Legislature(1993 - 1994)

04/17/1993 09:40 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  SENATE BILL NO. 58:                                                          
       An Act relating to the longevity bonus program.                         
                         Recess 10:15am                                        
                        Reconvene 10:18am                                      
  Senator Sharp MOVED for adoption of  CSSB 58(FIN) work draft                 
  "E" dated April 16, 1993.  No objections being heard, it was                 
  Senator  Sharp  said  that  the  bill  phased  out  all  new                 
  applicants to the  longevity bonus  program by December  31,                 
  1996.  It would stairstep down benefits that new  applicants                 
  can receive after January 1, 1994.   Everyone already in the                 
  program would continue to  receive $250 a month.   Section 2                 
  said that if a person is disqualified from receiving a bonus                 
  for purposes  called  for  that  they may  not  reapply  for                 
  application unless they apply before the cut-off date as set                 
  forth in  this legislation.  Section  3, items 5  and 6, set                 
  out certain disqualifications.                                               
  Co-chair  Pearce said  that it was  intended that  the draft                 
  have a severability  clause for  the section that  disallows                 
  those seniors  who move  to Alaska  after their  eligibility                 
  In  answer to  Senator Kelly,  Senator  Sharp said  that all                 
  present situations, including medical leave, that are exempt                 
  from disqualification remain  so, and  that only those  that                 
  become disqualified under  present statutes have  to reapply                 
  under the new regulations.                                                   
  NANCY    BEAR    USERA,    Commissioner,    Department    of                 
  Administration, spoke in support of CSSB  58(FIN).  She said                 
  the Governor's proposal  had tried  to protect the  original                 
  intent of the  longevity bonus program which was  to provide                 
  uninterrupted residence  and provide  an opportunity and  an                 
  incentive for  long-time Alaskans  to stay  in the  state of                 
  Alaska.  Because  of the lawsuit in 1983  that made terms of                 
  the original  program unconstitutional, the  program now had                 
  23,000 participants and is growing at a rate of $5 million a                 
  year.  Over  the life of  the program, this translates  into                 
  $150  million  cost to  the  state to  continue  paying each                 
  year's  worth  of   new  entrants   into  the  program   and                 
  unaffordable.  The  resources spent on this  not needs-based                 
  program will be money unavailable to provide more meaningful                 
  services to seniors in the future.  The long term plan is to                 
  protect participants and  provide a reasonable phase  out of                 
  the  program.   She  said  that  the department  was  in the                 
  process of designing a package of bills that expand assisted                 
  living  opportunities  for  seniors as  well  as  expand the                 
  program "elders against abuse".  This would provide a safety                 
  net for  the  future  with  a more  meaningful  package  for                 
  current  seniors and those  to come.  She  said this was the                 
  seventh year of  debate of this  issue and she  felt it  was                 
  hard for the seniors for this  issue to be remain undecided.                 
  Once this issue  was decided, the  state could then move  on                 
  into other areas for seniors.                                                
  RIP ANDREWS,  American Association of Retired  Persons, said                 
  that a letter had gone out to the committee regarding SB 58.                 
  He  said that his organization would  prefer an annuity bill                 
  but  did support the  Governor's phase out  bill rather than                 
  the House version which was an  immediate cut off of January                 
  1, 1994.                                                                     
  Co-chair Pearce said  that additional  language in the  CSSB
  58(FIN) was needed  relating to disqualification on  page 2,                 
  lines 28  through page 3, line  1.  She questioned  the need                 
  for a severability clause for Section 2.  Senator Sharp said                 
  that he  had requested the  advisability from legal  on that                 
  issue and was expecting an answer momentarily.                               
  Co-chair Pearce announced that CSSB 58(FIN) would be held in                 
  SENATE BILL NO. 200:                                                         
       An Act  allowing the holders of  a multiple-beneficiary                 
       charitable  gaming  permit  that  consists entirely  of                 
       noncommercial broadcasting stations or networks of such                 
       stations  to sell a  pull-tab series  at more  than one                 
       location during the same  day if the sales are  made at                 
       the customary business location  of one or more of  the                 
       holders, at another  location by an employee  of one of                 
       the stations or  networks, or  by a registered  vendor;                 
       allowing permittees that are noncommercial broadcasting                 
       stations or networks of such  stations to contract with                 
       vendors to sell pull-tabs on behalf of the permittee at                 
       retail  establishments,   eating  establishments,   and                 
       establishments   with    liquor   licenses;    allowing                 
       municipalities  to  prohibit  vendors  from  conducting                 
       gaming activities within the municipality; relating  to                 
       reports  by  the  commissioner   regulating  charitable                 
       gaming to  the legislature;  requiring registration  of                 
       vendors;  relating  to  multiple-beneficiary charitable                 
       gaming  permits and door  prizes for charitable gaming;                 
       preventing   persons   with   felony   convictions   or                 
       convictions for crimes involving theft or dishonesty or                 
       a violation  of gambling  laws from  being involved  in                 
       charitable gaming activities as  a permittee, licensee,                 
       vendor, person responsible for an activity, fund raiser                 
       or  consultant  of   a  licensee,  or  employee   in  a                 
       managerial  or  supervisory   capacity  and   providing                 
       exceptions for certain persons whose convictions are at                 
       least 10  years old  and are  not for  violation of  an                 
       unclassified  felony  described  in AS  11,  a  class A                 
       felony, or extortion;  prohibiting a prize or  award of                 
       more than $250,000 in a  pull-tab game that provides  a                 
       right to participate  in a lottery; requiring  a vendor                 
       contracting with a  permittee to  pay the permittee  at                 
       least 50  percent of  the ideal  net for  each pull-tab                 
       series delivered to  the vendor  by the permittee;  and                 
       providing for an effective date.                                        
  Co-chair  Pearce said that SB  200 was before the committee.                 
  She pointed out  that several years ago  the legislature had                 
  given public radio the authority to develop a statewide game                 
  in order to raise money for  an endowment to replace general                 
  fund that are  used to  support public radio.   She  invited                 
  Diane Kaplin, President & CEO,  Alaska Public Radio Network,                 
  to join the committee at the table and speak to the bill.                    
  End SFC-93 #60, Side 1                                                       
  Begin SFC-93 #62, Side 1                                                     
  DIANE  KAPLIN  said  that in  1967  a  Presidential Carnegie                 
  Commission created  the concept  of the  public broadcasting                 
  system in the United States.  It set out the  aspirations of                 
  what  the  public broadcast  system could  do.   One  of the                 
  important aspects was how  the system would be  financed and                 
  that a tax would be collected  on every television and radio                 
  set sold in the U.S.  That tax section was not adopted, and,                 
  annually,  a battle is fought  over funds for financing pbs.                 
  In  Alaska,  a  very  large  percentage  of  our  population                 
  receives only public broadcasting, and it has become more of                 
  an issue.  The legislature has supported substantial amounts                 
  of funding for public broadcasting with the investment at $6                 
  million annually.  With the decline of oil revenues in 1986,                 
  public  broadcast  has been  looking for  new ways  to raise                 
  revenues  recognizing a decline of state  grants.  Today, 32                 
  percent  of  state grants  have  been  lost.   In  1986, all                 
  stations  carried the  public national  radio  schedule, now                 
  only three carry it because of  the cost.  Several countries                 
  including Denmark,  Canada, Norway, Finland and  England use                 
  games to finance their system.  There was a federal law that                 
  prohibited on air contests or games.  PBS approached Senator                 
  Stevens to  get that  federal law  changed and  in 1989  the                 
  charity gaming act was signed.  At that point, pbs in Alaska                 
  approached the legislature and HB 587 was passed to allow an                 
  on-the-air  game.  Last  year, the  legislature appropriated                 
  $50,000 to hire  experts to put together  a game to  fund an                 
  endowment for support of  pbs.  Dave Rose, former  member of                 
  the permanent fund  dividend corporation, was hired,  and he                 
  has set  up  a  plan  for an  endowment  trust  fund.    She                 
  explained that SB  200 would allow  pbs to move towards  the                 
  goal of  setting up a game and the  endowment.  A poll taken                 
  last year of 3200 Alaskans said  that 84 percent approved or                 
  were neutral about  the subject  of the appropriateness  for                 
  pbs to raise money on the air by a game.                                     
  Senator Kelly said  he was opposed to SB 200 but asked if SB
  200 allowed for the sale of  pull tabs on the ferry  system.                 
  JOHN HANSEN, JR.,  Gaming Manager, Department of  Commerce &                 
  Economic Development, said that  pull tabs would be able  to                 
  be sold on the ferries.  Senator Kelly felt that would  be a                 
  problem.   He said  he was also  opposed to pull  tabs being                 
  sold in restaurants.   Ms. Kaplin  said that in rural  areas                 
  that might be the  only place that could sell the pull tabs.                 
  Mr.  Hansen  said   that  SB  200  would  allow  any  retail                 
  establishment to sell pull tabs.                                             
  Senator Jacko MOVED for adoption of CSSB 200(FIN) work draft                 
  "E".  No objections being heard, it was ADOPTED.                             
  JERRY  LUCKHAUPT,  Attorney,   Legislative  Legal   Counsel,                 
  Legislative Affairs Agency,  suggested that the words  "pull                 
  tab series  or the" on page 7, line  14 be deleted.  Senator                 
  Jacko MOVED an amendment deleting the words "pull tab series                 
  or the" on  page 7, line 14, including a change to the title                 
  to that affect.   No objections being heard, the  words were                 
  deleted and the title changed.                                               
  Senator Kelly asked how  the pull tab game would  be played.                 
  Ms. Kaplin said that the pull tabs  would be mailed in and a                 
  drawing  would be  held.   She said  that it  could be  held                 
  several  times   a  year,   limited  to   twelve  hours   of                 
  broadcasting a  year over  the air.   The  station would  be                 
  prohibited  from  using  operators, and  the  game  would be                 
  conducted by  Alaska  public radio  network.   It would  not                 
  receive  any state moneys to fund the  games.  She said that                 
  the majority of  the funds would go into an  endowment.  Mr.                 
  Hansen  said that  public radio  would have  to get  special                 
  permission to hold funds for more than one year.  Ms. Kaplin                 
  said   the  board  of  directors  met   on  February  2  and                 
  established a trust fund.  She  said that 50 percent of  the                 
  funds  would  go   into  a  general  endowment   for  public                 
  broadcasting statewide and the balance would be divided into                 
  separate endowment  accounts for each  broadcasting station.                 
  She said that  there was some  concern that funds should  be                 
  retained by the communities that raised them.  Senator Kelly                 
  felt that the endowment should be outlined in the bill.  Ms.                 
  Kaplin said that she  did not object to that.   In answer to                 
  Co-chair Pearce, Mr.  Luckhaupt said that a  certain percent                 
  could  be  put into  an endowment.    Discussion was  had by                 
  Senators  Rieger,  Pearce,  Mr.  Luckhaupt  and  Mr.  Hansen                 
  regarding the endowment and existing statutes regarding  the                 
  use of the gaming funds.                                                     
  Senator Kelly MOVED  for adoption of a  conceptual amendment                 
  that would provide for  at least half of the  adjusted gross                 
  income  to  go  into an  endowment  with  the Commissioner's                 
  approval.   Mr. Hansen  said that  under SB  76 at  least 30                 
  percent of the adjusted  net income would be required  to be                 
  shown as net proceeds.                                                       
  Mr. Hansen said that gross sales  were defined as the dollar                 
  paid for the pull tab game.   After prizes are subtracted it                 
  is  called the  adjusted gross  income.  After  expenses are                 
  paid the result is net proceeds.  Under SB 76, 30 percent of                 
  the adjusted gross income is required  to be reported as net                 
  proceeds.  In answer to Senator  Kelly, Mr. Hansen said that                 
  in  addition to regular  reports, SB 200  required a special                 
  report to the legislature.                                                   
  Senator  Kerttula asked for  the amendment to  be in writing                 
  rather  than  a  conceptual   amendment.    Co-chair  Pearce                 
  announced an at ease.                                                        
                         Recess 11:10am                                        
                        Reconvene 11:23am                                      
  Senator Kelly MOVED for  adoption of amendment 3 on  page 7,                 
  line  24 (copy of file).  No  objections being heard, it was                 
  Senator Kerttula voiced his opposition  to using gambling to                 
  fund public  broadcasting.  He  said that he  understood the                 
  need for  becoming independent  from state  funds but  asked                 
  about  the moral  issues  around gambling  and how  it would                 
  effect  the image of  public broadcasting.   Ms. Kaplin said                 
  that discussion had been going on for years on this subject.                 
  Some local boards were opposed to using gambling as a way to                 
  raise funds.   This was one reason the recent poll was done.                 
  Every station  is locally owned and operated  by a community                 
  board.  Each  station will  have to make  this decision  for                 
  themselves.    She said  that  the  game would  be  aimed at                 
  viewers who wanted  to be supportive of  public broadcasting                 
  and would not  target traditional  gamblers or presented  in                 
  gambling institutions.   The choice may come down  to giving                 
  up public broadcasting  and its  services or participate  in                 
  the game for support.  She believed that some stations would                 
  opt not to participate.                                                      
  Senator  Kerttula  maintained  his  opposition  to  allowing                 
  gambling in the state  and proposed that the state  could be                 
  seen as an advocate  of gambling.  He questioned  what other                 
  forms  of gambling  could  be approved.   He  maintained his                 
  objection to public broadcasting participating in gaming and                 
  felt it set a bad tone.                                                      
  Senator Rieger MOVED for adoption of amendment  4 adding the                 
  words "the earnings  of which  may be used"  after the  word                 
  fund to amendment 3 (copy on file).  Senator Sharp OBJECTED.                 
  Discussion  was  had  by Co-chair  Pearce,  Senators Rieger,                 
  Jacko, Sharp, and Mr. Luckhaupt regarding  the sunset of the                 
  bill  and  the possibility  of  earnings from  the endowment                 
  supporting public broadcasting.  Senator Sharp withdrew  his                 
  objection.  No  further objections being heard,  amendment 4                 
  was ADOPTED.                                                                 
  Co-chair Pearce asked Mr. Luckhaupt what would happen to the                 
  endowment  after  the sunset  date  in the  present proposed                 
  bill.  Mr.  Luckhaupt said that  when the bill sunsets,  the                 
  language  restricting  endowment  uses  would  end  and  his                 
  opinion  was  that public  broadcasting  could then  use the                 
  endowment at that time.   Senator Kelly said that he did not                 
  disagree with that.                                                          
  Senator Jacko asked, of the amount raised  by the endowment,                 
  how much  would be  generated from  federal matching  funds.                 
  Ms. Kaplin said that  it is a substantial amount.   Matching                 
  funds would be 13 cents on the dollar, and in rural areas or                 
  native stations it  varies between  19 and 26  cents on  the                 
  Senator  Sharp asked if it  was their intention to advertise                 
  pull  tabs on  public broadcasting.   Ms.  Kaplin said  that                 
  advertising on the air was prohibited by law.  She said that                 
  the law  allowed 12 hours a year on the air for the game and                 
  most of that time would be  used for the on-the-air drawing.                 
  Senator Sharp said it would  disturb him, especially because                 
  of the young  people, if there was  a promotion on  the air.                 
  Senator Kerttula said  that "friends"  of the station  could                 
  buy air time on other stations or newspaper ads.  Ms. Kaplin                 
  maintained that any advertising would  be disallowed by law.                 
  Mr.  Luckhaupt  said   that  there  cannot  be   any  gaming                 
  advertising or promotions  on commercial broadcasting.   The                 
  twelve  hours  that Ms.  Kaplin  mentioned are  an exception                 
  provided in this legislation.                                                
  End SFC-93 #62, Side 1                                                       
  Begin SFC-93 #64, Side 1                                                     
  PAUL FUHS, Commissioner, Department  of Commerce &  Economic                 
  Development, said that several years ago the legislature had                 
  passed authorization for APRN to hold a game.  He said  that                 
  because of existing statutes, APRN had not been able to hold                 
  a game that  the department could  authorize.  He said  that                 
  the  department  and  APRN  needed  clarification  from  the                 
  legislature regarding what  could be authorized in  order to                 
  proceed.  He said that he was not opposed to SB 200 but said                 
  that  the  Governor  was opposed  to  extending  gambling in                 
  Senator Jacko MOVED for passage of CSSB  200(FIN) as amended                 
  from committee  with individual  recommendations.   Senators                 
  Kerttula and Kelly OBJECTED  for the record.  CSSB  200(FIN)                 
  was REPORTED OUT of committee  with a "do pass" with  a zero                 
  fiscal  note  for  the  Department  of Commerce  &  Economic                 
  Development.   Co-chairs Pearce  and Frank,  Senators Jacko,                 
  and Rieger signed a "do pass."   Senators Kelly and Kerttula                 
  signed a "do not pass," and Senator Sharp signed a "no rec."                 
                         Recess 11:50am                                        
                        Reconvene 12:05pm                                      

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