Legislature(2003 - 2004)
05/07/2004 08:27 AM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CSHB 552(FIN)am-GAMBLING & GAMING MR. TOM WRIGHT, staff to the House Finance Committee, which sponsored HB 552 by request, explained that the bill establishes an Alaska gaming commission designed to oversee the statutes established in the bill that pertain to gambling. It also creates new statutes that authorize the commission to issue a license to own and conduct gambling games at a specified gambling facility in any municipality in the state with a population of 150,000 or more. The House amended the bill to say that if a municipality adopts an ordinance, it must be ratified by a majority of the municipal voters. MR. WRIGHT told members that the new gambling commission would administer, regulate and enforce licensing for gambling facilities, its employees and its suppliers. The commission would collect fees and taxes and place them into a state gaming fund, which would consist of all revenue received from gambling activities. The fund will pay any activity conducted by the commission and other agencies related to gambling and gaming. The state would receive a 17 percent tax; the municipality where the gambling facility is located could also collect a tax, but not more than 3 percent of adjusted gross receipts. CSHB 522(FIN)am also creates new class C and class A misdemeanors for crimes related to associated gambling operations and activities. Currently 48 states have some form of legalized gambling. The purpose of CSHB 552(FIN)am is to provide tools and strict supervision of gambling and gaming activities authorized by the Alaska gaming commission. 9:05 a.m. SENATOR THERRIAULT asked for a description of the level of debate that took place in the House about the possibility that if this legislation passes and a casino were to be licensed, that would open the state up for the spread of Indian gaming in the state. MR. WRIGHT said this bill would allow gambling operations on certain Indian lands: the Metlakatla reservation and Kake and Angoon. SENATOR OGAN said it was his understanding that the issue of Native allotments was not resolved by the Venetie case. He recalled a briefing given by the former attorney general to the Majority Caucus on that issue. That was one reason the legislature did away with allowing non-profits to conduct Monte Carlo nights. MR. WRIGHT had the same recollection. He noted that Susan Burke, a Juneau attorney who has worked on this issue, believes that Native allotments would not be considered as Indian land under the Indian Regulatory Gaming Act. SENATOR OGAN surmised that no one will have the final answer until the court rules on the question. MR. WRIGHT agreed. SENATOR FRENCH asked if any discussion has taken place about potential land swaps for reservation land. MR. WRIGHT said he was unable to answer that question as he did not have enough experience in Indian law. CHAIR SEEKINS referred to Sec. 05.18.100, beginning on page 11, entitled, Ejection or exclusion from facilities, and noted the section does not clarify that the provision is in addition to the power of the police to remove a trespasser. It basically says the commission will determine that. He then said, "The next part of that, if I go down to [Sec. 05.18.120[, on the same page, here it appears to me to subject the investigative powers of the state and the local police to the Alaska gaming commission. It puts it in a subjective role." MR. WRIGHT thought that if a trespassing complaint is filed, nothing would prohibit the local police force or DPS from becoming involved. He was unable to answer Chair Seekins' second question. CHAIR SEEKINS said Sec. 05.18.220 on page 18 appears to give the Alaska gaming commission the right to issue liquor licenses and security guard licenses, which are currently the responsibility of the Department of Public Safety (DPS). MR. WRIGHT said the licensed owner has to apply to the commission to hold any license if the owner is going to supply to that gambling facility. However, the bill also contains supplier license provisions that say what can be supplied, and he did not believe that includes alcohol or food. He clarified that it applies to all other licenses. CHAIR SEEKINS said it appears that the commission has supplanted the authority of DPS in that it says a license holder may apply to the commission for and may hold licenses that are necessary for the operation of a gambling facility, including the license to prepare and serve food for human consumption and any other necessary license. The commission will be putting itself in a position now held by other state agencies because the owner will just go to the commission to get what he needs. MR. WRIGHT said he believes that DEC and some of the other agencies that are responsible for food preparation inspections will still do so. CHAIR SEEKINS felt that should be clarified in the bill. SENATOR FRENCH referred to Sec. 05.18.010 on page 2, which pertains to the commission itself. He asked if it will consist of three members and how that number was arrived at. MR. WRIGHT said that is correct and that various numbers were floated around but three is the number the House decided to adopt. He noted the bill is based on the Indiana gambling law. SENATOR FRENCH said if this bill is enacted, three people will decide who will get the one casino license. MR. WRIGHT said the bill contains certain parameters that must be used when determining who will get that one license. SENATOR FRENCH expressed concern that there may be a fierce amount of competition for that one casino license. MR. WRIGHT said he could not argue that point. SENATOR FRENCH said he would prefer to see more decision makers and a broader array of interests represented on the commission. He said he appreciates the fact that the commission will include a person with a law enforcement background and another with an accounting background and that the majority cannot be from any one political party. He repeated that his concern is the large amount of power that those three people will have. MR. WRIGHT explained that one thing the [House Finance Committee] wanted to exclude from membership is anyone with a potential conflict of interest. SENATOR FRENCH asked, given that a fierce amount of competition for the license is likely, what the appeals structure will be for the applicants. MR. WRIGHT said the bill contains an appeals process that is based on the Administrative Procedures Act that can be used for any disagreement with a decision made by the commission. TAPE 04-67, SIDE B CHAIR SEEKINS questioned why Sec.05.18.450 on page 25 does not provide any authorization for the Anchorage police to inspect a facility; only the Department of Public Safety or commission employees can do an inspection. MR. WRIGHT did not believe the local police would be precluded from doing an inspection and said he was not opposed to including that in the bill. CHAIR SEEKINS said it appears that the forfeiture provision allows for the forfeiture of property belonging to innocent suppliers and might violate the substantive due processes in State v. Wilder [626 P2nd 104 1981]. MR. WRIGHT pointed out that a supplier's license issued under this chapter would allow a person to supply security, surveillance, supplies, money counting machines, gambling paraphernalia, supply services, and equipment to a licensed owner. Therefore, a supplier's license is limited to that scope. CHAIR SEEKINS maintained that the forfeiture section may still have due process problems. He then referred to Sec. 05.18.540 and said it reduces the level of certain crimes already in Alaska's criminal code, such as bribery. MR. WRIGHT said the new crimes established in the bill only pertain to the gambling operations. CHAIR SEEKINS said he has a problem charging a casino owner with a lower criminal charge than that given to any other gambling operator or otherwise. He then pointed out that (a)(1) and (6) in Sec. 05.18.540 are duplicative. He indicated that he has not had a lot of time to review the bill but from his quick review, he has some serious concerns. He said despite his personal disapproval of legalized gambling, as a legislator he is trying to craft a bill that he could approve of. He offered to make a list of the concerns he has with the bill itself so that the sponsor could address some of them. MR. WRIGHT offered to review the list. CHAIR SEEKINS asked if members objected to setting the bill aside for further review. SENATOR THERRIAULT said he had hoped to have a copy of a memo from independent counsel on the Indian gaming issue today but was unable to reach Mr. Popely. He offered to provide copies at the next meeting. CHAIR SEEKINS said it is not his intent to prevent people from testifying at this time but, rather, he does not want to take testimony on the bill in its current form so he would take public testimony when some of the concerns are addressed. SENATOR ELLIS asked about the timeframe. CHAIR SEEKINS said he intended to shut the committee down tomorrow.