HB 156: "An Act relating to charitable gaming; relating to the percentages of gross receipts from charitable gaming that are required to be devoted to charitable uses; requiring managers of charitable gaming activities to be licensed; removing the authority for operators to conduct charitable gaming; prohibiting permittees, members in charge, and gaming managers from having certain financial interests or associations with persons who have been convicted of certain crimes; and providing for an effective date."
00HOUSE BILL NO. 156 01 "An Act relating to charitable gaming; relating to the percentages of gross 02 receipts from charitable gaming that are required to be devoted to charitable 03 uses; requiring managers of charitable gaming activities to be licensed; removing 04 the authority for operators to conduct charitable gaming; prohibiting permittees, 05 members in charge, and gaming managers from having certain financial interests 06 or associations with persons who have been convicted of certain crimes; and 07 providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 05.15.020(b) is amended to read: 10 (b) An additional fee of one percent of the gross receipts [NET PROCEEDS] 11 received during the preceding year from the activities authorized under the permit shall 12 be paid to the department annually by the municipality or qualified organization 13 authorized to conduct activities under this chapter [,] if the gross receipts for the 14 activities were $20,000 or more.
01 * Sec. 2. AS 05.15.030(a) is amended to read: 02 (a) At the time of filing an application for a permit [OR LICENSE] under this 03 chapter, the applicant shall notify the city or borough nearest to the location of the 04 proposed activity of the application. A local government unit may protest the conduct 05 of the activity in its jurisdiction by resolution stating the reasons for the protest filed 06 with the department; protests are limited to the lack of qualifications prescribed by this 07 chapter. This resolution is only a recommendation by the local government that may 08 be considered by the department in determining whether to issue or refuse to issue a 09 permit [OR LICENSE]. 10 * Sec. 3. AS 05.15.030(c) is amended to read: 11 (c) If a permittee [OR LICENSEE] changes the location of an activity in the 12 jurisdiction for which a permit has been issued, the permittee shall notify the 13 department and the local government within 10 days after moving to the new location. 14 * Sec. 4. AS 05.15.060(a) is amended to read: 15 (a) The department shall adopt regulations under AS 44.62 (Administrative 16 Procedure Act) necessary to carry out this chapter covering, but not limited to, 17 (1) the issuance, renewal, and revocation of permits, certificates 18 [LICENSES], and vendor registrations; 19 (2) [A METHOD OF ASCERTAINING NET PROCEEDS, THE 20 DETERMINATION OF ITEMS OF EXPENSE THAT MAY BE INCURRED OR 21 PAID, AND THE LIMITATION OF THE AMOUNT OF THE ITEMS OF EXPENSE 22 TO PREVENT THE PROCEEDS FROM THE ACTIVITY PERMITTED FROM 23 BEING DIVERTED TO NONCHARITABLE, NONEDUCATIONAL, 24 NONRELIGIOUS, OR PROFIT-MAKING ORGANIZATIONS, INDIVIDUALS, OR 25 GROUPS; 26 (3)] the immediate revocation of permits, certificates [LICENSES], and 27 vendor registrations authorized under this chapter if this chapter or regulations adopted 28 under it are violated; 29 (3) [(4)] the requiring of detailed, sworn, financial reports of operations 30 from permittees [AND LICENSEES] including detailed statements of receipts and 31 payments;
01 (4) [(5)] the investigation of permittees, gaming managers 02 [LICENSEES], registered vendors, and their employees, including the fingerprinting 03 of those permittees, gaming managers [LICENSEES], registered vendors, and 04 employees whom the department considers it advisable to fingerprint; 05 (5) [(6)] the method and manner of conducting authorized activities and 06 awarding of prizes or awards [,] and the equipment that may be used; 07 (6) [(7)] the number of activities that may be held, operated, or 08 conducted under a permit during a specified period; however, the department may not 09 allow more than 14 bingo sessions a month and 35 bingo games a session to be 10 conducted under a permit; the holders of a multiple-beneficiary permit under 11 AS 05.15.100(d) may hold, operate, or conduct the number of sessions and games a 12 month equal to the number allowed an individual permittee a [PER] month multiplied 13 by the number of holders of the multiple-beneficiary permit; 14 (7) [(8) A METHOD OF ACCOUNTING FOR RECEIPTS AND 15 DISBURSEMENTS BY OPERATORS, INCLUDING THE KEEPING OF RECORDS 16 AND REQUIREMENTS FOR THE DEPOSIT OF ALL RECEIPTS IN A BANK; 17 (9)] the disposition of funds in possession of a permittee, a gaming 18 manager [A PERSON, MUNICIPALITY, OR QUALIFIED ORGANIZATION THAT 19 POSSESSES AN OPERATOR'S LICENSE], or a registered vendor at the time a 20 permit, a certificate [A LICENSE], or a vendor registration is surrendered, revoked, 21 or invalidated; 22 (8) [(10)] restrictions on the participation by employees of the 23 Department of Fish and Game in salmon classics and in king salmon classics, and by 24 employees of Douglas Island Pink and Chum in king salmon classics; 25 (9) [(11)] other matters the department considers necessary to carry out 26 this chapter or protect the best interest of the public. 27 * Sec. 5. AS 05.15.070 is amended to read: 28 Sec. 05.15.070. Examination of books and records. The department may 29 examine or have examined the books and records of a permittee, [AN OPERATOR,] 30 a registered vendor, a gaming manager, or a person licensed to manufacture or to 31 distribute pull-tab games in the state. The department may issue subpoenas for the
01 attendance of witnesses and the production of books, records, and other documents. 02 * Sec. 6. AS 05.15.080 is amended to read: 03 Sec. 05.15.080. Reports and fees required of municipalities and qualified 04 organizations. (a) A municipality or a qualified organization issued a permit under 05 this chapter shall file a report with the department by the 45th day following each 06 calendar quarter in which the permittee had gross receipts of $50,000 or more from 07 activities authorized under this chapter. The report must include the type of activity 08 conducted, the date and location of the activity, the amount of gross receipts, [THE 09 AMOUNT OF AUTHORIZED EXPENSES,] the value of prizes awarded, [THE 10 AMOUNT OF NET PROCEEDS,] and other information the department may require. 11 However, if the only activity conducted by a municipality or qualified organization 12 during a calendar quarter is a raffle or lottery, then the municipality or qualified 13 organization is not required to file a report under this subsection until the raffle or 14 lottery is completed. 15 (b) A municipality or a qualified organization issued a permit under this 16 chapter shall file an annual report with the department by March 15 of the year 17 following the year in which activities were conducted, accompanied by the payment 18 of the additional fee, as may be required under AS 05.15.020(b). The report must list 19 the types of activities conducted, and, for each activity, the total amount of gross 20 receipts, [THE TOTAL AMOUNT OF AUTHORIZED EXPENSES,] the total value 21 of prizes awarded, and the total amount of gross receipts retained for charitable uses 22 [NET PROCEEDS]. 23 * Sec. 7. AS 05.15.090 is amended to read: 24 Sec. 05.15.090. Agency reports. Before April 15 of each year, the department 25 shall prepare a detailed report containing a summary of all reports required of 26 permittees [AND OPERATORS]. The attorney general and the commissioner of 27 public safety shall, within 10 days after the convening of the legislature each year, 28 jointly prepare a detailed report outlining the effect, if any, of the operation of this 29 chapter on the legal and law enforcement activities of the state and notify the 30 legislature that the report is available. 31 * Sec. 8. AS 05.15.095(a) is amended to read:
01 (a) The applications and reports to the department required by this chapter 02 shall be signed under penalty of unsworn falsification by the following person, as 03 applicable: 04 (1) the member in charge for the qualified organization; 05 (2) a person authorized to sign on behalf of the municipality; 06 (3) [THE OPERATOR OR THE OPERATOR'S AGENT; 07 (4)] the licensed pull-tab distributor or the distributor's agent; or 08 (4) [(5)] the licensed pull-tab manufacturer or the manufacturer's agent. 09 * Sec. 9. AS 05.15.095(b) is amended to read: 10 (b) A permittee [OR OPERATOR] may not conduct an activity under this 11 chapter during a period in which a report or fee is delinquent. 12 * Sec. 10. AS 05.15.095(d) is amended to read: 13 (d) A permittee [OR LICENSEE] under this chapter shall pay a penalty of one 14 percent of the unpaid balance, as determined by the department, of a fee due under this 15 chapter for each 30-day period or part of a 30-day period that the fee is delinquent. 16 The department may waive the penalty if the failure to pay the fee on time is due to 17 a reasonable cause, as defined by regulation adopted by the department. The amount 18 of the penalty may not exceed 25 percent of the unpaid fee. 19 * Sec. 11. AS 05.15.105(a) is amended to read: 20 (a) If a person has been convicted of a violation of a law of this state that is, 21 or a law or ordinance of another jurisdiction that would be if it had been committed 22 in this state, a felony, or a violation of a law or ordinance of this state or another 23 jurisdiction that is a crime involving theft or dishonesty or a violation of gambling 24 laws, 25 (1) [THE DEPARTMENT MAY NOT ISSUE A LICENSE TO THE 26 PERSON; 27 (2)] the department may not [ISSUE A LICENSE TO, OR] register as 28 a vendor, an applicant who employs the person as a gaming manager or in a 29 managerial or supervisory capacity or uses the person as a fund raiser or consultant; 30 (2) [(3)] the department may not issue a permit for an activity if the 31 person is responsible for the operation of the activity;
01 (3) [(4)] the person may not be employed as a gaming manager or 02 in a managerial or supervisory capacity by a [LICENSEE OR] vendor or used as a 03 fund raiser or consultant by a [LICENSEE OR] vendor; 04 (4) [(5)] the person may not participate in charitable gaming as a 05 permittee, gaming manager [LICENSEE], or vendor. 06 * Sec. 12. AS 05.15.112(b) is amended to read: 07 (b) The member in charge is responsible for preparation, maintenance, and 08 transmittal of all records and reports required of the permittee [, AND, IF THE 09 PERMITTEE HAS ENTERED INTO A CONTRACT WITH AN OPERATOR 10 UNDER AS 05.15.115, FOR MONITORING THE OPERATOR'S PERFORMANCE 11 UNDER AND COMPLIANCE WITH THAT CONTRACT]. The alternate members 12 in charge are responsible for the duties of the member in charge in the absence of the 13 member in charge. The member in charge and the alternate members in charge shall 14 be members of the qualified organization or the board of directors of the qualified 15 organization or employees of the municipality. In the case of a multiple beneficiary 16 permit, the member in charge and the alternate members in charge shall be members 17 of one of the qualified organizations or the board of directors of one of the qualified 18 organizations or employees [EMPLOYERS] of one of the municipalities. 19 * Sec. 13. AS 05.15 is amended by adding a new section to read: 20 Sec. 05.15.114. Gaming manager. (a) A permittee may not employ, contract 21 with, or in any way engage a person to act as a gaming manager for the permittee 22 unless the person is certified by the department as a gaming manager. A person may 23 not act as a gaming manager for a permittee unless the person is certified by the 24 department as a gaming manager. 25 (b) The department may certify a person as a gaming manager if the person 26 (1) applies on a form provided by the department; 27 (2) pays the application fee set by the department by regulation; 28 (3) submits two complete sets of fingerprints on Federal Bureau of 29 Investigation approved fingerprint cards that are of sufficient quality so that the 30 fingerprints may be processed; and 31 (4) has passed a test formulated by the department on the contents of
01 this chapter and the regulations adopted under this chapter. 02 (c) Notwithstanding (b) of this section, a person may not be certified, and may 03 not maintain a certification, as a gaming manager if the person is licensed as a pull-tab 04 manufacturer under AS 05.15.181 or a pull-tab distributor under AS 05.15.183. 05 (d) A person certified as a gaming manager may not 06 (1) have or maintain a financial interest or association with a person 07 who is prohibited from involvement with charitable gaming under AS 05.15.105; or 08 (2) own any property or equipment used in the conduct of the activity 09 and may not receive compensation of any form or type that is not subject to federal 10 withholding taxes and that is not reported on Internal Revenue Service Form 941. 11 * Sec. 14. AS 05.15.124 is amended to read: 12 Sec. 05.15.124. Municipal regulation of [OPERATORS OR] vendors. A 13 municipality may by ordinance prohibit [AN OPERATOR OR] a vendor from 14 conducting activities under this chapter within the municipality. 15 * Sec. 15. AS 05.15.145(d) is amended to read: 16 (d) The holders of a multiple-beneficiary permit shall jointly file 17 (1) quarterly reports with the department by the last business day of 18 the month following each calendar quarter in which an activity was conducted; 19 the report must include the date and location of each activity, the type of activity 20 conducted, the amount of gross receipts, the amount of gross receipts paid to the 21 holders of the permit, the value of prizes awarded, and other information the 22 department may require; a completed Internal Revenue Service Form 941; and 23 a copy of the employer contributions and wage reports submitted to the 24 Department of Labor for the employees that conducted each activity; and 25 (2) an annual report with the department no later than 26 February 28 of the year following the year in which activities were conducted; the 27 report must include the types of activities conducted, the total amount of gross 28 receipts, the total value of prizes awarded, and the total amount of gross receipts 29 paid to each holder of the permit; the report must also include a completed 30 Internal Revenue Service Form W-2 for each person employed or paid to conduct 31 the activities [THAT COMPLY WITH THE REPORTING REQUIREMENTS
01 IMPOSED ON OPERATORS UNDER AS 05.15.083]. 02 * Sec. 16. AS 05.15.150 is amended to read: 03 Sec. 05.15.150. Limitation on use of proceeds. (a) The authority to conduct 04 the activity authorized by this chapter is contingent upon the dedication of at least 30 05 percent of the gross receipts of each [THE NET PROCEEDS OF THE] charitable 06 gaming activity to [THE AWARDING OF PRIZES TO CONTESTANTS OR 07 PARTICIPANTS AND TO] political, educational, civic, public, charitable, patriotic, 08 or religious uses in the state. "Political, educational, civic, public, charitable, patriotic, 09 or religious uses" means uses benefiting persons either by bringing them under the 10 influence of education or religion or relieving them from disease, suffering, or 11 constraint, or by assisting them in establishing themselves in life, or by providing for 12 the promotion of the welfare and well-being of the membership of the organization 13 within their own community, or through aiding candidates for public office or groups 14 that support candidates for public office, or by erecting or maintaining public buildings 15 or works, or lessening the burden on government, but does not include 16 (1) the direct or indirect payment of any portion of the gross receipts 17 [NET PROCEEDS] of a bingo or pull-tab game to a lobbyist registered under 18 AS 24.45; 19 (2) the erection, acquisition, improvement, maintenance, or repair of 20 real, personal, or mixed property unless it is used exclusively for one or more of the 21 permitted uses; or 22 (3) the direct or indirect payment of any portion of the gross receipts 23 [NET PROCEEDS] of a charitable gaming activity, except the proceeds of a raffle and 24 lottery, 25 (A) to aid candidates for public office or groups that support or 26 oppose candidates for public office; 27 (B) to a political party or to an organization affiliated with a 28 political party; or 29 (C) to a group, as that term is defined in AS 15.13.400, or a 30 political group, as that term is defined in AS 15.60, that seeks to influence the 31 outcome of an election.
01 (b) The percentage of gross receipts dedicated to charitable uses [NET 02 PROCEEDS] derived from the activity must be devoted within one year to one or 03 more of the uses stated in (a) of this section. A municipality or qualified organization 04 desiring to hold the percentage of gross receipts [NET PROCEEDS] for a period 05 longer than one year must apply to the department for special permission, and, upon 06 good cause shown, the department may grant the request. 07 * Sec. 17. AS 05.15.170 is amended to read: 08 Sec. 05.15.170. Suspension or revocation of permit, license, or vendor 09 registration. (a) The department may suspend, for a period of up to one year, or 10 revoke a permit, certificate [LICENSE], or vendor registration, after giving notice to 11 and an opportunity to be heard by the permittee, gaming manager [OR LICENSEE], 12 if the permittee, gaming manager [LICENSEE], or vendor 13 (1) violates or fails to comply with a requirement of this chapter or of 14 a regulation adopted under this chapter; 15 (2) breaches a contractual agreement with a permittee [, LICENSEE,] 16 or registered vendor; 17 (3) becomes disqualified to participate in charitable gaming as provided 18 in AS 05.15.105; for the purposes of this paragraph, a permittee [, LICENSEE,] or 19 vendor that is not a natural person is considered convicted if an owner or manager of 20 the permittee [, LICENSEE,] or vendor is convicted; 21 (4) knowingly submits false information to the department or, in the 22 case of a registered vendor, to a permittee when the vendor knows that the false 23 information will be submitted to the department as part of an application for 24 registration; or 25 (5) gives or acts upon any inside information on the status of the prizes 26 awarded or to be awarded in a pull-tab game. 27 (b) If the department revokes a gaming manager certificate [LICENSE], or 28 vendor registration under this section, it may prohibit the gaming manager 29 [LICENSEE] or vendor from reapplying for a certificate [LICENSE] or vendor 30 registration for a period of not more than five years. If the department revokes a 31 permit under this section, it may prohibit the permittee from reapplying for a permit
01 for a period of not more than one year. 02 * Sec. 18. AS 05.15.180(b) is amended to read: 03 (b) With the exception of raffles, lotteries, bingo games, pull-tab games, rain 04 classics, goose classics, mercury classics, deep freeze classics, snow machine classics, 05 mushing sweepstakes, canned salmon classics, salmon classics, king salmon classics, 06 an activity may not be permitted [LICENSED] under this chapter unless it existed in 07 the state in substantially the same form and was conducted in substantially the same 08 manner before January 1, 1959. A snow machine classic may not be permitted 09 [LICENSED] under this chapter unless it has been in existence for at least five years 10 before the permitting [LICENSING]. 11 * Sec. 19. AS 05.15.180(g) is amended to read: 12 (g) A municipality or a qualified organization may award a maximum of 13 $1,000,000 in prizes each year in activities authorized under this chapter [; 14 HOWEVER, IF A MUNICIPALITY OR A QUALIFIED ORGANIZATION 15 CONTRACTS WITH AN OPERATOR TO CONDUCT ON ITS BEHALF 16 ACTIVITIES AUTHORIZED UNDER THIS CHAPTER, THE MUNICIPALITY OR 17 QUALIFIED ORGANIZATION MAY AWARD A MAXIMUM OF $500,000 IN 18 PRIZES EACH YEAR]. The holders of a multiple-beneficiary permit under 19 AS 05.15.100(d) may award a maximum in prizes each year of $1,000,000 times the 20 number of holders of the permit for activities authorized under this chapter. In this 21 subsection, "activities authorized under this chapter" means all activities subject to this 22 chapter other than bingo. 23 * Sec. 20. AS 05.15.185 is amended to read: 24 Sec. 05.15.185. Distribution of pull-tab games. Each series of pull-tabs 25 distributed in the state must be sealed and have a serial number label issued by the 26 National Association of Fundraising Ticket Manufacturers or other serial number label 27 approved by the department and may be distributed only to 28 (1) a municipality or a qualified organization that has obtained a permit 29 issued under this chapter; or 30 (2) [AN OPERATOR ON BEHALF OF AN AUTHORIZING 31 PERMITTEE; OR
01 (3)] a distributor licensed under this chapter. 02 * Sec. 21. AS 05.15.187(g) is amended to read: 03 (g) Notwithstanding other provisions of this chapter, a pull-tab game that 04 confers an additional right upon all or some of the purchasers of a pull-tab series to 05 participate in a lottery for additional prizes may not be conducted in the state unless 06 a surety bond in the amount of $250,000 conditioned upon payment of all prizes and 07 awards when due is submitted to the department by the [OPERATOR OR 08 AUTHORIZING] permittee and approved by the attorney general. 09 * Sec. 22. AS 05.15.187(h) is amended to read: 10 (h) An owner, manager, or employee of a person holding a permit [OR 11 LICENSE] under this chapter, or registered under this chapter as a vendor, may not 12 purchase a pull-tab from a pull-tab series manufactured, distributed, or sold by the 13 permittee [, LICENSEE,] or registered vendor. 14 * Sec. 23. AS 05.15.187(i) is amended to read: 15 (i) A permittee [, OPERATOR,] or registered vendor may not turn over a prize 16 of $50 or more to a person with a pull-tab card entitling the person to that prize unless 17 the person signs a receipt for the prize and returns the receipt to the permittee [, 18 OPERATOR,] or vendor. The receipt must be in a form approved by the department. 19 * Sec. 24. AS 05.15.188(h) is amended to read: 20 (h) If a permittee contracts with a vendor under (a) of this section, the contract 21 must provide that the permittee shall receive no less than 30  percent of the ideal 22 gross net. 23 * Sec. 25. AS 05.15.188(i) is amended to read: 24 (i) An amount equal to the ideal gross [NET] less the compensation owed to 25 the vendor shall be paid by the vendor to the member-in-charge upon delivery of a 26 pull-tab series to the vendor for sale. The amount required to be paid by the vendor 27 shall be paid by check, and the check may not be drawn in a manner that the payee 28 is not identified. 29 * Sec. 26. AS 05.15.600 is amended to read: 30 Sec. 05.15.600. Cancellation of permits based on unlawful provision. If any 31 provision of this chapter, or regulation adopted under this chapter, is determined to be
01 unlawful, then all permits issued in connection with the permitted [LICENSED] 02 activity to which the unlawful provision or regulation related are cancelled. 03 * Sec. 27. AS 05.15.620(c) is amended to read: 04 (c) If a majority of the voters vote "yes" on the question set out in (a) or (b) 05 of this section, the department shall be notified immediately after certification of the 06 results of the election and thereafter the department may not issue a [LICENSE,] 07 permit [,] or vendor registration authorizing charitable gaming or pull-tab sales, as 08 appropriate, within the boundaries of a municipality and in unincorporated areas within 09 five miles of the boundaries of the municipality or within the perimeter of an 10 established village. As necessary to implement the results of an election under (a) or 11 (b) of this section, existing [LICENSES,] permits [,] and vendor registrations for 12 charitable gaming or pull-tab sales within the boundaries of a municipality and in 13 unincorporated areas within five miles of the boundaries of the municipality or within 14 the perimeter of an established village are void 90 days after the results of the election 15 are certified. A [LICENSE OR] vendor registration that will expire during the 90 days 16 after the results of a local option election under this section are certified is void as of 17 the expiration date. 18 * Sec. 28. AS 05.15.680(b) is amended to read: 19 (b) A person who, with the intent to mislead a public servant in the 20 performance of the public servant's duty, submits a false statement in an application 21 for a permit, certificate [LICENSE], or vendor registration under this chapter is guilty 22 of unsworn falsification. 23 * Sec. 29. AS 05.15.690(23) is amended to read: 24 (23) "ideal gross [NET]" means an amount equal to the total amount 25 of receipts that would be received if every individual pull-tab ticket in a series were 26 sold at face value [, LESS THE PRIZES TO BE AWARDED FOR THAT SERIES]; 27 * Sec. 30. AS 05.15.690(36) is amended to read: 28 (36) "qualified organization" means a bona fide civic or service 29 organization or a bona fide religious, charitable, fraternal, veterans, labor, political, or 30 educational organization, police or fire department and company, dog mushers' 31 association, outboard motor association, or fishing derby or nonprofit trade association
01 in the state, that operates without profits to its members and that has been in existence 02 continually for a period of three years immediately before applying for a permit 03 [LICENSE]; the organization may be a firm, corporation, company, association, or 04 partnership; 05 * Sec. 31. AS 05.15.690 is amended by adding a new paragraph to read: 06 (45) "gaming manager" means an individual who manages, controls, 07 or oversees the gaming activities of a municipality or qualified organization and who 08 directly or indirectly receives compensation in any form for that management, control, 09 or oversight; 10 * Sec. 32. AS 05.15.083, 05.15.087, 05.15.100(c), 05.15.112(c), 05.15.115, 05.15.122, 11 05.15.128, 05.15.160, 05.15.165, 05.15.167, 05.15.180(e), 05.15.188(j), 05.15.690(1), 12 05.15.690(2), 05.15.690(29) and 05.15.690(31) are repealed. 13 * Sec. 33. This Act takes effect January 1, 1998.