Legislature(2003 - 2004)
04/21/2004 01:53 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 552 An Act relating to gambling and gaming. Co-Chair Harris MOVED to ADOPT Committee Substitute Work Draft Version I dated 4-20-04 as the version of legislation before the Committee. There being NO OBJECTION, it was so ordered. TOM WRIGHT, STAFF TO REPRESENTATIVE HARRIS, explained the differences between the original bill and Work Draft Version I. Mr. Wright stated that Version I deleted the following: - all references to the Alaska Gaming Commission and its supervision of charitable gaming found in, or related to, AS 05.15; - Section 2 from the original bill that gave authority to the Alaska Gaming Commission to suspend a license or permit for a violation of AS 05.15; - Section 3 from the original bill that gave authority to the Alaska Gaming Commission to administer the provisions of AS 05.15; - Section 4 from the original bill that provided a definition of the Alaska Gaming Commission under AS 05.15. Mr. Wright stated that Work Draft Version I also made the following changes: - on page 2, line 21,provided a definition of a public officer of the State and gave it the same definition found in AS 39.52.960; - on page 3, line 2, further defined the grounds for removal of a commissioner. This includes the failure of a commissioner to attend at least 50% of the meetings in any 12-month period; - on page 5, line 27, provided an appeals process which allows a person to seek judicial review of a final administrative order of the commission as defined in AS 44.62.560 and 44.62.570 (judicial review under the Administrative Procedures Act); Mr. Wright continued explaining that Version I also: - deleted subsection 10 on page 10 of the original bill that required a person applying for an owner's or supplier's license to provide information of the amount, date and method of payment of political contributions, loans, donations or other payments to a candidate or office holder for the previous five years before the date the person applied for a license; - on page 11, line 13, added subsection (i). Requires an applicant for a license to submit to the commission, fingerprints and fees required by the Department of Public Safety for criminal justice information and a national criminal history record check. The commission is then required to forward fingerprints and fees to the department for a report of criminal justice information under AS 12.62 (Criminal Justice Information Systems Security and Privacy) and a national criminal history record check. The results will be used to then evaluate applicants. Mr. Wright emphasized that the change adding subsection (i) must be included for the department to get permission to request this information. Mr. Wright noted the following changes in Version I: - on page 16, line 5, clarified language that any income earned on the principal of a cash or negotiated securities bond will be paid to the benefit of the licensee; - on page 16, line 25, rewrote subsection (h) for clarity purposes; - on page 30, line 22, added security and surveillance services and supplies and money counting services and supplies to the definition of supplier's license; and - deleted Sections 10 and 11 from the original bill. Section 10 repealed the definition of department (Department of Revenue) since the commission was to provide supervision of charitable gaming activities. Section 11 instructed the revisor to change references to the commissioner and department in AS 05.15 to commission. Representative Stoltze asked if he had looked into the ramifications of the Indian gaming issues. Mr. Wright said that he was in contact with the Department of Law, and the request is under review. Mr. Barnhill could address it. Representative Stoltze asked if it is the intent to have a sole source contract, and whether there is expertise on Indian gaming within the Department of Law and Legislative Legal Services. Mr. Wright deferred to Mr. Barnhill. Co-Chair Harris concurred with Representative Stoltze's concerns. He thought that there might be a lack of expertise in that area because gaming is not a major part of Alaska's economy. MIKE BARNHILL, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW (DOL), agreed that Representative Stoltze's concerns are valid. As with any unclear issue of law, the decision falls to the courts. While the DOL can provide its best analysis and evaluation of legal questions, it cannot predict with certainty what a court would decide. Mr. Barnhill said that he and experts in Indian gaming and law discuss these issues. Representative Stoltze asked if it should be a legitimate concern of the policymakers on this Committee that with passage of the bill, the sole source contract in Anchorage could provide a legal remedy for Native gaming in other communities and other sites in Anchorage. Mr. Barnhill replied that passage of the bill would allow Indian gaming. Representative Joule asked if the State has a concern that Indian gaming could result from this bill. Mr. Barnhill said that the DOL declines to express views on policy issues. He was unaware of the Department having a concern. Representative Croft asked if it would be possible to get a ruling or declaratory judgment on the status of the tribes and their lands. Mr. Barnhill had spoken with the Solicitor's Office in the Department of the Interior and he noted that most of the requests for declaration of Indian land were turned down. Indian lands may have a different set of facts pertinent to the regulation of each particular parcel. He doubted the possibility of getting a declaratory judgment because it's on a case-by-case basis. Only a few of the seven or more Alaskan cases before the National Indian Gaming Commission (NIGC) succeeded in obtaining a decision of being Indian lands: Metlakatla, Kake and Klawock. In response to a question by Representative Croft, Mr. Barnhill explained that these were requests by the tribe for an Indian land declaration from the NIGC rather than lawsuits. The Department intervened in the Barrow case, and attempted to intervene in the Kake and Akiachak cases but was unsuccessful. SUSAN BURKE, ATTORNEY, JUNEAU, stated that she was asked by Mr. Green to look into the Indian gaming issues relating to the bill. Representative Croft asked if there is a procedure to determine the status of Alaska lands under the Indian Gaming Act before enacting this legislation. Ms. Burke responded that village lands are not subject to any alienation restrictions and explained that the only lands held with federal restrictions on alienation are individual Native allotments. It would be difficult for any tribal entity to persuade the Indian Gaming Commission or a court that it exercised governmental authority over the allotment of land. She pointed out that the courts don't issue advisory opinions. Ms. Burke said that she did not see the bill as a major threat to the proliferation of gaming in Alaska for two reasons. The Alaska Gaming Commission would have the authority to determine the games authorized in the Anchorage casino. In the Ninth Circuit, the State is required to negotiate with an Indian tribe only over specific games authorized by law or regulation. She stressed that it is an economic issue and she thought that Metlakatla, Kake and Klawock are so isolated that it would be difficult to come up with an economically feasible proposal. In response to a question by Representative Croft, Ms. Burke said that Eklutna had applied in the past for authority from the Indian Gaming Commission. TAPE HFC 04 - 92, Side B Ms. Burke continued discussing Eklutna. She thought that Eklutna would be unable to meet the governmental jurisdiction aspect of Indian lands. She didn't know if there was a Native allotment within the general Eklutna area. Representative Croft pointed out that the two issues involved in the Indian Gaming Regulatory Act (IGRA) are the lands issue and governmental authority by the tribe. He asked if Native allotments would be considered Indian land and not Indian Country. Ms. Burke answered that Indian Country is not irrelevant in relation to the reservations, and after the Venetie Decision, people argued the issues of Indian lands or Indian Country. The ANCSA settlement lands are not Indian Country and were deeded to the regional and village corporations without any alienation on restriction. The IGRA definition of lands would not include the ANCSA lands. Representative Croft asked if the Venetie and IGRA definitions are identical. Ms. Burke said that Indian Country and Indian land are distinct definitions. The definition of Indian lands must be considered under the IGRA and these include reservations, e.g. Metlakatla. Under the IGRA definition, Indian lands also are lands held in trust with restrictions on alienation imposed by the federal government. Representative Croft asked what it takes to change tribal governance status. He pointed out that President Clinton changed some of the authority given to tribes, allowing them to operate nonprofit organizations. Ms. Burke said that Congress has the authority to change tribal governance, but not the President. Representative Croft noted that Congress didn't declare the Venetie Decision Indian Country yet. Ms. Burke affirmed, and reiterated that Congress has authority over Indian issues involving lands or powers. Representative Hawker asked if passage of the bill would expose the State to the intrusion of [indisc]. Mr. Barnhill affirmed, and clarified that he said "yes" in relation to Metlakatla. If Class 3 gaming were permitted in Anchorage, Metlakatla would be able to conduct the same kind of gaming. Outside of the known exceptions of Metlakatla, Kake, and Klawock, he thought the odds were low that another parcel of land could qualify as Indian lands because there must be tribal governance over the land. He guessed there are relatively few parcels with tribal governing power, while noting that no one has done an exhaustive survey of all of the potential parcels. Representative Fate asked if Indian lands held in trust by the Bureau of Indian Affairs (BIA) would become available. Ms. Burke said that all village lands are subject to no restrictions on alienation, and she was unaware of any village land qualifying as Indian lands under IGRA. Co-Chair Williams commented that Congress passed the 1991 Amendments involving a different type of trust similar to a land bank wherein nothing can be done on village corporation land. The land can't be taxed or worked. Ms. Burke affirmed that it applies to regional corporation land. In response to a question by Representative Stoltze, Ms. Burk said no one knows how Eklutna's application would have fared before the Indian Gaming Commission because they withdrew it once the Legislature repealed the "Monte Carlo Nights." She was not sure if the Legislature's concerns were reasonable or unwarranted, or if Indian Gaming was the only reason prompting the repeal of the Monte Carlo Nights. In her view, Eklutna would have hard time persuading the Commission that it exercises policing and taxing powers and other governmental authority over its lands to qualify as Indian lands under the definition. Lawyers always dispute these issues, she said. Representative Croft brought up page 4 of 6 on Fiscal Note Component 2476, expressing surprise at how little revenue would derive from tourists visiting the Anchorage casino. He asked the source of the participation rates. LARRY MEYERS, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE, replied that the participation rates were based on Oregon's 8 casinos and Washington's 17 casinos. Two percent of the tourist population would visit the Anchorage casino. In response to a question by Representative Croft, Mr. Meyers clarified that the $50 million in revenue is the "after prize receipts:" not total money circulated, but the profit to the industry. Representative Hawker referred to the same chart on page 4 of 6 of the fiscal note, asking if Total Tourists includes both domestic and international tourists. Mr. Meyers replied that the figure is derived from Northern Economics, and reflects only the total domestic tourists statewide. At Ease: 2:58 P.M. Reconvene: 3:02 P.M. Representative Foster MOVED to report CSHB 552(FIN) out of Committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 552(FIN) was REPORTED out of Committee with individual recommendations and two new indeterminate fiscal impact notes.