Legislature(1995 - 1996)
05/07/1995 01:53 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 date." PASSED OUT OF COMMITTEE WITNESS REGISTER None 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. THE FOLLOWING MINUTES ON HB 327 ARE FROM THE HOUSE JUDICIARY 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 prohibition.' "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 addressed. "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 failure. "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 news. "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 communities. "REPRESENTATIVE VEZEY made a motion to move HB 327 out of committee. "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 Committee. ADJOURNMENT The House Judiciary Committee adjourned at 1:56 p.m.