pull-tab and bingo industries. The legislation is a
framework to oversee the industry and to control current and
potential activities. The number of members on the
commission should be left to the discretion of the
committee. Other states do not have industry members.
Co-Chair Harris thought it would be a good idea to have at
least one or two members with industry experience, and asked
if the Speaker had a personal position on that concern.
Speaker Kott deferred that consideration to the committee.
He agreed that there should be some industry representation
but he questioned how the determination would be made. He
did not want to see industry dominate the membership.
Co-Chair Williams noted that HB 509 would be HELD in
committee for further consideration.
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