Legislature(1995 - 1996)
03/15/1995 01:45 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 15, 1995
1:30 P.M.
TAPE HFC 95-46, Side 2, #000 - end.
TAPE HFC 95-47, Side 1, #000 - 683.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 1:45 p.m.
PRESENT
Co-Chair Hanley Representative Martin
Co-Chair Foster Representative Mulder
Representative Brown Representative Navarre
Representative Grussendorf Representative Parnell
Representative Kelly Representative Therriault
Representative Kohring
ALSO PRESENT
Dennis Pofhard, Director, Division of Charitable Gaming,
Department of Revenue; Jeff Prather, Chief of Audit and
Exams, Division of Charitable Gaming, Department of Revenue;
Keith Perkins, Sitka; Nancy Lethcoe, Alaska Wilderness
Recreation and Tourism Association; John Litten, Member,
Alaska Tourism Marketing Council; Bob Dindinger, Vice Chair,
Alaska Tourism Marketing Council; Rod Mourant, Staff,
Representative Kott.
SUMMARY
HB 44 An Act providing that a political use is not an
authorized use of charitable gaming proceeds;
prohibiting the contribution of charitable gaming
proceeds to candidates for certain public offices,
their campaign organizations, or to political
groups; providing that a political group is not a
qualified organization for purposes of charitable
gaming; relating to what is a qualified
organization for the purpose of charitable gaming
permitting; and providing for an effective date.
CSHB 44 (FIN) was reported out of Committee with a
"do pass" recommendation and with a fiscal impact
note by the Department of Revenue, dated 2/22/95.
HB 220 An Act relating to the duties of the commissioner
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of commerce and economic development concerning
the Alaska Tourism Marketing Council; relating to
the per diem travel expenses of the council's
board of directors; relating to the powers and
duties of the council; extending the termination
date of the council; and providing for an
effective date.
CSHB 220 (L&C) was reported out of Committee with
a "do pass" recommendation and with a fiscal
impact note by the Department of Commerce and
Economic Development, dated 3/8/95.
SB 55 An Act repealing the sunset of the enhanced 911
emergency reporting systems.
SB 55 was rescheduled to 3/20/95.
HOUSE BILL NO. 44
"An Act providing that a political use is not an
authorized use of charitable gaming proceeds;
prohibiting the contribution of charitable gaming
proceeds to candidates for certain public offices,
their campaign organizations, or to political groups;
providing that a political group is not a qualified
organization for purposes of charitable gaming;
relating to what is a qualified organization for the
purpose of charitable gaming permitting; and providing
for an effective date."
Representative Martin MOVED to adopt Amendment 1 (Attachment
1). Representative Mulder OBJECTED for purpose of
discussion. Representative Martin explained that the
amendment was requested by the Division of Charitable
Gaming. Amendment 1 removes licensees and vendors from the
reporting requirements of AS 05.15.060. The amendment also
allows the Division access to the accounts of organizations
which are required to report to the Division.
DENNIS POFHARD, DIRECTOR, DIVISION OF CHARITABLE GAMING
testified in support of Amendment 1. He reiterated concerns
expressed to the Committee during the 3/14/95 House Finance
Committee meeting, regarding the Division's funding level.
He emphasized that, with limited staff time, additional
reporting requirements would result in less time available
for field audits and investigations. He noted that
contributions over $100.0 hundred dollars by permittees,
vendors, or licensees to political candidates or their
campaign organizations must be reported to the Alaska Public
Offices Commission (APOC). He stressed that it is necessary
to retain the requirement that any qualified organizations
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or municipality, who maintains a permit, report net proceeds
to the Division of Charitable Gaming. He observed that the
Division needs to have access to accounts that charitable
gaming proceeds are transferred into by permittees to ensure
proceeds are not used for any purpose that is prohibited by
the legislation.
Representative Mulder WITHDREW his objection. There being
NO OBJECTION, Amendment 1 was adopted.
Representative Mulder MOVED to adopt Amendment 2 (Attachment
2). Representative Martin OBJECTED. Representative Mulder
summarized that HB 44 eliminates "political uses" as a
designation or beneficiary of gaming proceeds; and provides
that "political use" is not a proper use of pull-tab
revenue. He explained that Amendment 2 would exclude the
provision that "political use" is not a proper use of pull-
tab revenue. He spoke in support of allowing political
contributions from gaming. He pointed out that associations
are limited to a $1.0 thousand dollar contribution. He
noted that if a political party derives $20.0 thousand
dollars from a political pull-tab operator, that the entire
amount can go to an individual running for office. He
asserted that the amount of money that can be filtered
legally through a political party from an operator to an
individual legislator would be limited. He did not feel
that the $1.0 thousand dollar contribution would present a
problem.
Co-Chair Hanley clarified that, under Amendment 2, operators
could still give unlimited amounts to political parties.
Representative Martin spoke in opposition to Amendment 2.
He noted that some legislators have received large
contributions through gaming organizations. He asserted
that the amendment would defeat the purpose of the
legislation.
Representative Mulder asserted that the amendment would
enhance the opportunity for the legislation to be adopted by
the Legislature and signed into law. He acknowledged that
pull-tab operators have influence over the political
process. He noted that an individual or organization
holding a pull-tab permit could still give unlimited amounts
to political parties. He insinuated that he would support
an amendment to restrict contributions to political parties.
He emphasized that there would be a clear identifiable trace
of any contributions.
Representative Martin urged members to do what they think is
best without regard to a threat of veto. He maintained that
every dollar given to a politician is being taken away from
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charity. He observed that proceeds to charities are
diminishing.
Representative Mulder asserted that Amendment 2 has merit.
He noted that over $250.0 thousand dollars in net proceeds
went from pull-tab operators to political parties or their
subdivisions in 1994. He asserted that Amendment 2 would
result in more money to charities.
Representative Therriault stated that the legislation does
not go far enough. He stressed the need for people to know
what the proceeds of charitable gaming are supporting.
Representative Brown noted that her Amendments 4 and 5 would
address Representative Therriault's concern.
Representative Martin recalled that large amounts have been
given to legislators by political parties as a result of
gaming proceeds. Co-Chair Hanley pointed out that the
contributions referred to by Mr. Martin were legal.
Co-Chair Hanley stated that he did not feel that proceeds
from charitable gaming should be directed to political
parties. Representative Kohring agreed with the remarks by
Representative Hanley.
Representative Grussendorf spoke in support of Amendment 2.
He emphasized the need to "sell the product". He suggested
that the legislation would be more acceptable to other
members with the adoption of Amendment 2.
A roll call vote was taken on the MOTION.
IN FAVOR: Mulder, Navarre, Brown, Grussendorf, Foster
OPPOSED: Kohring, Martin, Parnell, Therriault, Kelly,
Hanley
The MOTION FAILED (5-6).
Representative Brown provided members with Amendment 3
(Attachment 3). She noted that Amendment 3 removes "all"
and inserts "in an aggregate amount of more than $100 in a
calendar year." She explained that the amendment would
require contributions to be reported the Division of
Charitable Gaming consistent with APOC recording
requirements. She MOVED to adopt Amendment 3.
Representative Martin OBJECTED.
Representative Brown explained that Amendment 3 will require
organizations to report any contributions from funds other
than gaming funds.
In response to a question by Co-Chair Hanley, Representative
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Brown stated that the intent of the amendment is to be
consistent with APOC reporting requirements. Co-Chair
Hanley noted that the amendment could be interpreted to mean
that reporting would be required once the $100 hundred
dollar level was reached in those types of contributions.
The total of three different contributions of $50 dollars to
separate individuals would have an aggregate affect of more
than the $100 hundred dollar reporting limit.
Co-Chair Hanley MOVED to adopt a conceptional Amendment 3 to
be consistent with the intent that all contributions in
excess of $100.0 hundred dollars to a candidate or a
political party, per individual entity be reported to the
Division of Charitable Gaming. There being NO OBJECTION, it
was so ordered.
Representative Brown provided members with Amendment 4
(Attachment 4). She explained that Amendment 4 requires
that: "Each pull-tab in a series, or each jar or other
receptacle containing a series of pull-tabs, must clearly
identify to the public the permittee that will benefit from
the sales of that pull-tab series."
In response to a question by Co-Chair Hanley, Representative
Brown clarified that permits must be posted. She noted that
several permits could be obtained. She emphasized that it
may not be clear that "this jar goes with that permit, over
there on the wall."
JEFF PRATHER, CHIEF OF AUDIT AND EXAMS, DIVISION OF
CHARITABLE GAMING, DEPARTMENT OF REVENUE clarified that each
set of pull-tabs is associated with a permit.
Representative Brown expressed concern with the expense of
printing labels on pull-tabs. Representative Brown
explained that the charitable identification does not have
to be printed on each tab. There is an option to put a sign
on each jar.
In response to a question by Representative Martin, Mr.
Prather explained that there are 10 licensed pull-tab
manufactures, all of which are in the lower 48 states.
Distributors purchase the tabs and sell them to the
operators and permittees. He noted that it would be
"impossible" for the name of the charity to be put on the
pull-tab at the manufacturer's level.
A roll call vote was taken on the MOTION to adopt Amendment
4.
IN FAVOR: Brown, Grussendorf, Navarre, Kelly, Kohring,
Mulder, Therriault, Foster, Hanley
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OPPOSED: Martin
Representative Parnell was absent from the meeting.
The MOTION PASSED (9-1).
Representative Brown provided members with Amendment 5
(Attachment 5). She explained that Amendment 5 would
require that: "Before a bingo game begins, the identity of
each permittee that will benefit from that game shall be
announced to the public." Mr. Pofhard did not think the
amendment would present a problem to operators.
Representative Martin observed that several games are played
each night. Mr. Prather noted that bingo games are
conducted in sessions of 11 games. Each session can only be
conducted for one permittee. There can be more than one
session in a day. He suggested that "session" be inserted
and "game" be deleted.
Representative MOVED to AMEND Amendment to insert "session"
and delete "game". Representative Therriault noted that a
player may enter in the middle of a session.
(Tape Change, HFC 95-47, Side 1)
Representative Brown spoke in support of the insertion of
"session". Representative Therriault OBJECTED. A roll call
vote was taken on the MOTION to amend Amendment 5.
IN FAVOR: Brown, Grussendorf, Navarre, Kelly, Kohring,
Martin, Mulder, Foster, Hanley
OPPOSED: Therriault
Representative Parnell was absent from the meeting.
The MOTION PASSED (9-1).
Representative Navarre provided members with a copy of AS
05.15.124 (copy on file). He noted that in 1993 multiple-
beneficiary permittees were allowed. Multiple-beneficiary
permittees do not qualify under the operators provisions.
He noted concerns that municipal governments may not
prohibit multiple-beneficiary permittees under AS 05.15.124.
He MOVED to insert "multiple-beneficiary permits" in AS
05.15.124, to allow municipal regulation; and to amend the
title to accommodate the amendment. There being NO
OBJECTION, it was so ordered.
Representative Martin MOVED to report CSHB 44 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. Representative Brown OBJECTED for
purpose of discussion. She emphasized that serious campaign
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finance reform is needed. She asserted that the legislation
cuts off a source of funds that is a broad, diffused base of
collections which is financing some of the activities that
are needed to run for office. She did not think there was a
huge difference between the influence that follows from this
source of money versus other sources of money that come into
the political process.
Representative Navarre did not feel that political parties
should be eligible for gaming permits. He emphasized that
the problems in charitable gaming will not be fixed by the
legislation.
There being NO OBJECTION, CSHB 44 (FIN) was passed out of
Committee with individual recommendations and with the
accompanying fiscal note.
CSHB 44 (FIN) was reported out of Committee with a "do pass"
recommendation and with a fiscal impact note by the
Department of Revenue, dated 2/22/95.
HOUSE BILL NO. 220
"An Act relating to the duties of the commissioner of
commerce and economic development concerning the Alaska
Tourism Marketing Council; relating to the per diem
travel expenses of the council's board of directors;
relating to the powers and duties of the council;
extending the termination date of the council; and
providing for an effective date."
ROD MOURANT, STAFF, REPRESENTATIVE KOTT testified in support
of HB 220. He stressed that the legislation assists in
tourism expansion and diversification of the state's
economy. He noted that the legislation allows the
Commissioner of Department of Commerce and Economic
Development to contract with a qualified in-state trade
association to promote Alaska as a visitor destination
through a cooperative marketing effort. The contract term
would be expanded from two to four years.
Mr. Mourant noted that section 2 recognizes a need for
outside travel on the part of the Alaska Tourism Marketing
Council (ATMC). He noted that ATMC reimbursable travel is
currently limited to in-state travel. Section 2 would allow
per diem and travel expenses for travel outside the state at
a standard allowable rate.
Mr. Mourant observed that sections 3 and 4 alleviate the
effort of promoting Alaska as a tourist destination from the
director level to the commissioner level. Section 5 amends
the sunset date from 1996 to December 30, 1999. He noted
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that the fiscal note accompanying HB 220 is simply the ATMC
proposed operating budget.
JOHN LITTON, MEMBER, ALASKA MARKETING TOURISM COUNCIL
testified via the teleconference network from Sitka. He
testified in support of HB 220. He noted that a trip he
took to New York City to promote Alaska tourism resulted in
the Good Morning America television show being broadcast
from Juneau. The trip was not reimbursable. He emphasized
that the legislation will assist the operations of the
Council.
KEITH PERKINS, MEMBER, CITY AND BOROUGH OF SITKA ASSEMBLY
testified via the teleconference network from Sitka. He
testified in support of HB 220. He noted that he is also a
member of the Alaska Visitor's Association. He stressed
support for ATMC's effort to market Alaska.
NANCY LETHCOE, ALASKA WILDERNESS RECREATION AND TOURISM
ASSOCIATION (AWRTC) testified via the teleconference network
from Valdez. She provided members with a letter to Co-Chair
Hanley (Attachment 6). She noted that AWRTC feels there is
an imbalance in the membership of the Alaska Tourism
Marketing Council. She stated that the imbalance has led to
an unintentional bias of the Council which is unfavorable to
small Alaskan owned and operated rural tourism businesses.
She noted that her letter details areas in which the
imbalance is evident.
Ms. Lethcoe referred to suggestions for amendments listed in
her letter. She stated that the definition of "qualified
trade organization" should be expanded to include "hunting,
sport fishing, and wilderness outfitters and guides."
Ms. Lethcoe suggested that the Governor appoint 12 seats to
the Council and the qualified trade association appoint 8
seats to the Alaska Tourism Marketing Council. She added
that the qualified trade association should be required to
appoint members that represent various sectors of the
tourism industry. She emphasized the need for a "fair
playing field" for the making of decisions regarding the
expenditures of state funds.
Mr. Mourant noted that AS 44.33.705 governs the appointments
to the Board. He noted that the Alaska Tourism Marketing
Council appoints 10 members. The Director of Tourism is
also a member of the Board. In addition, the Governor
appoints 10 members. He observed that statutes state that
the Governor shall ensure that the Board is broadly
representative of the different regions of the state and the
various sectors of the visitor industry. He pointed out
that if the definition of a qualified trade organization is
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expanded to include the recommendations by AWRTC then camp
grounds, food services, gift stores, tour and charter small
plane operations and helicopter operations would also need
to be considered. He maintained that the current definition
already includes the recommendations by the AWRTC.
Representative Brown noted that concerns have been expressed
concerning which audiences will be targeted by the Council.
She observed that the perception exists that cruise traffic
has been overly targeted as opposed to independent
travelers. She pointed out that any change would have to
take under consideration the ongoing relationship with the
large operators, who fund a large portion of the program.
BOB DINDINGER, VICE CHAIR, ALASKA MARKETING TOURISM COUNCIL
responded to comments by members. He noted that it takes
eleven affirmative votes to take any action by the Council.
He asserted that it is virtually impossible for the trade
association to manipulate or take advantage of the process.
He added that the trade association, by its own policy
appoints 3 of its 10 participants on a geographic basis.
The other 7 seats are appointed based upon their cash
contributions to the program. He pointed out the 90 percent
of the industry's cash contribution comes from less then 10
companies. He observed that legislative action has raised
the percentage of industry contribution from 10 to 25
percent. He noted that appointments based on contributions
range from $250.0 thousand dollars to 60.0 thousand dollars.
Representative Brown referred to remarks by Ms. Lethcoe.
Mr. Dindinger observed that the Council's funding has been
reduced. He noted that when more money was available the
Council was able to fund special interest marketing. He
emphasized that the current funding level requires generic,
centralized marketing. He asserted that all concerns have
equally shared the pain of downsizing.
In response to a question by Co-Chair Hanley, Mr. Mourant
noted that "shall" was changed on page 1, line 11 to "may".
Mr. Dindinger stated that the Council is not concerned by
the change.
Representative Brown noted that the change reflects the
difference in language on page 1, lines 8 and 9. She did
not think the change to "may" would constitute a problem.
Representative Brown asked if the Council has considered
marketing over Internet. Mr. Dindinger responded that the
Council is actively investigating the possibility of
utilizing network marketing technology. Mr. Mourant noted
the expense of investing in computer network marketing.
Representative Grussendorf noted that the contract term is
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being changed from 2 to 4 years. He asked how the contract
would be affected if the state did not appropriate funding.
Mr. Mourant noted that everything is subject to legislative
appropriation.
Representative Martin spoke in support of network marketing.
He expressed concern with the fiscal note. Co-Chair Hanley
explained that the fiscal note by the Department of Commerce
and Economic Development reflects the Council's operating
budget. He noted that the fiscal note does not obligate
future legislatures. He observed that the Council's funding
level will be debated.
Representative Mulder MOVED to report CSHB 220 (L&C) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 220 (L&C) was reported out of Committee with a "do
pass" recommendation and with a fiscal impact note by the
Department of Commerce and Economic Development, dated
3/8/95.
ADJOURNMENT
The meeting adjourned at 3:00 p.m.
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