SB 77-USE OF INTERNET FOR CHARITABLE GAMING  4:06:48 PM CHAIR SHOWER announced the consideration of SENATE BILL NO. 77 "An Act relating to charitable gaming online ticket sales and activities." He noted who was available to answer questions. 4:08:11 PM MELODIE WILTERDINK, Staff, Senator Mia Costello and the Senate Labor and Commerce Standing Committee, Alaska State Legislature, Juneau, Alaska, read the sponsor statement for SB 77 into the record: In January of 2021, Governor Dunleavy asked the Legislature to extend the public health disaster emergency through the passage of Senate Bill 56. This was a comprehensive bill with numerous provisions, one of which included an extension of the public health disaster emergency. This bill is taken from the Governor's bill and addresses Section 9 of the Governor's bill. It looks at charitable gaming online ticket sales. The purpose of this committee bill is to give the legislative branch the opportunity to take the necessary time to determine whether or not we need to make our statutes more COVID-19 aware, as opposed to relying on an emergency disaster declaration in order to keep our state operational. The Senate Labor and Commerce Committee intends to rely heavily on the administration to explain why certain sections in the disaster extension bill, such as the provisions now found in Senate Bill 77, are necessary. 4:09:39 PM MS. WILTERDINK read the following sectional analysis for SB 77: Sec. 1 AS 05.15.060(a) Page 1, Lines 3-15, & Page 2,  Lines 1-31, & Page 3, Lines 1-3 Is amended by adding a new subsection AS 05.15.060(a)(11) to establish standards for online ticket sales to ensure compliance with charitable gaming laws including age and location verification and data security standards. Sec. 2 AS 05.15.640 Page 3, Lines 4-16 Is amended by adding a new subsection AS 05.15.640(d) to allow permitees and operators of charitable gaming licenses to use the Internet to conduct charitable gaming activities for raffles, lotteries, dog mushers' contests, derbies, or types of classics defined in AS 05.15.690. This includes drawing winning tickets online. Is amended by adding a new subsection AS 05.15.640(e) to specify that permitees and operators of charitable gaming licenses must verify that purchasers are of legal purchasing age, physically present in the state, and not physically present in an area that has prohibited charitable gaming 4:11:17 PM CHAIR SHOWER asked if there were questions or comments. SENATOR REINBOLD thanked the sponsor for taking the initiative to introduce certain provisions of the Governor's disaster bill in separate pieces of legislation. CHAIR SHOWER advised that Senator Costello and other legislators are trying to get the legislative and executive branches to work together to make it possible to function in a situation like COVID-19 without having to declare a disaster. He asked Senator Costello to comment. 4:12:50 PM SENATOR COSTELLO, speaking as the chair of the Labor and Commerce Committee, thanked her staff, Melodie Wilterdink, for carrying the bill. She said it places a provision from the Governor's disaster declaration in separate legislation to make the statutes more COVID-aware. She said she believes this will benefit the state and she looks forward to hearing Ms. Glover talk about the entities that would use this law should it pass. 4:14:19 PM COLLEEN GLOVER, Director, Tax Division, Department of Revenue, Anchorage, Alaska, began her testimony by providing context for charitable gaming to be in the Governor's disaster declaration bill. She explained that it became apparent last summer that organizations that make up the gaming community were harmed by not being able to sell raffle tickets at public events. The current law allows promotion of these contests and derbies over the internet, but the raffles and games cannot be conducted online. The division issued temporary guidance saying that during the pandemic the sale and raffle would be allowed. When the original emergency declaration expired in November 2020, the administration worked to include that temporary regulatory exemption in Health Order 7 issued in mid-November 2020. She said that was extended every 30 days until the last one expired in February. Responding to Senator Costello's request, she said she did not have specific examples, but the division did receive feedback from organizations that expressed concern that online raffles and games would not be allowed once the emergency order expired. She referenced the supporting testimony from charitable organizations and others in House Finance last week about the benefits of online raffles and gaming. She said there has been no opposition and the administration support the statutory changes reflected in SB 77, she said. 4:17:11 PM SENATOR COSTELLO referred to a requirement in the Governor's disaster declaration legislation and asked how the administration intended to verify the age of the player and that play was conducted from a location in the state. MS. GLOVER replied the legislation called for the department to issue guidance through regulations and the division discussed the use of software to verify both age and location. 4:18:33 PM SENATOR KAWASAKI advised that the Catholic Schools of Fairbanks expressed concern about the expiration of the emergency regulations for online gaming. In response, his office researched Title 5 and found nothing prevents using electronic means to conduct raffles and gaming. The Department of Law and Legislative Legal Services worked on language for temporary guidance for gaming permitees and settled on the word "promote" as written in Title 5. He asked how that was implemented and if there were any problems with the emergency regulation. MS. GLOVER replied the division posted "temporary guidance" on the division's website and shared it with the gaming community. There were no emergency regulations and the permitees were not required to prove age or location. The department felt it was important to help prevent charitable gaming organizations from losing proceeds, and thus did not implement many constraints. She acknowledged that, like many others, they did not expect the pandemic to endure for more than a year. SENATOR KAWASAKI asked how smaller groups would be able to comply with the proposed statutory revisions, should they become permanent. MS. GLOVER answered the division does not want to make it be too difficult for these organizations to comply, but they will need to have controls in place to prevent selling to individuals who are out of state or do not meet the age requirement. The division believes there are affordable software options for the charitable gaming community to use to meet the proposed requirements. SENATOR KAWASAKI asked how long it would take to promulgate the regulations, should this become law. Specifically, he asked if online gaming could take place this summer the same way that it did last summer. 4:23:59 PM MS. GLOVER replied the legislation authorizes the division to issue guidance and standards initially and follow up later with formal regulations. CHAIR SHOWER asked if there is an effective date that allows the transition. [Audio difficulties between the chair who was in the committee room and members who were attending the meeting via Microsoft Teams.] 4:25:34 PM SENATOR KAWASAKI asked if SB 77 intends for the temporary guidance to continue at the discretion of the Department of Revenue (DOR). 4:26:14 PM SENATOR COSTELLO answered that the only intention in any of the bills the Senate Labor and Commerce Standing Committee introduced was to look at the issues [from the Governor's disaster declaration bill] more closely and answer that question. SENATOR COSTELLO noted that this was the first hearing on SB 77 and her sense, based on Ms. Glover's testimony, was there is a need for online charitable gaming to be an option going forward. Noting that there was not an effective date, she asked Ms. Glover if she would suggest adding an immediate effective date to the bill. MS. GLOVER replied she believes it is always good to have an effective date on any legislation. 4:27:42 PM At ease due to audio problems associated with Microsoft Teams. 4:30:06 PM CHAIR SHOWER reconvened the meeting and relayed that he was able to hear the discussion the members were having and the discussion was recorded, but the members could not hear him. He described SB 77 as an important effort to l prevent the need for a disaster declaration to conduct business. 4:30:49 PM CHAIR SHOWER found no further questions and announced he would hold SB 77 in committee.