Legislature(2007 - 2008)HOUSE FINANCE 519
05/01/2007 08:30 AM House FINANCE
| Audio | Topic |
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| Start | |
| SB59 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 59 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
May 1, 2007
8:39 A.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 8:39:24 AM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Harry Crawford
Representative Richard Foster
Representative Les Gara
Representative Mike Hawker
Representative Reggie Joule
Representative Mike Kelly
Representative Mary Nelson
Representative Bill Thomas Jr.
MEMBERS ABSENT
None
ALSO PRESENT
Senator Gary Stevens; Doug Letch, Staff, Senator Gary
Stevens; Dennis Egan, President and General Manager, Alaska-
Juneau Communications, Juneau; Suzanne Cunningham, Staff,
Representative Kevin Meyer; Jerry Burnett, Director,
Division of Administrative Services, Department of Revenue
PRESENT VIA TELECONFERENCE
Harry Keene, Jr., Retired Superior Court Judge, Anchorage;
David, Lambert, Alaska Dog Mushers Association, Fairbanks
SUMMARY
CS SB 59(FIN)
An Act relating to the use of broadcasting to
promote charitable raffles and lotteries and to
establishing cabbage classics as a form of
charitable gaming.
CS SB 59 (FIN) was reported out of Committee with
a "do pass" recommendation, the attached House
Concurrent Resolution (HCR) 7 and with an
indeterminist note #2 by the Department of
Revenue.
8:40:26 AM
CS FOR SENATE BILL NO. 59(FIN)
An Act relating to the use of broadcasting to promote
charitable raffles and lotteries and to establishing
cabbage classics as a form of charitable gaming.
SENATOR GARY STEVENS, SPONSOR, noted that the goal of SB 59
was to "level the playing field" for Alaska's television and
radio broadcasters. Current statutes prohibit those
broadcasters from airing ads for charitable gaming
activities.
DOUG LETCH, STAFF, SENATOR GARY STEVENS, commented on the
portion of the bill that deals with raffles & lotteries,
banned in Alaska. The broadcasters have requested help with
their funding efforts, in order to help non-profit
organizations; many of those entities rely on the generosity
of people participating.
Mr. Letch noted that as the bill moved through the various
committee processes, language was added:
· Cabbage Classic in Palmer
· Musher Race activities
8:44:45 AM
Vice Chair Stoltze wanted a guarantee that any changes added
to the charitable gaming statutes would not affect the 70/30
split for the charities. Mr. Letch understood there were no
changes to the split. The bill intends to allow only
broadcasters the opportunity to advertise raffles.
8:46:24 AM
DENNIS EGAN, PRESIDENT & GENERAL MANAGER, ALASKA-JUNEAU
COMMUNICATIONS, JUNEAU, testified in support of SB 59. SB
59 affords a solution to the disparity treatment currently
being imposed on Alaska's Broadcasters by current Alaska
Statute. The statute bans on radio and television, the
advertising of lawful charitable gaming or conduct.
Newspapers and related media are free to advertise.
Recognizing the unfair burden placed upon broadcasters, U.S.
Congress passed the Charity Games Advertising Clarification
Act in 1988 and has been in effect since 1990. Federal law
left it up to the individual states to ratify the law.
Nearly every state allows broadcasters in their respective
states, to be fully consistent with federal law. He urged
passage of SB 59.
Representative Foster voiced his appreciation for the work
that Mr. Egan has done on SB 59. He thought that it would
"positively" affect his community through station work. Mr.
Egan pointed out that broadcasters donate much of the
advertising when it is for charitable events. When
advertising is purchased, time is matched.
8:50:53 AM
Co-Chair Meyer asked if the legislation would affect
internet broadcasting. Mr. Egan replied that was a separate
issue, currently debated in the U.S. Congress.
8:52:02 AM
HARRY KEENE, JR., (TESTIFIED VIA TELECONFERENCE), RETIRED
SUPERIOR COURT JUDGE, ANCHORAGE, noted various charitable
activities in Anchorage that he participates in. He hoped
that the legislation could address existing confusion
regarding the use of "raffle". Mr. Keene urged that SB 59
be moved out of Committee.
8:55:22 AM
DAVID, LAMBERT, (TESTIFIED VIA TELECONFERENCE), ALASKA DOG
MUSHERS ASSOCIATION, FAIRBANKS, testified in strong support
of the legislation.
8:56:48 AM
Vice Chair Stoltze MOVED to ADOPT Amendment #1, #25-
LS0410\M.1, Luckhaupt, 4/13/07. Co-Chair Meyer OBJECTED.
Vice Chair Stoltze explained that around 1996, when pull tab
proceeds were removed as a funding entity for political
campaigns, raffles and lotteries remained. He thought that
charitable gaming should be for charities. The
beneficiaries of charitable gaming ought to be civic
organizations & true charities. He thought the language was
an oversight.
Mr. Letch advised that Senator Steven would not oppose
Amendment #1.
Representative Hawker understood that the intent of the
amendment was to remove politics from the allowable
application of proceeds from charitable gaming in the State,
which is addressed on Page 2; however, Page 1, Paragraph (a)
specifically authorizes charitable gaming activity to aid or
support candidates for public office. He asked if that
language should be removed. Vice Chair Stoltze commented
that would be okay.
Representative Hawker asked if Amendment #1, passed as is,
would authorize political purchase in Section (a). Vice
Chair Stoltze thought that both parties use it for
charitable activities, public relations and good will.
Representative Hawker counseled that if the intent was to
take politics out of the allowable uses, that language
should be changed. Vice Chair Stoltze agreed.
9:01:27 AM
Representative Hawker addressed the intent of the change
referencing Page 1, Line 7, where the authority to conduct
the activity authorized by the chapter is basically good
through dedication of the net proceeds. He recommended
deleting "political" in Amendment #1, Line 9 and then on
Lines 15 & 16, deleting "or through aiding candidate for
public office".
Representative Crawford understood & supported the language
proposed by Vice Chair Stoltze; however, he thought that the
changes recommended by Representative Hawker, would move the
State into gaming money given to political parties. He did
not support that.
Vice Chair Stoltze wanted to add the language as proposed by
Representative Hawker. He identified "true charities"
rather than "trade associations". Amendment #1 attempts to
clean up language.
Co-Chair Meyer understood that the concerns voiced by
Representative Crawford would still be protected.
Representative Hawker agreed that the activities mentioned
by Representative Crawford would not be precluded. "Fully
authorized" in all circumstances would be educational,
civil, public, charitable, religious and patriotic uses. He
recommended no ambiguity in the law.
9:07:44 AM
In response to Representative Joule, Representative Hawker
concurred that language was important to provide leeway to
define political candidates or purposes not defined in the
second page.
9:08:50 AM
JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE
SERVICES, DEPARTMENT OF REVENUE, noted that the
Administration has not taken a position on the amendment.
The current prohibition is specific & does not apply to
raffles and lotteries. It can not aid candidates for public
office or political parties. The amendment expands that
language. There is an attempt to define political uses.
The Department looks at the use of proceeds not the
organization.
Co-Chair Meyer asked about public-use concerns noted by
Representative Crawford. Mr. Burnett replied, it is not
clear if the political party could raise money for a civic
project. That is not easy to define. Representative
Crawford pointed out that no one is sure of that language
and that "political" can be broadly defined. He wanted to
see less money in campaigns but worried about exclusion.
Representative Hawker pointed out inappropriate language in
Page 1, Section 3, regarding the acceptable uses to aid
candidates with the inclusion of "except", which is a
contradiction in statute.
Representative Hawker MOVED to AMEND Amendment #1, Page 1,
Lines 15-16, deleting "or through aiding candidates for
public office or groups that support candidates for public
office,". Representative Crawford OBJECTED because he did
not understand the ramifications of removing that language.
9:13:44 AM
Representative Gara was confused about how to tell
communities groups what authority they have in "politics".
Unless the language is clean, the line between between
education and political raffles remains gray. He
recommended being more explicit.
Vice Chair Stoltze explained that most committee groups have
multiple check lists segregating compliance with the
Department of Revenue. Some of the tax exempt provisions
would be threatened if they were involved in politics.
9:16:22 AM
SUZANNE CUNNINGHAM, STAFF, REPRESENTATIVE KEVIN MEYER,
advised that she had discussed Amendment #1 with Mr.
Luckhaupt, Alaska Legal Services attorney. The intent of
the amendment was to prohibit any net proceeds from any
charitable gaming activity going to the items listed on Page
2. She asked Mr. Luckhaupt if it would be appropriate to
amend the amendment, removing the reference to "political".
Following discussions regarding organizations raising money
for charitable organizations, it was determined to be
acceptable if going to charitable or public use. It will be
the use of net proceeds.
Representative Hawker pointed out that leaving "political"
on Lines 8 & 9, creates an ambiguity. Lines 15 & 16 provide
the specific allowable uses of charitable gaming proceeds
including "aiding candidates for public office". There is
an exception listed on Page 2, which creates a contradiction
in statute. Ms. Cunningham agreed.
Representative Kelly asked if Mr. Luckhaupt agreed. Ms.
Cunningham reiterated that he agreed there is a conflict in
statute by prohibiting the proceeds from going to political
activities. She acknowledged the conflict, pointing out
that the language proposed by Representative Hawker would
clear-up the statute.
Representative Crawford noted that he had also spoken with
Mr. Luckhaupt and was under the impression that Amendment #1
does bar the items listed on Page 2. Ms. Cunningham stated
that the amendment, without the conceptual amendment, does
accomplish what Representative Stoltze intends; however, it
creates an ambiguity because it describes political
activity.
9:21:32 AM
Mr. Burnett commented that the Department could work with
the amendment either amended or not. He added that
Representative Hawker is correct in his premise regarding
the ambiguity. As a practical matter, Subsection 3 does not
allow the use of the proceeds.
Vice Chair Stoltze advised that Amendment #1 had been
drafted by Mr. Luckhaupt on a narrow scope. He admitted
that the entire charitable gaming issue is confusing.
Representative Crawford WITHDREW his OBJECTION to the
amended language for Amendment #1. There being NO further
OBJECTION, the amended language was adopted. Discussion on
the amended Amendment #1 continued.
9:24:18 AM
Representative Gara asked if there were other groups than
the Teamsters that raise money for raffles. Vice Chair
Stoltze thought that there were, and that Amendment #1
provides an opportunity to address the loop hole. Mr.
Burnett pointed out that the Association of General
Contractors supports raffles. Co-Chair Meyer listed other
agencies, noting the impact.
Representative Kelly pointed out that the amendment does
make a significant change. He encouraged that those
affected would be given an opportunity to testify regarding
that impact.
Mr. Letch advised that Senator Stevens would not object to
the amended language of Amendment #1.
Representative Gara pointed out that it is easy for people
that have a lot of money to donate to political candidates.
There are people who have little money that donate, who
ultimately do not have a lot of say. He worried about where
the money goes; he recommended looking also at where the
"big money" people go. He questioned the effect of the
change and the underlining activities. He questioned the
objective of the amendment. Politics is not always dirty.
The amendment cuts out the ability of people pooling money
together.
9:30:41 AM
Vice Chair Stoltze reiterated his motives that charitable
gambling dollars should be used for charities, emphasizing
that his record has been consistent.
Co-Chair Meyer WITHDREW his OBJECTION to Amendment #1.
There being NO further OBJECTION, the amended Amendment #1
was adopted.
9:33:33 AM
Representative Joule MOVED to ADOPT Amendment #2, #25-
LS0410\M.2, Luckhaupt, 4/18/07. Co-Chair Meyer OBJECTED.
Representative Joule explained the amendment would raise the
amount of pull tab prizes that can be awarded from one to
two million dollars. The current number has been in effect
since 1989.
Vice Chair Stoltze pointed out that the issue also had been
brought forward by the veterans' organizations. He noted
the substantial wait list, which reduces the dollar pool.
Mr. Burnett did not know the wait listed numbers. The
Department does support Amendment #2, which does not change
the amount for an operator, continuing to relieve some
pressure. Vice Chair Stoltze asked if it would include
"self-directed". Mr. Burnett said yes. Vice Chair Stoltze
noted his concerns were solved.
Co-Chair Meyer WITHDREW his OBJECTION. There being NO
further OBJECTION, it was adopted.
9:37:43 AM
Representative Crawford MOVED to ADOPT Amendment #3, #25-
LS0410\M.3, Luckhaupt, 4/18/07. Co-Chair Meyer OBJECTED.
Representative Crawford explained Amendment #3, which limits
advertising to public service announcements. He hoped that
contributions for good causes would continue. He indicated
that Alaska has problems with charitable gaming and bingo;
he did not want to see the State expand.
Mr. Letch noted charitable groups often use broadcasting as
a means of reaching an audience. He felt this was a
fairness issue.
Mr. Egan thought the amendment could raise first amendment
issues. He suggested that litigation would ensue if the
amendment were adopted. He suggested that the prohibition
include all media, if it is to move forward.
9:44:51 AM
Vice Chair Stoltze observed that pull tabs and bingo would
still be restricted. He asserted that raffles would be the
advertising, which ensues. Mr. Egan agreed, pointing to
things like Rotary Roses, which wants to tag onto
advertising for various raffles. That is prohibited.
9:47:02 AM
Representative Crawford expressed support for a more
expansive amendment, including television broadcasting. He
noted that the amendment would allow for Girl Scouts to
advertise. He maintained that the legislation promotes more
gambling and income for broadcasters.
9:48:39 AM
Co-Chair Meyer felt that the amendment was broad and would
impinge on the freedom of speech. He thought the amendment
would target one group.
Co-Chair Chenault commented that his community has a local
radio station. He gave examples of how the station has
worked with the community for charitable organizations. He
noted that there are organizations that do not have the
opportunity to utilize broadcast advertising. He suggested
that broadcast advertising is more effective than television
in his area, since television broadcasting comes primarily
from Anchorage. He indicated his support for the concept of
the legislation and spoke against the amendment.
9:52:55 AM
Representative Crawford argued that the legislation will
result in raising costs for charities.
A roll call vote was taken on the motion.
IN FAVOR: Nelson, Crawford, Gara
OPPOSED: Hawker, Joule, Kelly, Stoltze, Thomas,
Foster, Meyer, Chenault
The MOTION FAILED (3-8).
9:55:07 AM
Representative Gara requested a list of those charities
benefiting. Representative Thomas noted that he was not
aware of political action raffles in his community. He
spoke in support of the legislation.
Representative Foster stated that Native action groups have
sold raffles for support of Native legislators for many
years.
Representative Foster MOVED to REPORT CS SB 59 (FIN) out of
Committee with the attached House Concurrent Resolution
(HCR) 7 and with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS SB 59 (FIN) was reported out of Committee with a "do
pass" recommendation, the attached House Concurrent
Resolution (HCR) 7 and with an indeterminist note #2 by the
Department of Revenue.
ADJOURNMENT
The meeting was adjourned at 9:57 A.M.
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