Legislature(1993 - 1994)
04/01/1993 04:20 PM Senate JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
April 1, 1993
4:20 p.m.
*** The time and location of this meeting was changed
because of an extended floor session. For this reason,
SENATOR TAYLOR regrets the committee was unable to
teleconference the meeting.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Rick Halford, Vice-Chairman
Senator George Jacko
Senator Dave Donley
Senator Suzanne Little
MEMBERS ABSENT
NONE
OTHERS PRESENT
Senator Drue Pearce
COMMITTEE CALENDAR
SENATE BILL NO. 76
"An Act preventing persons with felony convictions from
being involved in charitable gaming activities as a
permittee, licensee, or employee in a managerial or
supervisory capacity; and relating to `political uses' and
`political organizations' as those terms are used in the
charitable gaming statutes."
PREVIOUS SENATE COMMITTEE ACTION
SB 76 - See Labor & Commerce minutes dated 2/11/93, 2/25/93,
and 3/4/93.
WITNESS REGISTER
Diane Kaplan, President/CEO
Alaska Public Radio Network
810 E. 9th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified for APRN.
John Hansen, Gaming Manager
Division of Occupational Licensing
Department of Commerce & Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
POSITION STATEMENT: Supported SB 76.
Jerry Luckhaupt, Attorney
Legislative Legal Counsel
Legislative Affairs Agency
130 Seward Street
Juneau, Alaska 99801-2105
POSITION STATEMENT: Drafted SB 76.
Paul Fuhs, Commissioner
Department of Commerce & Economic Development
P.O. Box 110806
Juneau, Alaska 99811-0806
POSITION STATEMENT: Supported SB 76.
Chip Thoma
202 Marine Way #2
Juneau, Alaska 99801
POSITION STATEMENT: Testified on SB 76.
Jeffrey Bush, Attorney
320 W. 8th Street
Juneau, Alaska 99801
POSITION STATEMENT: Represented APRN.
Gary Amendola, Asst. Atty. General
Civil Division
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Testified on SB 76.
ACTION NARRATIVE
TAPE 93-36, SIDE A
Number 001
Chairman Robin Taylor called the Judiciary Committee meeting
to order at 4:20 p.m. in the House Judiciary Committee room.
SENATOR TAYLOR introduced SB 76 (CHARITABLE GAMING
RESTRICTIONS) and invited the sponsor, SENATOR DRUE PEARCE,
to testify.
SENATOR JACKO moved to adopt CS FOR SENATE BILL NO. 76(JUD),
8-LSO279\U, Luckhaupt, 4/1/93, as a work draft. Without
objections, so ordered.
SENATOR PEARCE explained as SB 76 came from the Labor and
Commerce Committee it had a felony exclusion and a
prohibition against using pull-tab and bingo proceeds as
direct political contributions. In addition, she said the
committee substitute contains a section prohibiting the use
of pull-tab and bingo proceeds for direct payment for
lobbying fees.
SENATOR PEARCE explained the previous administration
disallowed third party vendors as a point of sale for pull-
tabs, but in this bill, this will be allowed only in
mechanical vending machines. She described the use of these
in the State of Washington.
Number 075
SENATOR PEARCE explained the committee substitute specified
a return to the non-profit organizations 30% on pull-tabs
and 10% on bingo. She also explained it allows multi-
beneficiary permits, which SENATOR ZHAROFF had been trying
to do for Native corporations.
SENATOR PEARCE referred to some technical amendments
presently being drafted by MR. LUCKHAUPT, and suggested by
JOHN HANSEN, Gaming Manager for the Division of Occupational
Licensing, after he read the bill. She explained it would
give the administration more latitude to manage gaming in
the state.
SENATOR PEARCE review some past legislation that would allow
the Alaska Public Radio Network (APRN) to use gaming on a
state-wide basis to raise funds for both public radio and
television. Last year, the legislature budgeted about
$1,000 to APRN to do a study to select the best sort of game
for them to use state-wide to raise money. She explained
that APRN wanted to create an endowment that would enable
them to become self-sufficient, but they found there needed
to be a change to the statutes to allow them to use the game
as determined by their study - an on-line lotto.
SENATOR JACKO asked SENATOR PEARCE if the legislation would
include gambling on ferries.
Number 160
SENATOR PEARCE said that it would not, but she had discussed
it with REPRESENTATIVE CARL MOSES, and he has a House bill
that would allow gaming videos such as black jack on the
ferries. She said they had an agreement to support each
others bills.
SENATOR JACKO commented he was in favor of a mechanism by
which APRN could generate its own revenue.
SENATOR TAYLOR referred to an amendment authorizing the
Alaska Public Radio Network to conduct the game of on-line
lotto and asked SENATOR PEARCE if it was hers. She
explained her amendment was on the table, and she noted that
DIANE KAPLAN, President/CEO of APRN, was present to testify.
SENATOR JACKO, SENATOR HALFORD, and SENATOR PEARCE discussed
the proposed amendment to the legislation. SENATOR TAYLOR
asked MS. KAPLAN to testify on the amendment.
Number 228
MS. KAPLAN gave some history on the enabling legislation in
1990 to assist public radio to be self-sufficient. She
explained the difficult in funding public broadcasting with
the declining revenues, praised SENATOR TED STEVENS for
helping them on the federal level, and conveyed a request
from the Department of Commerce to seek specific legislation
to issue the regulations and give them a permit.
MS. KAPLAN said APRN had received a $50 thousand capital
appropriation, supported by the administration, to obtain
the best possible assistance from experts who know about
state-wide games, hence, the on-line lotto game. She said
the game was not prohibited in state law, but she quoted the
Department of Commerce that it should be specifically
authorized.
MS. KAPLAN reported that APRN had set up a public
broadcasting endowment trust, and she outlined the
organization of the trust. She predicted in about 10 years
the endowment would be able to support a significant part of
the operating cost of public broadcasting.
SENATOR DONLEY questioned the limitations of time of
activity, and MS. KAPLAN quoted the existing limitations in
the statute as 12 hours per year, maximum. She explained
there was a prohibition against any operators being involved
and that 100% of the net proceeds, after expenses, would go
to public broadcasting.
SENATOR DONLEY asked who had drafted the amendment, and MS.
KAPLAN explained it had been drafted by their attorney, JEFF
BUSH.
SENATOR PEARCE explained the amendment would have to be
accepted conceptually and formally drafted by MR. LUCKHAUPT.
She explained a conceptual amendment to SENATOR LITTLE, and
SENATOR TAYLOR further pointed out the differences in
drafting. He discussed the use of the on-line lotto game as
specific to APRN.
Number 283
MR. HANSEN testified the current statutes define "bingo" and
"lotto" as the same thing.
SENATOR TAYLOR discussed it as being the drafting form, but
questioned what was to be accomplished. MR. HANSEN expanded
on his definition to specifically define on-line lotto.
SENATOR JACKO voiced his support for the amendment in that
it did not use funds from the general fund.
Number 325
SENATOR DONLEY continued to question the need for the
specific change in the amendment, and MR. HANSEN outlined
the previous legislation, which was legal under current
statute. He explained the amendment would provide for on-
line lotto, a lottery.
SENATOR DONLEY argued that current law allowed lotteries,
but MR. HANSEN said there were raffles but no state-wide
lotteries as conducted by other states. SENATOR DONLEY
wanted to know the difference in the proposed lottery and a
broadcast raffle.
There ensued a discussion with all participants about the
difference in gaming, on-line games, computer game
terminals, multiple locations, and simultaneous games state-
wide.
Number 400
SENATOR TAYLOR questioned MS. KAPLAN about the 12 hours of
on-air time, and she explained that would be the time used
in the drawings. SENATOR TAYLOR asked about spreading out
the time, and she explained it would be a drawing of the
tickets that people had purchased from around the state.
SENATOR JACKO asked how much money the game would generate,
and she had been given to expect about $5 million net per
year.
SENATOR DONLEY asked about a limit on prizes, and MS. KAPLAN
explained the prize limits on each permit. He questioned
closely as to the prize limits, people involved, and multi-
million dollars. He explained it would be a state lottery,
which has always been voted down in the past. SENATOR
DONLEY became agitated at what he saw as the magnitude of
the proposal and asked for a written description.
SENATOR TAYLOR asked for the pleasure of the committee on
Amendment #1. SENATOR LITTLE moved to table the motion
until input was received from the legislative bill drafter.
Without objections, so ordered.
SENATOR JACKO asked for clarification on the tabling motion.
Number 474
SENATOR LITTLE said she was waiting to hear if the amendment
would fit under the law, and she wanted a position paper
from the department.
SENATOR TAYLOR and SENATOR HALFORD discussed the fate of the
amendment, which SENATOR HALFORD opposed.
SENATOR HALFORD objected to the motion to table the
amendment, and the tabling motion was upheld. Without
objections, so ordered.
SENATOR PEARCE referred the committee to two of her
additional amendments and chose 8-LSO279\0.1, Luckhaupt,
3/5/93. SENATOR TAYLOR designated the next amendment as
Amendment #2.
SENATOR PEARCE explained the intent of the bill was to
prevent a person convicted of a crime of extortion from
participating in gaming for life, but the draft allows
gaming 10 years after the person's conviction.
SENATOR DONLEY asked for clarification.
SENATOR PEARCE explained the bill, as presently drafted,
extortionists can return to gaming after 10 years, and she
further explained that was not her intent. She claimed
Amendment #2 would ban extortionists from gaming for life.
SENATOR DONLEY said he had the Labor & Commerce version of
the bill, and SENATOR PEARCE said MR. LUCKHAUPT would put
the amendment where it should go.
Number 560
SENATOR TAYLOR said MR. LUCKHAUPT was bringing an updated
version of the Judiciary committee substitute. SENATOR
PEARCE discussed with SENATOR DONLEY and SENATOR JACKO as to
where the amendment fit.
SENATOR TAYLOR moved to adopt Amendment #2, the version as
previously described. He opened the committee to discussion
on the amendment.
SENATOR DONLEY expressed concern the department was being
given the authority to adopt regulations, and he questioned
why this was being done.
SENATOR PEARCE explained the Department of Commerce had set
up a three tier system to prohibit felons from gaming for
different time periods and would allow the department the
discretion to determine when the felon could return to
gaming.
Number 628
SENATOR TAYLOR thought there might be more flexibility by
allowing the department to write the regulations.
MR. HANSEN explained under current law, any crime of theft
or dishonesty is a lifetime ban, and he gave the example of
shop-lifting to explain his point. He further explained the
amendment would provide some discretion for a person who has
paid their debt to society, and after 10 years, that person
could be re-evaluated for participation in gaming. He gave
a true example where the crime of trespassing was keeping a
bingo caller from working, and he viewed the amendment as
allowing flexibility as to who should have the life-time
ban.
SENATOR DONLEY was astonished that the crime of trespassing
was considered a crime of dishonesty, but MR. HANSEN said it
was under Alaska statutes. There was some discussion on the
subject.
SENATOR TAYLOR asked for movement on the amendment.
SENATOR DONLEY referred to (2)(A) of Amendment #2 to
question when a felon has become a "person of good
character, honesty, and integrity." MR. HANSEN defended the
provision as being common in states that allow gaming and is
a right rather than a privilege. He explained the criteria
in the regulations would provide more of an intent and
latitude in crimes that are not felonies.
SENATOR DONLEY referred to line 2, under (b), and moved to
insert "of that person" after "conviction."
Number 696
SENATOR PEARCE reminded SENATOR DONLEY the phrase was given
at the beginning of line 2, but SENATOR DONLEY argued for
the inclusion. There was no objection to SENATOR DONLEY's
amendment to Amendment #2.
SENATOR TAYLOR found no objections to Amendment #2, which
was to be adopted conceptually. Without objections, so
ordered.
SENATOR TAYLOR asked SENATOR PEARCE to review her Amendment
places in the bill. SENATOR TAYLOR asked MR. HANSEN to
explain the amendment.
Number 740
There was a discussion on the amendment, as well as which
committee substitute was being used, by SENATOR TAYLOR and
SENATOR DONLEY.
MR. HANSEN explained the amendment would add fund raiser and
consultant to the licensee and to the title of the bill
which refers to definitions in the bill. They discussed the
reason for the amendment and the placement in the
legislation.
SENATOR DONLEY moved to adopt Amendment #3, and SENATOR
TAYLOR explained to MR. LUCKHAUPT the reasons for the
amendment.
Number 792
MR. LUCKHAUPT explained the amendment, previously passed,
dealing with banning extortionists from any involvement in
charitable gaming at any time.
SENATOR TAYLOR directed MR. LUCKHAUPT's attention to
Amendment #3, and MR. LUCKHAUPT explained it was an attempt
at defining fund raisers and consultants, as related to the
managerial and supervisory positions. He said it would fit
these people into the restrictions for those persons to get
a permit or license.
SENATOR TAYLOR said Amendment #3 was adopted conceptually.
Without objections, so ordered.
SENATOR TAYLOR asked MR. LUCKHAUPT for his second Judiciary
committee substitute, and he offered his 8-LSO279\X version,
which incorporated the changes made by the staff members
from Judiciary, SENATOR PEARCE, and JOHN HANSEN. SENATOR
TAYLOR asked if Amendments #2 and #3 had been incorporated
into the latest committee substitute, and MR. LUCKHAUPT
assured him they had.
SENATOR TAYLOR asked MR. LUCKHAUPT if the amendment dealing
with public broadcasting and on-line lotto had also been
incorporated, and MR. LUCKHAUPT said it had not.
MR. HANSEN offered to review the changes from the Labor &
Commerce version, and he used the X draft to explain Section
13. SENATOR DONLEY protested he didn't know what was in the
first Judiciary version. MR. HANSEN offered to give a
sectional analysis, and SENATOR TAYLOR asked that it be
brief.
Number 854
SENATOR JACKO moved to remove Amendment #1 from the table.
Without objections, so ordered.
SENATOR JACKO then moved Amendment #1, and in a 3-2 vote the
amendment failed.
TAPE 93-36, SIDE B
Number 001
MR. LUCKHAUPT began by explaining Section 1 added provisions
for vendor registration that was not in the previous
version, and in a later section a pull-tab permittee could
arrange to have a vendor sell pull-tabs for them through a
contractual arrangement.
SENATOR DONLEY asked to hear from the department as to why
this was a good idea, and he protested it would cause more
gambling. COMMISSIONER FUHS asked to speak to his concerns.
MR. FUHS described seeing pull-tabs in most bar in Alaska,
but he explained the legislation would allow the charities
to go directly to a vendor, without going through an
operator, to increase the amount which goes to the charity.
He claimed that 50% of the pull-tab money would go directly
to the charities, which is higher than the other provisions
of the bill, which are 30% - with an operator.
Number 080
MR. FUHS explained, in addition, when the pull-tabs are
delivered, the vendor writes a check, up front, for 50% of
the pull-tabs. He quoted SENATOR PEARCE as wanting the
pull-tabs to be dispensed from a machine to increase
accountability, and he reviewed the difficulty with the
present accountability.
SENATOR DONLEY asked for the statutory authority currently
used in pull-tab operations, and MR. HANSEN explained, under
current law, permittees or operators can sell pull-tabs.
These permittees can lease space and have their employees
sell pull-tabs, or under regulations, if the bar owner
volunteers that space, they can operate. He explained that
was the "hole" in the law. He said the legislation would
direct the bar owner to pay the money up front and clean up
the regulatory mess.
MR. LUCKHAUPT explained all of the vendor provisions in the
Labor & Commerce version are different, so Sections 1, 9,
19, 21, 22, 24, and 26 of the X version all deal with
vendors, and none of the provisions were in the L&C version.
SENATOR DONLEY asked where licensing provisions for vendors
appears, and MR. LUCKHAUPT explained they appear in Section
22 on pages 10 through 12 of the X version.
Number 143
There was some discussion between SENATOR DONLEY and MR.
HANSEN, and MR. LUCKHAUPT explained it was the same language
added through SB 6 last year, which went through House
Judiciary.
MR. LUCKHAUPT explained the multiple permittee game Sections
3, 5, 6, 7, 12, 16, 17, 18 and 20 all deal with the idea
that several municipalities and organizations can join
together to offer a bigger pot. He said these provisions
were not in the L&C version.
SENATOR DONLEY thought it would mean more permittees could
get together. MR. HANSEN said he was correct, and he
described current regulations in relation to the
legislation.
Number 206
SENATOR DONLEY expressed concern that among the multiple
groups, one group could become dominate, and he asked about
the safeguards to prevent such domination. MR. HANSEN
explained, under the current draft, there would be the same
filing requirements for each group, but he wasn't sure the
domination could ever be prohibited.
SENATOR DONLEY said he was worried the dominate group would
bring in "paper" organizations, add them to their group,
increase their activity level, and never return the money to
the paper organizations. MR. HANSEN explained why they
couldn't under the current law as well as the X version.
SENATOR DONLEY clarified the groups would have to maintain
individual checking accounts to prevent collective
accounting.
MR. LUCKHAUPT explained that Sections 4, 11, and 26 all deal
with the prohibition of involvement in charitable gaming by
those with criminal records. He said those provisions were
all in the L&C version of the bill and were discussed
earlier. He said Sections 5, 6, and 7 are all multiple
permittee sections, and Section 8 is a new section, which
would require the department to approve contracts between
permittees and operators.
Number 261
MR. LUCKHAUPT explained that current law instructed the
permittee to submit the contract, but did not allow the
department to approve or disapprove the contract. He also
explained how the department could be caught in a Catch 22
situation and not be able to stop the contract, but the
problem would be solved by Section 8.
MR. LUCKHAUPT explained Section 9 of the bill deals with
vendors again, and Sections 10, 14, and 29 deal with the
percentage that must be paid by operators to the permittees.
He said these provisions were not in the L&C version of the
bill. He explained Section 10, page 6, lines 8 through 12,
would require the permittee, each quarter, to pay the
permittee 30% of the adjusted gross income from the pull-tab
activity and 10% of the adjusted gross income from a gaming
activity other than pull-tabs. These percentages are
related to those in Section 14, and he said Section 29 would
changed the calendaring for the year.
SENATOR DONLEY said he has always wanted the department to
have the authority to increase the percentage and had
disagreed with the court decision that denied the authority.
He gave some history on this attempt and asked if it could
be included in the legislation.
Number 314
MR. FUHS said his department supports the numbers as given
by MR. LUCKHAUPT, and he supported it in combination with
bingo, which is used as a lost leader and written off
against the pull-tab activity. By his computations, the
bill doubles the amount going to charities.
SENATOR DONLEY questioned whether the rates could be raised
in a pull-tab parlor, where only pull-tabs are sold. MR.
FUHS defended the legislation as providing a fair return,
and SENATOR DONLEY continued to argue for a higher number.
(SENATOR TAYLOR recessed the meeting for 20 minutes so
committee members could attend other meetings.)
Number 362
SENATOR TAYLOR reconvened the meeting on SB 76, and he
explained that Amendments #2 and 3#, previously passed, are
incorporated within the new X version.
SENATOR HALFORD moved to adopt CS FOR SENATE BILL NO.
76(JUD), 8-LSO279\X, LUCKHAUPT, 4/1/93, as the current
committee substitute work draft. Without objections, so
ordered.
SENATOR TAYLOR asked COMMISSIONER FUHS if he wished to make
further comments.
MR. FUHS reviewed the importance of the legislation because
it prohibits gambling proceeds to be used for campaign
contributions or for lobbyists, and he described what he
considered a disturbing trend to see the political parties
dependent on gaming money. He said the legislation picked
up felons such a murderers, who presently hold permits, but
would give some relief to those who commit misdemeanors.
Number 411
SENATOR DONLEY expressed confusion at the over-all
philosophy of gaming and the dichotomy of allowing alcohol
around certain types of gaming and not others. He asked for
the position of the department if he offered an amendment to
prohibit alcohol where any gaming takes place.
MR. FUHS explained why he supported the CS for SB 76(JUD) as
presently drafted. There ensued a lengthy, and sometimes
heated, discussion between SENATOR DONLEY and MR. FUHS on
the subject of mixing alcohol and pull-tabs.
SENATOR TAYLOR interrupted the debate and moved on to some
concerns from SENATOR PEARCE.
Number 506
SENATOR PEARCE reviewed her opening remarks on the
legislation and expressed concern that previous language
requiring third party vendors to sue mechanical vending
machines was not in the new committee substitute. She asked
to entertain a motion to have a committee member introduce a
conceptual amendment to that effect. She discussed the
benefits of regulating the industry through the use of the
machines and suggested that MR. HANSEN could provide
additional information.
SENATOR TAYLOR moved a conceptual amendment, Amendment #4,
to require third party vendors to use the mechanical vending
machines to disperse pull-tabs. Without objections, so
ordered.
MR. FUHS gave his support to both the amendment and the
committee substitute for SB 76.
SENATOR DONLEY questioned MR. FUHS as to whether the
increased activity was reflected in a fiscal note, as well
as the use of program receipts from taxation.
MR. FUHS explained the department uses the program receipts,
and the Finance Committee had added some additional
positions for enforcement. He also explained how the new
procedures would require less enforcement. SENATOR DONLEY
clarified the need for additional personnel, and MR. FUHS
continued to contend it would be a much simpler operation.
Number 600
SENATOR TAYLOR next invited CHIP Thoma from Juneau, to
testify.
MR. Thoma explained he had testified on the bill in Labor &
Commerce, and thought he had more understanding of the bill.
He objected to COMMISSIONER FUHS' description of prohibiting
gambling money from going to politicians, and he objected to
it being characterized as a moral issue. He thought the
moral issue was selling pull-tabs in liquor establishments,
and he gave his experience of being a bartender to describe
what he considers the moral climate leading to the breakup
of families.
MR. Thoma argued the figures for gambling money funneled
into political campaigns was not an accurate statement, and
he didn't think it was a moral problem. He thought the use
of pull-tabs for political parties was the closest thing
there was to public financing and would eliminate the need
to use money from lobbyists. He said he was not aware of
any problems with politicians using pull-tabs. He thought
the legislation was a war between the two chief operators of
pull-tabs and bingo parlors throughout the state, and he
accused the legislators of participating in the war. He
deplored the lack of public participation in the discussion
of the bill, and he suggested holding the bill until more
public testimony could be given.
Number 687
SENATOR TAYLOR invited DIANE KAPLAN to return for some
additional comments.
MS. KAPLAN reviewed the objectives in finding alternative
sources of funding for public broadcasting aside from the
general fund and the recommendations from their consultants.
She asked for the consideration of a different amendment to
allow them to do some sort of a state-wide game this year.
She deferred the explanation to their attorney, JEFF BUSH.
MR. BUSH explained the proposed amendment would allow a
state-wide series of pull-tabs, and using the pull-tab as a
ticket to participate in a state-wide drawing on the air,
under the previous legislation which allows up to 12 hours a
year of broadcast time to play a game.
MS. KAPLAN described how the game would play, and how it
would fit into the present statutes - with some changes.
SENATOR JACKO questioned the confusion with their previous
proposal, and MS. KAPLAN explained there was a million
dollar limit on any one permit.
SENATOR JACKO moved to adopt a conceptual amendment,
Amendment #5, to allow APRN to raise money outside of the
general fund.
SENATOR TAYLOR asked for discussion on the amendment, and
SENATOR DONLEY suggested it should be redrafted.
SENATOR HALFORD wanted to know what it would generate, and
MS. KAPLAN explained the provisions. SENATOR HALFORD asked
to hear from the Department of Commerce on their position.
MR. HANSEN explained the amendment would allow pull-tabs of
the same series to be sold in more than one location, and it
would allow for an additional drawing if they posted an
additional bond of $250,000 and have approval from the
attorney general. He spoke for both himself and
COMMISSIONER FUHS in not opposing the amendment.
Number 780
SENATOR HALFORD asked how much money it would generate, and
MR. HANSEN talked about the limits of paying out no more
than $1 million in prizes per year. The prize percentage
would determine the amount they would make, and he gave some
possible figures.
MS. KAPLAN said their enabling legislation prohibited the
use of operators, so all of the proceeds would go to APRN.
MR. BUSH offered some rough figures on the possible amount
of about $3 million that could be generated.
MR. HANSEN added that APRN would be allowed to use retail
outlets to sell those games for them.
MR. BUSH qualified his previous figures as being the gross
receipts for APRN and does not take into account expenses.
Without objections, Amendment #2 passed.
SENATOR PEARCE asked if the last amendment would require a
title change, and MR. LUCKHAUPT explained why it would not.
SENATOR HALFORD and MR. LUCKHAUPT discussed what would
happen to the bill if sent to the House.
SENATOR LITTLE suggesting holding the bill to allow for more
public testimony, but it was not acted upon.
SENATOR DONLEY moved to adopt Amendment #6 which would allow
the Department of Commerce to license pull-tab manufacturers
outside the State of Alaska. He said all other states do
this, and it generates considerable revenue.
MR. HANSEN explained why the department absolutely supported
the amendment.
Number 855
SENATOR JACKO asked for some information on the amendment,
and SENATOR DONLEY said it was because the state licenses
in-state manufacturers so they can monitor their activity to
meet quality standards to protect the public.
MR. HANSEN provided some additional information on
collecting money on the licenses from Outside manufacturers,
and he quoted SENATOR DONLEY as saying all other states have
that regulatory control.
TAPE 93-37, SIDE A
Number 001
MR. HANSEN said some licensing fees amount to $10,000 in
this state, and SENATOR HALFORD asked if it would add a
fiscal note and Finance Committee referral. MR. HANSEN said
$5,000 would come to the state.
SENATOR TAYLOR said Amendment #6 passed without objections.
SENATOR DONLEY moved to adopt Amendment #7 which would
accept the same standard used by the State of Washington
involving pull-tabs.
SENATOR DONLEY explained the problems with the present
standard as being the lowest common denominator among the
industries, and he explained the benefits of the new
standard.
MR. HANSEN said SENATOR DONLEY was correct, and he urged the
adoption of the higher standard. He explained why he
supported the amendment.
SENATOR TAYLOR stated Amendment #7 passed without
objections.
Number 095
SENATOR HALFORD moved a conceptual amendment, Amendment #8,
to tighten up the title to reflect the requirements as
outlined. SENATOR TAYLOR asked MR. LUCKHAUPT if he
understood the changes. He said he did, including "An Act
relating to charitable gaming;" which opens the door.
SENATOR DONLEY began his proposed amendment by explaining
what he saw as the lack of knowledge on the part of
permittees in understanding the laws under which they
comply. He advocated a minimal testing program on the basic
knowledge of the statutes and regulations, before people are
allowed to have the permits.
SENATOR TAYLOR said Amendment #8 would have to be a
conceptual amendment regarding training and licensees.
SENATOR DONLEY continued to explain how it would fit into
the legislation and how it could be implemented. SENATOR
TAYLOR objected for purposes of discussion.
SENATOR PEARCE didn't know if the amendment was a worthy
goal, and she explained gaming was being moved from the
Department of Commerce to the Department of Revenue, which
would make it difficult for the Department of Commerce to do
any testing. She suggested that SENATOR DONLEY work with the
Department of Revenue on his proposal.
Number 193
MR. HANSEN explained the previous legislature provided the
incentive to conduct training seminars and educational
programs. The training seminars have been started with one
in Homer, and he reported positive results from the Kenai
Chamber of Commerce and Kenai Bicentennial Committee.
SENATOR TAYLOR clarified that training would be mandated for
permittees, but he expressed concern that the gaming
activity would cease until everyone was trained. SENATOR
DONLEY said his conceptual amendment could have an effective
date of 1995, and he stressed the fairness of his amendment.
SENATOR TAYLOR asked whether it could be done by regulation,
and MR. HANSEN deferred the answer to GARY AMENDOLA, from
the Civil Division of the Department of Law.
MR. AMENDOLA reviewed the statute that gives the department
broad authority to adopt regulations to carry out its
responsibilities under charitable gaming, and he read the
pertinent parts of the law.
Number 272
SENATOR TAYLOR reported Amendment #8 had failed on a 2-1
vote.
SENATOR DONLEY proposed an amendment, Amendment #9, to raise
the percentage of profits to the charities to 80%, and he
explained the vendors would have zero overhead, especially
with the machines. There ensued a discussion of gaming in
relation to the machine use.
MR. FUHS thought the number was too high, citing his
experience in the area, but he left it to the pleasure of
the committee. SENATOR TAYLOR referred to page 11, line 29
to confirm the "permittee shall receive no less than 50% of
the ideal net." SENATOR DONLEY argued against the
justification of 50% of the net and explained the reasons
for the low overhead with the machine concept.
SENATOR JACKO asked the sponsor, SENATOR PEARCE, for her
opinion on the proposed change in percentage, SENATOR PEARCE
objected for the same reasons as given by MR. FUHS.
SENATOR TAYLOR reported Amendment #9 had failed on a 2-1
vote.
SENATOR DONLEY asked if there was any increased percentage
any of the senators would support, and he reviewed his
reasons for maximizing funding to the charities. SENATOR
TAYLOR suggested he take his objections to the Finance
Committee, the next committee of referral, or to the floor
when the bill is heard.
SENATOR TAYLOR agreed more information was needed, and
SENATOR DONLEY continued his appeal for a higher percentage,
citing again the lower overhead with machine playing and
accounting.
SENATOR DONLEY moved a conceptual amendment, Amendment #10,
to allow the department to increase, or decrease, the
percentages for pull-tab activities by regulation and
explained his justification.
SENATOR TAYLOR asked MR. LUCKHAUPT if he understood the
concept put forth by SENATOR DONLEY, and he discussed with
SENATOR TAYLOR flexibility through regulation just for pull-
tabs.
SENATOR HALFORD questioned why just pull-tabs, and SENATOR
DONLEY explained the increase in profit ratio with pull-
tabs, especially with the emergence of pull-tab parlors.
Number 460
SENATOR PEARCE expressed concern that any commissioner,
governor, or gaming director could jack-up the percentages
so high that no once could operate. She preferred the
percentage be set in statute and changed by the legislature
as needed.
SENATOR DONLEY withdrew Amendment 10, and he proposed a
replacement Amendment #10, which would allow the department
to raise the percentage for all forms of gaming. He
defended the department's ability to promulgate regulations
for the changing of the percentage given to charities and
citing the restriction in statute that must be followed by
the departments.
SENATOR PEARCE explained SENATOR DONLEY was partially
correct, but she said lawyers could take the regulations to
court if they didn't like the percentages. She again
stressed putting the percentages in statute. SENATOR DONLEY
continued his defense of his amendment.
SENATOR TAYLOR reported Amendment #10 had failed on a 3-2
vote.
Number 503
SENATOR DONLEY expressed concern the meeting would end
before people on the teleconference network had a chance to
testify, and SENATOR TAYLOR explained that SENATOR PEARCE,
Co-Chair of Finance, assured him there would be a chance for
further testimony.
SENATOR DONLEY proposed Amendment #11 which would insert
"prohibiting charitable gaming from occurring more than once
a year at any place selling or dispensing alcoholic
beverages;". SENATOR HALFORD objected to the amendment.
SENATOR DONLEY explained his amendment.
SENATOR TAYLOR reported Amendment #11 had failed on a 3-2
vote.
SENATOR HALFORD moved to pass CS FOR SENATE BILL NO.
76(JUD)
(CHARITABLE GAMING RESTRICTIONS) from committee with
individual recommendations.
SENATOR LITTLE objected for purposes of questioning SENATOR
PEARCE on her promise of a teleconference, and SENATOR
PEARCE indicated a possible time.
SENATOR TAYLOR moved the bill with individual
recommendations. Without objections, so ordered.
There being no further business to come before the
committee, the meeting was adjourned at 7:10 p.m.
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