Legislature(2003 - 2004)

04/23/2004 08:42 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 23, 2004                                                                                           
                         8:42 A.M.                                                                                              
                                                                                                                                
TAPE HFC 04 - 95, Side A                                                                                                        
TAPE HFC 04 - 95, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 8:42 A.M.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative John Harris, Co-Chair                                                                                            
Representative Bill Williams, Co-Chair                                                                                          
Representative Kevin Meyer, Vice-Chair                                                                                          
Representative Mike Chenault                                                                                                    
Representative Eric Croft                                                                                                       
Representative Hugh Fate                                                                                                        
Representative Richard Foster                                                                                                   
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Carl Moses                                                                                                       
Representative Bill Stoltze                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Ralph  Samuels; Representative  Samuels  Rick                                                                   
Eckert, Homer  Electric Association;  Ben Mulligan,  Staff to                                                                   
Representative  Stoltze;  Pete  Ecklund,  Staff  to  Co-Chair                                                                   
Williams                                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Steve  VanSant,   State  Assessor,   Division  of   Community                                                                   
Advocacy,  Department of  Community  & Economic  Development,                                                                   
Anchorage;  Jeff Judd,  Director  of Operations,  Cook  Inlet                                                                   
Housing  Authority;   Howard   Levine;  Rick  Eckert,   Homer                                                                   
Electric Association.                                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 515    An  Act relating  to  the regulation  of  municipal                                                                   
          water and sewer utilities not in competition with                                                                     
          other water and sewer utilities.                                                                                      
                                                                                                                                
          HB 515 was REPORTED out of Committee with                                                                             
          individual recommendations and with two previously                                                                    
          published fiscal impact notes.                                                                                        
                                                                                                                                
HB 241    An  Act   relating  to  optional   exemptions  from                                                                   
          municipal property taxes on residential property.                                                                     
                                                                                                                                
          CSHB 241(FIN) was REPORTED out of Committee with a                                                                    
          "do  pass" recommendation  and with two  previously                                                                   
          published fiscal impact notes.                                                                                        
                                                                                                                                
HB 366    An  Act relating to  rat racing charitable  gaming;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CSHB 366(FIN) was REPORTED out of Committee with                                                                      
          individual recommendations  and with one previously                                                                   
          published fiscal impact note.                                                                                         
                                                                                                                                
HB 453    "An Act exempting from  regulation under the Alaska                                                                   
          Public    Utilities   Regulatory   Act    wholesale                                                                   
          agreements  for the sale  of power by  joint action                                                                   
          agencies    and   contracts   related    to   those                                                                   
          agreements,  and joint action agencies  composed of                                                                   
          public  utilities  of  political  subdivisions  and                                                                   
          utilities   organized   under  the   Electric   and                                                                   
          Telephone Cooperative Act."                                                                                           
                                                                                                                                
          HB 453 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 338    An  Act relating  to attendance  at public  school;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CSHB 338(HES) was REPORTED  out of Committee with a                                                                   
          "do  pass" recommendation  and with one  previously                                                                   
          published fiscal impact note.                                                                                         
                                                                                                                                
HOUSE BILL NO. 515                                                                                                            
                                                                                                                                
          An  Act relating  to  the regulation  of  municipal                                                                   
          water and  sewer utilities not in  competition with                                                                   
          other water and sewer utilities.                                                                                      
                                                                                                                                
Representative  Foster   MOVED  to  report  HB   515  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Stoltze voiced  a brief objection, noting that                                                                   
he had  raised some concerns  with the Regulatory  Commission                                                                   
of Alaska,  but he stated  that he would  bring those  to the                                                                   
House Floor.  He removed his objection.                                                                                         
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB  515  was  REPORTED  out  of   Committee  with  individual                                                                   
recommendations  and  with two  previously  published  fiscal                                                                   
impact notes.                                                                                                                   
HOUSE BILL NO. 453                                                                                                            
                                                                                                                                
     An  Act  exempting  from  regulation  under  the  Alaska                                                                   
     Public  Utilities  Regulatory Act  wholesale  agreements                                                                   
     for  the sale  of  power by  joint  action agencies  and                                                                   
     contracts related to those  agreements, and joint action                                                                   
     agencies  composed  of  public  utilities  of  political                                                                   
     subdivisions and utilities  organized under the Electric                                                                   
     and Telephone Cooperative Act.                                                                                             
                                                                                                                                
Co-Chair Williams  noted that  testimony on  HB 453  had been                                                                   
taken previously  and that it  was his intention to  hear and                                                                   
hold the bill today.                                                                                                            
                                                                                                                                
Co-Chair Williams  asked Mr. Eckert  if he had been  asked to                                                                   
be part of the joint action agencies (JAA) program.                                                                             
                                                                                                                                
RICK  ECKERT, HOMER  ELECTRIC  ASSOCIATION,  replied that  he                                                                   
believed  a JAA is  being negotiated  between Chugach  Golden                                                                   
Valley Electric  Association (CGVEA) and  Anchorage Municipal                                                                   
Light  &  Power,  and  the group  did  not  extend  a  formal                                                                   
invitation to  Homer Electric  Association (HEA) to  become a                                                                   
member.                                                                                                                         
                                                                                                                                
Co-Chair Williams  asked Mr. Eckert  to present his  views on                                                                   
the bill.                                                                                                                       
                                                                                                                                
Mr. Eckert  stated that the  HEA is opposed  to HB 453.   Its                                                                   
primary concern  is the governance  of the cost  of wholesale                                                                   
power for its members. The HEA  currently purchases its power                                                                   
from  the  CGVEA  through  its  generation  and  transmission                                                                   
subsidiary,  Alaska  Electric  &  Energy  Cooperative.    The                                                                   
contract with Chugach will expire in 2013.                                                                                      
                                                                                                                                
Mr.  Eckert  explained  that  in a  recent  case  before  the                                                                   
Regulatory   Commission  of   Alaska,  CGVEA   asked  for   a                                                                   
ratemaking  method  that  had   not  been  used  by  electric                                                                   
cooperatives  involved in  the  proceeding.   The CGVEA  also                                                                   
requested a  substantial increase  in the profit  margin that                                                                   
HEA would  pay to  CGVEA, above  the cost  of operations  and                                                                   
maintenance of  the facilities.   The request applied  to NEA                                                                   
in  Seward as  well.  The  HEA, Mat-Su  Electric  Association                                                                   
(MEA)  and Seward  opposed this  request  and the  Commission                                                                   
ruled in their  favor following the precedent  established in                                                                   
late 1980s.                                                                                                                     
                                                                                                                                
Mr. Eckert  stated that CGVEA  informed its members  that the                                                                   
rest of  its members now subsidize  HEA, NEA and  Seward, and                                                                   
HEA  became   concerned  over   the  use  of   the  undefined                                                                   
possibilities in  HB 453. The Railbelt energy  needs are best                                                                   
provided  by a  joint effort.  The Railbelt  is a  relatively                                                                   
small  market.  New  projects   providing  power  are  easily                                                                   
identified and limited in number.                                                                                               
                                                                                                                                
Mr. Eckert  expressed concern  that if  the bill passed,  the                                                                   
largest utilities would have the  ability to control the best                                                                   
projects without  Regulatory Commission of  Alaska oversight.                                                                   
The HEA does not  have to join a JAA if the  participation is                                                                   
not satisfactory,  and it would look for power  from that JAA                                                                   
at  a negotiated  price. If  a JAA  is not  regulated, a  JAA                                                                   
member that  HEA purchases  power from  will charge  based on                                                                   
what the JAA charges it. The Regulatory  Commission of Alaska                                                                   
will have ability  to review the wholesale  agreement between                                                                   
the JAA  member and  the HEA,  but would  have no ability  to                                                                   
review  or regulate  the agreement  between the  JAA and  its                                                                   
member. Mr.  Eckert noted that  the HEA could create  its own                                                                   
sources  of  power and  it  is  driven  by the  incentive  to                                                                   
produce the lowest  cost for its members rather  than profits                                                                   
for  stockholders.  The  HEA  believes  that  exemption  from                                                                   
regulation  should be  requested for  a specific project  and                                                                   
its economic participants. Exemption  should only happen when                                                                   
a unified system operation by  the utilities is demonstrated.                                                                   
                                                                                                                                
Representative  Stoltze  asked if  the crux  of  the bill  is                                                                   
removal  of  Regulatory  Commission of  Alaska  oversight  on                                                                   
consumer  protection due  to its  decisions in  favor of  the                                                                   
consumer.  He pointed out that the HEA is a consumer.                                                                           
                                                                                                                                
Mr.  Eckert said  that  HB 453  is  a significant  result  of                                                                   
Chugach Electric  Association's  concern over the  Regulatory                                                                   
Commission of Alaska  ruling in the rate case  he referred to                                                                   
earlier.  He   explained  that   the  HEA,  Mat-Su   Electric                                                                   
Association,  and  the City  of  Seward represent  50,000  to                                                                   
60,000   consumers   of   power   through   wholesale   power                                                                   
agreements.  Their rate  is cost-plus  and  there is  limited                                                                   
ability to affect that cost, so  the Regulatory Commission of                                                                   
Alaska has become its only advocate.                                                                                            
                                                                                                                                
Representative  Stoltze asked  if  the bill  would remove  an                                                                   
important  element  of  current  consumer  protection.    Mr.                                                                   
Eckert affirmed  that it is the Homer  Electric Association's                                                                   
concern.                                                                                                                        
                                                                                                                                
Representative Croft  asked for clarification of  whether the                                                                   
Regulatory Commission of Alaska  would retain jurisdiction to                                                                   
determine the  merits of an initial wholesale  power contract                                                                   
within the JAA  at a later date. Mr. Eckert said  that if the                                                                   
bill passed,  the Regulatory Commission  of Alaska  could not                                                                   
modify the internal agreements of the JAA.                                                                                      
                                                                                                                                
Representative  Croft asked if  the Regulatory Commission  of                                                                   
Alaska could take  another number as the allowable  rate base                                                                   
rather than  the agreed contract  within the JAA.  Mr. Eckert                                                                   
answered that  the Regulatory  Commission of Alaska  could do                                                                   
that, and he discussed its review.                                                                                              
                                                                                                                                
Representative  Croft asked if  the Regulatory Commission  of                                                                   
Alaska would have legal authority  but practical difficulties                                                                   
later on.  Mr. Eckert  agreed that  there would be  practical                                                                   
difficulties.                                                                                                                   
                                                                                                                                
Vice-Chair Meyer  began chairing  the meeting and  noted that                                                                   
Co-Chair Williams  requested to hold  HB 453. He  stated that                                                                   
testimony would be postponed until  this afternoon's hearing.                                                                   
                                                                                                                                
Representative  Heinze pointed out  that she had  worked with                                                                   
Mr. Eckert and she amended the  bill at his request.  She had                                                                   
involved  several electrical  associations in  the effort  to                                                                   
craft a good bill.                                                                                                              
                                                                                                                                
Representative Hawker noted a  letter in the HB 453 packet in                                                                   
opposition  to the bill  that contains  his typewritten  name                                                                   
but not his signature.   He stressed that he  did not endorse                                                                   
the letter, saying  that he had requested the  carrier remove                                                                   
his name  prior to  being entered into  the record.  He asked                                                                   
that the  letter be expunged from  the record until  his name                                                                   
was removed. Representative Hawker  pointed out that he is on                                                                   
record having made no commitment on the bill.                                                                                   
                                                                                                                                
Mr.  Eckert commented  that  the Homer  Electric  Association                                                                   
still   opposes   the   bill  after   the   drafting   change                                                                   
Representative Heinze made reference to.                                                                                        
                                                                                                                                
HB  453  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                              
HOUSE BILL NO. 338                                                                                                            
                                                                                                                                
     An Act relating to attendance at public school; and                                                                        
     providing for an effective date.                                                                                           
                                                                                                                                
Representative Chenault MOVED  to report CSHB 338(HES) out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB 338(HES) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and  with  one  previously  published  fiscal                                                                   
impact note.                                                                                                                    
                                                                                                                              
HOUSE BILL NO. 241                                                                                                            
                                                                                                                                
     An Act relating to optional exemptions from municipal                                                                      
     property taxes on residential property.                                                                                    
                                                                                                                                
Representative  Chenault  MOVED  to  ADOPT  Work  Draft  #23-                                                                   
LS0851,  Version  S,  Cook, dated  4/22/04.  There  being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
REPRESENTATIVE MIKE CHENAULT,  SPONSOR, explained that HB 241                                                                   
contains three  different provisions. The first  provision in                                                                   
Section  1 gives  municipalities  the  option  to provide  an                                                                   
exemption  of  up to  $25  thousand on  residential  property                                                                   
taxes. This must be done by ordinance  within a municipality.                                                                   
Currently,  five  municipalities  take  advantage  of  a  $10                                                                   
thousand  tax  exemption,  and  this bill  would  provide  an                                                                   
option   of  increasing   it  to  $25   thousand.  The   five                                                                   
municipalities  are  Bristol  Bay  Borough,  Kenai  Peninsula                                                                   
Borough, Fairbanks  North Star  Borough, North Slope  Borough                                                                   
and the City of Valdez.                                                                                                         
                                                                                                                                
Representative  Chenault  said  that  Section  2  deals  with                                                                   
municipalities' ability by ordinance  to partially or totally                                                                   
exempt all types of deteriorated  property from taxation. The                                                                   
properties  would be  exempt only  if located  within a  city                                                                   
center  or an  urban  center  identified in  a  comprehensive                                                                   
plan.                                                                                                                           
                                                                                                                                
Representative  Chenault noted  that he  has an Amendment  #1                                                                   
relating  to  the  third  section   of  the  bill.  The  bill                                                                   
currently reads  that a municipality could exempt  within its                                                                   
boundaries  up to  $10  thousand of  the  assessed value  for                                                                   
property owned  and occupied  in a high  crime area by  a law                                                                   
enforcement officer.                                                                                                            
                                                                                                                                
Representative Stoltze  asked the protections for  a property                                                                   
owner who  has to  pay the  insurance rates  in a high  crime                                                                   
area.  Representative  Chenault  noted  that it  is  not  his                                                                   
section of  the "catch-all bill."   He explained  the wording                                                                   
change in Amendment #1 removing  a high crime area because of                                                                   
concern  that the terminology  would lead  to insurance  rate                                                                   
increases.  The language  was changed  to "an eligible"  area                                                                   
and  a subsection  in  Amendment #1  deals  with an  eligible                                                                   
area.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  RALPH  SAMUELS  spoke  to  Section  2  giving                                                                   
municipalities the choice to offer  tax rebates as additional                                                                   
options  in  financing  mechanisms to  implement  their  town                                                                   
centers. The language is straightforward  and gives the mayor                                                                   
and the assembly leeway to move forward with a town plan.                                                                       
                                                                                                                                
STEVE  VANSANT,   STATE  ASSESSOR,   DIVISION  OF   COMMUNITY                                                                   
ADVOCACY,  DEPARTMENT OF  COMMUNITY  & ECONOMIC  DEVELOPMENT,                                                                   
VIA  TELECONFERENCE,  ANCHORAGE,  discussed  that  the  State                                                                   
assessors  found  Section  2  of  the  Work  Draft  confusing                                                                   
because  it appears  to give  two  different exemptions.  The                                                                   
primary change  seems to extend  the exemption to  ten years.                                                                   
If that  were true, he suggested  that the first  sentence be                                                                   
entirely removed, and to replace  the words "five years" with                                                                   
words "ten years" on line 9.                                                                                                    
                                                                                                                                
Mr. Vansant agreed  with all the other changes.  He supported                                                                   
the  change  in  Section  3 regarding  the  high  crime  area                                                                   
because  it  could  have  increased  insurance  premiums  and                                                                   
decreased the values in that area.                                                                                              
                                                                                                                                
HOWARD  LEVINE,  VIA  TELECONFERENCE, stated  that  the  bill                                                                   
would  be a  catalyst  for  redevelopment. Changing  the  tax                                                                   
abatement  period   from  five  to  ten  years   would  allow                                                                   
developers and  property owners to invest capital  into prime                                                                   
redevelopment  areas that  would otherwise  be too costly  to                                                                   
develop. This  unique community  revitalization would  not be                                                                   
possible without the additional tax abatement.                                                                                  
                                                                                                                                
JEFF  JUDD,  DIRECTOR  OF  OPERATIONS,   COOK  INLET  HOUSING                                                                   
AUTHORITY,  VIA  TELECONFERENCE   stated  that  the  regional                                                                   
nonprofit  strongly  supports  the provisions  of  the  bill,                                                                   
especially  the ability  for  local municipalities  to  abate                                                                   
property  taxes  for  deteriorated  property for  up  to  ten                                                                   
years.   This   would   promote   urban   revitalization   in                                                                   
underutilized, deteriorated property.  The amendment would be                                                                   
beneficial  to the  efforts of  local  government, profit  or                                                                   
nonprofit organizations  to revitalize  these areas.  He said                                                                   
that  these   revitalization   efforts  are  extremely   cost                                                                   
prohibitive without  substantial State support,  with the end                                                                   
result generally that quality  development cannot take place.                                                                   
The  ultimate  long-term  gain  is  in  assessed  values  and                                                                   
property taxes.   The bill is about economic  development and                                                                   
creating  healthy  neighborhoods  and     Mr.  Judd  strongly                                                                   
recommended its passage.                                                                                                        
                                                                                                                                
PETE ECKLUND,  STAFF TO REPRESENTATIVE WILLIAMS,  referred to                                                                   
the  3-page fiscal  note to  the original  bill, FN  #3.   He                                                                   
explained  that  the  estimated revenues  diverted  from  the                                                                   
State  General Fund  to municipalities  could be  up to  $1.6                                                                   
million  under the original  bill. The  revised fiscal  note,                                                                   
which hasn't been  received yet, should change  the figure to                                                                   
about $589 thousand.                                                                                                            
                                                                                                                                
Representative  Croft  referred to  the  suggestion to  amend                                                                   
Section 2.  He asked Mr. Judd  if deleting the first sentence                                                                   
and changing  the "five" to "ten,"  on page 2, line  24 would                                                                   
carry  any collateral  problems.  Mr.  Judd  did not  believe                                                                   
there would be negative consequence  to the suggestion by the                                                                   
State  Assessor  to  amend  line 6.  The  first  sentence  in                                                                   
Section  2   targets  the  additional  abatement   period  to                                                                   
deteriorated properties specifically  located within an urban                                                                   
center identified  in a comprehensive plan or  other document                                                                   
adopted by  a municipality.  However,  he said that  it would                                                                   
open up  the ten-year abatement  period for any  deteriorated                                                                   
property not specifically located within the town center.                                                                       
                                                                                                                                
Representative  Croft agreed that  Section 2 appears  to give                                                                   
two separate  and distinct  exemptions.  He  asked if  it was                                                                   
intended to be two different ones.   Mr. Judd said the intent                                                                   
was to  distinguish the period  of abatement possibility  for                                                                   
properties  either  inside  or   outside  of  a  city  center                                                                   
identified in  a comprehensive plan.   He was not  opposed to                                                                   
deleting the first sentence if  it didn't diminish the bill's                                                                   
support by local  governments.  Changing from five  to ten in                                                                   
the  current  law  wouldn't  deteriorate  local  governments'                                                                   
ability to  revitalize deteriorated  sites but he  questioned                                                                   
if  local  governments would  support  the  bill if  it  were                                                                   
opened  to any deteriorated  property  within or outside  the                                                                   
city center.                                                                                                                    
                                                                                                                                
Representative Chenault  MOVED to ADOPT Amended  Amendment #1                                                                   
with conforming changes  as follows:  "Page 3,  line 2: Amend                                                                 
bill section  3 to read:"  [Page  1, line 11 to page  2, line                                                                 
4: Amend bill section 2 to read:]                                                                                               
                                                                                                                                
There  being  NO  OBJECTION, the  Amended  Amendment  #1  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
Sec. 2.  AS 29.45.050 is amended  by adding a  new subsection                                                                   
to read:                                                                                                                        
                                                                                                                                
(s) A municipality may by ordinance  designate an area within                                                                   
its boundaries as                                                                                                               
 HIGH CRIME]  an eligible  area and  exempt from taxation  an                                                               
amount not  to exceed $10,000  of the assessed value  of real                                                                   
property  within the  area that  is owned and  occupied  as a                                                                   
permanent place  of abode by  a law enforcement  officer. The                                                                   
ordinance  must  include  a definition  of  "law  enforcement                                                                   
officer." A municipality that  adopts an ordinance under this                                                                   
subsection  may   not  request  state  funds   to  cover  any                                                                   
municipal budget  shortfall caused by the ordinance.  In this                                                               
subsection,  "eligible   area"  means  an  area   within  the                                                             
municipality  that would  be eligible  for designation  as an                                                               
urban  empowerment zone  under  the urban  empowerment  zones                                                               
program  of  the  federal department  of  housing  and  urban                                                           
development,  as a HUB  zone under  the HUB zone  empowerment                                                               
program  of  the federal  small  business  administration,  a                                                             
neighborhood  revitalization   area  as  designated   by  the                                                               
federal department of housing  and urban development or as an                                                               
eligible neighborhood under the  weed and seed program of the                                                               
federal department  of justice,  whether or  not the  area is                                                             
actually so  designated, or an  area within the  municipality                                                               
with a  statistically higher occurrence  of crime  than other                                                               
areas of the municipality.                                                                                                
                                                                                                                                
Representative Croft proposed  a conceptual Amendment #2 that                                                                   
would  delete the  first  sentence on  page  1, lines  13-14,                                                                   
delete language  on page 2, lines  1-3 and part of  line 4 up                                                                   
to "municipality,"  and add the word "ten"  instead of "five"                                                                   
on page 2, line 24.                                                                                                             
                                                                                                                                
There  being  NO  OBJECTION,   conceptual  Amendment  #2  was                                                                   
adopted.                                                                                                                        
                                                                                                                                
TAPE HFC 04 - 95, Side B                                                                                                    
                                                                                                                                
Representative  Foster MOVED to  report CSHB 241(FIN)  out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered                                                                                                                      
                                                                                                                              
CSHB 241(FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation  and  with  two  previously  published  fiscal                                                                   
impact notes.                                                                                                                   
                                                                                                                                
The meeting was recessed at 9:33 A.M.                                                                                           
                                                                                                                                
TAPE HFC 04-96, Side A                                                                                                      
                                                                                                                                
House Finance  Committee reconvened at 10:11  A.M. with Vice-                                                                   
Chair Meyer  chairing the meeting.  All members  were present                                                                   
with the exception of Co-Chair  Williams and Co-Chair Harris.                                                                   
                                                                                                                                
HOUSE BILL NO. 366                                                                                                            
                                                                                                                                
     An Act relating to rat racing charitable gaming; and                                                                       
     providing for an effective date.                                                                                           
                                                                                                                                
Representative  Stoltze MOVED to  ADOPT Work Draft  Version H                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
BEN  MULLIGAN,  STAFF TO  REPRESENTATIVE  STOLTZE,  explained                                                                   
that the  intent of  the Committee  Substitute is to  include                                                                   
only charitable gaming in existence  before Nov. 1, 2002, and                                                                   
it would not allow new forms of  gaming.  It is for nonprofit                                                                   
groups that supply money toward charities.                                                                                      
                                                                                                                                
Representative  Fate referred  to  the definition  of  animal                                                                   
classics, and  asked if there  are other games using  rats or                                                                   
gerbils.  Mr. Mulligan  said that  he  was not  aware of  any                                                                   
other  games.   Both  Palmer and  the  Tanana  Fair have  rat                                                                   
racing.                                                                                                                         
                                                                                                                                
Representative Fate  asked if this  bill would provide  for a                                                                   
new  animal classic  game.   Representative  Stoltze  replied                                                                   
that  the intent  of  the bill  is  a narrow  focus  allowing                                                                   
continuation of  events having  an historic precedent  and to                                                                   
limit gaming and gambling to charitable operations.                                                                             
                                                                                                                                
Representative  Fate  asked  if  a true  rat  race  would  be                                                                   
illegal under this bill. Representative  Stoltze replied that                                                                   
it  would have  to  be handled  on  a case-by-case  basis  as                                                                   
legislative policymakers.  He expressed that  the Legislature                                                                   
has a duty to  ensure that big loopholes are  not created and                                                                   
that the gaming  activities are controlled by  the Department                                                                   
of Revenue. By  keeping the focus narrow, that  goal would be                                                                   
accomplished.                                                                                                                   
                                                                                                                                
Representative  Fate expressed  concern that  there could  be                                                                   
other gaming events  but agreed that the bill  seems narrowly                                                                   
worded.                                                                                                                         
                                                                                                                                
Representative Joule commented  on having a gaming commission                                                                   
versus legislative control.                                                                                                     
                                                                                                                                
Representative Croft  understood why it was  narrowly drafted                                                                   
but asked if a separate statutory  change would be needed for                                                                   
each game other than manure-related games.                                                                                      
                                                                                                                                
Representative Stoltze  thought it was a good  point, but the                                                                   
Department of Revenue  (DOR) wouldn't be able  to control the                                                                   
activities if the bill was too broadly crafted.                                                                                 
                                                                                                                                
Representative  Croft moved  to enter  a photograph  into the                                                                   
record.                                                                                                                         
                                                                                                                                
Representative Stoltze  MOVED to ADOPT Amendment  #1. Several                                                                   
OBJECTIONS were voiced simultaneously.                                                                                          
                                                                                                                                
Amendment #1 reads:                                                                                                             
                                                                                                                                
     Page 2, line 19                                                                                                            
     Delete "a"                                                                                                                 
                                                                                                                                
     Page 2, line 19 following "chicken" insert manure                                                                        
                                                                                                                                
Representative Joule and Representative  Croft both asked how                                                                   
(b) would read.                                                                                                                 
                                                                                                                                
Representative  Stoltze explained  on  page 2,  line 19,  (b)                                                                   
would read: "concerning an activity  involving chicken manure                                                                   
and a numbered or lettered grid."                                                                                               
                                                                                                                                
Representative Chenault removed  his objection.  Amendment #1                                                                   
was adopted.                                                                                                                    
                                                                                                                                
Representative Stoltze  MOVED to report CSHB  366(FIN) out of                                                                   
Committee  with individual  recommendations the  accompanying                                                                   
fiscal note.   There being NO OBJECTION, it was so ordered.                                                                     
                                                                                                                                
CSHB 366(FIN)  was REPORTED out of Committee  with individual                                                                   
recommendations  and  with one  previously  published  fiscal                                                                   
impact note.                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:23 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

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