Legislature(1993 - 1994)
04/07/1993 06:05 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 7, 1993
6:05 p.m.
TAPES
SFC-93, #48, Side 2 (end-000)
SFC-93, #54, Side 1 (000-end)
SFC-93, #54, Side 2 (end-246)
CALL TO ORDER
Representative Brian Porter convened the meeting at 6:05
p.m.
He temporarily presided until the arrival of Co-chair
Pearce.
PRESENT
Representative Brian Porter chaired the meeting because the
Senate was on the floor. Co-chair Pearce, Senators Rieger
and Sharp arrived while the meeting was in progress. Co-
chair Frank, Senators Jacko, Kelly, and Kerttula did not
attend.
ALSO ATTENDING: Representative Moses, Commissioner Paul
Fuhs, Department of Commerce & Economic Development; Ann
Dudley, Executive Director, WRCC, Kenai; Ron Pagenkopf,
representing Juneau Youth Activities Co-op and himself; Rich
McClear, Chair-APRN and Manager-KCAW, Sitka; John Hansen,
Jr., Gaming Manager, Department of Commerce & Economic
Development; and aides to committee members and other
members of the legislature.
ALSO PARTICIPATING VIA TELECONFERENCE: Janet Strickland,
Chamber of Commerce, Dillingham; Jim Stukey, Craig; Elsie
O'Bryan, Mid-Valley Seniors, Houston; Joe McGill, President,
BBHMC, Dillingham; Christophor Napoli, Beaver Round-up,
Dillingham; Allen Sanderson, Alaska Independent Blind,
Anchorage; Roger Cunningham, Wasilla; John Lopez, Anchorage;
Rick Koch, Barrow; Greg Wakefield, Anchorage; Will
Peterson, Chairman, KBBI, Homer; Wildred Lamoreux,
representing area blind readers, Anchorage; Bruce Smith,
KUAC, Fairbanks; Tuesday Smith, Fairbanks; Kent Hartzberg,
Executive Director, Boniface Bingo, Anchorage; Randi Smith,
Women's Resource & Crisis Center, Kenai; Pat Vincent, Kenai
Peninsula Builders Assoc.; Jack Powers, licensed operator,
Anchorage; Rob Rawls, General Manager, Public Radio KOTZ,
Kotzebue; G. Gordon Pile, Anchorage; Bill Bishop, Executive
Committeeman, American Legion, Kodiak; Ann Dooley, Crisis
Center, Juneau; Myrna Maynard, Anchorage; Jim Fisk, Bayside
Fire Department, Kodiak; Alyce A. Hanley, Anchorage; Gary
Langille, President, Kodiak liquor license, Kodiak; Beverly
A. Matthews, Anchorage; Jim Pagekoff, treasurer for soccer
clubs and Juneau Action Coop (5 permittees); Dick Stoffel,
general contractor, Wasilla; Joseph W. Albrecht, Anchorage
Fire Fighters, Anchorage; Coral Seymour, Peninsula Oilers
(baseball club), Kenai; Debra Schnabel, management
consultant, Haines; Ben Benediktsson, Retire Officers
Assoc., Anchorage; Jim Peot, distributor, Anchorage; and Ski
Olsonaski, private citizen.
SUMMARY INFORMATION
CSSB 76 - An Act requiring regulations relating to pull-tabs
(JUD) adopted by the Department of Commerce and Economic
Development to be consistent with the North
American Gaming Regulators Association standards
on pull-tabs; allowing permittees to contract with
vendors to sell pull-tabs on behalf of the
permittee; restricting the purchase of pull-tabs
by certain persons; requiring the sale of
pull-tabs by vendors to be solely by a pull-tab
ticket dispensing machine; requiring receipts
before certain prizes may be paid; prohibiting
distributors from supplying pull-tabs to vendors;
relating to registration of vendors; requiring the
licensing of out-of-state manufacturers; allowing
public or nonprofit broadcasting stations to sell
pull-tabs at more than one location; preventing
persons with certain convictions from being
involved in charitable gaming activities as a
permittee, licensee, vendor, person responsible
for an activity, fund raiser or consultant of a
licensee, or employee in a managerial or
supervisory capacity and providing exceptions for
certain persons whose convictions are at least 10
years old; relating to multiple-beneficiary
charitable gaming permits and door prizes for
charitable gaming; requiring Department of
Commerce and Economic Development approval of
contracts between charitable gaming permittees and
operators before gaming may occur; limiting the
amount of authorized expenses to a percentage of
adjusted gross income for a charitable gaming
activity; relating to the reporting and payment of
a percentage of the adjusted gross income by
operators to permittees; requiring Department of
Commerce and Economic Development approval of
contracts between permittees and operators;
allowing the commissioner of commerce and economic
development to issue orders prohibiting violations
of state gaming laws; relating to the authority of
the commissioner of commerce and economic
development to suspend or revoke a permit,
license, or registration; relating to the uses to
which charitable gaming proceeds may be put;
relating to `political uses' and `political
organizations' as those terms are used in the
charitable gaming statutes; and providing for an
effective date."
Representative Porter announced that since the
Senate was still on the floor and he would chair
the Senate Finance meeting. Testimony was heard
via teleconference on CSSB 76(JUD). It was held
in committee until April 8, 1993.
CS FOR SENATE BILL NO. 76(JUD):
An Act requiring regulations relating to pull-tabs
adopted by the Department of Commerce and Economic
Development to be consistent with the North American
Gaming Regulators Association standards on pull-tabs;
allowing permittees to contract with vendors to sell
pull-tabs on behalf of the permittee; restricting the
purchase of pull-tabs by certain persons; requiring the
sale of pull-tabs by vendors to be solely by a pull-tab
ticket dispensing machine; requiring receipts before
certain prizes may be paid; prohibiting distributors
from supplying pull-tabs to vendors; relating to
registration of vendors; requiring the licensing of
out-of-state manufacturers; allowing public or
nonprofit broadcasting stations to sell pull-tabs at
more than one location; preventing persons with certain
convictions from being involved in charitable gaming
activities as a permittee, licensee, vendor, person
responsible for an activity, fund raiser or consultant
of a licensee, or employee in a managerial or
supervisory capacity and providing exceptions for
certain persons whose convictions are at least 10 years
old; relating to multiple-beneficiary charitable gaming
permits and door prizes for charitable gaming;
requiring Department of Commerce and Economic
Development approval of contracts between charitable
gaming permittees and operators before gaming may
occur; limiting the amount of authorized expenses to a
percentage of adjusted gross income for a charitable
gaming activity; relating to the reporting and payment
of a percentage of the adjusted gross income by
operators to permittees; requiring Department of
Commerce and Economic Development approval of contracts
between permittees and operators; allowing the
commissioner of commerce and economic development to
issue orders prohibiting violations of state gaming
laws; relating to the authority of the commissioner of
commerce and economic development to suspend or revoke
a permit, license, or registration; relating to the
uses to which charitable gaming proceeds may be put;
relating to `political uses' and `political
organizations' as those terms are used in the
charitable gaming statutes; and providing for an
effective date.
REPRESENTATIVE BRIAN PORTER announced that public testimony
would be heard on CSSB 67(JUD) until 8:00 p.m.
The following individuals testified via teleconference:
JIM STUKEY, Craig, said he did not wish to testify.
JANET STRICKLAND, Chamber of Commerce, Dillingham, said that
there were portions of the bill that needed closer
examination. She voiced her concern especially in regard to
the lobbying exclusion.
JOE MCGILL, President, BBHMC, Dillingham, said he had just
received the bill and, in general, voiced his support. He
said that the bill would need some changes.
Christophor Napoli, Beaver Round-up, Dillingham, voiced his
support of the bill. He was concerned about the lobbying
exclusion.
Representative Porter read the sponsor statement by Senator
Drue Pearce, sponsor of CSSB 76(FIN) (copy on file).
PAUL FUHS, Commissioner, Department of Commerce & Economic
Development, said he had some documents to read for the
committee. First, he said he had a letter from the Governor
in support of SB 76. Although the Governor does not believe
gaming is a positive influence on society, he believed if it
existed, the money should be going to charities. He was in
support of the increase percent of profit going to
charities, prohibiting the use of proceeds for campaigns
contributions and for lobbyists. The Governor felt that
gambling should not be involved in government. He also
supported the provision that operator licenses could not be
held by convicted felons. He also supported the provisions
that allowed the charity to be its own vendor providing more
profits for the charity.
Commissioner Fuhs said that radio ads by Alaskans for Less
Gaming had been heard. He said that after inquiry, Higgins
Corp. was found to be producing these ads. He stated that
Mark Higgins is a major lobbyist for the gaming industry in
Alaska and was opposed to SB 76. Mr. Higgins represents the
group that is the largest distributor of pull tabs in Alaska
and the largest operator in Alaska. He felt the ads
misrepresented the legislation. Commissioner Fuhs said that
Mr. Higgins operates a political consulting firm for Alaska
Bingo Management and manages the political campaigns of
current legislators. He felt this was a perfect example of
why gambling needed to be eliminated from government. He
also provided a copy of the financial statement of the
Alaska Charitable Gaming Association. This organization is
a group of gaming operators who have set themselves up as a
non-profit organization. The state has denied a permit to
them. Its financial statement shows that 75 percent of its
proceeds paid lobbyist Mark Higgins. The rest of the money
went for campaign contributions. The only charitable
contribution was made to the YMCA for $200. He felt this
made a strong case for excluding campaign contributions from
gaming proceeds.
Commissioner Fuhs said another provision of the bill
required the department to approve contracts between
charities and operators to prevent abuses of the charities.
He also said the department supported provisions that
required out of state pull tab distributors to be licensed
with the state of Alaska, and action by the Senate Finance
adding $381.0 to the Department of Revenue budget to provide
increased auditing and enforcement of the pull tab industry.
He stated he was calling on the common decency of Alaskans
to support this legislation that gets gambling out of
government.
ALLEN SANDERSON, Alaska Independent Blind, Anchorage,
testified in support of the bill. He pointed out that any
charity that used their proceeds for lobbying would lose
their non-profit status. He voiced his concern over the
disbursement of pull tab machines. He felt that the
machines were hard to maintain and distribute, and would
rather have the machines as an option.
ROGER CUNNINGHAM, Wasilla, testified in support of the bill.
He said he was a member of the gaming industry and made his
living by selling pull tabs and bingo supplies to non-
profits and charities across the state. He objected to
Commissioner Fuhs' comments toward the entire gaming
industry. He felt his business improved when charities and
non-profits did well. His experience with vending machines
proved them unprofitable because of break-downs. He pointed
out that a pull tab vending machine had not been perfected
that worked well for paper pull tab. He also said that the
machines were expensive and should not come out of the
charities' profits. He felt that the machines did not
improve accountability and was a needless expense.
Representative Porter pointed out that the pull tab machine
was not an electronic device. He said it was a machine that
holds pull tabs, would hopefully provide greater control,
and less opportunity for insider information.
JOHN LOPEZ, Anchorage, asked if self-directed permittees
would be subject to the same percentages that operators
would. Representative Porter answered affirmatively and
informed those on teleconference that information was being
provided by John Hanson, Jr., Gaming Manager, Department of
Commerce & Economic Development. Mr. Lopez felt that SB 67
would restrict gaming more than it would enhance it. He
voiced his opposition to the vendor provision and multiple
location provision for public broadcasting.
RICK KOCH, Barrow, voiced his opposition to SB 67 in its
present form. He felt the bill had moved too quickly and
was opposed to its effects on political organizations. He
expressed his appreciation to the people who had worked on
this bill and recognized it as a tough issue.
GREG WAKEFIELD, Anchorage, voiced his support of changes in
gaming legislation but was opposed to SB 76 in its current
form. He also felt the legislation had been rushed, and the
agreements had been made behind closed doors and without the
public process. He felt this bill would hurt the political
process and saw it as an anti-party bill. He encouraged
further study of the legislation and asked for more
hearings.
Representative Porter pointed out that this issue had been
before the legislature since 1991 and has had at least 43
committee hearings. He felt that the charge that this
legislation was being rushed might be an over statement.
WILL PETERSON, General Manager, KBBI, Homer; Vice-Chairman
of Alaska Public Radio Network; Chairman of APRN's
committee, and person in charge of KBBI's gaming permit,
testified in support of SB 76. He said that since PBS had
taken approximately 30 percent cuts to their operating
budget from the state, there has been a search for ways to
increase funding. He said that if SB 76 was passed, it
would clarify gaming and allow PBS to set up an endowment
from the proceeds.
ELSIE O'BRYAN, Mid-Valley Seniors, Houston, testified in
support of SB 76 as a way to clean up gaming legislation.
She felt this legislation would clear up the distribution of
money after allowable expenses to the operators and the
charities.
End SFC-93 #48, Side 2
Begin SFC-93 #54, Side 1
WILDRED LAMOREUX, representing area blind readers,
Anchorage, voiced his appreciation of the work done on this
legislation and supported SB 76. His concern was with the
gaming machines.
BRUCE SMITH, KUAC, Fairbanks, said that he had sent a letter
in support of SB 76. He spoke of cuts taken by public
broadcasting and the need for finding new funding. He felt
SB 76 clarified gaming intent for public broadcasting.
TUESDAY SMITH, operator in Fairbanks, said that she had not
had time to review SB 76. She felt that the legislation was
being pushed through and unstable for the operators. She
would encourage change in the gaming laws but felt 30
percent for charities was too high.
KENT HARTZBERG, Executive Director, Boniface Bingo,
Anchorage, previously an auditor for the State of Alaska for
gaming and felt he had both regulatory and hands-on
experience of gaming activities. He supported SB 76 but
recommended a few changes to the bill. He said that there
was no need in Sec. 4 to limit the number of permittees that
can participate in the gaming activity. The more permittees
that can be involved in a joint venture or use of the same
location can benefit all the permittees involved. By
limiting the number of permittees, he felt it provided the
operators with an unfair advantage. He said that Sec. 5
should be expanded to exclude anyone with a felony
conviction or conviction of theft or dishonesty from
participating in any gaming activity. He felt the integrity
of charitable gaming should be held to the highest possible
standards. In Sec. 24 retail outlets could charge the
charities for the privilege of selling pull tabs. He felt
this would not benefit charities, and that third party
vendor situation causes accounting problems.
RANDI SMITH, Women's Resource & Crisis Center, Kenai,
testified in support of SB 76, and agreed with the 30/70
split for charities.
PAT VINCENT, Executive Officer, Kenai Peninsula Builders
Assoc., testified in support of SB 76.
JACK POWERS, licensed operator, Anchorage, testified that he
was opposed to SB 76. He said he was especially opposed to
the pull tab machines which could give easier access to
minors. Since he only received the bill several hours ago,
he asked for another hearing in order to study the bill and
offer amendments.
ROB RAWLS, General Manager, Public Radio KOTZ, Kotzebue,
testified in support of SB 76. He said that public
broadcasting was in the state of crisis because of state
funding cuts. He was not in support of gaming but these
cuts have forced public radio to look to gaming for funding.
He pointed out that KOTZ offered not just a radio station
but the only communication, some life and death situations,
for many of the NW communities. He felt that public
broadcasting was one of the few things that united all of
Alaska and urged the passage of SB 76.
G. GORDON PILE, Anchorage, testified in opposition to SB 76.
He felt the bill was prejudiced against political groups.
BILL BISHOP, Executive Committeeman, American Legion,
Kodiak, testified in support of SB 76. He said that the
pull tab machines should be an option since he had
experience with their disrepair.
MYRNA MAYNARD, Anchorage, testified in opposition to SB 76.
She particularly objected to vending machines in bars. She
voiced her support of politics being involved with gaming,
but was unsure if public broadcasting should run a statewide
game. She said that if in fact the issue was keeping
politics out of gaming, then charities should keep all of
the proceeds.
JIM FISK, Bayside Fire Department, Kodiak, spoke in support
of SB 76. He was in favor of banning operators of gaming in
Alaska.
ALYCE A. HANLEY, Anchorage, voiced her opinion that
political candidates were not charitable organizations, and
felt it was appropriate that SB 76 eliminated them from
gaming. She voiced her concern with the criminal element
involved in the gaming industry.
GARY LANGILLE, President, Kodiak liquor license, Kodiak,
spoke in support of SB 76. He felt that he would clean up
gaming, and also was pleased with a larger percent going to
charities. He stated that machines were bulky, expensive
and a maintenance problem, especially in rural Alaska.
BEVERLY A. MATTHEWS, Anchorage, spoke in opposition to not
being able to contribute to political candidates and hoped
the political portion of the bill would be made more clear.
DICK STOFFEL, general contractor, Wasilla, nature tour
guide, and district chair of the Republican party, spoke in
opposition to gambling in general. He felt that gambling
did not solve economic problems, but rather uses people's
weaknesses and covers up problems. He felt creativity
should be used in financial tight times.
JOSEPH W. ALBRECHT, Vice President of Local Anchorage Fire
Fighters Union, Anchorage, testified in support of gaming
reform. He was also in support of helping public
broadcasting. He was in opposition to Sec. 14, line 2 which
restricted funds for lobbying. He explained that two years
earlier the fire fighters had used money from charitable
gaming to lobby in Juneau for needed funds. He spoke in
support of gaming reform. SENATOR DRUE PEARCE asked for
confirmation that he came to Juneau to lobby as a citizen
and not a registered lobbyist. Mr. Albrecht answered
affirmatively. Senator Pearce suggested that the bill could
be amended by excluding "registered" lobbyists, therefore
allowing ordinary citizens to lobby on their special
interests.
CORAL SEYMOUR, Peninsula Oilers Baseball Club, Kenai, said
he had not had a chance to read SB 76 but asked the
legislature not to adjourn early since there was so much
legislation left to do.
DEBBIE SCHNABEL, management consultant, Haines, spoke in
support of SB 76. She believed it clarified issues and
would help organizations with larger revenues. She was in
support of the unique opportunity the bill would provide
public broadcasting.
BEN BENEDIKTSSON, President, Retire Officers Assoc.,
Anchorage, spoke in opposition to SB 76. He objected to the
section on dispensing machines on page 3 of the bill and
felt the cost, maintenance, and repair of the machines
needed more study. He felt charitable gaming should be left
as is.
JIM PEOT, distributor, Anchorage, said that he was in the
middle of this issue since he sells to operators and
charities. He said that felons should not be involved in
charitable gaming. However, misdemeanors should not
eliminate a person for a lifetime. He felt vending machines
should be optional because they would complicate the
situation. In general, he spoke in support of SB 76.
Ski Olsonaski, private citizen, asked the legislature to
extend the effective date for at least one year to allow a
transition period for operators. She was concerned that it
would put some new operators out of business.
The following individuals testified in Juneau:
RICH MCCLEAR, Chairman of the Board-APRN and Manager-KCAW,
Sitka, testified in person. He said that since 1986, public
broadcasting had taken a 32 percent cut in state funds.
Other countries have used forms of on-the-air radio gaming.
Public radio in Alaska thought that might be a good way to
raise money. In 1990, HB 587 was passed by the legislature
which allowed an on-the-air radio game. So far, APR has not
been able to make a game fit the existing laws. The
amendment to SB 76 to sell pull tabs in multiple locations
would allow the radio game. He said that this was not a
lottery, that it was pull tab game but because there are
stations all over the state, pull tabs must be sold in
several locations at the same time. The pull tab sale is
then followed by a raffle. APR will not have an operator
but will operate the game itself. One hundred percent of
the net proceeds will go to the charity which is public
broadcasting. Those proceeds will be placed in an endowment
which after ten years could make public broadcasting self
sufficient.
ANN DOOLEY, Crisis Center, Juneau, testified in support of
SB 76. She saw this legislation providing an opportunity
for other non-profits to start their own businesses. She
preferred that the vending machines be optional rather than
mandatory. She said that her organization had been able to
operate successfully under a 60-40 percent split.
JOHN HANSEN, JR., Gaming Manager, Department of Commerce &
Economic Development, said under existing statutes there is
a prohibition against convicted felons of certain crimes for
five years. Crimes that are a five-year prohibition are
crimes of violence such as murder. Crimes that impose
prohibition for life are such crimes as theft. This
legislation allows the department some discretion on
specific misdemeanor crimes, and also increases the ban for
other felons from five to ten years. Co-chair Pearce voiced
her support that the department would have some leeway in
regard to individuals who have committed misdemeanor crimes.
RON PAGENKOPF, treasurer of Juneau Soccer Club, and member
of Juneau Youth Activities Co-op (5 permittees), testified
in support of SB 76. He said that this bill would allow his
organization to work under one permit, requiring one report
to the state instead of five (in regard to quarterlies--5
reports instead of 21), benefiting the state by less paper
to process. It would allow uninterrupted play of games,
simplify accounting procedures, making the auditing process
more efficient. He said his organization would like the
pull tab machines to be an option. Personally, he said he
supported political parties being removed from charitable
gaming. He felt the integrity in the gaming industry was
improving and although he did not agree with the entire
bill, he felt it had more benefits than drawbacks.
ADJOURNMENT
The meeting was adjourned at approximately 8:05 p.m.
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