Legislature(1995 - 1996)

05/07/1995 01:53 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE JUDICIARY STANDING COMMITTEE                              
                          May 7, 1995                                          
                           1:53 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Brian Porter, Chairman                                         
 Representative Joe Green, Vice Chairman                                       
 Representative Al Vezey                                                       
 Representative Cynthia Toohey                                                 
 Representative David Finkelstein                                              
 MEMBERS ABSENT                                                                
 Representative Con Bunde                                                      
 Representative Bettye Davis                                                   
 COMMITTEE CALENDAR                                                            
 SB 172:  "An Act eliminating `monte carlo' nights as an authorized            
          form of charitable gaming;  and providing for an effective           
          PASSED OUT OF COMMITTEE                                              
 WITNESS REGISTER                                                              
 PREVIOUS ACTION                                                               
 BILL:  SB 172                                                               
 SHORT TITLE: ELIMINATE MONTE CARLO NIGHTS                                     
 SPONSOR(S): RULES BY REQUEST                                                  
 JRN-DATE     JRN-PG               ACTION                                      
 04/28/95      1311    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 04/28/95      1312    (S)   JUDICIARY                                         
 04/29/95      1336    (S)   JUD RPT  3DP                                      
 04/29/95      1336    (S)   FISCAL NOTE FORTHCOMING                           
 04/29/95      1336    (S)   FIN REFERRAL ADDED                                
 04/29/95              (S)   JUD AT 02:30 PM BELTZ ROOM 211                    
 04/29/95              (S)   MINUTE(JUD)                                       
 04/29/95              (S)   RLS AT 06:30 PM FAHRENKAMP RM 203                 
 04/30/95      1362    (S)   FIN RPT  2DP 1DNP 3NR                             
 04/30/95      1362    (S)   ZERO FISCAL NOTE (S.FIN/REV)                      
 04/30/95              (S)   FIN AT 01:00 PM SENATE FINANCE 532                
 04/30/95              (S)   MINUTE(FIN)                                       
 04/30/95              (S)   RLS AT 05:40 PM FAHRENKAMP RM 203                 
 05/01/95      1379    (S)   RULES RPT 2CAL 1OTHER 2NR  5/1/95                 
 05/01/95      1383    (S)   READ THE SECOND TIME                              
 05/01/95      1383    (S)   ADVANCE TO THIRD READING FLD                      
                             Y12 N7 E1                                         
 05/01/95      1383    (S)   THIRD READING 5/2 CALENDAR                        
 05/02/95      1420    (S)   READ THE THIRD TIME  SB 172                       
 05/02/95      1420    (S)   PASSED Y12 N8                                     
 05/02/95      1421    (S)   EFFECTIVE DATE PASSED Y18 N2                      
 05/02/95      1421    (S)   ZHAROFF  NOTICE OF RECONSIDERATION                
 05/03/95      1497    (S)   RECONSIDERATION NOT TAKEN UP                      
 05/03/95      1498    (S)   TRANSMITTED TO (H)                                
 05/04/95      1848    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 05/04/95      1848    (H)   JUDICIARY                                         
 05/07/95              (H)   JUD AT 01:02 PM CAPITOL 120                       
 ACTION NARRATIVE                                                              
 NOTE:  No tape is available for this meeting due to a malfunction             
 of the taping equipment.                                                      
 The House Judiciary Standing Committee was called to order at 1:53            
 p.m. on Sunday, May 7, 1995.  A quorum was present.                           
 Representatives Bunde and Davis were absent.  CHAIRMAN BRIAN PORTER           
 stated that SB 172 was the only bill to be heard.                             
 SB 172 - ELIMINATE MONTE CARLO NIGHTS                                     
 CHAIRMAN PORTER explained that this was essentially the same bill             
 as HB 327 that they had passed out of committee a few days ago.               
 REPRESENTATIVE DAVID FINKELSTEIN said that he would not bring up              
 all of the same points he had debated on the House version of this            
 legislation, but he did ask that the minutes from HB 327 be                   
 included with SB 172 for the record, since the points he had made             
 for HB 327 are also true for SB 172.                                          
 COMMITTEE MEETING DATED MAY 5, 1995:                                          
 "CHAIRMAN PORTER announced that in communication through the                  
 Speaker with the Attorney General who says we need this bill, so we           
 will consider it.  This bill eliminates monte carlo nights.  He               
 stated that he could be the reason we have monte carlo.  Back in              
 the 60s he came to visit his mother in Anchorage and found her                
 having a monte carlo day with her Soroptimist Club, and he had to             
 close her down.  It is gambling.  They asked what they needed to do           
 in order to do this, and he told her she needed to go to Juneau and           
 get a permit or a change in the law to allow her to do that, and              
 they did.                                                                     
 "CHAIRMAN PORTER said the question is,  `Why do we want to shut               
 down monte carlo nights?'  The answer is that monte carlo is a                
 procedure in our law that allows the following to happen:  A                  
 charity may operate a virtual casino for one night a year with                
 craps and roulette and "21", and those kinds of things for members            
 who wish to contribute to this charity, but do have the opportunity           
 through this process to actually win something or their investment.           
 They buy chips with real money, play games all night, and those who           
 have won, and end up with more chips than they started with, can go           
 and redeem the chips for prizes that have been donated.  It is a              
 very nice function for charity.  The Indian Gaming Commission has             
 gained through court decisions, that people who allow certain kinds           
 of gaming permitted in their state, also have to allow Indian                 
 tribes within the definition of Indian country may then negotiate             
 with the state, so that little innocuous monte carlo, provides the            
 opportunity for casino gambling in Alaska.                                    
 "REPRESENTATIVE BUNDE asked if in keeping monte carlo nights, we              
 allow Indian gaming, if the reverse would also be true.  If we get            
 rid of monte carlo, will we not have the full fledged casino?  Can            
 we be assured of that?                                                        
 "CHAIRMAN PORTER answered that there are assumptions you have to              
 make.  The assumption most of us are running with here, and perhaps           
 not correctly, but at least, in his opinion, that is not something            
 we would like to see happen in this state.  Assuming that is the              
 policy of the Administration, they would be negotiating with the              
 Indian tribes to try to avoid full fledged casino operations in               
 Alaska.  With the assumption that they would take that position,              
 their position on being able to successfully negotiate that                   
 position is enhanced tremendously if this is not in the law.                  
 Conversely, it is almost guaranteed to fail if the compact cannot             
 be reached and is appealed, if it stays in the law.  The cruise               
 ship bill fell into that same category and that is why we are                 
 sunsetting the thing, so that they can negotiate in good faith                
 saying that will not occur after September 1 in this state.                   
 "REPRESENTATIVE BUNDE said that brings him to his next question.              
 If we did that for the cruise ships, he did not know that it would            
 make a difference.  He has heard from a number of charities, most             
 notably, Greater Anchorage, Incorporated, where they have monte               
 carlo night not only as a money generating thing, but as a part of            
 the festival, where people are out having a good time, and that               
 makes donating a little more comfortable.  Could we put a sunset              
 date in this of December 31, 1995?  Would it still accomplish what            
 we are trying to accomplish?                                                  
 "CHAIRMAN PORTER answered that was a great idea.  As a matter of              
 fact, if you read Section 6...                                                
 "REPRESENTATIVE BUNDE said "January 1996.  Obviously this bill is             
 hot off of the presses."                                                      
 "REPRESENTATIVE VEZEY stated that is not Representative Bunde's               
 question.  His question was a sunset clause.  What you have here is           
 an effective date clause.                                                     
 "REPRESENTATIVE BUNDE said that is essentially the same thing.                
 "REPRESENTATIVE VEZEY argued they are not at all the same.  This              
 Act takes effect January 1, 1996.  That is not in any aspect, a               
 sunset clause.                                                                
 "CHAIRMAN PORTER said he thought the bill would eliminate monte               
 carlo nights as of January 1, 1996.  It has the same effect.                  
 "REPRESENTATIVE FINKELSTEIN said, `He wants to sunset the                     
 "REPRESENTATIVE BUNDE said, that, no, he wanted to give monte carlo           
 and the charities a time to phase out, and now they have until the            
 end of the year, if this were to pass.                                        
 "CHAIRMAN PORTER said he did not know how Representative Bunde had            
 said it, but knew what he meant.                                              
 "REPRESENTATIVE VEZEY felt the problem here is a gross error in               
 federal law, and that is really where the matter needs to be                  
 "CHAIRMAN PORTER did not disagree.                                            
 "REPRESENTATIVE BETTYE DAVIS asked if we had information on what              
 has happened in other states where they have full fledged gambling            
 on Indian reservations.  They do not necessarily comply with state            
 law, and are still doing it.  How is this law going to keep it from           
 happening in our state?                                                       
 "CHAIRMAN PORTER said one reason he went to the NCSL conference was           
 to get the full day Indian gaming seminar the day before.  The                
 states that have this are kind of all over the board, because they            
 have developed this case law, and been guided by different kinds of           
 decisions throughout the last couple of years when they have                  
 engaged in these negotiations with their individual Indian tribes.            
 Some governors and legislatures have come from different positions            
 of policy, too.  What they have negotiated in the compacts that               
 exist are a gambit of some allowing it, and others not allowing it.           
 Those who have tried to revisit totally, have had mixed case and              
 federal court reviews, too.  The most relevant one is under review            
 again at the Ninth Circuit, which is our Federal Court of Appeals             
 for the state.  Unfortunately, it is kind of unsettled for us as to           
 just exactly where we are.  What you try to do is build the best              
 hand that you can hold while sitting down in these negotiations.              
 Having these things off of our books would provide a much better              
 position to argue from.                                                       
 "REPRESENTATIVE BUNDE said he attended the same conference, and               
 while he does not have any personal heartburn with gambling of many           
 kinds, it became very apparent that for Alaska, any casino                    
 operation, no matter what entity ran it, would be a disaster                  
 financially.  Obviously money had to come from out of your local              
 community, out of your state, and even out of your country, if you            
 will, because it involves disposable income, and if all the local             
 people take their disposable income to the casino, then the                   
 hamburger joints, bowling alleys, and all of these other places               
 that survive on disposable income go away.  It is just not good for           
 the local community.                                                          
 "CHAIRMAN PORTER added that sometimes the income is not disposable.           
 "REPRESENTATIVE FINKELSTEIN felt the most likely scenario, if it              
 were going to be allowed in Alaska, under the status quo, would               
 only be relatively few areas that are deemed Indian land.  He felt            
 the most likely areas were remote villages.  There are very few               
 villages who, under the 1971 Settlement Act, chose to hold their              
 own reservations.                                                             
 "CHAIRMAN PORTER said that once it is allowed, there will be other            
 communities trying.  Tyonek is already making noises like they want           
 to try.                                                                       
 "REPRESENTATIVE FINKELSTEIN said his point is that first of all,              
 they have to ask why it has not occurred already.  All over the               
 rest of the country under the exact same law, and the exact same              
 circumstances, these casinos exist.  This is not just some                    
 discussion that is going on.  He said Indian casinos are all over             
 the place.  The reason it has not happened here is that areas that            
 the entities they just described have no interest in it, or are in            
 lousy locations, and the point that was made by Representative                
 Bunde is true.  They do not have very many people to hit.  The ones           
 most likely to do it, are the ones who are on some sort of tourist            
 route.  This is going to tend to be a Southeast place that can                
 somehow get ferries or cruise ships to come by.  He thought this              
 was a far fetched reason to get rid of monte carlo nights, and he             
 has nothing against monte carlo nights.  Also he does not see                 
 anything wrong with Indian gaming.  He felt it should be regulated,           
 and they do not necessarily want it near our large populations, but           
 this is a self-determination issue.  He is affected by the fact               
 that two of his brothers are Indians, one whose tribe has chosen to           
 pursue this avenue.  They are very poor down in Arizona, as are               
 many of our Natives in Alaska.  He found it hard to imagine that we           
 would decide that the Indian entities that want to pursue this do             
 not have enough self-determination to make that decision for                  
 themselves, and that we are so anti-gambling that we are going to             
 preclude that, but at the same time, we just passed a law saying              
 that cruise ships can have all out casinos while they are in Alaska           
 waters.  Why would we preclude one and then allow another?  He does           
 not see a strong reason to do this.                                           
 "REPRESENTATIVE TOOHEY asked, `Are you going to get him, Mr.                  
 Chairman?  I will.'                                                           
 "REPRESENTATIVE GREEN said he, too, attended the gambling seminar             
 in San Diego.  The stories they told from the states that had                 
 gambling were horrendous, but the bottom line was that if you do              
 not have an outside source of people to come and gamble, you are              
 doomed to failure.  The reason the cruise ship gambling works is              
 because they take their people with them.  They pick them up in               
 some foreign port and they bring them in, and they are not allowed            
 to gamble within three miles of a port here.  They have got their             
 gamblers, but when you go to some place like Metlakatla, you really           
 do not have a large draw area, so even if for some reason that                
 would become some sort of a Mecca for people to swing by and be               
 able to say they played cards at Metlakatla, is not going to get it           
 done for the rest of the year.  There is tourist season, and then             
 there are nine other months when they would have to depend on their           
 local people.  We know it is not just disposable income that goes             
 into gambling, and the state ends up holding the bag for people who           
 have somehow been lured into this thing repeatedly.  Statistically,           
 they showed that if you were not in an area where you could draw in           
 business from outside of your community, you were doomed to                   
 "REPRESENTATIVE TOOHEY was concerned about people using their Aid             
 to Families with Dependent Children (AFDC) checks to gamble, so the           
 state would always be feeding that whole gambling group.  It is bad           
 "CHAIRMAN PORTER noted that in response to Representative                     
 Finkelstein's concerns, it is just now coming into the light up               
 here because of ANCSA.  We are the only state in that situation.              
 Most of the land that might have been categorized that way was                
 signed off of that category and we still dispute as to whether that           
 is or is not Indian country.                                                  
 "REPRESENTATIVE GREEN wondered why we were allowing this to                   
 continue through the fall until January.                                      
 "CHAIRMAN PORTER guessed it was probably because there are some               
 monte carlo functions already scheduled for the fall.  He really              
 did not know.                                                                 
 "REPRESENTATIVE GREEN stated the reason for his concern is that the           
 longer this continues, the worse the situation gets as far as the             
 federal government observing what the state is doing.  Unless there           
 is some strong reason or some major thing that comes up before the            
 end of the year, he thought this time period should be shortened.             
 "REPRESENTATIVE TOOHEY hoped that after the state has settled its             
 position on gambling and gaming, that they could come back and                
 visit a way for the charities to raise funds, because we have put             
 so much effort into making them responsible for their monies, and             
 now we are taking it away from them.  It is a very harsh treatment,           
 and we really need to revisit that.                                           
 "REPRESENTATIVE VEZEY thought the only communities possibly                   
 pursuing this include Metlakatla, Angoon, Klawock and Kake.  He did           
 not see how it could be possible for any kind of gambling casino to           
 be economically feasible in those communities.  He thought they               
 were trying to make a mountain out of a mole hill.  The problem               
 does lie with the federal law, and if we try to take the burden on            
 ourselves, we are really not addressing the problem.  We need to be           
 addressing this with our Congressional Delegation.  A Resolution              
 would be more appropriate than a statute.                                     
 "CHAIRMAN PORTER could not disagree that the problem is at the                
 federal level, but he did not know if it would be solvable in the             
 period of time during which we are required to negotiate with                 
 tribes.  There is a chance that at some point in time, the                    
 presumption of good faith negotiations goes away and it could be              
 turned around, but we do not even have the right to appeal this               
 final decision of the Gaming Commission.  He does not like this               
 solution, but what it does is give us six or seven months to work             
 on it, and we would not be devastating any charities if they found            
 the solution between now and then, and they would only be without             
 the ability to have monte carlo for a month until we got geared up            
 next January.                                                                 
 "REPRESENTATIVE FINKELSTEIN said they have no evidence before us              
 that there is anything wrong with monte carlo nights.  He thought             
 monte carlo nights were great and were one of the most charitable,            
 social occasions, and all of the ones he has ever been to have been           
 very nice events that serve a very good cause.  They are also one             
 of the very few options people have in that realm, because the same           
 crowd is not going to come and play bingo.  Those are two different           
 crowds.  The people who put on monte carlo nights, put in tons of             
 time and they turn volunteer effort into money.  It takes a hundred           
 volunteers to run a monte carlo night.  What we are doing is                  
 getting rid of something that is definitely good to make our hand             
 somewhat stronger over something that we are not even sure how bad            
 it is.  These small communities could already be doing this, but if           
 not, the reason they are not is because they will not make money.             
 It is the tribal authority or whatever entity they have who is in             
 charge.  It is not some outside entity trying to make money off of            
 the small community.  So the money they make from their people all            
 goes into a pool that is used for their people.  All they are doing           
 is putting money into the community funds that is often used for              
 community good.                                                               
 "REPRESENTATIVE FINKELSTEIN stated that the issue here that we are            
 not really talking about is Indian self-determination, and these              
 folks made the decision not to opt into the Native Claims                     
 Settlement Act.  Tetlin was in that same circumstance.  They chose            
 to remain in control of their own communities, and for the main               
 reason of self-determination.  Gambling is not that popular and               
 does not have the support of all of our citizens, but he felt that            
 was what Indian self-determination comes down to.  We sometimes               
 have to decide that we cannot control what goes on in their                   
 "REPRESENTATIVE VEZEY made a motion to move HB 327 out of                     
 "REPRESENTATIVE FINKELSTEIN made a motion to amend the bill first.            
 Amendment Number 1 would move the date from January to March.  The            
 legislature can never act within a month, the way things work                 
 around here.  He thought they should allow two more months, so that           
 if this all works out, there does not have to be a period where               
 this is made illegal, because it would only preclude activities               
 during that one month, these activities involve months and months             
 of planning and so it would probably preclude it over the first               
 half of the year.                                                             
 "CHAIRMAN PORTER objected to the amendment.  He did not know what             
 the schedule of negotiations were or what it was that drove this              
 particular date.  If this goes to the floor of the House, he will             
 know by then what the reason for that particular effective date is.           
 "REPRESENTATIVE FINKELSTEIN said in light of that, he would                   
 withdraw his amendment.  He then offered a conceptual amendment               
 that would give a two year sunset date from the end of this fiscal            
 year.  This would sunset the effect of this prohibition.                      
 "CHAIRMAN PORTER said this would take two cards out of the state's            
 hand in negotiations, because then they would not be able to say              
 that we are not going to have this.                                           
 "REPRESENTATIVE FINKELSTEIN said he would not offer the amendment.            
 "REPRESENTATIVE TOOHEY asked if it would be reasonable to say                 
 January 30 instead of January 1.                                              
 "CHAIRMAN PORTER would really resist changing the date at all,                
 because he did not know much about the bill, since he just got it.            
 He then said that we have had a motion to move, and asked if there            
 was any further discussion.                                                   
 "REPRESENTATIVE BUNDE objected, just for the record, but would not            
 keep the bill from moving out of committee.  That is not an                   
 indication of how he would vote on the floor.                                 
 "CHAIRMAN PORTER asked if there was objection to moving the bill.             
 "REPRESENTATIVE FINKELSTEIN objected.  A roll call vote was taken.            
 Representative Finkelstein voted no.  Representatives Toohey,                 
 Bunde, Davis, Vezey, Green and Porter voted yes.  The bill passed             
 with a six to one vote.                                                       
 "The following persons submitted testimony for the record, in                 
 opposition to eliminating monte carlo nights:                                 
           Ms. Margaret E, Webber, Anchorage                                   
           Susan M. Sullivan, State Director of the Alaska Chapter             
               of March of Dimes Birth Defects Foundation                      
           Joanne Lovitz-Edmiston, Board Member, apparently of a               
               handicap charity group                                          
           Jennifer McGrady, Kenai                                             
           Frank Miller, Diamond Rose Bingo Hall for Multiple                  
               Charities Co-op"                                                
 EDITORIAL NOTE:  This concludes the minutes on HB 327 from the              
 House Judiciary Committee meeting, dated May 5, 1995.                         
 REPRESENTATIVE VEZEY mentioned that there were no fiscal notes in             
 the bill packets.                                                             
 CHAIRMAN PORTER mentioned that the only fiscal impact from this               
 bill would be loss of revenue due to the lack of permit fees.  He             
 then asked if there was any further discussion or objection to SB             
 172.  Hearing none, SB 172 passed out of the House Judiciary                  
 The House Judiciary Committee adjourned at 1:56 p.m.                          

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