Legislature(1997 - 1998)

04/08/1997 01:40 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                          APRIL 8, 1997                                        
                            1:40 P.M.                                          
                                                                               
  TAPE HFC 97 - 89, Side 1, #000 - end.                                        
  TAPE HFC 97 - 89, Side 2, #000 - #253.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Gene Therriault called  the House Finance Committee                 
  meeting to order at 1:40 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kelly                           
  Co-Chair Therriault           Representative Grussendorf                     
  Representative Davies         Representative Martin                          
  Representative Davis          Representative Moses                           
  Representative Foster                                                        
                                                                               
  Representative  Mulder and  Representative Kohring  were not                 
  present for the meeting.                                                     
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative   Mark   Hodgins;   Michael  Conway,   Acting                 
  Director, Division  of Air  & Water  Quality, Department  of                 
  Environmental   Conservation;   Dennis   Poshard,  Director,                 
  Charitable Gaming Division, Department of Revenue.                           
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 50     An  Act  relating to  the  use of  broadcasting to                 
            promote   or   conduct    certain   classics    or                 
            sweepstakes; and providing for an effective date.                  
                                                                               
            CS HB 50  (FIN) was reported out of Committee with                 
            "individual  recommendations"  and  with   a  zero                 
            fiscal  note by  the  Department of  Revenue dated                 
            2/21/97.                                                           
                                                                               
  HB 128    An Act relating  to water  quality; directing  the                 
            Department   of   Environmental   Conservation  to                 
            conduct water quality  research; establishing  the                 
            Water Science  Oversight Board; and  providing for                 
            an effective date.                                                 
                                                                               
            CS HB 128 (FIN) was reported out of Committee with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the  Department of  Law dated  4/01/97 and  the                 
            House Finance Committee.                                           
                                                                               
                                1                                              
                                                                               
                                                                               
  HOUSE BILL 128                                                               
                                                                               
       "An  Act  relating  to  water  quality;  directing  the                 
       Department  of  Environmental  Conservation to  conduct                 
       water quality research; establishing the Water  Science                 
       Oversight Board; and providing for an effective date."                  
                                                                               
  Co-Chair Hanley MOVED  to RESCIND previous action  of moving                 
  CS HB 128 (FIN) out of Committee, 4/07/97, in order that the                 
  fiscal  note could  be further  discussed.   There  being NO                 
  OBJECTION, action was rescinded.                                             
                                                                               
  MICHAEL CONWAY,  ACTING DIRECTOR,  DIVISION OF  AIR &  WATER                 
  QUALITY,  DEPARTMENT  OF ENVIRONMENTAL  CONSERVATION, stated                 
  that the Department supports the  fiscal note as prepared by                 
  the House Finance Committee.                                                 
                                                                               
  Co-Chair  Hanley  MOVED to  report CS  HB  128 (FIN)  out of                 
  Committee with  individual recommendations and with  the new                 
  fiscal note adopted  by the House Finance  Committee and the                 
  4/01/97 fiscal note by  the Department of Law.   There being                 
  NO OBJECTION, it was so ordered.                                             
                                                                               
  CS HB  128 (FIN) was  reported out of  Committee with  a "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department  of  Law  dated  4/01/97  and the  House  Finance                 
  Committee.                                                                   
  HOUSE BILL 50                                                                
                                                                               
       "An Act relating to the use of broadcasting to  promote                 
       or  conduct   certain  classics  or   sweepstakes;  and                 
       providing for an effective date."                                       
                                                                               
  REPRESENTATIVE MARK HODGINS explained that HB 50 would amend                 
  AS  05.15.640  by  removing  the  prohibition  on  broadcast                 
  advertising for the legislatively identified classics as per                 
  statute.  At present  the only classics that are  allowed to                 
  use  broadcasting  for promotion  are  fishing derbies.   To                 
  provide   an   advertising   vehicle   will   assist   these                 
  organizations  to increase public awareness of their events.                 
                                                                               
                                                                               
  Representative Martin noted his concern  in opening the door                 
  to   "gambling".      He   questioned   how   the   proposed                 
  classification  had  been  chosen.   Representative  Hodgins                 
  replied that the proposed groups are the only non-profits in                 
  the State established legislatively.                                         
                                                                               
  Co-Chair Therriault pointed out that this year, the Iditarod                 
  had lost money  which they  attribute to not  being able  to                 
  advertise the  race.  He inquired if  they were the ones who                 
                                                                               
                                2                                              
                                                                               
                                                                               
  had requested the  legislation.  Mr.  Hodgins noted that  he                 
  had  been working  most closely  with the  Kenai Chamber  of                 
  Commerce based upon their concern  for the local Snow  Goose                 
  Classic race.  These groups can not advertise their  events,                 
  curtailing public knowledge of ticket availability.  At this                 
  time,  the only  legal  advertising which  can  be done,  is                 
  through  broadcast  media  news  stories.    Advertising  by                 
  statute only provides  that the  organization receive 5%  of                 
  the revenue generated.  Co-Chair  Hanley questioned where in                 
  statute the 5% reference occurred.                                           
                                                                               
  DENNIS  POSHARD,  DIRECTOR,   CHARITABLE  GAMING   DIVISION,                 
  DEPARTMENT OF REVENUE, responded that there is no 5% percent                 
  budget  limit  requirement  on  advertising with  regard  to                 
  gaming statutes.  He pointed out  that he could not speak to                 
  other statutes which may exist.                                              
                                                                               
  Co-Chair  Hanley  asked  if  these  organizations  had  been                 
  allowed  to  advertise  through  print  media only  and  not                 
  through broadcast.  Mr. Poshard stated that this restriction                 
  would apply to  all charitable  gaming activities and  would                 
  only be applied  to the  use of broadcasting  as defined  in                 
  statute.  The restriction  is on the use of  broadcasting to                 
  "promote"  or   "conduct"  the  use  of   charitable  gaming                 
  activities.                                                                  
                                                                               
  Representative  Hodgins explained  his understanding  of the                 
  difference between "conducting" and  "promoting" activities.                 
  The intent of HB 50 is solely for  advertising.  Mr. Poshard                 
  emphasized that the bill would continue to  prohibit the use                 
  of  broadcasting to  promote  or  conduct bingo,  pull-tabs,                 
  raffles, lotteries  and contests of  skill.  The  only games                 
  which  would  become open  would  be  the classics  and  dog                 
  mushing contests.                                                            
                                                                               
  Mr.  Poshard  pointed  out that  those  types  of activities                 
  account for less than 1% of the total charitable gaming pie.                 
  Dog  mushing  is  not  a major  part  of  charitable  gaming                 
  activities.  The ice classics are small,  although returns a                 
  higher percentage of gross than other activity types.                        
                                                                               
  Co-Chair Therriault asked  if there would be  a problem with                 
  deleting "or conduct", on Page 1,  Line 6.  He thought  that                 
  deletion would clarify that broadcasting  would be used only                 
  to  "promote".   Representative  Hodgins  commented that  he                 
  would  support that change.   Mr. Poshard indicated that the                 
  Department objected to the change, unless language was added                 
  prohibiting   the  conduct  of  gaming  over  the  airwaves.                 
  Removing  that  language  would  remove the  prohibition  on                 
  conducting.   Co-Chair Therriault  pointed out that  concern                 
  had been clarified on Page 1, Line 14.  Mr. Poshard agreed.                  
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  Co-Chair Therriault  MOVED Amendment  #1 which would  delete                 
  "or conduct", reiterating  that the  change would allow  the                 
  "promotion" of the  classics without the "conducting".   Co-                 
  Chair Hanley pointed out conflict with the reference on Page                 
  2, Section (b), should that language be deleted.                             
                                                                               
  Representative  Hodgins  explained that  the entire  list of                 
  designated non-profits  indicated in  the sponsor  statement                 
  were not all in  operation at this time.   Representative J.                 
  Davies  concurred  that  problems   would  result  with  the                 
  proposed language change.                                                    
                                                                               
  Representative Kelly referenced language on  Page 2, Line 4,                 
  in which "cable"  is used  for a distribution  method.   Co-                 
  Chair Therriault WITHDREW the MOTION  to adopt Amendment #1.                 
  He suggested that  changes to Section  (b) would not be  for                 
  the promotion of the fish derbies but rather would provide a                 
  means to conduct the fish derbies.                                           
                                                                               
  Mr. Poshard clarified the intent  of the House State Affairs                 
  committee  substitute.    A  deletion  to  the  group  using                 
  broadcasting  to promote  fish  derbies,  would  remove  the                 
  exemption from the prohibition, in  which broadcasting would                 
  then no longer be used to promote the derbies.   Section (a)                 
  of  the  bill  allows promotion  or  conducting  of all  the                 
  classic contests.                                                            
                                                                               
  Co-Chair Therriault inquired  if there would be a problem in                 
  deleting the language on Page 1, Line 6.   Mr. Poshard could                 
  not foresee a problem with that change.                                      
                                                                               
  Discussion followed  between Mr. Poshard  and Representative                 
  Kelly  regarding broadcasting  to promote  charitable gaming                 
  activities  and  the  use of  cable  lines.   Representative                 
  Hodgins pointed out that Section (a) allows the broadcast of                 
  various activities.   A  group may not  use broadcasting  to                 
  promote or conduct  any other activities other than the ones                 
  listed.   There is  no prohibition  on cable.   Mr.  Poshard                 
  emphasized, currently, an organization is not allowed to use                 
  any broadcast means to conduct  charitable gaming other than                 
  the  exemption  for  non-commercial.    Under  the  proposed                 
  legislation, a group  would be able to  use commercial, non-                 
  commercial  or  cable  to promote  or  conduct  a charitable                 
  gaming activity.                                                             
                                                                               
  Mr.  Poshard  explained  his  personal  distinction  between                 
  conducting  and promoting  over  the  airwaves.   Conducting                 
  would  be  using  the  airwaves  to  conduct  the  activity;                 
  whereas, announcing a winner or having a live broadcast at a                 
  fish derby  weigh-in would merely be promoting.  Mr. Poshard                 
  pointed out that auctions are not gaming activities.                         
                                                                               
                                                                               
                                4                                              
                                                                               
                                                                               
  (Tape Change HFC 97-89, Side 2).                                             
                                                                               
  Representative  Martin  asked if  the  drawing of  a winning                 
  ticket on television would be promoting or conducting.   Mr.                 
  Poshard stated that  he felt that  would be promoting.   For                 
  the use of the broadcast  media to consider conducting would                 
  involve the participants in that media.                                      
                                                                               
  Mr. Poshard spoke to  the fiscal note.  He  pointed out that                 
  currently  in  Alaska,  there  exists  a limited  number  of                 
  organizations  which could  qualify  to participate  in this                 
  type of activity.  The  Department does not anticipate  that                 
  there will be much more work generated since the  activities                 
  must be  authorized by  statute.   Violation  of any  action                 
  could  place  the  permit in  jeopardy,  creating  a natural                 
  monitor.                                                                     
                                                                               
  Co-Chair Hanley asked if  there was a limit attached  to the                 
  profit  received for classics.   Mr. Poshard replied that $1                 
  million dollars could be awarded  in prizes annually for all                 
  charitable gaming activities  except bingo which has  a $840                 
  thousand dollar limit.                                                       
  Co-Chair Therriault MOVED  to delete  "or conduct", Page  1,                 
  Line 6.  Representative Foster OBJECTED.                                     
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      Moses, Kelly, Martin, Therriault, Hanley                 
       OPPOSED:       J. Davies, G. Davis, Grussendorf                         
                                                                               
  Representatives Mulder, Foster and  Kohring were not present                 
  for the meeting.                                                             
                                                                               
  The MOTION PASSED (5-3).                                                     
                                                                               
  Co-Chair Hanley suggested that the legislation would provide                 
  an advantage  to the  classics.   He thought that  advantage                 
  could  result  in  other groups  "pushing"  for  legislative                 
  designation in order to take  advantage of such advertising.                 
  Representative Martin voiced his concern with passage of the                 
  legislation.    He  reiterated  that  action  would  provide                 
  "openings" for more gambling in the State.                                   
                                                                               
  Representative Foster MOVED to report CS  HB 50 (FIN) out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.  Representative Martin OBJECTED.                   
                                                                               
  A roll call vote was taken on the MOTION.                                    
                                                                               
       IN FAVOR:      J.   Davies,   G.   Davis,  Grussendorf,                 
                      Foster, Moses, Therriault                                
       OPPOSED:       Kelly, Martin, Hanley                                    
                                                                               
                                5                                              
                                                                               
                                                                               
  Representatives Mulder and Kohring were  not present for the                 
  vote.                                                                        
                                                                               
  The MOTION PASSED (6-3).                                                     
                                                                               
  CS  HB  50  (FIN)   was  reported  out  of   Committee  with                 
  "individual recommendations" and with the fiscal note by the                 
  Department of Revenue dated 2/21/97.                                         
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 2:35 P.M.                                           
                                                                               
                                                                               
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