Legislature(1993 - 1994)
04/17/1993 09:40 AM 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 17, 1993
9:40 a.m.
TAPES
SFC-93, #60, Side 1 (000-end)
SFC-93, #62, Side 1 (000-end)
SFC-93, #64, Side 1 (000-350)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 9:40 a.m.
PRESENT
In addition to Co-chairs Frank and Pearce, Senators Jacko,
Kelly, Kerttula, Rieger, Sharp, and were present.
ALSO ATTENDING: Senator Rick Halford, Senator Judith Salo,
Shelby Stastny, Director, Office of Management & Budget;
Nancy Bear Usera, Commissioner, Department of
Administration; Raga Elim, Special Assistant, Department of
Natural Resources; Nico Bus, Chief, Financial Services,
Department of Natural Resources; C. E. Swackhammer, Deputy
Commissioner, Department of Public Safety; John Hansen, Jr.,
Gaming Manager, Department of Commerce & Economic
Development; Jerry Luckhaupt, Attorney, Legislative Legal
Counsel, Legislative Affairs Agency; Paul Fuhs,
Commissioner, Department of Commerce & Economic Development;
Diane Kaplin, President & CEO, Alaska Public Radio Network;
Rip Andrews, American Association of Retired Persons; Mike
Greany, Director and David Tonkovich, and Karen Rehfeld,
Fiscal Analysts, Legislative Finance Division; and aides to
committee members.
SUMMARY INFORMATION
SB 50 - An Act making appropriations for capital projects;
and providing for an effective date.
Discussion was held with Shelby Stastny, Director,
Office of Management & Budget; Raga Elim, Special
Assistance & Legislative Liaison, Department of
Natural Resources; and C.E. Swackhammer, Deputy
Commissioner, Department of Public Safety. SB 50
was HELD in committee.
SB 58 - An Act relating to the longevity bonus program.
The committee adopted CSSB 58(FIN) work draft "E".
Testimony was heard by Nancy Bear Usera,
Commissioner, Department of Administration and Rip
Andrews, American Association of Retired Persons
in support of the bill. Senator Rieger MOVED a
conceptual amendment in regard to the severability
clause. The bill was HELD for a written amendment
from legal services.
SB 200- An Act allowing the holders of a
multiple-beneficiary charitable gaming permit that
consists entirely of noncommercial broadcasting
stations or networks of such stations to sell a
pull-tab series at more than one location during
the same day if the sales are made at the
customary business location of one or more of the
holders, at another location by an employee of one
of the stations or networks, or by a registered
vendor; allowing permittees that are noncommercial
broadcasting stations or networks of such stations
to contract with vendors to sell pull-tabs on
behalf of the permittee at retail establishments,
eating establishments, and establishments with
liquor licenses; allowing municipalities to
prohibit vendors from conducting gaming activities
within the municipality; relating to reports by
the commissioner regulating charitable gaming to
the legislature; requiring registration of
vendors; relating to multiple-beneficiary
charitable gaming permits and door prizes for
charitable gaming; 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 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 and are not for
violation of an unclassified felony described in
AS 11, a class A felony, or extortion; prohibiting
a prize or award of more than $250,000 in a
pull-tab game that provides a right to participate
in a lottery; 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; and
providing for an effective date.
The committee ADOPTED CSSB 200(FIN) word draft "E"
and made amendments. Testimony was heard in
support and discussion was had by Diane Kaplin,
Alaska Public Broadcasting Commission; John
Hansen, Jr., Gaming Manager, Department of
Commerce & Economic Development; Jerry Luckhaupt,
Attorney, Legislative Legal Counsel, Legislative
Affairs Agency; and Paul Fuhs, Commissioner,
Department of Commerce & Economic Development.
Senator Kerttula voiced his concern with regard to
legalized gambling by the state. CSSB 200(FIN)
was REPORTED OUT of committee as amended with a
"do pass" and with a zero fiscal note for the
Department of Commerce & Economic Development.
Co-chairs Pearce and Frank, Senators Jacko, and
Rieger signed a "do pass." Senators Kelly and
Kerttula signed a "do not pass," and Senator Sharp
signed a "no rec."
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.
The committee rescinded its action adopting CSSB
76(FIN) work draft "M" and amendment 1. It then
ADOPTED CSSB 76(FIN) work draft "S" and ADOPTED
amendments 1, 2 and 3. CSSB 76(FIN) work draft
"S" was REPORTED OUT of committee as amended with
a "do pass" and with a zero fiscal note for the
Department of Commerce & Economic Development and
a new fiscal note for the Department of Revenue in
the amount of $86.9. Co-chairs Pearce and Frank,
Senators Jacko, Kelly, Sharp and Rieger signed "do
pass." Senator Kerttula signed "no rec."
These bills were scheduled but not heard:
SB 59 - SCHOOL CONSTRUCTION & MAINTENANCE GRANTS
SB 60 - APPROP:SCHOOL CONSTRUCTION GRANT FUND
SB 165 - APPROP: ALYESKA SETTLEMENT FUND
SB 180 - SCHOOL CONSTRUCTION DEBT REIMBURSEMENT
SB 181 - SCHOOL CONSTRUCTION GRANTS
SB 183 - APPRO: EXXON VALDEZ RESTORATION PROJECTS
SENATE BILL NO. 50:
An Act making appropriations for capital projects; and
providing for an effective date.
Department of Natural Resources:
NICO BUS, Chief, Financial Services, Department of Natural
Resources, came before the committee to speak to three
projects. The first project was the RS 2477 Assertion
Project from the federal government in the amount of $720.0.
He said it was not part of the original Governor's budget.
The state has been informed that there is a deadline to
present the recommendations for approximately 1,500 right-
of-ways to the Congress by May 1. The $720.0 pays for the
mapping and identification for this presentation in order
for the state to receive title and ownership. Co-chair
Pearce asked the difference between this request and the
request in the original SB 50 from the Governor for $2,265.0
for owner state assertion and land selections. He said in
the land selection capital project, $175.0 was included for
the most critical right-of-ways. The department understood
that would be all that was asked for and those would be used
as test cases dealing with the federal government. Because
of the time frame of the statue of limitations, the request
was amended to include all right-of-ways.
The next project was the Alaska North Slope Royalty Oil
Price Reopeners for $100.0 enabling the state to discuss oil
price and methodology with the large oil companies. It will
buy expert advice on such things as transportation costs,
capitalization, destination value, etc. It will be used as
a contingency fund if there is a need for it.
The last amended request was funding for the Alaska Oil &
Gas Conservation Commission for $100.0 to evaluate the
Alaska Prudhoe Bay Reservoir models that large oil companies
have done. This is important for the state in order to
maximize the production of oil and determining the most
appropriate time for gas sales. The money will be used for
consultants to evaluate the existing models. SENATOR TIM
KELLY asked why the full time state consultants could not
take on this project. Mr. Bus said that their time was
already being taken up by North Slope work with the large
oil companies to insuring production is up to standards. In
answer to Senator Sharp, Mr. Bus explained that the Alaska
Oil & Gas Conservation Commission's responsibility was to
maximize existing reservoir analysis for the state to
optimize production. The reservoir in the request is for
future oil and gas explorations. Co-chair Pearce pointed
out that their is a confidentiality issue that may be a
problem if the commission was asked to share information.
Co-chair Pearce asked how many models would be analyzed.
Mr. Bus said that the oil companies are asserting that the
most advantageous time to sell gas would be in the year
2000. This reservoir study would make an independent
determination regarding the oil company's conclusion. RAGA
ELIM, Special Assistant, Department of Natural Resources,
said that there were three models by oil companies and the
request would retain a consultant who would evaluate these
existing models and provide an independent analysis of that
information to help the state determine the appropriate time
to shift to gas sales.
SHELBY STASTNY, Director, Office of Management & Budget,
said that the chairman of the commission had told him,
because of the intense pressure to start gas sales and the
oil companies reluctance to agree that it is not feasible
for at least ten years, this independent study was needed to
make a determination for the state.
Co-chair Pearce said that the latest phase of the gas
handling facility on the north slope was going on line this
year. Since all the gas in Prudhoe Bay is being reinjected
to help produce oil, she felt that the companies know what
they are talking about and that they are using all the gas
right now. She felt the state would lose some oil
production if gas was sold off at the present time. She
agreed that the state needed this information as a base for
decision making.
In answer to Senator Kelly, Mr. Elim said that there is one
vacancy on the Alaska Oil & Gas Conservation Commission.
Mr. Elim said that the vacancy must be filled by a public
member.
SENATOR STEVE RIEGER asked for an explanation regarding the
difference between gas sales and reinjection. Mr. Elim said
that the oil companies have given their time frame for
optimum gas revenues to be between 2015 and 2030. There is
increasing interest for potential gas sales. Given the time
frame that the state is hearing from the oil industry, the
state is asking for independent information to find out if
that information is accurate. Senator Rieger said that he
would like to know what the dynamics would be to cause the
interests of the state to diverge from the oil companies.
Mr. Stastny said that according to Harold Hines, special
assistant to oil & gas commission in the Governor's office,
when gas sales do begin it will be around $300-500 million
of revenue a year. It seemed that the oil companies may not
have that same interest since they have a pipeline of oil
and have enough gas to satisfy customers from other sources.
So he could see a divergent interest occurring at the
present time.
Department of Public Safety:
C. E. SWACKHAMMER, Deputy Commissioner, Department of Public
Safety, said that the department had two items for budget
amendments. The first was a $50.0 appropriation to correct
the ventilation system in the Kodiak jail which is a
settlement of a lawsuit. He explained that the poor
condition of the Kodiak jail caused inmates to bring a
lawsuit against the city. This request would provide the
state's contribution for clean air for prisoners. In answer
to Senator Sharp, he said that the Kodiak jail is a contract
facility but it was cheaper for the state to help with the
jail improvements than to build a new facility. He said
that the jail would eventually need to be replaced. He said
$50.0 would pay the state's portion of the lawsuit.
Mr. Swackhammer said that the request of $150.0 was for the
cost of seizing vessels that were caught fishing illegally.
Last year vessels from 20 to 200 feet were seized. It will
result in income to the state for penalties. If the state
decides to be aggressive to correct the illegal fishing
activity, then seizure must be made and the funds must be
provided to accomplish the seizures. Discussion was had by
Senators Jacko, Rieger, Co-chair Pearce, and Mr. Swackhammer
regarding the high cost of moving the seized vessels. In
answer to Senator Sharp, Mr. Swackhammer said cost recovery
had been realized through fines in the amount of about $1
million. Mr. Stastny said that last year the money had to
be taken out of other budget items to fund the seizure of
three vessels and that was when it was decided that a
revolving fund be established for this purpose. Mr.
Swackhammer said that legislation was being drafted and
would be ready next session between the Departments of
Public Safety, Fish & Game, and Law to develop a fund such
as Mr. Stastny described.
Senator Jacko asked for a detailed break down of the costs
for moving the three seized vessels. Mr. Swackhammer said
that he would provide that information to the committee.
SENATE BILL NO. 58:
An Act relating to the longevity bonus program.
Recess 10:15am
Reconvene 10:18am
Senator Sharp MOVED for adoption of CSSB 58(FIN) work draft
"E" dated April 16, 1993. No objections being heard, it was
ADOPTED.
Senator Sharp said that the bill phased out all new
applicants to the longevity bonus program by December 31,
1996. It would stairstep down benefits that new applicants
can receive after January 1, 1994. Everyone already in the
program would continue to receive $250 a month. Section 2
said that if a person is disqualified from receiving a bonus
for purposes called for that they may not reapply for
application unless they apply before the cut-off date as set
forth in this legislation. Section 3, items 5 and 6, set
out certain disqualifications.
Co-chair Pearce said that it was intended that the draft
have a severability clause for the section that disallows
those seniors who move to Alaska after their eligibility
year.
In answer to Senator Kelly, Senator Sharp said that all
present situations, including medical leave, that are exempt
from disqualification remain so, and that only those that
become disqualified under present statutes have to reapply
under the new regulations.
NANCY BEAR USERA, Commissioner, Department of
Administration, spoke in support of CSSB 58(FIN). She said
the Governor's proposal had tried to protect the original
intent of the longevity bonus program which was to provide
uninterrupted residence and provide an opportunity and an
incentive for long-time Alaskans to stay in the state of
Alaska. Because of the lawsuit in 1983 that made terms of
the original program unconstitutional, the program now had
23,000 participants and is growing at a rate of $5 million a
year. Over the life of the program, this translates into
$150 million cost to the state to continue paying each
year's worth of new entrants into the program and
unaffordable. The resources spent on this not needs-based
program will be money unavailable to provide more meaningful
services to seniors in the future. The long term plan is to
protect participants and provide a reasonable phase out of
the program. She said that the department was in the
process of designing a package of bills that expand assisted
living opportunities for seniors as well as expand the
program "elders against abuse". This would provide a safety
net for the future with a more meaningful package for
current seniors and those to come. She said this was the
seventh year of debate of this issue and she felt it was
hard for the seniors for this issue to be remain undecided.
Once this issue was decided, the state could then move on
into other areas for seniors.
RIP ANDREWS, American Association of Retired Persons, said
that a letter had gone out to the committee regarding SB 58.
He said that his organization would prefer an annuity bill
but did support the Governor's phase out bill rather than
the House version which was an immediate cut off of January
1, 1994.
Co-chair Pearce said that additional language in the CSSB
58(FIN) was needed relating to disqualification on page 2,
lines 28 through page 3, line 1. She questioned the need
for a severability clause for Section 2. Senator Sharp said
that he had requested the advisability from legal on that
issue and was expecting an answer momentarily.
Co-chair Pearce announced that CSSB 58(FIN) would be held in
committee.
SB200
SENATE BILL NO. 200:
An Act allowing the holders of a multiple-beneficiary
charitable gaming permit that consists entirely of
noncommercial broadcasting stations or networks of such
stations to sell a pull-tab series at more than one
location during the same day if the sales are made at
the customary business location of one or more of the
holders, at another location by an employee of one of
the stations or networks, or by a registered vendor;
allowing permittees that are noncommercial broadcasting
stations or networks of such stations to contract with
vendors to sell pull-tabs on behalf of the permittee at
retail establishments, eating establishments, and
establishments with liquor licenses; allowing
municipalities to prohibit vendors from conducting
gaming activities within the municipality; relating to
reports by the commissioner regulating charitable
gaming to the legislature; requiring registration of
vendors; relating to multiple-beneficiary charitable
gaming permits and door prizes for charitable gaming;
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 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 and are not for violation of an
unclassified felony described in AS 11, a class A
felony, or extortion; prohibiting a prize or award of
more than $250,000 in a pull-tab game that provides a
right to participate in a lottery; 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; and
providing for an effective date.
Co-chair Pearce said that SB 200 was before the committee.
She pointed out that several years ago the legislature had
given public radio the authority to develop a statewide game
in order to raise money for an endowment to replace general
fund that are used to support public radio. She invited
Diane Kaplin, President & CEO, Alaska Public Radio Network,
to join the committee at the table and speak to the bill.
End SFC-93 #60, Side 1
Begin SFC-93 #62, Side 1
DIANE KAPLIN said that in 1967 a Presidential Carnegie
Commission created the concept of the public broadcasting
system in the United States. It set out the aspirations of
what the public broadcast system could do. One of the
important aspects was how the system would be financed and
that a tax would be collected on every television and radio
set sold in the U.S. That tax section was not adopted, and,
annually, a battle is fought over funds for financing pbs.
In Alaska, a very large percentage of our population
receives only public broadcasting, and it has become more of
an issue. The legislature has supported substantial amounts
of funding for public broadcasting with the investment at $6
million annually. With the decline of oil revenues in 1986,
public broadcast has been looking for new ways to raise
revenues recognizing a decline of state grants. Today, 32
percent of state grants have been lost. In 1986, all
stations carried the public national radio schedule, now
only three carry it because of the cost. Several countries
including Denmark, Canada, Norway, Finland and England use
games to finance their system. There was a federal law that
prohibited on air contests or games. PBS approached Senator
Stevens to get that federal law changed and in 1989 the
charity gaming act was signed. At that point, pbs in Alaska
approached the legislature and HB 587 was passed to allow an
on-the-air game. Last year, the legislature appropriated
$50,000 to hire experts to put together a game to fund an
endowment for support of pbs. Dave Rose, former member of
the permanent fund dividend corporation, was hired, and he
has set up a plan for an endowment trust fund. She
explained that SB 200 would allow pbs to move towards the
goal of setting up a game and the endowment. A poll taken
last year of 3200 Alaskans said that 84 percent approved or
were neutral about the subject of the appropriateness for
pbs to raise money on the air by a game.
Senator Kelly said he was opposed to SB 200 but asked if SB
200 allowed for the sale of pull tabs on the ferry system.
JOHN HANSEN, JR., Gaming Manager, Department of Commerce &
Economic Development, said that pull tabs would be able to
be sold on the ferries. Senator Kelly felt that would be a
problem. He said he was also opposed to pull tabs being
sold in restaurants. Ms. Kaplin said that in rural areas
that might be the only place that could sell the pull tabs.
Mr. Hansen said that SB 200 would allow any retail
establishment to sell pull tabs.
Senator Jacko MOVED for adoption of CSSB 200(FIN) work draft
"E". No objections being heard, it was ADOPTED.
JERRY LUCKHAUPT, Attorney, Legislative Legal Counsel,
Legislative Affairs Agency, suggested that the words "pull
tab series or the" on page 7, line 14 be deleted. Senator
Jacko MOVED an amendment deleting the words "pull tab series
or the" on page 7, line 14, including a change to the title
to that affect. No objections being heard, the words were
deleted and the title changed.
Senator Kelly asked how the pull tab game would be played.
Ms. Kaplin said that the pull tabs would be mailed in and a
drawing would be held. She said that it could be held
several times a year, limited to twelve hours of
broadcasting a year over the air. The station would be
prohibited from using operators, and the game would be
conducted by Alaska public radio network. It would not
receive any state moneys to fund the games. She said that
the majority of the funds would go into an endowment. Mr.
Hansen said that public radio would have to get special
permission to hold funds for more than one year. Ms. Kaplin
said the board of directors met on February 2 and
established a trust fund. She said that 50 percent of the
funds would go into a general endowment for public
broadcasting statewide and the balance would be divided into
separate endowment accounts for each broadcasting station.
She said that there was some concern that funds should be
retained by the communities that raised them. Senator Kelly
felt that the endowment should be outlined in the bill. Ms.
Kaplin said that she did not object to that. In answer to
Co-chair Pearce, Mr. Luckhaupt said that a certain percent
could be put into an endowment. Discussion was had by
Senators Rieger, Pearce, Mr. Luckhaupt and Mr. Hansen
regarding the endowment and existing statutes regarding the
use of the gaming funds.
Senator Kelly MOVED for adoption of a conceptual amendment
that would provide for at least half of the adjusted gross
income to go into an endowment with the Commissioner's
approval. Mr. Hansen said that under SB 76 at least 30
percent of the adjusted net income would be required to be
shown as net proceeds.
Mr. Hansen said that gross sales were defined as the dollar
paid for the pull tab game. After prizes are subtracted it
is called the adjusted gross income. After expenses are
paid the result is net proceeds. Under SB 76, 30 percent of
the adjusted gross income is required to be reported as net
proceeds. In answer to Senator Kelly, Mr. Hansen said that
in addition to regular reports, SB 200 required a special
report to the legislature.
Senator Kerttula asked for the amendment to be in writing
rather than a conceptual amendment. Co-chair Pearce
announced an at ease.
Recess 11:10am
Reconvene 11:23am
Senator Kelly MOVED for adoption of amendment 3 on page 7,
line 24 (copy of file). No objections being heard, it was
ADOPTED.
Senator Kerttula voiced his opposition to using gambling to
fund public broadcasting. He said that he understood the
need for becoming independent from state funds but asked
about the moral issues around gambling and how it would
effect the image of public broadcasting. Ms. Kaplin said
that discussion had been going on for years on this subject.
Some local boards were opposed to using gambling as a way to
raise funds. This was one reason the recent poll was done.
Every station is locally owned and operated by a community
board. Each station will have to make this decision for
themselves. She said that the game would be aimed at
viewers who wanted to be supportive of public broadcasting
and would not target traditional gamblers or presented in
gambling institutions. The choice may come down to giving
up public broadcasting and its services or participate in
the game for support. She believed that some stations would
opt not to participate.
Senator Kerttula maintained his opposition to allowing
gambling in the state and proposed that the state could be
seen as an advocate of gambling. He questioned what other
forms of gambling could be approved. He maintained his
objection to public broadcasting participating in gaming and
felt it set a bad tone.
Senator Rieger MOVED for adoption of amendment 4 adding the
words "the earnings of which may be used" after the word
fund to amendment 3 (copy on file). Senator Sharp OBJECTED.
Discussion was had by Co-chair Pearce, Senators Rieger,
Jacko, Sharp, and Mr. Luckhaupt regarding the sunset of the
bill and the possibility of earnings from the endowment
supporting public broadcasting. Senator Sharp withdrew his
objection. No further objections being heard, amendment 4
was ADOPTED.
Co-chair Pearce asked Mr. Luckhaupt what would happen to the
endowment after the sunset date in the present proposed
bill. Mr. Luckhaupt said that when the bill sunsets, the
language restricting endowment uses would end and his
opinion was that public broadcasting could then use the
endowment at that time. Senator Kelly said that he did not
disagree with that.
Senator Jacko asked, of the amount raised by the endowment,
how much would be generated from federal matching funds.
Ms. Kaplin said that it is a substantial amount. Matching
funds would be 13 cents on the dollar, and in rural areas or
native stations it varies between 19 and 26 cents on the
dollars.
Senator Sharp asked if it was their intention to advertise
pull tabs on public broadcasting. Ms. Kaplin said that
advertising on the air was prohibited by law. She said that
the law allowed 12 hours a year on the air for the game and
most of that time would be used for the on-the-air drawing.
Senator Sharp said it would disturb him, especially because
of the young people, if there was a promotion on the air.
Senator Kerttula said that "friends" of the station could
buy air time on other stations or newspaper ads. Ms. Kaplin
maintained that any advertising would be disallowed by law.
Mr. Luckhaupt said that there cannot be any gaming
advertising or promotions on commercial broadcasting. The
twelve hours that Ms. Kaplin mentioned are an exception
provided in this legislation.
End SFC-93 #62, Side 1
Begin SFC-93 #64, Side 1
PAUL FUHS, Commissioner, Department of Commerce & Economic
Development, said that several years ago the legislature had
passed authorization for APRN to hold a game. He said that
because of existing statutes, APRN had not been able to hold
a game that the department could authorize. He said that
the department and APRN needed clarification from the
legislature regarding what could be authorized in order to
proceed. He said that he was not opposed to SB 200 but said
that the Governor was opposed to extending gambling in
Alaska.
Senator Jacko MOVED for passage of CSSB 200(FIN) as amended
from committee with individual recommendations. Senators
Kerttula and Kelly OBJECTED for the record. CSSB 200(FIN)
was REPORTED OUT of committee with a "do pass" with a zero
fiscal note for the Department of Commerce & Economic
Development. Co-chairs Pearce and Frank, Senators Jacko,
and Rieger signed a "do pass." Senators Kelly and Kerttula
signed a "do not pass," and Senator Sharp signed a "no rec."
Recess 11:50am
Reconvene 12:05pm
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.
Senator Sharp MOVED to RESCIND prior committee action
adopting CSSB 76(FIN) work draft "M" and amendment 1. No
objections being heard, prior action was RESCINDED.
Senator Sharp MOVED for ADOPTION of CSSB 76(FIN) work draft
"S" dated April 16, 1993. No objections being heard, it was
ADOPTED. Co-chair Pearce outlined the changes in CSSB
76(FIN) work draft "S". She said that felony exclusions
remained in the bill, net proceeds from pull tabs and bingo
(not raffle proceeds) are prohibited for direct campaign
contributions to candidates as in the prior bill, net
proceeds are also prohibited for payment to registered
lobbyists, third party vendor language has been tightened,
multiple beneficiary permits allowed, the APRN section has
been removed, and language was removed allowing the use of
vendor machines for pull tabs. She said that an amendment
had been prepared to allow package stores to participate in
the sale of pull tabs. She invited John Hansen, Jr., Gaming
Manager, Department of Commerce & Economic Development to
rejoin the members at the table.
Senator Sharp MOVED for ADOPTION of amendment 1 on page 15,
line 16 of CSSB 76(FIN) work draft "S". Mr. Hansen said
that amendment 1 was a technical amendment that would give
an exception to the Department of Labor that would allow 16
to 19 year olds to work in restaurants where pull tabs are
sold. The way the bill is drafted, it basically excludes
those establishments from being able to sell pull tabs as
vendors. No objections being heard, amendment 1 was
ADOPTED.
Senator Sharp MOVED for ADOPTION of amendment 2 on page 15,
line 11, with consideration of the title. Co-chair Pearce
explained that amendment 2 would add package store licenses
back into the third party vendor. In answer to Co-chair
Pearce, Mr. Hansen said that package stores were at the
present time selling pull tabs in Alaska. No objections
being heard, amendment 2 was ADOPTED.
Mr. Hansen said that currently in Alaska pull tabs are
authorized and allowed to be sold in any location. This
bill would provide for permittees to go directly to bars and
liquor stores and receive a minimum of 50 percent of the net
proceeds at the time they deliver the pull tabs. Under
current, these sales are occurring using operators or
permittees. When they use an operator they receive a
minimum of 15 percent of net proceeds, that minimum is
usually the maximum. Discussion was had by Mr. Hansen and
Senator Kelly regarding net proceeds, expenses and profit.
Co-chair Pearce invited Paul Fuhs, Commissioner, Department
of Commerce & Economic Development, to come before the
committee again and speak to SB 76. Mr. Fuhs said that the
Governor was opposed to gambling but if the state was going
to authorize it, he felt profits should be going to the
charities. He said that gaming associations were opposed to
the legislation. He explained that every bar could have
pull tabs under the existing law, and of the 1,320 permittee
locations in Alaska, 537 are bars. The advantage of this
legislation is that the charities would get 50 percent
instead of 15 percent under existing legislation. He said
that his department was in support of prohibiting proceeds
for use for campaign contributions.
Discussion was had by Senator Kelly, Mr. Fuhs and Co-chair
Pearce regarding the difference between using third party
vendors and operators. Mr. Fuhs estimated that the
combination of stopping the diversion of gaming proceeds to
campaign contributions and lobbyists and the increase in the
percentages would result in about $10 million more a year
going to charities than under existing legislation. He said
that about $16 million net goes to charities at the present
time.
Co-chair said that a new fiscal note for the Department of
Revenue shows $86.9 but because of the addition of an
auditor position it could provide $100.0 additional revenue
for the department.
Senator Rieger asks for clarification regarding permittees
expenses. Mr. Hansen said that under CSSB 76(FIN), if a
permittee chooses to use an operator or a vendor, or
operates the game out of their own bingo hall, they are not
going to be allowed to use more than 70 percent of the
adjusted gross income for overall expenses which leaves 30
percent for charities.
Senator Kelly MOVED for ADOPTION of amendment 3 adding a
comma and the words "directly or indirectly" after the word
"portion" on page 9, line 19. No objections being heard,
amendment 3 was ADOPTED.
Senator Kelly MOVED for passage of CSSB 76(FIN) as amended
with individual recommendations. CSSB 76(FIN) work draft
"S" was REPORTED OUT of committee as amended with a "do
pass" and with a zero fiscal note for the Department of
Commerce & Economic Development and a new fiscal note for
the Department of Revenue in the amount of $86.9. Co-chairs
Pearce and Frank, Senators Jacko, Kelly, Sharp and Rieger
signed "do pass." Senator Kerttula signed "no rec."
ADJOURNMENT
The meeting was adjourned at approximately 12:40 p.m.
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