Legislature(2003 - 2004)

03/04/2004 01:43 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ 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  Work Draft 23-LS1768, Version                                                                   
U. There being NO OBJECTION, it was so ordered.                                                                                 
                                                                                                                                
Representative Croft asked for explanation of the changes.                                                                      
                                                                                                                                
SUE STANCLIFF,  STAFF TO  REPRESENTATIVE KOTT explained  that                                                                   
the new changes in Version U have  resulted from working with                                                                   
the gaming  industry.  On page 2,  "Creation of  commission,"                                                                   
the commission  would still consist  of five voting  members,                                                                   
but  would  now  include  two  non-voting  members  from  the                                                                   
industry. Addressing a question  that arose during a previous                                                                   
hearing, she  stated that  one voting  member must  have five                                                                   
years' experience  in law enforcement.   One of  the industry                                                                   
members must  hold a  permit or license  under AS  05.15, and                                                                   
the other ex-officio nonvoting  member must hold a license or                                                                   
permit under AS 04.11. The voting members elect the chair.                                                                      
                                                                                                                                
Ms.  Stancliff noted  that  in Subsection  (b),  page 2,  the                                                                   
voting members  serve staggered terms  of three years  and it                                                                   
is already  defined in  AS 39.05.55.   The nonvoting  members                                                                   
serve a non-staggered three-year  term. The change on page 3,                                                                   
(f) sets out that  an ex officio member may not  serve if the                                                                   
person has been convicted of a crime                                                                                            
                                                                                                                                
In  response  to  a question  by  Representative  Croft,  Ms.                                                                   
Stancliff advised  that ex officio  members can  hold permits                                                                   
for charitable  gaming, must submit to a  criminal background                                                                   
check,  and cannot  serve on the  commission  if they have  a                                                                   
criminal record.  She stated that there would  be five voting                                                                   
members and two non-voting members.                                                                                             
                                                                                                                                
Ms.  Stancliff  referred  to  page  4,  explaining  that  the                                                                   
provision  that the  commission  may participate  with  other                                                                   
states in multi-gaming activities  was moved from "Duties and                                                                   
powers   of  the  commission"   in  Version   S  to   "Gaming                                                                   
activities" in Version U.                                                                                                       
                                                                                                                                
Ms. Stancliff  pointed  out a  change on page  5, "Duties  of                                                                   
director."   The director  now  would be exempt  but not  the                                                                   
director's employees.   This change  resulted from  a concern                                                                   
that   the  seven   current  non-exempt   employees  in   the                                                                   
Department of Revenue  would gain exempt status  by moving to                                                                   
the commission.                                                                                                                 
                                                                                                                                
Ms.  Stancliff  referred  to  page  5,  line  8,  "Duties  of                                                                   
director," and explained that  the contractual questions with                                                                   
agents have  been removed in  the current version  because no                                                                   
gaming  is  allowed under  AS  05.18.    On page  6,  "Gaming                                                                   
activities,"  language  has been  removed  that stated,  "the                                                                   
commission  may not  authorize a  charitable gaming  activity                                                                   
unless  that activity  is authorized  under AS  05.15."   The                                                                   
language was unnecessary because  this section speaks only to                                                                   
AS 05.18.                                                                                                                       
                                                                                                                                
Ms. Stancliff  pointed out  a change  on page 6,  "Prohibited                                                                   
acts," which removed  price fixing from the  previous version                                                                   
because  it  would be  inappropriate  for  the state  to  set                                                                   
prices on  raffle tickets.  She  added that it  was confusing                                                                   
language that doesn't apply to AS 05.15.                                                                                        
                                                                                                                                
PETE  ECKLUND,   STAFF  TO   REPRESENTATIVE  BILL   WILLIAMS,                                                                   
clarified  that AS 05.15  is the  charitable gaming  statute.                                                                   
Most  of this  bill would  create a  new section  of law,  AS                                                                   
O5.18,  for future new  gaming. He  noted existing  confusion                                                                   
over how AS 05.15 and AS 05.18  interplay, and he pointed out                                                                   
that these are totally separate sections of law.                                                                                
                                                                                                                                
Ms. Stancliff noted that page  6, "Prohibited acts," (b) does                                                                   
not reflect a change but speaks  only to AS 05.18 under which                                                                   
no gaming is allowed.   The Governor and his  staff can still                                                                   
buy a raffle ticket under AS 05.15.                                                                                             
                                                                                                                                
Ms. Stancliff  explained  one requested  change that  was not                                                                   
made to  Version U.  The Department  of Law  asked for  added                                                                   
language on  page 8,(C), stating "expressly  authorized under                                                                   
AS 05.15 or 05.18." The legal  drafter thought it would apply                                                                   
to  specific  activities  like  Blackjack  and  that  it  was                                                                   
unnecessary.                                                                                                                    
                                                                                                                                
Representative Hawker  MOVED to ADOPT Amendment  1.  Co-Chair                                                                   
Williams OBJECTED for purposes of discussion.                                                                                   
                                                                                                                                
     Amendment 1 reads:                                                                                                         
                                                                                                                                
     Page 3, following line 25:                                                                                                 
          Insert a new subsection to read:                                                                                      
          "(c) The voting members of the commission may                                                                         
     exclude the ex officio members from executive sessions                                                                     
     otherwise permitted by law."                                                                                               
                                                                                                                                
Ms. Stancliff explained that Am#1  would give only the voting                                                                   
non-industry  members  the  authority to  go  into  executive                                                                   
session.                                                                                                                        
                                                                                                                                
Co-Chair Williams WITHDREW his OBJECTION.                                                                                       
                                                                                                                                
Representative  Hawker MOVED to  ADOPT Amendment  2. Co-Chair                                                                   
Williams OBJECTED for purposes of discussion.                                                                                   
                                                                                                                                
     Amendment 2 reads:                                                                                                         
                                                                                                                                
     Page 6, line 5, following "if":                                                                                            
     Insert "that participation and those activities are"                                                                       
                                                                                                                                
Ms.  Stancliff explained  that  Am#2 was  recommended by  the                                                                   
gaming  industry  and the  sponsor  does  not object  to  the                                                                   
change.                                                                                                                         
                                                                                                                                
Representative Stoltze  asked for examples of  these types of                                                                   
activities.  Ms.  Stancliff replied that Am#2  falls under AS                                                                   
05.18,  which  currently has  no  gaming activities,  so  the                                                                   
expansion  of new  gaming could  not take  place without  the                                                                   
authority of the legislature.                                                                                                   
                                                                                                                                
Co-Chair Williams WITHDREW his OBJECTION.                                                                                       
                                                                                                                                
LARRY   MEYERS,  DEPUTY   DIRECTOR,   DIVISION  OF   FINANCE,                                                                   
DEPARTMENT   OF  REVENUE,   VIA  TELECONFERENCE,   ANCHORAGE,                                                                   
provided  background on  staffing  of the  charitable  gaming                                                                   
unit.  He  explained  that  it  is  a  regulatory  unit  that                                                                   
oversees  1200 permittees  who,  in FY  03,  paid about  $2.6                                                                   
million in  taxes and fees to  the state.  While  gambling is                                                                   
illegal  and  falls  outside  the  gaming  unit's  regulatory                                                                   
authority, charitable gaming is the exception.                                                                                  
                                                                                                                                
STEVEN  BORCHERDING SR.,  GENERAL MANAGER,  GOLD CASH  BINGO,                                                                   
VIA TELECONFERENCE,  ANCHORAGE, expressed  that he's  been in                                                                   
the  industry  for fourteen  years,  and  that this  bill  is                                                                   
nothing more  than a springboard  for full scale  gambling in                                                                   
the future.   He stated  that charitable gaming  is currently                                                                   
working very  well, with enforcement and  regulatory statutes                                                                   
in  place.   The majority  of  the gaming  industry is  truly                                                                   
charitable and non-profit.                                                                                                      
                                                                                                                                
BOB  LOESCHER,  ALASKA  NATIVE   BROTHERHOOD  (ANB),  JUNEAU,                                                                   
explained  that he  has worked  with a  number of  charitable                                                                   
permittees,   including  the   ANB   and  the   Tlingit-Haida                                                                   
Community Council.   The ANB has worked with  the legislature                                                                   
for two years on charitable gaming  legislation. He expressed                                                                   
the   ANB's  support   of   HB   509;  in   particular,   the                                                                   
restructuring  that  would  move the  Department  of  Revenue                                                                   
commission to a new commission,  and separation of charitable                                                                   
gaming and any  new gaming in the future.  He  stated that he                                                                   
has  received  assurances that  any  changes  to statute  and                                                                   
regulation would  come before  the legislature.  He expressed                                                                   
support that the industry is included  in an advisory role as                                                                   
part  of the  commission.   He  expressed that  the issue  of                                                                   
taxes and fees  is an important condition of  his support for                                                                   
HB  509  because  the ANB  believes  the  legislature  should                                                                   
establish taxes and fees.                                                                                                       
                                                                                                                                
Representative  Foster MOVED  to report  CSHB 509, Version  U                                                                   
out  of  committee  with the  accompanying  fiscal  note  and                                                                   
individual recommendations.                                                                                                     
                                                                                                                                
Representative Stoltze OBJECTED.                                                                                                
                                                                                                                                
A roll  call vote was  taken on the  motion to move  the bill                                                                   
from committee.                                                                                                                 
                                                                                                                                
IN FAVOR: Moses, Chenault, Croft, Fate, Foster, Hawker,                                                                         
          Joule, Harris, Williams                                                                                               
OPPOSED: Stoltze                                                                                                                
                                                                                                                                
Vice-Chair Meyer was not present for the vote.                                                                                  
                                                                                                                                
The MOTION PASSED (9-1).                                                                                                        
                                                                                                                                
Representative  Foster commented that  he does not  object to                                                                   
the  concept of  the  bill, but  he expressed  concerns  over                                                                   
creating   another  commission   that  would   come  to   the                                                                   
legislature with additional funding requests.                                                                                   
                                                                                                                                
CSHB 509(FIN)  was REPORTED out of Committee  with individual                                                                   
recommendations and one fiscal note.                                                                                            
                                                                                                                              

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