Legislature(1993 - 1994)
04/23/1993 01:00 PM House JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
April 23, 1993
1:00 p.m.
MEMBERS PRESENT
Rep. Brian Porter, Chairman
Rep. Jeannette James, Vice-Chair
Rep. Gail Phillips
Rep. Pete Kott
Rep. Joe Green
Rep. Cliff Davidson
Rep. Jim Nordlund
COMMITTEE CALENDAR
SB 173 "An Act relating to health insurance for small
employers; and providing for an effective date."
SENATE FINANCE COMMITTEE SUBSTITUTE PASSED OUT
WITH A DO PASS RECOMMENDATION
SB 149 "An Act revising the laws governing financial
institutions and relating to trust companies, the
Alaska Small Loans Act, and the Premium Financing
Act; amending Alaska Rule of Criminal Procedure 17
and Alaska Rule of Civil Procedure 45(b); and
providing for an effective date."
HOUSE JUDICIARY COMMITTEE SUBSTITUTE PASSED OUT
WITH A DO PASS RECOMMENDATION
SB 76 "An Act 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;
requiring the registration of vendors and
regulating activities involving them; requiring
the licensing of out-of-state 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 each quarter 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 each quarter
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 50 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 each quarter; 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 direct contribution
of proceeds of a bingo or pull-tab game to a
candidate for a public office of the state or a
political subdivision of the state or to that
candidate's campaign organization; prohibiting the
payment of any portion of the net proceeds of a
charitable gaming activity to a registered
lobbyist; relating to `political uses' and
`political organizations' as those terms are used
in the charitable gaming statutes; and providing
for an effective date."
SENATE FINANCE COMMITTEE SUBSTITUTE PASSED OUT
WITH NO RECOMMENDATION
SCR 4 Relating to the Alaska Supreme Court's
interpretation of Alaska Rule of Civil Procedure
82 and requesting that the court modify its
interpretation of that rule.
NOT HEARD
WITNESS REGISTER
SEN. STEVE RIEGER
Alaska State Legislature
Capitol Building, Room 516
Juneau, Alaska 99801
Phone: 465-3879
Position Statement: Prime sponsor of SB 173
JAMIE PARSONS
Alaska State Chamber of Commerce
217 Second Street, Suite 201
Juneau, Alaska 99801
Phone: 586-2323
Position Statement: Supported SB 173
JAY FRANK
State Farm/Allstate
431 North Franklin Street
Juneau, Alaska 99801
Phone: 586-5777
Position Statement: Supported SB 173
GORDON EVANS
Health Insurance Association of America
318 Fourth Street
Juneau, Alaska 99801
Phone: 586-3210
Position Statement: Discussed SB 173
RESA JERREL
National Federation of Independent Businesses
9159 Skywood
Juneau, Alaska 99801
Phone: 789-4278
Position Statement: Supported SB 173
PAUL FUHS, Commissioner
Department of Commerce and Economic Development
P.O. Box 110800
Juneau, Alaska 99811
Phone: 465-2500
Position Statement: Supported SB 173; Discussed SB 76
REP. BETTYE DAVIS
Alaska State Legislature
Court Building, Room 600
Juneau, Alaska 99801
Phone: 465-3875
Position Statement: Supported SB 173
WILLIS KIRKPATRICK, Director
Division of Banking, Securities and Corporations
Department of Commerce and Economic Development
P.O. Box 110807
Juneau, Alaska 99811
Phone: 465-2521
Position Statement: Supported amendment to SB 149
JACK BARRY
1831 Tongass Avenue
Ketchikan, Alaska 99901
Phone: 225-9841
Position Statement: Supported amendment to SB 149
ARNE IVERSEN
1831 Tongass Avenue
Ketchikan, Alaska 99901
Phone: 225-9841
Position Statement: Supported amendment to SB 149
JAMES BARRY
1831 Tongass Avenue
Ketchikan, Alaska 99901
Phone: 225-9841
Position Statement: Supported amendment to SB 149
JACK DAVIES
100 Main Street
Ketchikan, Alaska 99901
Phone: 225-2179
Position Statement: Supported amendment to SB 149
JIM SARVELA
Vice President and Chief Financial Officer
First Bank
P.O. Box 7920
Ketchikan, Alaska 99901
Phone: 225-4219
Position Statement: Deferred to Mr. Bill Moran
BILL MORAN
President
First Bank
P.O. Box 7920
Ketchikan, Alaska 99901
Phone: 225-4202
Position Statement: Supported amendment to SB 149
GREG ERKINS
Alaska Association of Realtors
3340 Arctic Boulevard
Anchorage, Alaska 99503
Phone: 562-3382
Position Statement: Supported amendment to SB 149
GARY ROTH
President
Denali State Bank
119 North Cushman
Fairbanks, Alaska 99701
Phone: 456-1400
Position Statement: Supported amendment to SB 149
GINA MCBRIDE, Executive Director
Alaska Independent Insurance Agents and Brokers
P. O. Box 203088
Anchorage, Alaska 99520
Phone: 349-2500
Position Statement: Supported amendment to SB 149
JOSH FINK
Office of Sen. Tim Kelly
Alaska State Legislature
Capitol Building, Room 101
Juneau, Alaska 99801
Phone: 465-3822
Position Statement: Discussed SB 149
GAYLE HORETSKI
Committee Counsel
House Judiciary Committee
Capitol Building, Room 120
Juneau, Alaska 99801-1182
Phone: 465-6841
Position Statement: Discussed SB 149
CHIP THOMA
Juneau, Alaska 99801
Position Statement: Discussed SB 76
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: Discussed SB 76
MARK HIGGINS
Higgins Corporation
3707 Woodland Drive, Suite 2
Anchorage, Alaska 99517
Phone: 243-7908
Position Statement: Discussed SB 76
REP. CARL MOSES
Alaska State Legislature
Capitol Building, Room 204
Juneau, Alaska 99801
Phone: 465-4451
Position Statement: Discussed SB 76
JERRY LUCKHAUPT
Division of Legal Services
Legislative Affairs Agency
130 Seward Street, Suite 401
Juneau, Alaska 99801
Phone: 465-2450
Position Statement: Discussed SB 76
PREVIOUS ACTION
BILL: SB 173
SHORT TITLE: GROUP HEALTH INS. FOR SMALL EMPLOYERS
BILL VERSION: CSSB 173(FIN)
SPONSOR(S): SENATOR(S) RIEGER,Pearce,Salo,Kelly,Phillips;
REPRESENTATIVE(S)B.Davis,Nordlund,Ulmer,Brice,Toohey
JRN-DATE JRN-PG ACTION
03/25/93 946 (S) READ THE FIRST TIME/REFERRAL(S)
03/25/93 946 (S) LABOR & COMMERCE, FINANCE
03/30/93 (S) L&C AT 01:30 PM FAHRENKAMP
ROOM 203
03/30/93 (S) MINUTE(L&C)
03/30/93 (S) MINUTE(L&C)
03/31/93 1003 (S) L&C RPT 4DP 1AM
03/31/93 1003 (S) ZERO FISCAL NOTE (DCED)
04/08/93 1269 (S) FIN RPT CS 5DP SAME TITLE
04/08/93 1269 (S) PREVIOUS ZERO FN APPLIES TO CS
04/08/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
04/12/93 1307 (S) RULES TO CALENDAR 4/12/93
04/12/93 1309 (S) READ THE SECOND TIME
04/12/93 1309 (S) FIN CS ADOPTED UNAN CONSENT
04/12/93 1310 (S) AM NO 1 FAILED Y5 N11 E3 A1
04/12/93 1311 (S) AM NO 2 FAILED Y5 N11 E3 A1
04/12/93 1311 (S) AM NO 3 FAILED Y6 N11 E3
04/12/93 1312 (S) AM NO 4 WITHDRAWN
04/12/93 1313 (S) AM NO 5 FAILED Y5 N11 E3 A1
04/12/93 1313 (S) FAILED TO ADVANCE TO 3RD RDG
Y11 N6 E3
04/12/93 1313 (S) THIRD READING 4/13 CALENDAR
04/13/93 1338 (S) READ THE THIRD TIME CSSB
173(FIN)
04/13/93 1338 (S) RET TO SECOND FOR AM 6 FAILED
Y10 N10
04/13/93 1339 (S) PASSED Y19 N1
04/13/93 1339 (S) EFFECTIVE DATE CLAUSE VOTE SAME
AS PSG
04/13/93 1339 (S) Adams NOTICE OF
RECONSIDERATION
04/14/93 1393 (S) RECON TAKEN UP-IN THIRD READING
04/14/93 1394 (S) PASSED ON RECONSIDERATION
Y19 N1
04/14/93 1394 (S) EFFECTIVE DATES VOTE SAME AS
PASSAGE
04/14/93 1396 (S) TRANSMITTED TO (H)
04/15/93 1249 (H) READ THE FIRST TIME/REFERRAL(S)
04/15/93 1250 (H) JUDICIARY, FINANCE
04/15/93 1272 (H) CROSS SPONSOR(S):B.DAVIS
04/16/93 1303 (H) CROSS SPONSOR(S):NORDLUND,ULMER
04/19/93 1341 (H) CROSS SPONSOR(S):BRICE
04/21/93 (H) JUD AT 01:00 PM CAPITOL 120
04/21/93 (H) MINUTE(JUD)
04/22/93 1450 (H) CROSS SPONSOR(S): TOOHEY
04/23/93 (H) JUD AT 01:30 PM CAPITOL 120
BILL: SB 149
SHORT TITLE: REVISION OF BANKING CODE
BILL VERSION: CSSB 149(FIN)
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
03/05/93 616 (S) READ THE FIRST TIME/REFERRAL(S)
03/05/93 616 (S) JUDICIARY, FINANCE
03/19/93 (S) JUD AT 01:30 PM BELTZ ROOM 211
03/19/93 (S) MINUTE(JUD)
03/22/93 898 (S) JUD RPT 1DP 2NR
03/22/93 898 (S) ZERO FISCAL NOTE (DCED)
03/22/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
03/23/93 911 (S) FIN RPT CS 5DP 2NR
SAME TITLE
03/23/93 911 (S) PREVIOUS ZERO FN (DCED)
03/23/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
03/23/93 (S) MINUTE(FIN)
03/24/93 (S) MINUTE(RLS)
03/31/93 1004 (S) RULES 3CAL 1NR 3/31/93
03/31/93 1007 (S) READ THE SECOND TIME
03/31/93 1007 (S) FIN CS ADOPTED UNAN CONSENT
03/31/93 1008 (S) ADVANCE TO 3RD RDG FAILED
Y12 N8
03/31/93 1008 (S) THIRD READING 4/1 CALENDAR
04/01/93 1031 (S) READ THE THIRD TIME
CSSB 149(FIN)
04/01/93 1032 (S) PASSED Y18 N2
04/01/93 1032 (S) COURT RULE CHANGES VOTE SAME
AS PASSAGE
04/01/93 1032 (S) EFFECTIVE DATE VOTE SAME AS
PASSAGE
04/01/93 1032 (S) ADAMS NOTICE OF
RECONSIDERATION
04/02/93 1079 (S) RECONSIDERATION NOT TAKEN UP
04/02/93 1081 (S) TRANSMITTED TO (H)
04/02/93 955 (H) READ THE FIRST TIME/REFERRAL(S)
04/02/93 955 (H) LABOR & COMMERCE,JUDICIARY
04/13/93 (H) L&C AT 03:00 PM CAPITOL 17
04/13/93 (H) MINUTE(L&C)
04/14/93 1203 (H) L&C RPT HCS(L&C) 2DP 5NR
04/14/93 1204 (H) DP: MULDER, HUDSON
04/14/93 1204 (H) NR: PORTER,SITTON,WILLIAMS,
GREEN, MACKIE
04/14/93 1204 (H) -SEN ZERO FN (DCED) 3/22/93
04/19/93 (H) JUD AT 01:00 PM CAPITOL 120
04/19/93 (H) MINUTE(JUD)
04/19/93 (H) MINUTE(JUD)
04/20/93 1353 (H) JUD RPT HCS(L&C) 4DP
04/20/93 1354 (H) DP: KOTT,GREEN,PORTER,PHILLIPS
04/20/93 1354 (H) -SENATE ZERO FN (DCED) 3/22/93
04/21/93 1420 (H) RETURN TO JUD COMMITTEE
04/23/93 (H) JUD AT 01:30 PM CAPITOL 120
BILL: SB 76
SHORT TITLE: CHARITABLE GAMING RESTRICTIONS
BILL VERSION: CSSB 76(FIN)
SPONSOR(S): SENATOR(S) PEARCE,Kelly,Frank,Sharp,Taylor,
Phillips,Halford
JRN-DATE JRN-PG ACTION
02/19/30 (S) L&C AT 01:30 PM BELTZ ROOM 211
01/29/93 188 (S) READ THE FIRST TIME/REFERRAL(S)
01/29/93 188 (S) LABOR & COMMERCE, JUDICIARY
02/11/93 (S) L&C AT 01:30 PM BELTZ RM 211
02/11/93 (S) MINUTE(L&C)
02/25/93 (S) L&C AT 01:30 PM FAHRENKAMP
ROOM 203
02/25/93 (S) MINUTE(L&C)
03/04/93 (S) L&C AT 01:30 PM FAHRENKAMP
ROOM 203
03/04/93 (S) MINUTE(L&C)
03/05/93 612 (S) L&C RPT CS 1DP 2NR 1AM
NEW TITLE
03/05/93 612 (S) ZERO FISCAL NOTE TO SB &
CS (DCED)
04/01/93 (S) JUD AT 03:30 PM CAPITOL RM 120
04/01/93 (S) MINUTE(JUD)
04/02/93 1073 (S) JUD RPT CS 2DP 2NR 1DNP NEW
TITLE
04/02/93 1075 (S) FISCAL NOTE TO CS (DCED)
04/02/93 1075 (S) FINANCE REFERRAL ADDED
04/02/93 1080 (S) FIN WAIVED PUBLIC HEARING
NOTICE,RULE 23
04/07/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
04/07/93 (S) MINUTE(FIN)
04/07/93 (S) FIN AT 06:00 PM SENATE FINANCE
ROOM 518
04/08/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
04/10/93 (S) MINUTE(FIN)
04/12/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
04/15/93 (S) FIN AT 06:45 PM SENATE FINANCE
ROOM 518
04/17/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
04/17/93 (S) MINUTE(FIN)
04/17/93 (S) FIN AT 09:00 AM SENATE FINANCE
ROOM 518
04/18/93 1465 (S) FIN RPT CS 6DP 1AM NEW TITLE
04/18/93 1466 (S) FISCAL NOTE TO CS (DCED/REV)
04/18/93 1466 (S) PREVIOUS ZERO FN APPLIES TO
CS (DCED)
04/19/93 1483 (S) RULES 3CAL 1DNP 4/19/93
04/19/93 1485 (S) READ THE SECOND TIME
04/19/93 1486 (S) FIN CS ADOPTED Y14 N6
04/19/93 1496 (S) AM NO 1 MOVED BY KERTTULA
04/19/93 1496 (S) AM NO 1 FAILED Y10 N10
04/19/93 1497 (S) AM NO 2 MOVED BY LITTLE
04/19/93 1497 (S) AM NO 2 FAILED Y9 N11
04/19/93 1498 (S) AM NO 3 MOVED BY LITTLE
04/19/93 1499 (S) AM NO 3 FAILED Y10 N10
04/19/93 1504 (S) AM NO 4 MOVED BY SALO
04/19/93 1504 (S) AM NO 4 FAILED Y9 N11
04/19/93 1505 (S) AM NO 5 MOVED BY DUNCAN
04/19/93 1505 (S) AM NO 5 FAILED Y9 N11
04/19/93 1506 (S) AM NO 6 MOVED BY ZHAROFF
04/19/93 1506 (S) AM NO 6 FAILED Y9 N11
04/19/93 1507 (S) AM NO 7 MOVED BY LINCOLN
04/19/93 1510 (S) AM NO 7 FAILED Y9 N11
04/19/93 1510 (S) AM NO 8 MOVED BY LINCOLN
04/19/93 1513 (S) AM NO 8 FAILED Y9 N11
04/19/93 1516 (S) AM NO 9 MOVED BY ELLIS
& WITHDRAWN
04/19/93 1516 (S) AM NO 10 MOVED BY SALO
04/19/93 1517 (S) AM NO 10 FAILED Y9 N11
04/19/93 1517 (S) AM NO 11 MOVED BY DONLEY
04/19/93 1518 (S) AM 1 TO AM 11 FAILED Y8 N12
04/19/93 1518 (S) AM NO 11 FAILED Y9 N11
04/19/93 1519 (S) AM NO 12 MOVED BY DONLEY
04/19/93 1520 (S) AM NO 12 FAILED Y9 N11
04/19/93 1521 (S) AM NO 13 MOVED BY LITTLE
& WITHDRAWN
04/19/93 1520 (S) AM NO 14 MOVED BY ELLIS
04/19/93 1523 (S) AM NO 14 FAILED Y9 N11
04/19/93 1523 (S) AM NO 15 MOVED BY LITTLE
04/19/93 1524 (S) AM NO 15 FAILED Y9 N11
04/19/93 1524 (S) AM NO 16 MOVED BY ZHAROFF
04/19/93 1528 (S) AM NO 16 FAILED Y4 N16
04/19/93 1528 (S) AM NO 17 MOVED BY LITTLE
04/19/93 1528 (S) AM NO 17 FAILED Y9 N11
04/19/93 1529 (S) AM NO 18 MOVED BY ELLIS
04/19/93 1530 (S) AM NO 18 FAILED Y9 N11
04/19/93 1530 (S) AM NO 19 MOVED BY DUNCAN
04/19/93 1531 (S) AM NO 19 FAILED Y9 N11
04/19/93 1532 (S) AM NO 20 MOVED BY LITTLE
04/19/93 1532 (S) AM NO 20 FAILED Y10 N10
04/19/93 1533 (S) AM NO 21 MOVED BY ELLIS
04/19/93 1533 (S) AM NO 21 FAILED Y8 N12
04/19/93 1534 (S) AM NO 22 MOVED BY LITTLE
04/19/93 1534 (S) AM NO 22 FAILED Y9 N11
04/19/93 1541 (S) AM NO 23 MOVED BY ZHAROFF
04/19/93 1541 (S) AM NO 23 WITHDRAWN
04/19/93 1542 (S) ADVANCE TO 3RD RDG FLD
Y11 N9
04/19/93 1542 (S) THIRD READING 4/20 CALENDAR
04/20/93 1592 (S) READ THE THIRD TIME
CSSB 76(FIN)
04/20/93 1593 (S) RET 2ND RESCIND ACTION AM 20
FLD Y9 N11
04/20/93 1594 (S) RET 2ND RESCIND ACTION AM 10
FLD Y10 N10
04/20/93 1594 (S) MOVED TO BOTTOM OF CALENDAR
04/20/93 1597 (S) RET TO 2ND TO RESCIND RULED
OUT OF ORDER
04/20/93 1598 (S) COSPONSOR(S):KELLY,FRANK,SHARP,
04/20/93 1598 (S) TAYLOR, PHILLIPS, HALFORD
04/20/93 1600 (S) PASSED Y13 N7
04/20/93 1600 (S) EFFECTIVE DATE PASSED Y16 N4
04/20/93 1600 (S) Adams NOTICE OF
RECONSIDERATION
04/21/93 1614 (S) RECON TAKEN UP - IN THIRD
READING
04/21/93 1615 (S) TITLE AM NO 24 MOVED BY
DUNCAN
04/21/93 1615 (S) AM NO 24 FAILED Y9 N11
04/21/93 1616 (S) RULING OF CHAIR UPHELD
Y11 N9
04/21/93 1618 (S) PASSED ON RECONSIDERATION
Y15 N5
04/21/93 1618 (S) EFFECTIVE DATES VOTE SAME AS
PASSAGE
04/21/93 1642 (S) TRANSMITTED TO (H)
04/22/93 1425 (H) READ THE FIRST TIME/REFERRAL(S)
04/22/93 1426 (H) JUDICIARY, FINANCE
04/22/93 1431 (H) MOTION TO WAIVE PUBLIC NOTICE
RULE 23(D)
04/22/93 1431 (H) MOTION WITHDRAWN-WORKSESSION
4/22
04/22/93 (H) JUD AT 01:00 PM CAPITOL 120
04/22/93 (H) MINUTE(JUD)
04/23/93 (H) JUD AT 01:30 PM CAPITOL 120
BILL: SCR 4
SHORT TITLE: REQUEST CHANGE IN RULE 82 FEES
BILL VERSION:
SPONSOR(S): SENATOR(S) TAYLOR
JRN-DATE JRN-PG ACTION
03/29/93 974 (S) READ THE FIRST TIME/REFERRAL(S)
03/29/93 974 (S) JUDICIARY
04/05/93 (S) JUD AT 01:30 PM BELTZ RM 211
04/06/93 (S) JUD AT 01:30 PM BELTZ RM 211
04/12/93 (S) JUD AT 01:30 PM BELTZ RM 211
04/13/93 1331 (S) JUD RPT 3DP 1NR
04/13/93 1331 (S) ZERO FISCAL NOTE (S.JUD)
04/16/93 1440 (S) RULES RPT 3CAL 1NR 4/16/93
04/16/93 1449 (S) READ THE SECOND TIME
04/16/93 1449 (S) PASSED Y11 N9
04/16/93 1449 (S) DUNCAN NOTICE OF
RECONSIDERATION
04/18/93 1462 (S) HELD ON RECONSIDERATION TO
4/19/93
04/19/93 1554 (S) RECONSIDERATION TAKEN UP
04/19/93 1554 (S) PASSED ON RECONSIDERATION
Y11 N9
04/19/93 1555 (S) TRANSMITTED TO (H)
04/20/93 1346 (H) READ THE FIRST TIME/REFERRAL(S)
04/20/93 1346 (H) JUDICIARY
04/23/93 (H) JUD AT 01:30 PM CAPITOL 120
ACTION NARRATIVE
TAPE 93-71, SIDE A
Number 000
The House Judiciary Standing Committee meeting was called to
order at 1:43 p.m. on April 23, 1993. A quorum was present.
Chairman Porter announced that the hearing on SB 173 and
SB 149 was being teleconferenced; therefore, those two bills
would be before the committee first. Later, he said, the
committee would hear SB 76 and SCR 4.
SB 173 GROUP HEALTH INSURANCE FOR SMALL EMPLOYERS
Number 061
SEN. STEVE RIEGER, PRIME SPONSOR OF SB 173, explained that
the bill had passed the Senate by a vote of 19-1. The
purpose of the bill, he said, was to increase the
availability of health insurance to small employers. Senate
Bill 173 would set up a reinsurance mechanism through which
small employers' insurance plans would be pooled, thereby
taking on characteristics of a single, larger insurance
pool. Every insurance company offering small business
insurance in Alaska would participate in the reinsurance
pool, he added.
Number 116
CHAIRMAN PORTER asked, if an employer did not have insurance
coverage, could he or she participate as a member of a group
of individuals that did have coverage?
Number 124
SEN. RIEGER explained that coverage could not be denied to
any individual. He stated that a person would work through
a private insurance company, which would offer a person the
small group health insurance plan. The policy would be
underwritten and the person assigned a "risk rating," he
said. He noted that the procedure included in SB 173 was
similar to the way that insurance now worked, except that
the bill included a reinsurance mechanism, in case there
were some high-risk individuals. He said that SB 173 would
avoid the problem of entire groups of employees being denied
insurance coverage because of one high-risk individual
within that group. It would also avoid a situation in which
the one high-risk person was denied coverage.
Number 144
REP. DAVIDSON commented that the sponsor had emphasized the
"pro-business" aspects of SB 173. He asked if the bill
could also be characterized as "pro-worker."
Number 151
SEN. RIEGER replied that SB 173 would be considered a "pro-
worker" bill, as it was the individual employees who needed
the insurance coverage.
Number 166
JAMIE PARSONS, representing the ALASKA STATE CHAMBER OF
COMMERCE (ASCC), testified in support of SB 173 because it
offered an avenue for small business owners to provide
health insurance coverage for their employees. He said that
ASCC endorsed the bill because it guaranteed availability of
insurance coverage for all employees in a group, regardless
of individual health risks. Also, he said, it guaranteed
renewability of coverage, regardless of cases of health
deterioration and number and size of previously submitted
claims. Senate Bill 173 allowed for continuity of coverage,
so that individuals who initially satisfied a plan's
preexisting conditional restrictions would not be faced with
meeting those restrictions again if they changed jobs or the
employer changed insurance companies. Mr. Parsons also
indicated ASCC's support for SB 173's rate limitations,
stability, and predictability.
Number 196
JAY FRANK, representing STATE FARM and ALLSTATE insurance
companies, testified in support of SB 173. He said that the
bill was based on model legislation, as adopted by the
National Association of Insurance Commissioners. He stated
that the bill would not solve all the problems with health
insurance, but attempted to address availability problems
that small employers faced.
Number 216
REP. GREEN asked if SB 173 was similar to an "assigned risk"
system.
Number 224
MR. FRANK responded that SB 173 was similar to "assigned
risk" in that an insurance company that provided coverage to
small employers could not refuse to provide coverage to any
group of employees. He said that SB 173 would work because
every company in the business of writing insurance policies
for small employers would have to play by the same rules.
In the past, he said, companies would exclude high-risk
individuals, or entire groups which contained one or more
high-risk individuals. He noted that SB 173 was also
similar to "assigned risk" in that coverage would be made
available to everyone.
Number 246
REP. GREEN asked if premiums would vary under SB 173's
provisions.
Number 255
MR. FRANK commented that premiums would be set by the
individual insurance companies. He said that SB 173 would
set up a state authority which would determine baseline
coverages. Once those coverages were determined, he added,
companies would set rates for the different types of
coverage.
Number 269
REP. GREEN asked if insurance companies could charge
different premium rates, and then employers could choose
with which insurance company to do business.
MR. FRANK said that Rep. Green was correct.
Number 281
REP. KOTT asked if the state authority would establish a
base rate, which could then be adjusted according to
preexisting conditions or other criteria. He asked if the
rates would be established according to type of business, or
if not, according to what criteria.
MR. FRANK stated that rates would vary according to the type
of business requesting coverage.
Number 304
REP. KOTT asked if individuals within the same occupation
would be rated differently, or if they would all be assessed
the same premium.
MR. FRANK replied that individuals working in the same
occupation might be rated differently, due to preexisting
medical conditions. Similarly, he said, persons with the
same preexisting medical conditions, but working in
different occupations, would be rated differently.
Number 329
GORDON EVANS, representing the HEALTH INSURANCE ASSOCIATION
OF AMERICA, said that no base rate would be set. The state
authority would establish "basic" and "standard" plans and
outline what would be covered under each of those plans.
Insurance companies would then set rates for each type of
plan, he added. Employers could then choose to do business
with any insurance company which offered the coverage. He
noted that premiums for all individuals within an employer's
group would be the same.
MR. EVANS commented that if there was a high-risk individual
within a group, the insurance company would decide whether
it was going to make use of the reinsurance provisions of SB
173. He said that if a primary insurer, one that wrote
policies, felt that it could not insure a high-risk
individual using its own reserves, then that individual
could be reinsured, after the primary insurer paid the first
$5,000 in claims. He noted that SB 173 allowed insurance
companies to accept a greater variety of risks.
MR. EVANS said that SB 173 would have no fiscal impact on
the state budget and would "sunset" after five years, unless
the legislature chose to renew the program. He stated that
a similar bill had nearly passed the legislature last year.
Twenty-four other states had already enacted laws like SB
173, he said.
Number 395
RESA JERREL, representing the NATIONAL FEDERATION OF
INDEPENDENT BUSINESS (NFIB), testified in support of SB 173
and called the members' attention to a written position
paper which was included in their bill packets.
Number 406
REP. NORDLUND indicated his support for SB 173. He asked
Ms. Jerrel if she thought that the bill would encourage more
small businesses to offer health insurance to their
employees.
Number 415
MS. JERREL commented that two years ago she had put a
question on the NFIB ballot regarding whether the state
should institute an insurance pooling plan. She stated that
76% of respondents indicated their support for such a
program. Of those 76%, she added, 50% said that they would
participate in such a program.
Number 425
REP. NORDLUND repeated his question regarding whether or not
SB 173 would encourage small employers to provide health
insurance coverage to their employees.
Number 431
MS. JERREL replied that she thought that SB 173 would
encourage small employers to provide coverage to their
employees.
Number 440
COMMISSIONER PAUL FUHS, from the DEPARTMENT OF COMMERCE AND
ECONOMIC DEVELOPMENT (DCED), indicated the department's
strong support for SB 173, saying that it would help both
employees and small business owners.
Number 449
REP. KOTT asked Comm. Fuhs how many small businesses in
Alaska employed full-time employees, as defined in SB 173.
Number 454
COMM. FUHS replied that he did not know the answer to Rep.
Kott's question.
Number 457
REP. GREEN asked Comm. Fuhs if SB 173 would have any effect
on the percentage of the health insurance premium paid by
the employer versus the percentage paid by the employee.
Number 463
COMM. FUHS responded that the bill would have no effect on
who paid the premiums.
Number 470
REP. BETTYE DAVIS, SPONSOR OF THE HOUSE COMPANION BILL TO
SB 173 (HB 12), was invited to address the committee. She
stated that she would be glad to defer the opportunity to
testify, so long as the committee was willing to move SB 173
out of committee.
CHAIRMAN PORTER declared that Rep. Davis had a deal.
Number 498
REP. JAMES made a motion to move CSSB 173(FIN) out of
committee with individual recommendations, and a zero fiscal
note.
Number 503
REP. KOTT indicated his support for SB 173. He said that,
after a trial period, the program should be reevaluated and
perhaps broadened.
Number 513
REP. JAMES stated that, as an accountant and tax preparer
for small businesses and a small business owner herself, she
supported the bill.
There being no objection to moving SB 173 out of committee,
it was so ordered.
SB 149 REVISION OF BANKING CODE
Number 528
CHAIRMAN PORTER announced that the committee would now take
up SB 149, which it had already heard and passed out of
committee, but which had been returned to the Judiciary
Committee for the consideration of one or two amendments.
He called the committee members' attention to a proposed
amendment (version K.1) dated April 22, 1993, contained in
their bill packets. He said that the amendment would insert
a new subsection on page 24 following line 27. He read the
proposed amendment for the benefit of those on the
teleconference network. The effect of the amendment would
be to prohibit state banks from purchasing, establishing, or
operating a subsidiary that engaged in the business of
insurance or real estate brokerage. He said that the
committee would also be considering another proposed
amendment, which would "grandfather" in state banks with
subsidiaries already in the insurance or real estate
brokerage business.
Number 563
WILLIS KIRKPATRICK, DIRECTOR OF THE DIVISION OF BANKING,
SECURITIES, AND CORPORATIONS IN THE DEPARTMENT OF COMMERCE
AND ECONOMIC DEVELOPMENT (DCED), indicated his support for
the first amendment. He said that when SB 149 was before
the House Labor and Commerce Committee, he had stated that
federal law would prohibit banks from engaging in insurance
activities unless states specifically allowed it. He
indicated that he had misspoken. He noted that all of
Alaska's banks except for one were owned by bank holding
companies, which were subject to federal regulation. He
said that these federal regulations prohibited banks from
engaging in insurance activities.
MR. KIRKPATRICK mentioned a Delaware court case in which the
federal government's prohibition against a bank subsidiary
engaging in the insurance business had been upheld. He
commented that the matter was now before the U.S. Supreme
Court. He said that the one Alaska bank which was not part
of a bank holding company was a "fed member bank," and thus
was also prohibited by the federal government from engaging
in insurance activities.
MR. KIRKPATRICK noted that there was a bank, owned by a bank
holding company, in an Alaskan community of less than 9,000
people, which, through a series of events, that bank had a
presently unauthorized title insurance company. He stated
that the title insurance company was acquired at a time when
it was closing down, which would have been a burden on the
community. The bank formed its own bank holding company to
purchase the title insurance agency, he added. However, the
federal government regulators asserted that the bank holding
company could not own a private insurance company.
MR. KIRKPATRICK stated that in the five or six years that
the bank had run the title insurance company, he had not
received a single complaint. He noted that the title
insurance company did business on a couple of islands where
the community's other title company did not. He expressed
support for "grandfathering" this bank's title insurance
subsidiary. He urged the committee to amend the bill so as
to specifically allow for this one situation.
REP. JAMES asked if the bank to which Mr. Kirkpatrick was
referring was the only one in Alaska which had a title
insurance subsidiary.
MR. KIRKPATRICK said that Rep. James was correct. It was
the only state-chartered financial institution which had a
title insurance subsidiary.
Number 652
REP. JAMES asked if the title insurance company made a
profit.
Number 655
MR. KIRKPATRICK responded that he could not address the
profitability of the subsidiary, but said that he was able
to attest that the title company was not a financial drain
on the bank.
Number 662
REP. DAVIDSON asked Mr. Kirkpatrick to clarify his response.
Number 665
MR. KIRKPATRICK reiterated his previous comment.
Number 669
REP. DAVIDSON asked what was wrong with a bank having a
title insurance subsidiary.
Number 671
MR. KIRKPATRICK replied that there was concern that one
industry might require a type of service from another
industry which the first industry controlled. For example,
if a bank made a mortgage loan, title insurance would be
required before the loan could be sold. He said that it was
possible that a bank would refuse someone a loan unless that
person agreed to purchase the requisite title insurance from
the bank. He stated that regulations needed to be set up to
protect customers from this type of situation. He commented
that this was not a problem with the bank in question.
Number 694
REP. NORDLUND stated that he had not been present when SB
149 was last before the committee. He asked Mr. Kirkpatrick
to explain the intent of the amendment.
Number 703
CHAIRMAN PORTER stated that the amendment before the
committee would preclude insurance and real estate brokerage
businesses from being owned by banks. He said that the
theory behind this prohibition was that banks would have the
appearance of a conflict of interest and the ability to
unfairly compete with non-banks which owned those types of
businesses.
CHAIRMAN PORTER noted that title insurance companies had to
send copies of policies to banks issuing loans. If the bank
held a title insurance company of its own, then the banks
would receive valuable information from their competitors
and could take advantage of the situation, he said.
Number 727
REP. NORDLUND commented that, on its face, the amendment
appeared to discourage competition. But, he said, the
Chairman's explanation indicated that it would actually
encourage competition. He asked Mr. Kirkpatrick to give his
position on the amendment.
Number 731
MR. KIRKPATRICK indicated his support for the amendment.
Number 739
REP. DAVIDSON asked if Mr. Kirkpatrick could address the
issue of the undue concentration of commerce.
Number 748
CHAIRMAN PORTER stated that he would accept testimony from
the teleconference sites first.
Number 751
JACK BARRY testified via teleconference from Ketchikan that
he had no problem with Mr. Kirkpatrick's suggested
amendment. He indicated his support for separating the
banking industry from the insurance industry.
Number 762
ARNE IVERSEN, testifying via teleconference from Ketchikan,
echoed the comments of Mr. Barry.
Number 765
JAMES BARRY, testifying via teleconference from Ketchikan,
said that he agreed that the insurance industry and the
banking industry should be kept separate.
Number 769
CHAIRMAN PORTER asked those testifying from Ketchikan if
they had a position on Mr. Kirkpatrick's suggested
amendment, which would "grandfather" in the Ketchikan bank
which held a title insurance subsidiary.
Number 780
JACK DAVIES, testifying via teleconference from Ketchikan,
said that he wholeheartedly supported both amendments.
Number 787
JIM SARVELA, VICE-PRESIDENT AND CHIEF FINANCIAL OFFICER OF
FIRST BANK IN KETCHIKAN, testified via teleconference from
Ketchikan and deferred to Bill Moran, president of the bank.
Number 789
BILL MORAN, PRESIDENT OF FIRST BANK IN KETCHIKAN, testifying
via teleconference from Ketchikan, indicated his support for
the amendment and said that he would answer questions about
his bank's activities, as well as those of the title
insurance company.
Number 802
REP. JAMES asked Mr. Moran if there was only one bank in
Ketchikan.
Number 805
MR. MORAN replied that there were many banks in Ketchikan.
Number 808
REP. JAMES asked if the bank had made any effort to sell the
title insurance company.
Number 811
MR. MORAN responded that the bank had not done so.
Number 812
REP. JAMES asked if First Bank ever intended to sell the
title insurance company.
Number 813
MR. MORAN replied that the bank did not, at present, intend
to sell the title insurance company.
Number 814
REP. JAMES asked Mr. Moran if the title insurance company
was a profitable business.
Number 818
MR. MORAN commented that, while the title insurance company
was basically profitable, it was not a big contributor to
the bank's overall profit picture. He noted that the
company's returns were highly volatile, depending on the
amount of real estate activity. He said that the bank had
been in the title insurance business for nine years, and
that the company had been profitable every year.
MR. MORAN explained how First Bank had gotten into the title
insurance business in the first place. He said that his
bank had offices in many small communities in Southeast
Alaska. He noted that First Bank used to have a continuing
problem with obtaining title insurance for property on
Prince of Wales Island, as well as in Petersburg and
Wrangell.
TAPE 93-71, SIDE B
Number 000
MR. MORAN commented that First Bank had presented the idea
of acquiring the title insurance company to the Federal
Deposit Insurance Corporation (FDIC) and the Division of
Banking, Securities and Corporations as a kindred service,
closely associated with the extension of credit. He said
that the title insurance company was acquired in response to
a specific need and for the convenience of the bank's
customers.
MR. MORAN said that First Bank was sensitive to the concern
that the bank might tie loan and title service together. He
said that such a practice was illegal. He noted that the
title insurance agency was kept separate from the bank.
REP. JAMES asked if, at the time that First Bank acquired
the title insurance company, there was no other title
insurance company operating in Ketchikan.
MR. MORAN replied that there was another title insurance
agency in Ketchikan at that time, but it did not service
Wrangell, Petersburg, or communities on Prince of Wales
Island to the necessary extent.
REP. JAMES asked if the other title insurance agency now
served those areas to a greater extent.
MR. MORAN said that he believed that the other title
insurance agency served Wrangell; and he was not sure if the
agency served Petersburg. He stated that he was almost
certain that the agency wrote policies on Prince of Wales
Island.
Number 101
REP. JAMES asked Mr. Moran what First Bank would do if SB
149 were not amended so as to "grandfather" in its ownership
of the title insurance company.
Number 106
MR. MORAN commented that First Bank was a state-chartered
bank. In the early 1980s, he said, the bank switched from a
national charter to a state charter in order to take
advantage of certain benefits relating to lending limits and
the investment of reserves. Since that time, he added,
there had been many changes made to the national banking
laws, and the original benefits of a state charter had
disappeared to a large extent.
MR. MORAN indicated his understanding that one reason behind
the state's current recodification was a need to bring the
state banks back to parity with the national banks.
REP. JAMES repeated her question regarding what First Bank
would do if its situation was not "grandfathered" in.
MR. MORAN replied that he was not sure what the bank would
do. He said that, regarding the entire recodification, the
legislature should consider that it was neither difficult
nor expensive for a bank to change its charter from state to
national, or vice versa.
Number 175
GREG ERKINS, testifying via teleconference from Anchorage,
spoke on behalf of the ALASKA ASSOCIATION OF REALTORS. He
said that he supported the amendment to limit banks'
ownership of insurance or real estate businesses, but did
not support "grandfathering" in First Bank, as he said that
the bank engaged in illegal practices. He noted that a real
estate agent in Cordova used a title insurance company in
Anchorage, as none existed in Cordova. That did not present
much of a problem at all, he said.
Number 249
GARY ROTH, PRESIDENT OF DENALI STATE BANK, testified via
teleconference from Fairbanks. He urged the committee to
pass SB 149, and said that he supported both the amendment
prohibiting banks from entering the insurance or real estate
brokerage business and the amendment "grandfathering" in
First Bank's ownership of its title insurance company.
Number 265
GINA MCBRIDE testified via teleconference from Anchorage.
She said that she supported the amendment which prohibited
banks from engaging in insurance or real estate brokerage
activities. She said that the "grandfather" clause was a
bad idea. She questioned whether the amendment would affect
more banks than just the one bank in Ketchikan. She noted
that safeguards that were supposed to prevent industry tie-
ins had often not worked in the past.
Number 304
CHAIRMAN PORTER clarified that there were two amendments
before the committee. Both would prohibit banks from
engaging in the real estate brokerage or insurance
industries. The second one, however, also included a
"grandfather" clause for First Bank. He said that it might
be best to address the second amendment first, as if it was
adopted, and there would be no need to address the other
amendment.
Number 310
REP. GREEN offered the second amendment.
CHAIRMAN PORTER objected for the purposes of discussion.
Number 312
REP. DAVIDSON spoke in favor of the amendment. He noted
that, as an island-dweller, he was aware of the problems of
doing business in an isolated location.
Number 327
REP. PHILLIPS asked the Chairman to address the alleged
illegality of First Bank's operation.
Number 331
CHAIRMAN PORTER responded that, in his assessment, First
Bank's situation was at worst illegal and at best not
formally or properly authorized. He said that he did not
support the amendment for two reasons: (1) the legislature
might be "grandfathering" in an illegal activity; and (2)
the amendment might affect more banks than just First Bank
in Ketchikan.
Number 346
REP. PHILLIPS asked for some background on how First Bank
could conduct a potentially illegal operation for nine
years, given that banks were periodically reviewed.
Number 356
MR. KIRKPATRICK responded that the Alaska Banking Code, as
currently written, was not terribly clear. Over the years,
he said, examiners had questioned whether First Bank's
investment was permissible. He noted that there was some
subjectivity involved in the determination of whether title
insurance and banks were of a "kindred kind." He added that
there was no statute which said that a title insurance
business was an illegal business for a bank. Therefore, he
said, there were questions about whether or not First Bank's
title insurance company was illegal. Senate Bill 149
included a more precise subsidiary provision, he said. He
also commented that there was no current Attorney General's
opinion on the issue.
Number 398
REP. GREEN asked Mr. Kirkpatrick if he knew of any other
banks which would be affected by the proposed "grandfather"
provision.
Number 402
MR. KIRKPATRICK testified that there were no other state-
chartered banks, savings and loans, or credit unions that
had subsidiaries that were title insurance companies.
Number 407
REP. JAMES commented that, since there was another title
insurance company operating in Ketchikan, she would probably
not support the "grandfather" provision. She said that she
understood what it was like to do business on islands and in
small communities in Alaska, and was willing to make
provisions for the peculiarities of doing so. She expressed
her opinion that title insurance companies should not be in
the lending business, nor should banks be in the title
insurance business. She added that since there was already
a title insurance agency in Ketchikan that could be
providing the same service that the bank's title insurance
company did, she felt that the bank's subsidiary was a
conflict of interest.
Number 427
REP. DAVIDSON noted that when only one title insurance
company was located in an isolated community, the rates were
not subject to competition and were often very high.
Number 431
REP. JAMES replied that title insurance rates in the state
were uniform and set by law.
Number 436
REP. PHILLIPS noted that the amendment would only allow for
existing situations to continue; it would not allow for
other banks to get into the insurance or real estate
brokerage business in the future.
Number 445
CHAIRMAN PORTER agreed that the amendment would
"grandfather" in one existing situation, but would preclude
other banks from getting into the insurance or real estate
brokerage business.
REP. NORDLUND asked what current law said about banks
getting into the insurance or real estate brokerage
business.
CHAIRMAN PORTER commented that, if SB 149 passed, a bank
could not enter the insurance business. Under current state
law, he added, a bank was not precluded from doing so.
However, federal regulations prohibited such activity
without specific statutory authority from the state or many
"hoops" at the federal level.
Number 464
REP. NORDLUND questioned why, if the Division of Banking,
Securities, and Corporations supported the proposed
amendment, it was not included in SB 149 in the first place.
Number 468
MR. KIRKPATRICK stated that the original SB 149 would have
allowed banks to enter the insurance or real estate
brokerage business. The amendment would remove that
authority. He said that his division had seen no specific
harm resulting from First Bank's operation; the amendment
would clear up a question regarding the legality of First
Bank's practices.
Number 479
REP. NORDLUND asked if SB 149's sponsor supported the
amendment.
Number 483
JOSH FINK, LEGISLATIVE AIDE TO SEN. TIM KELLY, PRIME SPONSOR
OF SB 149, indicated that the sponsor had no position on the
amendment.
Number 493
REP. DAVIDSON asked Mr. Kirkpatrick to address where
statewide uniform title insurance rates could be found in
the Alaska Statutes.
Number 498
MR. KIRKPATRICK replied that he did not regulate insurance
companies and could not answer Rep. Davidson's question.
REP. DAVIDSON asked if there was a state law regarding
uniform title insurance rates.
MR. KIRKPATRICK responded that he did not know the answer to
Rep. Davidson's question.
REP. DAVIDSON asked, if title insurance rates were uniform,
why the "grandfather" provision created a competition
problem.
Number 515
CHAIRMAN PORTER stated that the issue was that there was
perceived coercion by the bank for its customers to buy the
bank's title insurance.
REP. PHILLIPS expressed her opinion that it was not right to
pass legislation which pertained specifically to one entity.
She asked if there were any statutes which prohibited the
legislature from doing that.
REP. DAVIDSON expressed his opinion that the committee's
recent action on SB 178 indicated that the legislature did
pass bills which affected only one entity.
Number 540
CHAIRMAN PORTER stated that SB 178 would apply to any
lawsuit filed by anyone.
Number 547
GAYLE HORETSKI, COMMITTEE COUNSEL TO THE HOUSE JUDICIARY
COMMITTEE, noted that a provision in the state constitution
prohibited special interest legislation, or legislation
affecting one party. She said that there clearly had been
many bills passed by the legislature over the years which
only affected one entity, however.
Number 558
REP. DAVIDSON asked what the perceived problem was in
"grandfathering" in the First Bank operation in Ketchikan.
Number 561
CHAIRMAN PORTER responded that if the committee's philosophy
was that tie-ins between the banking industry and the
insurance industry were not a good idea due to perceived and
real conflicts of interest, then the harm was that (1) there
was another title insurance company in Ketchikan that could
provide the necessary services to the public; and (2) if
another title insurance company wanted to enter and compete
in the Ketchikan market, it would face the only city in
Alaska where a bank was allowed to own a title company.
Number 569
REP. DAVIDSON asked if the other title insurance company in
Ketchikan had complained about the bank-owned title
insurance company.
Number 572
MR. KIRKPATRICK replied that the other title insurance
company had not submitted a complaint about the bank-owned
title insurance company.
Number 577
REP. GREEN asked if it would constitute a "taking" if the
legislature were to pass SB 149 without the amendment under
consideration, given that First Bank might not have broken
any laws.
Number 582
CHAIRMAN PORTER stated that it was not clear whether First
Bank had broken any laws by acquiring the title insurance
company. He said that he could not answer Rep. Green's
question.
Number 586
REP. JAMES noted that when title insurance companies insured
titles, they listed all of the "clouds" and all of the
conditions of record pertaining to a piece of property.
Some title insurance companies, in competition with other
title insurance companies, would insure "around" certain
conditions, while other companies would not.
REP. JAMES expressed her opinion that there was a definite
conflict of interest between title insurance companies and
mortgagors. Because First Bank's title insurance company
was not the only one in Ketchikan, she said, she would not
support the proposed "grandfather" provision.
Number 612
REP. PHILLIPS commented that she would abide by the
constitution's prohibition against special acts, when a
general act could be made applicable.
Number 621
REP. NORDLUND noted that if Rep. James' intention was to
enhance competition, then her actions ran counter to that
intention.
CHAIRMAN PORTER indicated that the committee had a motion to
adopt what would now be designated as Amendment 1, which
included the "grandfather" provision. Objection had been
heard.
REP. PHILLIPS made a motion to divide the question.
CHAIRMAN PORTER stated that if Amendment 1 passed, then the
committee was done with the issue. If the amendment did not
pass, then the committee would turn to Amendment 2, which
included part of Amendment 1.
REP. PHILLIPS withdrew her motion.
A roll call vote was taken on Amendment 1. Reps. Nordlund,
Davidson, Green and Kott voted "yea." Reps. Phillips,
James, and Porter voted "nay." And so, Amendment 1 was
adopted.
CHAIRMAN PORTER announced that, because Amendment 1 had
passed, there was no need to consider Amendment 2.
REP. PHILLIPS made a motion to move SB 149, as amended, out
of committee with individual recommendations. There being
no objection, it was so ordered.
CHAIRMAN PORTER announced that the teleconference had come
to an end. He said that the committee would now take up SB
76.
SB 76 CHARITABLE GAMING RESTRICTIONS
Number 675
REP. PHILLIPS made a motion to move SB 76 out of committee,
with individual recommendations.
REP. NORDLUND objected.
REP. PHILLIPS withdrew her motion so that testimony could be
heard from witnesses.
Number 708
MR. CHIP THOMA commented that he had followed the issue of
charitable gaming for the past several years, and had
testified on SB 76 when it was in the Senate. He spoke in
support of an amendment offered by Senator Jay Kerttula,
which would eliminate pull-tab gambling in the state. He
expressed his opinion that promoting charities through
nearly-exclusive use of pull-tabs was not good or prudent
state policy. He stated that the concept of and intent
behind SB 76 were fatally flawed, because charitable
organizations were being forced to rely very heavily on
gaming as a revenue source.
MR. THOMA said that 80% of the money raised by charitable
gaming was from pull-tab sales. He noted that charitable
gaming raised a lot of money for charities, but with
questionable consequences. He stated that the purpose of
SB 76 was supposedly to crack down on questionable
activities by those involved in charitable gaming. He
expressed his opinion that the amount of money said to go to
political candidates was greatly exaggerated.
TAPE 93-72, SIDE A
Number 000
MR. THOMA asserted that SB 76 was an attempt by Mr. Mitch
Gravo, a lobbyist representing the Charitable Gambling
Association of Alaska, to quash competition. He said that
he resented the use of legislation for such purposes. He
commented that an important issue which was not addressed by
SB 76 was the sale of pull-tabs in establishments which sold
alcohol. He expressed his opinion that linking liquor
establishments with charitable gaming was bad state policy.
MR. THOMA commented that most charities operating in Alaska
served clients who had been affected by alcohol. The state,
he said, was forever linking the sale of pull-tabs to
alcohol establishments. He noted that he did not consider
the relatively small amount of charitable gaming proceeds
which went to political candidates to be a problem. He said
that he had recently learned that the Alaska Environmental
Lobby (AEL) would, under SB 76's provisions, no longer be
allowed to use its raffle proceeds to pay the salary of its
lobbyist. He called that "outrageous." He expressed his
opinion that SB 76 attempted to eliminate a fund raising
source for Democrats. He noted that the Democrats did not
rely on $1,000 contributors, as did the Republicans.
MR. THOMA stated that the bill gave short shrift to the
concept of multiple beneficiaries. He said that SB 76
contained many loopholes, and had received little scrutiny
from legislative committees. He predicted that SB 76 would
expand gambling in the state, and reiterated his concern
that linking gambling and alcohol was wrong.
Number 137
COMM. FUHS noted that he had distributed to the committee
additional information which had been requested by Rep.
Davidson at the previous work session on SB 76. He said
that charitable gaming was not a partisan issue, as both
Republicans and Democrats received proceeds from charitable
gaming. He added that some operators ran pull-tab games
almost solely for the benefit of political candidates. In
response to Mr. Thoma's allegation that SB 76 was a war
between two operators, he said that the bill would not
affect either operator. He said that, in addition to
bringing operations currently in bars under state
regulation, SB 76 would give municipalities the option to
prohibit vendors from operating in their communities.
Number 203
REP. DAVIDSON noted that Kodiak had already outlawed
operators. He asked Comm. Fuhs if SB 76 would increase
economic opportunities for the liquor industry. He asked if
the bill would increase the value of a bar license.
Number 225
COMM. FUHS replied that he did not know if the bill would
increase the value of a bar license.
Number 230
REP. DAVIDSON asked if SB 76's allowance that a bar owner
could become a pull-tab vendor would not increase the
revenue taken in by the bar.
COMM. FUHS responded that it would depend on the bar owner's
operating expenses, and whether or not a bar owner chose to
sell pull-tabs in the first place. He noted that some bar
owners did not feel that pull-tabs fit in with the bar's
image.
Number 243
REP. DAVIDSON asked if "upscale" bars generally did not sell
pull-tabs.
COMM. FUHS said, in general, that was true.
REP. DAVIDSON asked if DCED had conducted a zip code
analysis of where pull-tab revenues came from.
COMM. FUHS replied that no such analysis had been done.
REP. DAVIDSON asked what result the commissioner would
predict from such an analysis.
COMM. FUHS expressed his opinion that such an analysis would
indicate that gambling revenues were received from areas
throughout the state.
Number 258
REP. DAVIDSON stated his belief that SB 76 would increase
the mixing of alcohol and gambling. He said that if upscale
bars, in general, would not sell pull-tabs, that led him to
believe that people who could afford to buy pull-tabs would
not do so. Therefore, the funding of non-profit
organizations would primarily be done by the poor. He said
that, despite the commissioner's opinion that SB 76 would
not expand gambling, there was a real possibility that the
bill would expand the availability of pull-tabs.
Number 296
REP. PHILLIPS asked if a bar owner, when selling his or her
bar, could sell a pull-tab license along with it.
COMM. FUHS replied that the pull-tab permit would not be
transferred along with the facility.
CHAIRMAN PORTER asked Comm. Fuhs to compare the
proliferation of gambling, in the event that SB 76 passed
and in the event that the bill failed.
Number 331
COMM. FUHS said that it was difficult to speculate. He
predicted that passage of SB 76 would result in the
"redistribution" of gaming revenues, but not necessarily an
expansion of gaming activities.
Number 347
REP. PHILLIPS noted that there was nothing in current law
that would prohibit the expansion of pull-tab activity in
the state.
COMM. FUHS stated that Rep. Phillips was correct. He added
that any bar in Alaska could sell pull-tabs under current
law if it so desired.
Number 358
CHAIRMAN PORTER noted that SB 76 would make it more
difficult for bar owners to sell pull-tabs, as they would
have to give more of the proceeds to the permittee.
Number 362
REP. PHILLIPS expressed her opinion that SB 76 did not make
the selling of pull-tabs easier or more difficult for bar
owners. What the bill did, she said, was to change the
percentage of proceeds which the permittees received.
COMM. FUHS stated that bar owners would be required to pay
50% of the "ideal net" from each pull-tab game series, up-
front, to the permittee.
Number 387
REP. PHILLIPS asked Mr. John Hansen to address why some
pull-tab sellers gave 30% of proceeds to permittees, while
others were required to give 50% of proceeds to the
permittees.
Number 396
JOHN HANSEN, GAMING MANAGER FROM THE DCED, stated that
licensed operators would be required to give permittees 30%
of proceeds from pull-tab sales. That person would not be
required to pay for the pull-tabs upon delivery, he said,
and would perform services for permittees which the
permittees did not choose to do themselves. Under SB 76,
permittees would still receive monthly checks from
operators, but the amount of the checks would double.
MR. HANSEN explained that if a permittee chose to do
business with a vendor, the permittee would purchase pull-
tabs and deliver them to the vendor. Unlike doing business
with an operator, permittees contracting with vendors would
be required to do their own accounting and financial
reporting. Although permittees contracting with vendors
received a higher rate of return, he noted, the permittee
still bore the burden of doing the paperwork.
REP. DAVIDSON commented that he had spoken with the director
of a non-profit organization in his district and was told
that in the last eight years a state regulator had only come
by once to check on the organization's gaming permit. He
asked Mr. Hansen how his office would increase oversight of
charitable gaming.
Number 435
MR. HANSEN noted that the percentages built into SB 76 did
not exist in current law. He said that currently
organizations which did not choose to use the services of an
operator had no expense limitations. Therefore, many groups
did millions of dollars worth of gaming, yet ended up with
no net proceeds. The fixed percentages in SB 76 would help
the state to ensure compliance simply by performing desk
audits. He noted that field inspections would still be
conducted. He expressed his opinion that, under current
law, the state enjoyed substantial compliance with its
licensing requirements.
REP. DAVIDSON asked Mr. Hansen why he believed this to be
true.
MR. HANSEN cited the number of inspections conducted. He
said that the state lacked auditing powers. He said that SB
76 would enable the state to more easily accomplish audits,
due to the built-in percentages.
Number 473
MR. HANSEN stated that in 1992, the state issued permits to
1,003 permittees. Some permittees, he noted, held more than
one permit. He said 1,320 permits were issued exclusively
for pull-tab activity. He noted that the state had only
four gaming investigators.
Number 491
REP. DAVIDSON asked if, under SB 76, a permittee could still
conduct a raffle and donate proceeds from that raffle to a
political candidate.
Number 498
MR. HANSEN said that Rep. Davidson was correct, as long as
the candidate was affiliated with a political organization.
REP. DAVIDSON asked if a permittee could hold a raffle and
donate proceeds directly to a candidate, instead of to the
candidate through his or her political party, under SB 76's
provisions.
MR. HANSEN stated that the permittee could contribute raffle
proceeds either to the party or to the candidate's
organization, if that organization was affiliated with a
political party.
Number 510
REP. DAVIDSON asked if similar contributions to lobbyists
would be illegal.
MR. HANSEN said that was correct.
Number 518
REP. DAVIDSON expressed his opinion that it was ironic that
a permittee could contribute to a person who was to be
lobbied, but not to a person who did the lobbying.
Number 525
MR. HANSEN noted that federal law and SB 76 both made
distinctions between different types of gaming activities.
He added that the DCED was currently conducting an analysis
of gaming revenues by zip code.
Number 544
REP. PHILLIPS asked why SB 76 contained such an onerous
title.
Number 548
COMM. FUHS indicated that the title was written by the
Senate. He suggested that Rep. Phillips ask the bill's
sponsor what her intentions were in writing such a
restrictive title. He stated that he had heard that the
reason was not to tie the House's hands, but instead to
attempt to "put some kind of sideboards on the thing," to
try to keep it from coming apart.
Number 564
MARK HIGGINS, representing the ALASKA CHARITABLE GAMES
ASSOCIATION, said that SB 76 would undoubtedly expand
gambling. He said that Comm. Fuhs' figures regarding how
many bars in Alaska already sold pull-tabs were grossly
exaggerated. He commented that SB 76 provided a tremendous
economic incentive for bars to get into the pull-tab
business. He expressed his opinion that the sale of pull-
tabs in a bar would increase the value of that bar, if the
owner decided to sell.
MR. HIGGINS noted that SB 76 would delete an existing bond
requirement. He predicted that the bill would expand gaming
by at least 100%. He commented that, when the 1988 Gaming
Reform Act was enacted, no one involved envisioned that
stand-alone pull-tab stores would be established. He noted
that when permittees contracted with vendors, it was true
that the permittee would receive 50% of the "ideal net" up-
front. What was not being stated, he added, was that the
permittee had to pay for the cost of the pull-tabs, plus
taxes. That meant that the permittee actually only received
about 35% of the ideal net.
MR. HIGGINS expressed his opinion that bar owners serving as
vendors ought to pay permittees more than 50% of the ideal
net, as the vendor's expenses were essentially nothing. He
distributed a series of graphs to the committee, which he
said were based on state figures. He said the DCED
contended that, out of the $200 million annually involved in
the charitable gaming industry, only about 8% was going to
charitable organizations. His graphs demonstrated that
charities actually received about 40% of the "bottom-line
net." He said that SB 76 would increase, but not double,
the amount of money which went to charities.
Number 688
REP. JAMES questioned Mr. Higgins' figures. She said that
when the state was talking about 15%, that was 15% of the
ideal gross, which was after prizes had been taken out. It
appeared to her that Mr. Higgins' figures compared total
pull-tab sales to proceeds going to the non-profit
organizations.
Number 695
MR. HIGGINS stated that the state's method of portraying
figures created a false impression that there was rampant
abuse in the charitable gaming industry. In fact, he said,
charitable organizations were currently receiving a return
from 30-40%, which was better than most businesses in Alaska
could report.
Number 701
REP. JAMES indicated that Mr. Higgins had missed her point.
She called attention to Mr. Higgins' second graph.
MR. HIGGINS stated that the second graph represented all of
the money left over after prizes had been awarded. The
percentage of that amount that actually went to the
charities was approximately 40%, he added. He alleged that
the DCED was misinforming legislators.
Number 718
CHAIRMAN PORTER asked Mr. Higgins if he believed that SB 76
would provide more money to charities than did existing law.
MR. HIGGINS replied that the Chairman was correct.
REP. DAVIDSON asked Mr. Higgins to explain what, in the
bill, would ensure that charitable organizations received
more money.
Number 727
MR. HIGGINS replied that that would occur in situations in
which operators or self-directed charitable organizations
were not currently realizing a 30% return. He mentioned
that an operator in Anchorage had recently switched from
being an operator to being a multiple-beneficiary operation.
That person was now sub-leasing in the same space which he
had used as an operator, and was charging $176,000 more per
year to permittees in his new role. The state had
determined that it had no authority to sanction that
activity. He expressed concerns over placing multiple-
beneficiary permits in statute.
MR. HIGGINS cited another example, Catholic Bingo in
Fairbanks, an organization that did not meet the 30%
requirement and would therefore be put out of business by
SB 76.
Number 756
REP. DAVIDSON asked Mr. Higgins what percentage of the
gaming abuse he attributed to pull-tab activity. He asked
him what the legislature should do to discourage the
proliferation of gambling combined with alcohol.
MR. HIGGINS responded that pull-tab sales made up about 80%
of the charitable gaming revenue in the state. Regarding
the combination of gambling and alcohol, he expressed his
opinion that it was a judgment call for the legislature. He
added that there needed to be protections for the players
and the charities. He stated that two years ago bars were
willing to accept 25% of the ideal net. In that light, he
questioned why SB 76 was offering the bars 50% of the ideal
net.
MR. HIGGINS stated that control was a key issue. He stated
that he had complained several weeks ago that SB 76, as then
drafted, would have allowed pull-tab machines to be located
virtually anywhere. They could have been owned by anyone,
he added, and there would be no human interaction in that
situation. That situation cried out for abuse, he said.
The bill was eventually changed, he noted. He said that
many people would attempt to skirt regulation. He expressed
his opinion that the bill as drafted would expand the
opportunities for abuse. He predicted that the abuse would
be seen immediately.
Number 792
REP. DAVIDSON asked how players could be better protected.
Number 795
MR. HIGGINS said that there were tracking mechanisms in
existing law. He suggested that bars be required to put up
a real property bond, or do something else to make the bars
accountable -- even requiring them to put their liquor
licenses on the line.
(Chairman Porter acknowledged the arrival of Rep. Carl
Moses.)
Number 809
REP. DAVIDSON asked that a representative of the DCED
respond to the statements made by Mr. Higgins.
TAPE 93-72, SIDE B
Number 000
COMM. FUHS responded to Mr. Higgins' comment regarding the
number of bars in the state which sold pull-tabs by stating
that out of 1,320 permit locations, 527 of those locations
sold alcohol. He said the DCED had never claimed that 80-
90% of the state's bars sold pull-tabs. The department had
said that an inventory of bars in Juneau showed that 80-90%
sold pull-tabs. He defended the DCED's figures.
COMM. FUHS said that, regarding figures of overall net
return, the DCED had been very careful to review them in
detail with the committee during the work session the day
before. He said that he had explained that when a permittee
ran a game him or herself, the return was 45%, but when a
permittee used an operator, the return was 31%. The reason
for that, he added, was that some operators voluntarily paid
more than 30%. He commented that one Juneau operator
voluntarily paid 40%. He also mentioned that SB 76's
prohibition against proceeds going toward campaign
contributions and lobbyists would result in increased
proceeds to true charities. He estimated that SB 76 would
result in an additional $10 million per year going to
charities.
Number 050
REP. NORDLUND mentioned a statement included in Sen.
Pearce's written sponsor statement which said, "all non-
profits, including political parties and labor
organizations, would still be allowed to . . . use raffles
and other permitted games to earn money which could then be
used for direct contributions to candidates."
COMM. FUHS commented that the sponsor's statement was
correct.
Number 071
CHAIRMAN PORTER said that the name of the sponsoring
organization appeared on raffle tickets, so there was no
confusion regarding where the contribution went.
COMM. FUHS said that was true.
Number 076
REP. NORDLUND stated that Rep. Davidson had an amendment
which would address the issue. He said that he saw no
difference between organizations contributing to candidates
and lobbyists.
Number 085
REP. PHILLIPS mentioned that political parties had used
raffles to raise money long before pull-tabs came on the
scene in Alaska. She expressed her opinion that raffles
should be treated differently than pull-tabs.
Number 094
REP. JAMES agreed that raffles were different than other
types of gambling. She said that her understanding of SB 76
was that raffles could still be held, but the proceeds could
not be donated to political candidates.
Other members of the committee corrected her by saying that
the proceeds could not be used for lobbyists.
REP. DAVIDSON asked if the Homer Ski Club could hold a
raffle and use the proceeds to make a direct contribution to
Rep. Phillips.
COMM. FUHS said that was correct.
REP. DAVIDSON asked Comm. Fuhs to discuss bonding
requirements for bar owners who sold pull-tabs, as well as
revocation of liquor licenses for gaming abuses.
Number 133
MR. HANSEN discussed the sanctions included in SB 76. He
said that no bond requirement was necessary, as vendors gave
permittees 50% of the ideal net up-front, upon delivery of
the pull-tabs. Additionally, he said, SB 76 gave the DCED
much greater regulatory authority over charitable gaming.
It gave the commissioner the right to issue an emergency
order to "cease and desist." It also gave the department
the authority to suspend, revoke, or deny permits for up to
five years. The sanctions, he added, were linked both to
the permittee and to the vendor or operator.
REP. DAVIDSON asked who could initiate those sanctions. He
asked if a bar patron who felt that he or she had been "had"
could initiate those sanctions.
Number 164
MR. HANSEN stated that under current law, if a complaint was
filed, the department investigated it, and action might be
taken.
REP. DAVIDSON expressed concern that, because the present
gaming investigators were spread so thin, the only
investigations would center around complaints. He asked Mr.
Hansen to comment on the 50/50 split if the cost of the
pull-tabs and the tax were to be paid by the bar owner.
Number 182
MR. HANSEN stated that it would be logistically difficult,
as the cost of each game varied; thus the ideal net and the
taxes owed would vary also.
REP. DAVIDSON asked why the permittee could not collect
those amounts at the same time that he or she collected the
50% of the ideal net.
MR. HANSEN responded that it would be difficult to compute
those figures on the spot.
COMM. FUHS mentioned that the cost of the game was about
10%. He expressed the department's desire that the
permittee be physically involved in the delivery of the
pull-tabs and the receipt of the check up-front. He noted
that if anyone was paid to "broker" vendor-permittee
interactions, that would be an illegal expense under SB 76.
Number 212
MR. HANSEN commented that current law alluded to certain
prohibitions for persons with criminal records, but did not
specifically define them. He said SB 76, in contrast, set
out specifically who was prohibited from doing what.
Number 228
REP. DAVIDSON noted that that had nothing to do with a
person who saw an opportunity to broker a situation. He
asked how the brokerage situation could be controlled.
Number 243
COMM. FUHS said that when a pull-tab game was delivered to a
vendor, the game was registered with the DCED. The vendor
and the permittee were required to show the DCED what each
did with their 50%.
Number 250
MR. HANSEN stated that SB 76 would require that a permittee
receive 50% of the ideal net and deposit the check in the
permittee's checking account. Once the money was in the
checking account, he added, the DCED had a "hook" to monitor
compliance.
Number 255
COMM. FUHS commented that, although there were some
"sensational" aspects of SB 76, the most important parts of
it from the regulators' standpoint were the "nuts and bolts"
requirements which were being placed on the charitable
gaming industry. He said that the bill gave the DCED very
clear methods for tracking gaming activity, which would save
personnel time.
Number 264
REP. PHILLIPS asked why SB 76 did not include a requirement
that pull-tabs be manufactured in Alaska. She said that it
could spawn a new industry in the state.
Number 275
MR. HANSEN replied that there were only ten pull-tab
manufacturers in the country. He noted that the manufacture
of pull-tabs required a tremendous printing press, and was
often done during the daytime by companies which printed
newspapers at night. In order for a pull-tab manufacturing
operation to be economically feasible, he said, a huge
volume was required. He said SB 76 licensed out-of-state
manufacturers which were currently not licensed in Alaska.
REP. PHILLIPS asked if a licensing fee was charged.
MR. HANSEN stated that the fee was $500 per license per
year.
Number 296
REP. NORDLUND indicated his understanding that the $500
licensing fee was very low, compared to fees charged by
other states.
Number 300
MR. HANSEN responded that the highest fee he had ever heard
of was $2,500. He said that none of the pull-tab
manufacturers wanted to pay the $500 fee, but did not object
to it.
Number 319
COMM. FUHS asked that the committee, if it opted to amend
SB 76, submit a resolution allowing the title to be amended
so as to specifically pertain to the amendments made.
Number 338
REP. JAMES asked if the only way in which to change the
title of SB 76 was to have a concurrent resolution passed by
both the House and the Senate. Additionally, she asked, if
the committee made an amendment, then would that amendment
be tied to a concurrent resolution that would have to be
passed by both bodies in order to give the committee
permission to change the title?
COMM. FUHS stated that the committee could either make very
specific title amendments or a blanket title amendment.
Number 352
REP. JAMES commented that the committee needed to determine
whether or not SB 76 should pass this year.
CHAIRMAN PORTER stated that he would like to see SB 76 pass
this year.
Number 368
REP. JAMES agreed with the Chairman, but cautioned that
amending the bill might not allow for its passage this year.
REP. PHILLIPS echoed Rep. James' comments.
Number 372
REP. CARL MOSES, PRIME SPONSOR OF HB 168, CHARITABLE GAMING
AMENDMENTS, a companion bill to SB 76, expressed the opinion
that any attempt to amend SB 76 was equivalent to an attempt
to kill it.
Number 378
REP. NORDLUND mentioned that the legislature could choose to
ignore the Uniform Rules. If SB 76 passed, there was
nothing that the courts could say that would invalidate the
bill on legislative procedural grounds.
Number 384
CHAIRMAN PORTER stated that the House had elected not to
violate the Uniform Rules.
Number 387
REP. DAVIDSON said that the legislature was not a unicameral
body. As such, he said, it did not behoove the House to
follow the lead of the Senate in this matter. He said that
the House was not doing its public duty if it did not do
what it thought was right in creating a good law.
Number 400
CHAIRMAN PORTER commented that he would consider any
proposed amendments, and that all committee members should
do what they felt was right regarding the amendments. He
noted that it was important to consider the political
ramifications of amending SB 76. He expressed his opinion
that SB 76 contained a number of good provisions, and said
that more could probably be added. But, he said, "at some
point in time, you have to make a decision to stop." He
said that he felt it was time to stop.
Number 425
REP. NORDLUND stated that, in terms of the House of
Representatives, the review process was starting, not
stopping. He noted that this was the first public hearing
on SB 76 in the House, and that it was proper for the House
to consider amendments to the bill. He said that both he
and Rep. Davidson were going to offer amendments, starting
with the most expansive amendments and working toward the
least expansive amendments.
REP. NORDLUND moved Amendment 1, which he said would
prohibit the sale of pull-tabs in the state.
REP. PHILLIPS objected.
REP. NORDLUND expressed his opinion that a lot of gaming
activity that occurred in the state had some value. There
was social activity involved in bingo and raffles, he noted.
But, he said that he could not see any redeeming value in
playing pull-tabs. It was a mindless and non-social
activity, he stated. Pull-tabs had not existed in Alaska
until quite recently, he added, and charities had been able
to survive quite well before they appeared on the scene.
A roll call vote was taken on Amendment 1. Reps. Davidson
and Nordlund voted "yea." Reps. Phillips, Kott, James, and
Porter voted "nay." Rep. Green passed. And so, Amendment 1
failed.
Number 462
REP. DAVIDSON offered Amendment 2, which would allow local
communities to prohibit pull-tabs. He said that the effect
of the amendment would be to save what little cash was left
in rural areas of the state. He expressed his belief that
rural areas supported a disproportionate share of gaming in
Alaska. He moved the amendment.
REP. PHILLIPS objected.
CHAIRMAN PORTER asked Comm. Fuhs to discuss how Amendment 2
related to local option provisions already in the bill.
Number 480
COMM. FUHS stated that local option provisions in SB 76
would allow local communities to eliminate operators or
vendors. But, he said, permittees would still be able to
run pull-tab games on their own. Amendment 2 would allow
local communities to also prevent permittees from running
their own pull-tab games, he said.
Number 489
REP. DAVIDSON asked Comm. Fuhs to offer his opinion of the
amendment.
Number 503
COMM. FUHS stated that there were potential legal problems
with the amendment's definition of "community." He said
that the bill's current local option provisions pertained to
"municipalities."
Number 512
REP. DAVIDSON requested a legal opinion on that issue.
Number 517
JERRY LUCKHAUPT, an ATTORNEY from the LEGISLATIVE AFFAIRS
AGENCY'S DIVISION OF LEGAL SERVICES, stated that Amendment 2
tracked local option language in the Alcoholic Beverage
Control (ABC) statutes, which the Supreme Court had recently
found to be constitutional. The amendment, he said, allowed
municipalities and unincorporated communities to vote to ban
pull-tabs within their boundaries. He said that it did not
give IRA Councils or village corporations the authority to
make a decision to ban pull-tabs.
Number 542
REP. PHILLIPS asked Mr. Luckhaupt if he had drafted the
Senate Finance Committee's substitute for SB 76.
MR. LUCKHAUPT replied that he had done so.
REP. PHILLIPS asked if language on page 7, Section 11, of
the bill already accomplished what Amendment 2 was seeking
to do.
Number 548
MR. LUCKHAUPT responded that the language to which Rep.
Phillips was referring was part of what the amendment sought
to accomplish. The amendment, he said, went further to
include unincorporated communities.
Number 554
REP. DAVIDSON urged the members to give serious
consideration to the amendment. He noted that the amendment
would help to ensure that what little disposable cash was in
rural areas remained there to help the residents of the
communities.
Number 565
CHAIRMAN PORTER indicated that he did not object to the
amendment, but expressed concern that adopting it would
effectively kill SB 76 for this session.
Number 572
REP. DAVIDSON urged the committee to remember that it had
plenty of time to do its job right.
A roll call vote was taken on Amendment 2. Reps. Davidson
and Nordlund voted "yea." Reps. Phillips, James and Porter
voted "nay." Reps. Green and Kott passed. And so,
Amendment 2 failed.
Number 592
REP. GREEN said that he would like to offer an amendment.
An "at ease" was taken at 4:31 p.m. The meeting reconvened
at 4:49 p.m.
REP. GREEN then stated that he had decided not to offer his
amendment.
Number 614
REP. DAVIDSON offered Amendment 3, which would allow local
communities to prohibit all charitable gaming. He expressed
his opinion that SB 76 would expand gaming in the state.
Amendment 3 would allow local residents to protect
themselves to some extent from that expansion. He moved the
amendment.
CHAIRMAN PORTER objected. He stated that he did not object
to the content of the amendment, but merely to making any
amendments at all to SB 76 at this point.
Number 653
REP. NORDLUND mentioned that the Chairman's desire to make
additional reforms to charitable gaming next year might not
come to pass, due to a lack of momentum behind reforms. In
that light, he recommended that SB 76 be amended now.
Number 658
CHAIRMAN PORTER expressed his opinion that if Amendment 3
were introduced as a bill next year, it would enjoy a great
deal of support.
Number 664
REP. JAMES added that she would support a bill containing
Amendment 3's provisions next year.
Number 666
REP. DAVIDSON noted that SB 76 would give purveyors of
alcohol added income and the ability to put as many jars of
pull-tabs on their bar counters as the counters could hold.
He said that pull-tab income could pay the expenses of bar
owners to come to Juneau to lobby against a bill containing
Amendment 3's provisions. He said that the state would
never be able to effectively track pull-tab income, which
was in fact used for lobbying expenses. He expressed hope
that the committee would "see the light" on this important
public policy issue.
Number 689
CHAIRMAN PORTER noted that pull-tabs could be sold in bars
under current law, and that would continue upon enactment of
SB 76. He recognized that most of the committee members
wished that the issue of charitable gaming would simply go
away. He commented that a person might enter a bar with $30
in his or her pocket. If pull-tabs were not there, he said,
that person might "drink away" the $30. If pull-tabs were
there, they might lead to her or him drinking less and
diverting some of that $30 to charities.
Number 707
REP. DAVIDSON said that the Chairman had made an excellent
point. He stated that the committee had the power to make
the issue of charitable gaming go away.
Number 712
CHAIRMAN PORTER stated that SB 76 did not preclude gambling.
He called for a roll call vote on Amendment 3. Reps.
Nordlund and Davidson voted "yea." Reps. Kott, Phillips,
James, and Porter voted "nay." Rep. Green passed. And so,
Amendment 3 failed.
Number 721
REP. DAVIDSON raised a procedural question regarding the
vote on Amendment 2. The Chairman, he said, had allowed two
members to pass. The amendment failed by a vote of 3 nays
and 2 yeas. He noted that when members passed, the vote
should come back to them.
REP. PHILLIPS called for a re-vote on Amendment 2.
TAPE 93-73, SIDE A
Number 000
There was a motion to rescind the committee's action on
Amendment 2. Hearing no objection, the action was
rescinded.
REP. DAVIDSON explained that Amendment 2 would allow local
communities to prohibit pull-tab activity.
A roll call vote was taken on Amendment 2. Reps. Nordlund
and Davidson voted "yea." Reps. Kott, Phillips, Green,
James, and Porter voted "nay." And so, Amendment 2 failed.
REP. NORDLUND offered Amendment 4, which would prohibit
gaming activities from taking place in bars and liquor
stores. He moved the amendment.
REP. PHILLIPS objected.
Number 025
REP. NORDLUND noted earlier concerns that charitable gaming
proceeds might go toward lobbying or candidates. He said
that he could guarantee that proceeds received by bar owners
would be used to lobby the legislature on legislation which
favored the liquor industry, as well as legislation which
allowed the liquor industry to continue to sell pull-tabs.
He expressed his opinion that it was bad business to combine
gambling and alcohol.
Number 049
CHAIRMAN PORTER noted that one advantage of selling pull-
tabs in bars was that children would not be exposed to that
gambling activity.
Number 065
REP. NORDLUND stated that people who purchased pull-tabs in
bars could be easily preyed upon by unethical bartenders and
bar owners, who could ask customers if, instead of getting
cash as change, they wanted pull-tabs.
Number 084
REP. PHILLIPS noted that Rep. Nordlund's concern could apply
to the sale of anything in bars, including jewelry and
ivory.
REP. NORDLUND responded that he was not aware that
bartenders were licensed by the state to sell ivory and
jewelry in bars.
REP. PHILLIPS commented that it did occur, however.
A roll call vote was taken on Amendment 4. Reps. Davidson
and Nordlund voted "yea." Reps. Phillips, Green, Kott,
James, and Porter voted "nay." And so, the amendment
failed.
Number 112
REP. DAVIDSON offered Amendment 5, which would delete SB
76's prohibition against raffle proceeds being used for
lobbying purposes. He noted that Comm. Fuhs and others had
testified that, under SB 76, raffle proceeds could be used
to contribute to those who were lobbied, but not to those
doing the lobbying. He expressed his opinion that SB 76
went too far in penalizing those with the least ability to
raise money in order to promote their interests in the
legislature. He said that Amendment 5 would preserve a
right which had been in existence since statehood. He noted
his belief that it was not a terrible thing that the Alaska
Environmental Lobby, various women's and children's groups,
and even chambers of commerce held raffles in order to fund
their lobbying efforts. He moved the amendment.
REP. PHILLIPS objected.
Number 158
CHAIRMAN PORTER said that, although he did not completely
agree with SB 76's provision, he felt that Amendment 5 was a
step in the wrong direction.
Number 166
REP. NORDLUND indicated his understanding that the DCED did
not oppose the amendment. He asked Comm. Fuhs to comment.
Number 170
COMM. FUHS responded that the DCED had not taken a position
on the amendment, but did not oppose it. He expressed
concern that if the amendment would necessitate a title
change, it could jeopardize the bill's chance to be enacted.
A roll call vote was taken on Amendment 5. Reps. Davidson
and Nordlund voted "yea." Reps. Phillips, Green, Kott,
James, and Porter voted "nay." And so, Amendment 5 failed.
Number 193
REP. NORDLUND offered amendment 6, which would limit
charitable gaming activities to 501(c)(3) organizations,
those recognized as non-profit entities under federal tax
codes. He moved the amendment.
REP. PHILLIPS objected.
A roll call vote was taken on Amendment 6. Reps. Davidson
and Nordlund voted "yea." Reps. Green, Kott, Phillips,
James, and Porter voted "nay." And so, Amendment 6 failed.
Number 230
REP. DAVIDSON offered Amendment 7, which would increase
payments to permittees from 30% to 40% for pull-tab games,
and from 10% to 15% for bingo, and also limit operator
expenses to 60% for pull-tabs and to 85% for bingo. He said
that the effect of the amendment would be to increase the
amount of money going to the permittees. He moved the
amendment.
REP. PHILLIPS objected.
Number 277
CHAIRMAN PORTER stated that he would support Amendment 7,
but for the fear that its adoption would effectively kill SB
76. He suggested that it be brought back before the
legislature after the DCED had determined how SB 76's
percentages worked.
REP. DAVIDSON noted that instead of raising the percentages
in the future, they could be raised now and adjusted
downward in the future if need be.
CHAIRMAN PORTER responded that, either way, the legislature
was attempting to strike a balance between maximizing
profits to charities while still allowing vendors and
operators to meet their expenses.
Number 309
REP. DAVIDSON expressed his opinion that it was sad that
worthwhile charities were being given to the "gambling lion"
to fund. He commented that it was a sad commentary on our
state and our society.
CHAIRMAN PORTER said that he would like to identify himself
with those remarks.
Number 322
REP. JAMES noted that Rep. Davidson was "preaching to the
choir" and said that charities were the ones that supported
gaming activities.
A roll call vote was taken on Amendment 7. Reps. Nordlund
and Davidson voted "yea." Reps. Kott, Green, Phillips,
James, and Porter voted "nay." And so, Amendment 7 failed.
Number 338
REP. NORDLUND offered Amendment 8, which would increase the
percentage of the ideal net paid to the permittee at the
time when pull-tabs were delivered to the vendor, from 50%
to 75%. He noted that, under SB 76's provisions, the
permittee's 50% had to pay for the cost of the pull-tabs as
well as taxes. He moved the amendment.
REP. PHILLIPS objected.
Number 376
CHAIRMAN PORTER noted that Amendment 8 would be worthy of
consideration in the future, after the DCED had had an
opportunity to review the effect of the 50/50 split
contained in SB 76.
A roll call vote was taken on Amendment 8. Reps. Nordlund
and Davidson voted "yea." Reps. Green, Kott, Phillips,
James, and Porter voted "nay." And so, Amendment 8 failed.
Number 402
REP. NORDLUND commented that he had no more amendments to
offer.
Number 409
REP. PHILLIPS made a motion to move the Senate Finance
Committee substitute for SB 76 out of committee, with
individual recommendations.
REP. NORDLUND objected.
Number 416
REP. DAVIDSON said that he had grave misgivings about how
the bill was sent over to the House. The Alaska Legislature
was not a unicameral body, he stated, and the Senate had
effectively tied the House's hands by sending over a bill
with such a restrictive title. He asserted that the House
majority had assisted the Senate in that regard. He noted
that there was sometimes a need for hurried legislation, but
expressed his opinion that there was still plenty of time
remaining in the 1993 session. He commented that many of
the committee members were obviously uncomfortable with the
"forced vote" on the amendments. He expressed his opinion
that SB 76 was harming the wrong people.
Number 441
REP. KOTT noted that he agreed to some extent with Rep.
Davidson. But, he said, SB 76 represented a great
improvement over current law. He commented that the bill
could be made even better, but tampering with it too much
might mean that the legislature would end up with nothing.
He said SB 76 brought about some reforms, which could be
built upon in future years. He stated that he would support
moving the bill out of committee.
Number 456
REP. JAMES said that if she had the opportunity, she would
vote against all gambling, all bars, and gambling in bars.
But, she said, those were not options at this time. And,
she said, she could not impose her beliefs on others to that
extent. She stated that there were currently grave concerns
over charitable gaming activity. She expressed her opinion
that it was imperative that reforms happen this year. She
noted her distress over SB 76's restrictive title, but said
that the Senate had visited every area and every concern
that the Judiciary Committee had just considered, and had
produced the version of SB 76 now before them. She
indicated her support for the bill.
Number 480
REP. DAVIDSON stated that all legislators were individuals,
hopefully with their democratic faculties intact. The House
did not have to dance to the Senate drum, he added, nor to
the drum beats of the lobbyists. He said that the members
of the House danced to the tune of their constituents. He
expressed his disappointment that, on the issue of
charitable gaming, the system of checks and balances of the
bicameral legislature had been undermined. He said that
there was nothing in the constitution which said that the
House had to or should permit the Senate's activity. He
expressed his hope that, in the future, when the legislature
was in a hurry not to do the public's business well, it at
least took the time to do it as well as it possibly could.
A roll call vote was taken on moving SB 76 out of committee.
Reps. Nordlund and Davidson voted "nay." Reps. Green, Kott,
Phillips, James, and Porter voted "yea." And so, the Senate
Finance Committee substitute for SB 76 passed out of
committee.
Number 512
CHAIRMAN PORTER noted that this would likely be the
Judiciary Committee's last meeting of the year. He
expressed his pleasure in working with each member on the
committee, and said that he looked forward to the following
year.
ADJOURNMENT
CHAIRMAN PORTER adjourned the meeting at 5:25 p.m.
BILLS NOT HEARD
The committee did not hear SCR 4 today.
| Document Name | Date/Time | Subjects |
|---|