Legislature(1993 - 1994)
03/24/1993 01:00 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE March 24, 1993 1:00 p.m. MEMBERS PRESENT Representative Brian Porter, Chairman Representative Jeannette James, Vice-Chair Representative Pete Kott Representative Gail Phillips Representative Joe Green Representative Jim Nordlund MEMBERS ABSENT Representative Cliff Davidson COMMITTEE CALENDAR HB 136 "An Act relating to the offenses of driving while intoxicated and refusal to submit to a breath test; and providing for an effective date." CSHB 136 (JUD) PASSED OUT WITH A DO PASS RECOMMENDATION HB 28 "An Act relating to the penalty for providing alcoholic beverages to a person under the age of 21; and providing for an effective date." HEARD AND PLACED IN A SUBCOMMITTEE HB 168 "An Act relating to multiple-beneficiary charitable gaming permits and door prizes for charitable gaming; and providing for an effective date." CSHB 168 (JUD) PASSED OUT WITH NO RECOMMENDATION WITNESS REGISTER MARGOT KNUTH Assistant Attorney General Department of Law Criminal Division P. O. Box 110300 Juneau, Alaska 99811-0300 Phone: 465-3428 Position Statement: Supported HB 136; Discussed HB 28 JUANITA HENSLEY Chief, Driver Services Division of Motor Vehicles Department of Public Safety P. O. Box 20020 Juneau, Alaska 99802 Phone: 465-4335 Position Statement: Discussed HB 136 REPRESENTATIVE BILL WILLIAMS Alaska State Legislature State Capitol, Room 128 Juneau, Alaska 99801 Phone: 465-3424 Position Statement: Prime sponsor of HB 28 JEANNEANE HENRY 1038 Dunton Street Ketchikan, Alaska 99901 Phone: 225-2429 Position Statement: Supported HB 28 SUE PICKRELL Drug Prevention Specialist Alaskans for Drug-Free Youth 2417 Tongass Avenue Ketchikan, Alaska 99901 Phone: 247-2273 Position Statement: Supported HB 28 LYNDA ADAMS, Executive Director Alaskans for Drug-Free Youth 2417 Tongass Avenue Ketchikan, Alaska 99901 Phone: 247-2273 Position Statement: Supported and suggested amendments to HB 28 JOHN SALEMI Director Public Defender Agency 900 West Fifth Avenue, Suite 200 Anchorage, Alaska 99501-2090 Phone: 279-7541 Position Statement: Opposed HB 28; suggested alternatives DANA LATOUR Special Assistant to the Commissioner Department of Corrections P. O. Box 112000 Juneau, Alaska 99811 Phone: 465-3376 Position Statement: Explained the fiscal note to HB 28 JIM FISK Bayside Fire Department P. O. Box 2968 Kodiak, Alaska 99615 Phone: 486-7088 Position Statement: Opposed HB 28; Supported HB 168 REPRESENTATIVE CARL MOSES Alaska State Legislature State Capitol, Room 204 Juneau, Alaska 99801 Phone: 465-4451 Position Statement: Prime sponsor of HB 168 GAYLE HORETSKI Committee Counsel House Judiciary Committee State Capitol, Room 120 Juneau, Alaska 99801-1182 Phone: 465-6841 Position Statement: Outlined components of CSHB 168 (JUD) JOHN HANSEN Gaming Manager Division of Occupational Licensing Department of Commerce and Economic Development P. O. Box 110806 Juneau, Alaska 99811 Phone: 465-2581 Position Statement: Provided information related to HB 168 RON PAGENKOPF Juneau Soccer Club 613 West Willoughby Avenue Juneau, Alaska 99801 Phone: 586-2027 Position Statement: Supported HB 168 GARRY LANGILLE, President Kodiak Liquor License Association P. O. Box 947 Kodiak, Alaska 99615 Phone: 486-2700 Position Statement: Supported HB 168 SAM KITO Aleutian/Pribilof Association 2713 David Street Juneau, Alaska 99801 Phone: 364-2659 Position Statement: Expressed Dimitri Philemonof's support of HB 168 BILL BISHOP American Legion P. O. Box 687 Kodiak, Alaska 99615 Phone: 486-3258 Position Statement: Supported HB 168 ELSIE O'BRYAN Project Director Mid-Valley Seniors P. O. Box 168 Houston, Alaska 99694 Phone: 892-6114 Position Statement: Supported HB 168 PREVIOUS ACTION BILL: HB 136 SHORT TITLE: DRUNK DRIVING AND BREATH TEST OFFENSES BILL VERSION: CSHB 136(FIN) SPONSOR(S): REPRESENTATIVE(S) MULDER,Phillips TITLE: "An Act relating to revocation of and limitations on a driver's license to the offenses of driving while intoxicated and refusal to submit to a breath test; imposing a limited license fee; amending Alaska Rule of Civil Procedure 32(b); and providing for an effective date." JRN-DATE JRN-PG ACTION 02/05/93 238 (H) READ THE FIRST TIME/REFERRAL(S) 02/05/93 238 (H) HES, JUDICIARY, FINANCE 02/25/93 (H) HES AT 03:00 PM CAPITOL 106 02/25/93 (H) MINUTE(HES) 02/25/93 (H) MINUTE(HES) 03/02/93 (H) HES AT 03:00 PM CAPITOL 106 03/02/93 (H) MINUTE(HES) 03/05/93 543 (H) HES RPT CS(HES) NEW TITLE 3DP 6NR 03/05/93 543 (H) DP: B.DAVIS, NICHOLIA, BRICE 03/05/93 543 (H) NR: KOTT, VEZEY, G.DAVIS, BUNDE, 03/05/93 543 (H) NR: OLBERG, TOOHEY 03/05/93 543 (H) -FISCAL NOTE (CORR) 3/5/93 03/05/93 543 (H) -2 ZERO FNS (DPS, LAW) 3/5/93 03/19/93 (H) JUD AT 01:00 PM CAPITOL 120 03/19/93 (H) MINUTE(JUD) 03/19/93 (H) MINUTE(JUD) 03/19/93 (H) MINUTE(JUD) 03/22/93 739 (H) COSPONSOR(S): PHILLIPS 03/24/93 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 28 SHORT TITLE: PENALTY FOR PROVIDING ALCOHOL TO A MINOR BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) WILLIAMS,Phillips,B.Davis, Nicholia,Olberg,Bunde,Kott TITLE: "An Act relating to the penalty for providing alcoholic beverages to a person under the age of 21; and providing for an effective date." JRN-DATE JRN-PG ACTION 01/04/93 31 (H) PREFILE RELEASED 01/11/93 31 (H) READ THE FIRST TIME/REFERRAL(S) 01/11/93 31 (H) HES, JUDICIARY, FINANCE 01/13/93 54 (H) COSPONSOR(S): OLBERG 01/14/93 62 (H) COSPONSOR(S): BUNDE 02/10/93 312 (H) COSPONSOR(S): KOTT 03/04/93 (H) HES AT 03:00 PM CAPITOL 106 03/04/93 (H) MINUTE(HES) 03/05/93 539 (H) HES RPT 3DP 3NR 03/05/93 539 (H) DP: BUNDE, TOOHEY, NICHOLIA 03/05/93 540 (H) NR: KOTT, VEZEY, BRICE 03/05/93 540 (H) -2 FISCAL NOTES (CORR, ADM) 3/5/93 03/05/93 540 (H) -3 ZERO FNS (LAW, DPS, ADM) 3/5/93 03/24/93 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 168 SHORT TITLE: CHARITABLE GAMING AMENDMENTS BILL VERSION: CSHB 168(FIN) AM SPONSOR(S): RULES BY REQUEST TITLE: "An Act establishing a testing program for charitable gaming permittees and operators; relating to the duties of a member in charge; requiring regulations relating to pull-tabs to be consistent with North American Gaming Regulators Association standards on pull-tabs to the extent permitted by charitable gaming laws; allowing permittees to contract with vendors to sell pull-tabs on behalf of the permittee at an establishment holding a package store license and certain establishments holding a beverage dispensary license; allowing municipalities to prohibit vendors from conducting gaming activities within the municipality; restricting the purchase of pull-tabs by permittees, licensees, and vendors and their owners, managers, and employees; requiring receipts before prizes of $50 or more may be awarded in pull-tab games; prohibiting distributors from supplying pull-tabs to vendors; relating to the distribution of pull-tabs from one distributor to another distributor; requiring the registration of vendors and regulating activities involving them; requiring the licensing of out-of-state pull-tab manufacturers and increasing the annual licensing fee for pull-tab manufacturers; requiring the department regulating charitable gaming to approve contracts between permittees and operators before gaming may occur; preventing persons with felony convictions or convictions for crimes involving theft or dishonesty or a violation of gambling laws from being involved in charitable gaming activities as a permittee, licensee, vendor, person responsible for the operation of an activity, fund raiser or consultant of a licensee or vendor, or employee in a managerial or supervisory capacity, and providing exceptions for certain persons whose convictions are at least 10 years old and are not for violation of an unclassified felony described in AS 11, a class A felony, or extortion; relating to multiple- beneficiary charitable gaming permits and door prizes for charitable gaming; requiring operators to pay permittees at least 30 percent of the adjusted gross income from a pull- tab activity and limiting operators to expenses of not more than 70 percent of the adjusted gross income from that activity; requiring operators to pay permittees at least 10 percent of the adjusted gross income from a charitable gaming activity other than pull-tabs and limiting operators to expenses of not more than 90 percent of the adjusted gross income from that activity; requiring a permittee who uses a pull-tab vendor to enter into a contract with that vendor; requiring a vendor contracting with a permittee to pay the permittee at least 70 percent of the ideal net for each pull-tab series delivered to the vendor by the permittee; requiring that operators report an adjusted gross income of at least 15 percent of gross income; allowing the commissioner regulating charitable gaming to issue orders prohibiting violations of state gaming laws; relating to the authority of the commissioner regulating charitable gaming to suspend or revoke a permit, license, or registration; prohibiting the payment of any portion of the net proceeds of a bingo or pull-tab game to a registered lobbyist; providing a penalty for false statements in gaming license applications; providing communities with the authority by local option election to prohibit charitable gaming within the community; and providing for an effective date." JRN-DATE JRN-PG ACTION 02/19/93 390 (H) READ THE FIRST TIME/REFERRAL(S) 02/19/93 390 (H) LABOR & COMMERCE, JUDICIARY, FINANCE 03/09/93 (H) L&C AT 03:00 PM CAPITOL 17 03/09/93 (H) MINUTE(L&C) 03/10/93 588 (H) L&C RPT 2DP 5NR 03/10/93 588 (H) DP: SITTON, HUDSON 03/10/93 588 (H) NR: PORTER,WILLIAMS,MACKIE, GREEN,MULDER 03/10/93 588 (H) -FISCAL NOTE (DCED) 3/10/93 03/24/93 (H) JUD AT 01:00 PM CAPITOL 120 ACTION NARRATIVE TAPE 93-40, SIDE A Number 000 The House Judiciary Standing Committee meeting was called to order at 1:10 p.m., on March 24, 1993. A quorum was present. Chairman Porter announced that the committee would address HB 136 first. He announced that the meeting was being teleconferenced. HB 136: DRUNK DRIVING AND BREATH TEST OFFENSES Number 043 MARGOT KNUTH, ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW (DOL), expressed her support for HB 136. She then gave an overview of the draft committee substitute for HB 136 dated March 23, 1993. She said that the bill would place first and second driving while intoxicated (DWI) offenders in halfway houses, and require them to pay for their incarceration, up to $1,000. Additionally, those offenders would be required to perform community service while housed in the halfway house. She said that the current version of HB 136 defined halfway house placements in such a way that it would exclude house arrests. MS. KNUTH stated that HB 136 also solved serious problems that had been created with regard to limited licenses. She noted that section 2 of the bill changed the period of time for mandatory minimum revocations on third and fourth DWI offenses so that the mandatory minimum time would now be the same period for which a person's license would be revoked and the person was ineligible for a limited license. She said that the bill would get rid of limited license privileges for offenders convicted of second, third, fourth, and subsequent DWI offenses. Number 100 MS. KNUTH commented that sections 1 and 3 allowed the Division of Motor Vehicles (DMV) and the court system to restore driving privileges to people who, under former versions of the law, had their licenses revoked for much longer periods of time than the mandatory minimum times. She said that this would only occur if people had met the mandatory minimum periods, had completed alcohol treatment programs, and were otherwise in good standing with the court system and the DMV. She said that people in Alaska who were making a good recovery were often greatly hampered by not being allowed to drive. Number 140 MS. KNUTH noted that section 4 rewrote the limited license statute. She said that the new section provided that there would be no more limited licenses for anything except a first offense DWI conviction. She mentioned that the section included a special definition of "previously convicted." Ms. Knuth commented that for the purposes of a limited license, the state would count a ".08 conviction" from another jurisdiction. She noted her earlier concern that a person could have multiple .08 convictions from other jurisdictions and still not be subject to repeat DWI offender laws in Alaska. That would no longer happen under section 4's provisions, she said. Number 175 MS. KNUTH stated that section 5 ensured that offenders enrolled in and complied with alcohol treatment programs before they receive their licenses back. Section 6 added a $100 fee for obtaining a limited license. She said that another $100 fee would be charged at the time that a person went from a limited license to a regular driver's license. Number 197 REPRESENTATIVE JOE GREEN asked how long a limited license would be in effect. Number 205 JUANITA HENSLEY, CHIEF OF DRIVER SERVICES, DMV, DEPARTMENT OF PUBLIC SAFETY, replied that after the period of revocation, a person was eligible to get a regular, five year license. At that time, she added, a person would pay a reinstatement fee of $100. She also mentioned the $100 application fee for a limited license, which would be in effect for 60 days. Number 222 MS. KNUTH called the members' attention to section 7 of HB 136. That section clarified to the court of appeals that limited licenses could not be granted to people whose licenses had been revoked for driving while a license was revoked or cancelled. She said that the rest of section 7 related to placements in halfway houses and requiring payment of up to $1,000. She reiterated that the bill contained a tight definition of what appropriate placements would be. She noted that all convicted DWI offenders would be required to pay up to $1,000 toward the cost of their placement, regardless of whether they were housed in a prison or a halfway house. MS. KNUTH commented that section 11 indicated that there was a court rule change regarding making it a part of a defendant's judgment that he or she pay the cost of the incarceration. She stated that if HB 136 did not pass the legislature with a 2/3 vote, as required for a court rule change, section 11 would not take effect and judgments would not necessarily contain an order for payment of up to $1,000 for placement. However, she said that the court system could enforce that requirement on its own initiative. MS. KNUTH mentioned the applicability section of HB 136, and the effective date. She stated that the provisions of HB 136 relating to limited licenses would start applying to people regardless of when their conviction occurred. Number 295 CHAIRMAN BRIAN PORTER agreed with Ms. Knuth that the current version of HB 136 was a very good bill, as earlier concerns with the bill had been addressed. Number 303 REPRESENTATIVE JEANNETTE JAMES made a MOTION to ADOPT CSHB 136 (JUD), dated March 23, 1993. There being no objection, IT WAS SO ORDERED. Number 318 REPRESENTATIVE PETE KOTT made a MOTION to PASS CSHB 136 (JUD), dated March 23, 1993, out of committee, with attached fiscal note. There being no objection, IT WAS SO ORDERED. CHAIRMAN PORTER announced that the committee would take up HB 28 next. HB 28: PENALTY FOR PROVIDING ALCOHOL TO A MINOR Number 356 REPRESENTATIVE BILL WILLIAMS, PRIME SPONSOR of HB 28, mentioned that a similar bill had been introduced the year before by former-Representative Cheri Davis, in response to the tragic alcohol-related deaths of two Ketchikan youths. He said that the purpose of the bill was to change the penalty for providing alcoholic beverages to persons under the age of 21. He said that the crime of furnishing alcohol to a minor was currently a misdemeanor with a maximum penalty of one year in jail and a $5,000 fine. House Bill 28, he said, would make the same crime a class C felony with a maximum jail sentence of five years and a maximum fine of $50,000. REPRESENTATIVE WILLIAMS commented that HB 28 would serve as a greater deterrent to those providing alcohol to minors. Number 395 JEANNEANE HENRY testified via teleconference from Ketchikan. She mentioned that Kathy Blauser, Director of Ketchikan Youth Services, was unable to be present, but wished to convey her organization's wholehearted support for HB 28. MS. HENRY is the mother of one of the boys who was killed in 1991, after an adult provided a gallon of vodka to him and four other youths. She said that the man who purchased the vodka was arrested, sentenced, and then left the community after serving part of his sentence. She mentioned that the man had previously been sentenced in Oregon, to receive alcohol screening and treatment. However, due to a lack of monitoring, the man never received the treatment and left Oregon for Ketchikan. She said that if Oregon officials had monitored the man, her son might be alive today. Number 440 MS. HENRY said that adults giving children drugs was a serious crime that violated the rights of children to be protected by their parents and by the community. She said that many adults willingly provided alcohol to minors. She commented that one month after the man who had provided her son with alcohol was sentenced, another man provided alcohol to a minor, who was killed as a result. She said that children deserved more protection than the current law offered. She urged support for HB 28. REPRESENTATIVES NORDLUND and PHILLIPS joined the committee. Number 474 SUE PICKRELL, a drug prevention specialist with ALASKANS FOR DRUG-FREE YOUTH, testified via teleconference from Ketchikan. She urged the committee to pass out HB 28. She is a former police officer, who had often investigated minor consuming cases. She said that teenagers would often not tell law enforcement officers who had purchased alcohol for them, making arrests and prosecutions of adults difficult. She said that making a second offense of providing alcohol to a minor a felony was not out-of-line. She said that it would send a clear message to adults that furnishing alcohol to minors would no longer be tolerated. Number 493 LYNDA ADAMS, EXECUTIVE DIRECTOR, ALASKANS FOR DRUG-FREE YOUTH, testified via teleconference from Ketchikan. She mentioned that the bill introduced by former-Representative Cheri Davis had contained two components that were not included in HB 28. She suggested putting those two components back into the bill. One would require that signs regarding the penalties for furnishing alcohol to a minor be posted in bars and liquor stores. The other section provided that a minor who solicited an adult to purchase alcohol for him or her would be guilty of a misdemeanor. MS. ADAMS noted that the second provision would place some responsibility on the minor. She expressed her opinion that HB 28 was an effective tool for reducing alcohol consumption among youth. She urged the committee to pass the bill. Number 523 JOHN SALEMI, DIRECTOR, PUBLIC DEFENDER AGENCY, testified via teleconference from Anchorage. He said that passage of HB 28 would have a fiscal impact on his agency. He expressed his opinion that everyone could agree that alcohol was a drug, and was commonly abused by youth in our society, creating tremendous suffering. He commented that alcohol was a prevalent part of the social fabric in our society. He said that disagreement existed with regard to what effect HB 28 would have on the social problem of youth and alcohol. He stated that his agency felt that HB 28 would not have the desired impact of addressing the real problem of alcohol abuse. MR. SALEMI noted that not all social problems were susceptible to elimination or reduction through the passage of laws. He mentioned the federal Prohibition Law, which had significant penalties, but was consistently violated. He stated that in past hearings, HB 28 had been promoted as a means of deterring adults from furnishing liquor to minors. He said that if he thought HB 28 would serve as a deterrent, he would support it. However, he said that over the last ten years in Alaska, it had been found that enhancing penalties was not a guarantee that people would be less likely to engage in criminal conduct. MR. SALEMI commented that the Alaska criminal laws had been completely overhauled, yet crime was on the rise, and prison populations continued to grow. He said that the problem was that in many instances, crime was a thoughtless and impulsive act, and an offender did not necessarily consider the consequences of his or her actions. He questioned the value of stiff penalties and sentences. MR. SALEMI anticipated, based on DOL estimates, that HB 28 would result in the Public Defender Agency handling an additional 75-100 felony cases per year. Based on national caseload standards, he said, that would mean that his agency would require an additional half-time attorney and some support staff. He said that his agency's current staff simply could not absorb the increased caseload that would result from HB 28. MR. SALEMI suggested an alternative to HB 28. He said that furnishing alcohol to a minor was already a crime, with a maximum penalty of up to one year in prison and a $5,000 fine. He recommended that judges be educated about the need to impose maximum penalties on those who furnished alcohol to minors. Additionally, he suggested that liquor stores post notices stating that it was a crime for adults to furnish alcohol to minors, and stating the penalties for committing that crime. He commented that the state might already have adequate laws on the books, but simply needed to educate judges and inform potential violators of the consequences of their actions. Number 647 REPRESENTATIVE JAMES asked Mr. Salemi how increasing the penalty for an existing crime would increase the number of cases handled by his agency. Number 653 MR. SALEMI replied that HB 28 would change the character of cases that his agency received. He noted that the DOL had estimated there were about 200 cases of adults furnishing alcohol to minors every year, and that 100 of those cases could be prosecuted as felony offenses, if HB 28 was enacted. That, he said, meant cases that his agency now handled as misdemeanors would become felonies, which entailed much more work. Number 679 REPRESENTATIVE KOTT asked Mr. Salemi if increasing the penalty for furnishing alcohol to a minor to life imprisonment would serve as a deterrent, in light of Mr. Salemi's earlier questioning of the deterrent value of increasing penalties for furnishing alcohol to minors. Number 686 MR. SALEMI responded that if penalties were grave enough for all crimes, society might eventually see some deterrent effect. The question then became, he said, what was society willing to spend in order to achieve that deterrent effect? He stated that capital punishment or life imprisonment would likely result in some deterrent effect, but the issue was whether or not offenders would process that information, if they knew it at all, at the time they were considering committing the crime. Number 705 REPRESENTATIVE KOTT asked Mr. Salemi to comment on the potential deterrent effect of posting signs in liquor stores, stating what the penalties were for providing alcohol to minors. Number 711 MR. SALEMI said that he had mentioned posting signs in liquor stores, because in reviewing his notes from when HB 28 was heard in the House Health, Education and Social Services (HESS) Committee, proponents of the bill had mentioned adding a section to HB 28 requiring the posting of signs. He did not necessarily agree that posting signs would have a deterrent effect. However, he said that under current law, signs could be posted in liquor stores. He said that posting signs certainly would not hurt, and would cost very little money. Number 731 CHAIRMAN PORTER mentioned that someone had testified earlier that HB 28 would only apply to second and subsequent convictions for furnishing alcohol to minors. However, he clarified for committee members that the bill would also affect first-time offenders. He asked Mr. Salemi if a person convicted of a misdemeanor for furnishing alcohol to a minor could be subject to civil litigation. Number 734 MR. SALEMI replied that nothing that had occurred in criminal court would preclude an injured party or his or her family from filing a civil action. He stated that a criminal court could also order restitution, upon conviction of an individual. Number 748 MS. HENRY stated that, as the mother of a child who was killed after an adult furnished him with alcohol, a penalty of life imprisonment for that adult would be fine with her. However, she said that she knew that that was impractical. She recommended putting some "meat" into the current law and sending a clear message to adults that it was not acceptable to furnish minors with alcohol. She stated that providing alcohol to minors was a serious crime. She indicated that in many cases, civil litigation did not work, as offenders were sometimes indigent. She stated that making the crime a misdemeanor did not send a strong enough message to society. Number 793 MS. KNUTH stated that making Alaska a "dry" state would result in much less crime and suffering. She said that a very substantial percentage of crimes committed were alcohol-related. She added that there was a double standard when it came to alcohol in our society. Parents did not want their children to drink, she said, yet the parents would not stop drinking themselves. Not only was it legal for children to start drinking once they turned 21, she said, but it also was not a crime for parents to furnish alcohol to their own children. Number 805 MS. KNUTH noted the existing disparity between adults lawfully providing alcohol to their own children, and adults illegally providing alcohol to other minors. House Bill 28, she said, would create an even greater disparity. She commented that making the furnishing of alcohol to minors a felony offense might not have the desired effect. Now, she said, furnishing alcohol to a minor was a serious misdemeanor, one taken very seriously by judges, and punished rather severely. If the crime was changed to be a felony, she continued, offenders would be brought before superior court judges instead of district court judges. Number 830 MS. KNUTH said that in comparison to other crimes that superior court judges saw, furnishing alcohol to a minor would seem like a pretty minor offense. TAPE 93-40, SIDE B Number 000 MS. KNUTH stated that the effect of HB 28 would probably be that offenders would serve even less jail time than they did now. She said that Representative Cheri Davis' bill had proposed making second and subsequent offenses felonies. She again mentioned that making the crime a felony at all was troublesome to her. She commented that a situation in which furnishing alcohol to a minor resulted in that minor's death could result in an adult being prosecuted for homicide. She commented that the Ketchikan case was a tragedy. Number 042 REPRESENTATIVE JAMES asked Ms. Knuth to comment on the social stigma associated with being a felon, and its deterrent value. Number 057 MS. KNUTH stated that being labeled a felon had a significant impact on non-indigent individuals, as it made it difficult for a person to get a job. Yet she did not know that it would have any deterrent effect because offenders, in her view, did not consider the consequences prior to furnishing alcohol to minors. She expressed doubt that people would know that the crime was a felony. The criminal mentality, she said, was very limited, and offenders did not expect to get caught. Number 083 REPRESENTATIVE JAMES asked Ms. Knuth to express her opinion on posting signs in liquor stores. Number 097 MS. KNUTH was aware of signs already in liquor stores, which stated that minors were not allowed on the premises. She said that if those signs did not make a person furnishing alcohol to a minor think about his or her actions, she was not sure that a new sign would serve as a deterrent. She said that a large part of the problem was that many people did not feel that furnishing alcohol to minors was an inherently bad thing, as evidenced by the large number of adults who were willing to provide alcohol to minors. Number 126 REPRESENTATIVE JIM NORDLUND asked Ms. Knuth if a parent could be prosecuted for a situation in which his or her child, accompanied by another minor, raided that parent's liquor cabinet, unbeknownst to the parent. Number 139 MS. KNUTH replied that that parent could be prosecuted, although the prosecution would be difficult. Number 155 REPRESENTATIVE NORDLUND stated that under HB 28, then, a parent in that situation could be subject to a five-year prison sentence. MS. KNUTH concurred. Number 159 REPRESENTATIVE KOTT asked what the mean sentence was for violation of the current law regarding furnishing alcohol to minors. Number 166 MS. KNUTH did not have that information with her. Number 174 REPRESENTATIVE KOTT asked if the state had any data pertaining to what type of people furnished alcohol to minors. Number 184 MS. KNUTH replied that two classes of people would be subjected to liability under HB 28's provisions. The first class was liquor store clerks, she said, easily caught and prosecuted. However, she said that those people were not whom HB 28 meant to target. With regard to non-liquor store clerks, she suspected that offenders would be more responsible than the average defendant in criminal court. She said that most defendants would probably believe they were not doing any harm by providing alcohol to minors. Number 222 REPRESENTATIVE KOTT asked if a Department of Corrections (DOC) representative could explain that agency's fiscal note. Number 228 DANA LATOUR, SPECIAL ASSISTANT TO THE COMMISSIONER OF THE DOC, described how she had prepared the fiscal note on HB 28. She called the members' attention to the third paragraph on page 2 of the DOC's fiscal note. She said that, for the purposes of the fiscal note, she had assumed that the lowest mean sentence for a class C felony of this type was 7.5 months, or 225 bed days. The average mean sentence for a class A misdemeanor, as providing alcohol to a minor currently was, was 1.5 months, or 45 days, she added. Number 265 MS. LATOUR said that by raising the offense from a class A misdemeanor to a class C felony, offenders would receive sentences of an additional 180 days. Subtracting one-third of that sentence for "good time," she said, left an increase of 120 days. Multiplying 120 bed days by 100 convictions (a figure that she got from the DOL), by the average cost of incarceration at a community residential center, $50 per day, she arrived at the cost of HB 28 at $600,000 per year. Number 281 REPRESENTATIVE KOTT asked how she had arrived at the mean sentence of 45 days for the class A misdemeanor for providing alcohol to a minor. Number 294 MS. LATOUR replied that the 45-day figure was based somewhat on assumption. She said that she had spoken with many experts to determine how long these offenders served. Number 306 REPRESENTATIVE KOTT commented that the correctional data information system in the state needed to be improved. Number 313 REPRESENTATIVE GREEN asked Ms. Latour if the DOC's fiscal note would be less, in light of Ms. Knuth's testimony that elevating the crime from a misdemeanor to a felony might result in judges handing down shorter sentences. Number 342 MS. LATOUR did not know how Ms. Knuth's theory would impact the DOC's fiscal note. Number 351 JIM FISK testified via teleconference from Kodiak. He has been involved in the liquor business for over 40 years, and said that the problem of minor consuming was an age-old problem that started at home. He stated that all the legislation in the world would not stop minors from drinking. He said that the education process needed to begin at home and in the schools. Number 378 MR. FISK added that Alaska was unique in its approach of having the legislature, the Alcoholic Beverage Control Board, and the liquor industry work together to bring about the use of alcohol management techniques. He cited a bill that would require alcohol dispensers to pass an alcohol management course. He asserted that the state could not simply post signs and expect deterrence. He indicated his lack of support for HB 28. Number 416 REPRESENTATIVE JAMES made a MOTION to MOVE HB 28 out of committee with individual recommendations and accompanying fiscal notes. Number 422 REPRESENTATIVE NORDLUND OBJECTED. Number 430 REPRESENTATIVE KOTT OBJECTED for the purpose of taking an "at ease" at 2:18 p.m. The committee then reconvened at 2:19 p.m. Number 436 REPRESENTATIVE JAMES WITHDREW her MOTION to MOVE HB 28 out of committee. Number 439 REPRESENTATIVE KOTT stated that he would WITHDRAW his OBJECTION. Number 440 CHAIRMAN PORTER noted that with the motion withdrawn, the objections were already removed. He said that during the brief "at ease," it had come to his attention that it was the will of the committee that HB 28 needed work. He APPOINTED A SUBCOMMITTEE consisting of Representatives Phillips, Kott, and Nordlund to consider amendments to HB 28. He asked the subcommittee to bring the bill back before the committee as soon as they had done their work. CHAIRMAN PORTER announced that the committee would address HB 168 next. HB 168: CHARITABLE GAMING AMENDMENTS Number 469 REPRESENTATIVE CARL MOSES, PRIME SPONSOR of HB 168, testified that if enacted, his bill would clarify in statute what activities were permissible and also create a new charitable gaming permit called a "multiple beneficiary permit." Two to six qualified organizations would be allowed to apply jointly for a multiple beneficiary permit, he stated. The organizations could then conduct as many games and sessions as allowed by law for each permittee, multiplied by the number of holders of the multiple beneficiary permit. Number 501 GAYLE HORETSKI, COMMITTEE COUNSEL, HOUSE JUDICIARY COMMITTEE, outlined the components of a draft committee substitute, dated March 24, 1993. She said that the draft committee substitute was identical to the original HB 168, except for three additional sections. The first additional language appeared in section 6, on page 2 of the bill, she said. She said that John Hansen, from the Department of Commerce and Economic Development (DCED) would explain the new language and its effect later. MS. HORETSKI commented that sections 7 and 9 were also new additions to HB 168. She said that the new language would require 40% of the adjusted gross income from a pull-tab activity be provided to the sponsoring charity. Conversely, the bill held that the total amount of authorized expenses could not exceed 60% of the adjusted gross income. She deferred to Mr. Hansen to explain the practical effect of that new language. Number 538 REPRESENTATIVE GAIL PHILLIPS noted that the changes to the body of HB 168 would require a title change. Number 539 MS. HORETSKI replied that the title of the draft committee substitute reflected the changes made in the body of HB 168. Number 543 REPRESENTATIVE GREEN asked Ms. Horetski a question regarding the language on page 3, section 7, line 12, of the draft committee substitute. Number 549 MS. HORETSKI said that, in her understanding, at least 40% of the adjusted gross income from pull-tab activities, or at least 15% of the adjusted gross income from gaming activities other than pull-tabs had to be provided to the sponsoring charity. Number 555 REPRESENTATIVE GREEN expressed concern with the language. He asked what would happen in the event that an operator ran gaming activities consisting of both pull-tabs and other types of games. Number 562 MS. HORETSKI stated that if an operator ran both pull-tab and other gaming operations, he or she would apply one percentage rule to the pull-tab activity and another percentage rule to the other activity. Number 569 JOHN HANSEN, GAMING AMANGER, DCED, said that the amendments included in the draft committee substitute required two separate expense limitations. Specifically, he said that pull-tab expenses would be limited to 60% of adjusted gross income, or net income. Other activities, he said, would have to have at least 15% of adjusted gross income for net proceeds. Under current law, he said that operators were required to pay 15% of adjusted gross income for all gaming activities within two consecutive quarters. MR. HANSEN said that currently, an operator could incur a loss in one quarter and pay no net proceeds. In the following quarter, he said, the operator could pay the 15% minimum and be in compliance with the law. Therefore, he said, although current law required that charities receive 15% of adjusted gross income, in reality they sometimes received substantially less than that. Number 597 REPRESENTATIVE GREEN asked Mr. Hansen to address a situation in which an operator ran both pull-tab and other gaming activities. Number 601 MR. HANSEN replied that each activity would stand on its own, in terms of expenses. He stated that under current law, an operator could offset bingo or pull-tab expenses with other types of gaming activity. House Bill 168, however, would separate pull-tab activity from other activities. CHAIRMAN PORTER asked if an operator running both pull-tab and other gaming activities would have to keep expenses and revenues separate. Number 618 MR. HANSEN responded that under current law, that separation was already required. On both financial statements and quarterly reports, he said, each activity's income and expenses were separately identified. However, he said that when the finances of those two activities were combined on the front of the financial statement, they became a joint net income, where one could offset the other. House Bill 168, he said, would isolate pull-tabs from other types of gaming activity and set percentages which would end up as net proceeds. Number 628 REPRESENTATIVE GREEN indicated his understanding of the practical applications of HB 168. Number 634 REPRESENTATIVE NORDLUND asked if the 40% threshold would present any problems for operators or charitable organizations. Number 642 MR. HANSEN stated that the DCED had some financial statements on file, which were completed under the 40% requirement that had been imposed via regulation. He said that some operations would have to change as a result of HB 168. While the 40% requirement was in effect, he said, some operators said that they had shut down less-profitable operations. Other operators had complied with the regulation, and continued to comply with the regulation, although it was no longer in effect. MR. HANSEN commented that HB 168 would have an effect not just on operators, but also on organizations that conducted their own gaming activity. He said that there were currently no expense limitations on permittees who ran their own gaming activities. He expressed an opinion that the changes that would result from HB 168 would be positive changes. Number 667 REPRESENTATIVE KOTT recalled that the regulations had affected the larger gaming operations. He asked Mr. Hansen to elaborate on the effect of the regulations. Number 674 MR. HANSEN replied that the Alaska gaming industry had seen substantial changes over the last several years. Most of the changes that resulted in operators going out of business, he said, had nothing to do with the regulations. He stated that today, there was only one operator left out of the six largest operators doing business in 1990. He mentioned that prior to the regulations going into effect, there were 26 operators in Alaska. Today, there were almost 40, he added. JIM FISK testified via teleconference from Kodiak in support of charitable organizations and the Charitable Gaming Reform Act of 1988. He said that the goal of that act was to put the money in the hands of the charitable organizations. That, he stated, had not happened. He said that his organization, the Bayside Fire Department, and other Kodiak charitable organizations, strongly supported the 60% expenses/40% charities break-out. He also urged support for a forthcoming bill which related to gaming agents representing charitable organizations. He said that permittees needed to get more money from charitable gaming. TAPE 93-41, SIDE A Number 000 RON PAGENKOPF said that he was a gaming operator and had gone into the business one year earlier to support youth athletics in Juneau. He said that in several days, he was going to turn his business over to the charities that he had been representing. He noted that under current law, it was very complicated to turn his operation over to the five permittees. MR. PAGENKOPF mentioned that HB 168 would allow the process that he was currently going through to be expedited. Additionally, he said that the bill would put less of a burden on charities when it came to auditing. He indicated his strong support for HB 168. He did not see any negative aspects of the bill, even for operators. He said that the bill would allow those charities that had the time and expertise to run gaming operations the ability to reap maximum profits. Number 079 REPRESENTATIVE NORDLUND asked Mr. Pagenkopf how HB 168 would change the way in which operators currently did business. MR. PAGENKOPF understood that HB 168 would allow several charities to share a location, have volume purchasing power, and file a single report with the DCED. Number 117 MR. HANSEN stated that HB 168 would allow for up to six organizations to conduct gaming activity at a single location, under a single permit. Under current regulations, he said, this was already allowed, to some extent. He commented that when the 1988 reform act was passed, pull- tabs were legalized, and operators were recognized as another class of licensee. He said that particularly for large gaming operations, the law was more likely to recognize a licensed operator. MR. HANSEN mentioned that the DCED had gone as far as it could, through the regulatory process, to allow multiple organizations to band together and conduct gaming operations without a licensed operator. He said that HB 168 would recognize a new class of licensee: a group of permittees that operated out of a single facility and had a blanket license for that activity. He said that the bill would result in greater purchasing power, fewer reporting requirements, and economies of scale for labor. Number 170 REPRESENTATIVE NORDLUND asked Mr. Hansen if the charitable organizations would share the gaming proceeds equally. MR. HANSEN replied that organizations with a multiple- beneficiary permit could allocate the proceeds any way they desired. Number 205 GARRY LANGILLE, PRESIDENT, KODIAK LIQUOR LICENSE ASSOCIATION, testified via teleconference from Kodiak in support of HB 168. He favored the 60/40 split. He commented that the bill would allow non-profit organizations not currently involved in charitable gaming to become involved. Number 233 SAM KITO made a statement on behalf of Dimitri Philemonof, Executive Director of the Aleutian/Pribilof Association. He said that that organization operated Lucky Strike Bingo in Anchorage, and had requested the introduction of HB 168, so that multiple permittees could operate gaming activities in a single location. He said that the bill would allow the organizations to use a single permit and distribute net income as they saw fit. MR. KITO mentioned that the 60/40 split would create problems for some organizations, including Lucky Strike Bingo. He said that HB 168 would result in a 73% reduction in the amount of money that would go to the charities, due to non-consolidated federal business income taxes. Number 324 BILL BISHOP, from the AMERICAN LEGION, testified in support of HB 168 via teleconference from Kodiak. He said that his organization relied heavily on the proceeds from charitable gaming activities to fund community service projects. He supported the 60/40 split. Number 355 ELSIE O'BRYAN, PROJECT DIRECTOR, MID-VALLEY SENIORS IN HOUSTON and a permit-holder, testified via teleconference. She said that in 1992, her organization had used an operator, received 15% of the adjusted gross income, and paid taxes on that 15%. She strongly endorsed the 60/40 split. She asked Mr. Hansen if her organization were to become part of a multiple-beneficiary pull-tab permit, would it be prohibited from solely holding a bingo permit. Number 382 MR. HANSEN understood that the holder of a multiple- beneficiary permit would not be allowed to hold another gaming permit. He said that gaming laws were designed to spread the wealth among many organizations, by limiting annual prize amounts. He stated that the DCED would likely not oppose an amendment allowing a participant in a multiple-beneficiary permit to also be involved in a different gaming activity at a different location. MS. O'BRYAN asked Mr. Hansen about prize limitations for multiple-beneficiary gaming operations. MR. HANSEN stated that under a multiple-beneficiary permit, the $1 million prize limitation would be multiplied by the number of organizations conducting gaming activities at a single location. Number 437 MS. O'BRYAN responded that it was her interpretation that HB 168 would allow her organization to double its potential income from charitable gaming, by getting involved in a multiple-beneficiary operation, and not utilizing an operator. Number 441 MR. HANSEN concurred. He added that under current law, a self-directed charitable organization was allowed a $1 million prize limitation. Number 447 MS. O'BRYAN indicated her organization's strong support of HB 168, saying that it provided charities with options. She stated that the amendments incorporated into the Judiciary Committee's draft committee substitute were positive changes to HB 168. Number 463 REPRESENTATIVE KOTT asked Mr. Hansen to elaborate on his earlier comment that the DCED would not likely oppose an amendment allowing participants in a multiple-beneficiary venture to hold another gaming permit for a different type of gaming activity. Number 467 MR. HANSEN called the members' attention to section 8 of the draft committee substitute, which held that a participant in a multiple-beneficiary gaming operation could not hold another gaming permit. He stated that the DCED would not object to changing that provision of the bill, provided that a charity still adhered to its $1 million prize limitation requirement. Number 492 REPRESENTATIVE NORDLUND asked who had requested the changes that appeared in the draft committee substitute. Number 497 MR. HANSEN replied that the amendment relating to the 60/40 split had been drafted by the DCED, and embodied the essence of the Hickel administration's stance on charitable gaming. Regarding the second amendment, he mentioned that under current law, an operator and a permittee entered into a contract, which had to be submitted to the DCED within 15 days. He said that under current law, the DCED had no rights to approve or disapprove contracts. The Mid-Valley Seniors had had contract problems, he said, and had requested some sort of legislative fix to ensure that contracts complied with the law and were approved by the DCED. MR. HANSEN added that under the bill's provisions a contract would set out the amount of compensation that an operator and a permittee would receive. Number 537 REPRESENTATIVE NORDLUND asked the Chairman to consider holding HB 168 in committee until Friday. He wanted to hear from additional gaming operators in the Anchorage area, to find out their opinions on the bill. He mentioned that he had heard that some gaming operators ran their bingo games at a deficit, and used pull-tab proceeds to make up for that deficit. He expressed concern about the effects of HB 168 on those types of gaming operations and the charities which benefited from them. CHAIRMAN PORTER commented that the committee had heard from operators, the DCED, and charitable organizations, and stated that no one had mentioned the concern raised by Representative Nordlund. Number 574 REPRESENTATIVE JAMES was comfortable with moving HB 168 out of committee. Number 577 MR. HANSEN stated that Anchorage bingo games were often operated as a "loss leader," to get people in the door of a gaming facility to play pull-tabs. If a gaming operation had no adjusted gross income, there would be no expense report to file, he said. He mentioned that it was up to operators to set prize amounts. He stated that some bingo facilities paid out enormous prizes, because of competition. He said that HB 168 might force gaming operators to adjust their prize pay-offs to be more profitable. MR. HANSEN commented that committee members would hear that HB 168 would have a big impact. He admitted that the bill would have an impact, but said that the impact would be positive, because it would be across the board. Number 601 REPRESENTATIVE NORDLUND hoped to achieve a higher comfort level with regard to HB 168. He again requested that the Chairman hold the bill in committee until Friday. CHAIRMAN PORTER stated that because the bill had a House Finance Committee referral, he was inclined to pass the bill out of committee today. He said that if Representative Nordlund's research turned up serious concerns with the bill, they could be addressed in the House Finance Committee. Number 616 REPRESENTATIVE JAMES made a MOTION to MOVE CSHB 168 (JUD) out of committee, with individual recommendations and attached fiscal note. Number 621 REPRESENTATIVE KOTT OBJECTED. He questioned whether the committee had adopted the draft committee substitute. REPRESENTATIVE JAMES WITHDREW her MOTION to MOVE CSHB 168 (JUD) out of committee. She made a new MOTION to ADOPT CSHB 168 (JUD), dated March 24, 1993. There being no objection, IT WAS SO ORDERED. Number 634 REPRESENTATIVE JAMES made a MOTION to MOVE CSHB 168 (JUD) out of committee with individual recommendations and attached fiscal note. Number 638 REPRESENTATIVE NORDLUND said that he would not object to the motion. He added that he would bring his concerns before the House Finance Committee. There being no objection to Representative James' motion, CSHB 168 (JUD) MOVED out of committee. ADJOURNMENT CHAIRMAN PORTER adjourned the meeting at 3:14 p.m.