Legislature(1993 - 1994)
05/04/1994 03:00 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
May 4, 1994
3:00 p.m.
MEMBERS PRESENT
Representative Brian Porter, Chairman
Representative Jeannette James, Vice-Chair
Representative Gail Phillips
Representative Pete Kott
Representative Joe Green
Representative Cliff Davidson
Representative Jim Nordlund
MEMBERS ABSENT
None
COMMITTEE CALENDAR
SB 316: "An Act relating to commercial fishing penalties."
MOVED WITH LETTER OF INTENT
SB 370: "An Act providing an exemption from gambling laws
for gambling conducted by cruise ships for their
ticketed passengers in the offshore water of the
state; relating to promotions on board cruise
ships; defining 'cruise ship'; providing for
exemption procedures for certain cruise ships
before they can conduct gambling in the offshore
water of the state; and providing for an effective
date."
MOVED AS AMENDED
SB 292: "An Act relating to transfers of prisoners under
the Interstate Corrections Compact."
MOVED OUT
HCR 37: Proposing amendments to the Uniform Rules of the
Alaska State Legislature relating to the Joint
Committee on the Constitution and to joint
resolutions; and providing for an effective date.
NOT HEARD
WITNESS REGISTER
DAVID THOMPSON, Aide
Senator Rick Halford
State Capitol, Room 111
Juneau, AK 99801-1182
Phone: 465-4958
POSITION STATEMENT: Introduced CS SB 316(RES)
DEAN PADDOCK
Bristol Bay Driftnetters Association
PO Box 21951
Juneau, AK 99802
Phone: 789-4231 h./ 463-4970 w.
POSITION STATEMENT: Opposed CS SB 316(RES)
JERRY MCCUNE, President
United Fishermen of Alaska
211 Fourth Street, Suite 112
Juneau, AK 99801
Phone: 586-2820
POSITION STATEMENT: Supported CS SB 316(RES)
KATE TROLL, Executive Director
Southeast Alaska Seiners
9226 Long Run
Juneau, AK 99801
Phone: 789-5117
POSITION STATEMENT: Supported CS SB 316(RES)
ROSELEEN MOORE (SNOOKS), via teleconference
41980 Kachemak Dr.
Homer, AK 99603
Phone: None Given
POSITION STATEMENT: Opposed CS SB 316(RES)
DAN HENNICK, via teleconference
40345 Waterman Road
Homer, AK 99603
Phone: None Given
POSITION STATEMENT: Opposed CS SB 316(RES)
KEN RYFKOGEL
116 Seward St.
Juneau, AK 99801
Phone: 586-4367 h./586-4367 w.
POSITION STATEMENT: Testified on CS SB 370(JUD)
TOM DOW, Vice President of Hotels
Princess Tours
2815 2nd Ave., No. 400
Seattle, WA 98121
Phone: (206) 728-4202
POSITION STATEMENT: Supported CS SB 370(JUD)
DON STOLWORTHY, Director
Charitable Gaming Division
Department of Revenue
PO Box 110410
Juneau, AK 99811-0440
Phone: 465-2229
POSITION STATEMENT: Testified on CS SB 370(JUD)
JERRY LUCKHAUPT, Legal Council
Division of Legal Services
Legislative Affairs Agency
PO Box 110300
Juneau, AK 99811-0300
Phone: 465-3428
POSITION STATEMENT: Testified on CS SB 370(JUD)
SUSAN BURKE, Attorney
Representing Princess Cruise Lines
424 N. Franklin St.
Juneau, AK 99801
Phone: 586-2777
POSITION STATEMENT: Supported CS SB 370(JUD)
DAVID SKIDMORE, Aide
Senator Steve Frank
State Capitol, Room 518
Juneau, AK 99801-1182
Phone: 465-3709
POSITION STATEMENT: Introduced SB 292
PREVIOUS ACTION
BILL: SB 316
SHORT TITLE: FISHING VIOLATIONS:FINES & RECORDS
SPONSOR(S): SENATOR(S)HALFORD,Jacko,Kerttula,
Miller,Frank,Pearce
JRN-DATE JRN-PG ACTION
02/14/94 2831 (S) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2831 (S) RES, FIN
03/02/94 (S) RES AT 3:30 PM BUTROVICH RM 205
03/02/94 (S) MINUTE(RES)
03/03/94 3056 (S) RES RPT CS 3DP 4NR SAME TITLE
03/03/94 3056 (S) FISCAL NOTE TO SB & CS
PUBLISHED (LAW)
03/15/94 (S) FIN AT 08:30 AM SENATE FIN 518
03/15/94 (S) MINUTE(FIN)
03/16/94 3240 (S) FIN RPT 5DP 2NR (RES)CS
03/16/94 3240 (S) FISCAL NOTE TO CS PUBLISHED
(DPS)
03/16/94 3240 (S) PREVIOUS FN APPLIES TO CS (LAW)
03/15/94 (S) MINUTE(FIN)
03/16/94 (S) RLS AT 00:00 AM FAHRENKAMP
ROOM 203
03/16/94 (S) MINUTE(RLS)
03/16/94 (S) FIN AT 09:00 AM SENATE FIN 518
03/24/94 3344 (S) RULES TO CALENDAR 3CAL 2NR
3/24/94
03/24/94 3350 (S) READ THE SECOND TIME
03/24/94 3350 (S) RES CS ADOPTED UNAN CONSENT
03/24/94 3350 (S) AM NO 1 MOVED BY ADAMS
03/24/94 3350 (S) AM NO 1 FAILED Y3 N12 E1 A4
03/24/94 3351 (S) ADVANCED TO THIRD READING UNAN
CONSENT
03/24/94 3351 (S) READ THE THIRD TIME
CSSB 316(RES)
03/24/94 3351 (S) PASSED Y13 N2 E1 A4
03/24/94 3351 (S) Kerttula NOTICE OF
RECONSIDERATION
03/28/94 3379 (S) RECON TAKEN UP/IN THIRD READING
03/28/94 3380 (S) PASSED ON RECONSIDERATION Y15
N4 E1
03/28/94 3380 (S) TRANSMITTED TO (H)
03/29/94 3037 (H) READ THE FIRST TIME/REFERRAL(S)
03/29/94 3037 (H) JUDICIARY, FINANCE
04/15/94 (H) JUD AT 01:00 PM CAPITOL 120
04/16/94 (H) JUD AT 01:00 PM CAPITOL 120
04/16/94 (H) MINUTE(JUD)
04/18/94 (H) MINUTE(JUD)
05/02/94 (H) JUD AT 03:00 PM CAPITOL 120
05/04/94 (H) JUD AT 03:00 PM CAPITOL 120
BILL: SB 370
SHORT TITLE: CRUISE SHIP GAMBLING & PROMOTIONS
SPONSOR(S): TRANSPORTATION BY REQUEST
JRN-DATE JRN-PG ACTION
03/30/94 3408 (S) READ THE FIRST TIME/REFERRAL(S)
03/30/94 3409 (S) JUDICIARY, FINANCE
04/06/94 (S) JUD AT 01:30 PM BELTZ ROOM 211
04/06/94 (S) MINUTE(JUD)
04/06/94 (S) MINUTE(JUD)
04/08/94 3524 (S) JUD RPT CS 2DP 1NR NEW TITLE
04/12/94 (S) FIN AT 09:00 AM SENATE FIN 518
04/13/94 3625 (S) FN TO SB PUBLISHED (REV)
04/13/94 3626 (S) FN TO CS PUBLISHED (REV)
04/25/94 (S) FIN AT 09:00 AM SENATE FIN 518
04/27/94 (S) RLS AT 05:00 PM FAHRENKAMP
ROOM 203
04/27/94 4010 (S) FIN RPT CS 2DP 2NR 1DNP
NEW TITLE
04/27/94 4010 (S) FN TO CS PUBLISHED (REV)
04/28/94 4072 (S) RULES TO CALENDAR 4/28/94
04/28/94 4078 (S) READ THE SECOND TIME
04/28/94 4078 (S) FIN CS ADOPTED UNAN CONSENT
04/28/94 4079 (S) ADVANCED TO THIRD READING UNAN
CONSENT
04/28/94 4079 (S) READ THE THIRD TIME
CSSB 370(FIN)
04/28/94 4079 (S) PASSED Y11 N9
04/28/94 4080 (S) EFFECTIVE DATE PASSED Y20 N-
04/28/94 4080 (S) Pearce NOTICE OF
RECONSIDERATION
04/29/94 4185 (S) RECON TAKEN UP - IN THIRD
READING
04/29/94 4185 (S) MOTION TO HOLD TO 5/2 CALENDAR
04/29/94 4186 (S) MOTION TO HOLD TO 5/2 FAILED
Y10 N10
04/29/94 4186 (S) MOTION TO HOLD TO 5/3 CAL FLD
Y9 N11
04/29/94 4187 (S) RESCIND ACTION FAILING TO HOLD
TO 5/2
04/29/94 4187 (S) PREVIOUS ACTION RESCINDED
Y11 N9
04/29/94 4187 (S) MOTION TO HOLD TO 5/2 CAL
ADOPTED Y11 N9
04/29/94 4187 (S) HELD ON RECONSIDERATION TO 5/2
CALENDAR
05/02/94 4211 (S) FISCAL NOTE TO CS PUBLISHED
(REV)
05/02/94 4242 (S) PASSED ON RECONSIDERATION Y12
N8
05/02/94 4243 (S) EFFECTIVE DATE SAME AS PASSAGE
05/02/94 4260 (S) TRANSMITTED TO (H)
05/03/94 3953 (H) READ THE FIRST TIME/REFERRAL(S)
05/03/94 3953 (H) JUDICIARY, FINANCE
05/04/94 (H) JUD AT 03:00 PM CAPITOL 120
BILL: SB 292
SHORT TITLE: INTERSTATE TRANSFERS OF INMATES
SPONSOR(S): SENATOR(S) FRANK,Pearce
JRN-DATE JRN-PG ACTION
02/11/94 2787 (S) READ THE FIRST TIME/REFERRAL(S)
02/11/94 2787 (S) JUD, FIN
03/23/94 (S) JUD AT 02:30 PM BELTZ ROOM 211
04/05/94 3445 (S) JUD RPT 2DP 1NR
04/05/94 3445 (S) ZERO FISCAL NOTES PUBLISHED
(CORR, DPS)
04/13/94 (S) FIN AT 08:30 AM SENATE FIN 518
04/13/94 (S) RLS AT 04:10 PM FAHRENKAMP
ROOM 203
04/13/94 3623 (S) FIN RPT 6DP
04/13/94 3624 (S) PREVIOUS ZERO FN (CORR, DPS)
04/27/94 4019 (S) RLS RPT 3CAL 1DNP 4/27/94
04/27/94 4045 (S) READ THE SECOND TIME
04/27/94 4045 (S) HELD TO NEXT CALENDAR
04/28/94 4083 (S) ADVANCED TO THIRD READING UNAN
CONSENT
04/28/94 4083 (S) READ THE THIRD TIME SB 292
04/28/94 4083 (S) PASSED Y15 N5
04/28/94 4092 (S) TRANSMITTED TO (H)
04/29/94 3857 (H) READ THE FIRST TIME/REFERRAL(S)
04/29/94 3857 (H) JUDICIARY, FINANCE
05/02/94 (H) JUD AT 03:00 PM CAPITOL 120
05/04/94 (H) JUD AT 03:00 PM CAPITOL 120
BILL: HCR 37
SHORT TITLE: JOINT COMMITTEE ON CONSTITUTION
SPONSOR(S): RULES BY REQUEST OF H CONST. REV. TASK FORCE
JRN-DATE JRN-PG ACTION
04/27/94 3780 (H) READ THE FIRST TIME/REFERRAL(S)
04/27/94 3780 (H) JUDICIARY
05/02/94 (H) JUD AT 03:00 PM CAPITOL 120
05/04/94 (H) JUD AT 03:00 PM CAPITOL 120
ACTION NARRATIVE
TAPE 94-67, SIDE A
Number 000
The House Judiciary Standing Committee was called to order
at 3:15 on May 4, 1994. A quorum was present. CHAIRMAN
PORTER stated that the following bills would be heard: CSSB
316(RES), CSSB 370(JUD), and SB 292. He called Dave
Thompson, Aide to Senator Halford forward to introduce the
CSSB 316(RES).
CSSB 316(RES) - AN ACT RELATING TO FISHING VIOLATIONS
Number 027
DAVE THOMPSON, Aide to Senator Halford, Chief sponsor of SB
316, explained that the Senator had drafted a Committee
Substitute for the Judiciary Committee's consideration. It
basically strips everything that was in the bill, save for
Section 1, which is the fines section. All it would do
would be to up the fines from the current $3,000 - $6,000 to
a maximum of $6,000 - $12,000. Everything else in the bill
has been stripped out.
CHAIRMAN PORTER said after the testimony we received last
time we heard the bill, language concerning the suspended
and revoked licenses is no longer in the bill.
REPRESENTATIVE JAMES asked Mr. Thompson about one of the
things we had in testimony with the original bill. She
asked if he knew whether there was an agreement with the
Division to create a physical line of buoys in the water, or
are they going to forget it because we are forgetting it?
Number 070
MR. THOMPSON said Mr. Swackhammer might be able to answer
that question a little more directly, but Mr. Swackhammer
was not in the room at the moment. He did know, after
Representative Phillips focused on that particular part of
it, the Department of Public Safety had previously discussed
it. The two issues from the department's mind were, one,
that kind of activity would be undertaken, not by Public
Safety, but rather Fish and Game. Secondly, the cost
factor; that line is about five miles long, and depending on
how far you were to space buoys, it could be a fairly
expensive project. There were also concerns over the
possibility of being able to get that done this year. Those
were the kind of responses we got when we inquired about
that.
Number 093
CHAIRMAN PORTER noted that the actual establishment of a
buoy line as opposed to a (indiscernible) line, is the
responsibility of the Department of Fish and Game, not the
Department of Public Safety. The committee had decided that
when we take action on the bill, we will send a letter to
the Department of Fish and Game asking them to strongly
establish that as a buoy line.
Number 104
REPRESENTATIVE JAMES's concern was that the buoy line is not
even involved in the bill, so it would be kind of ridiculous
to send along a message that has nothing to do with the bill
anymore.
Number 110
CHAIRMAN PORTER said he guessed we could not do it, but that
would not help. So we will continue to send a letter.
REPRESENTATIVE JAMES agreed that would be fine, and they
would continue to do that.
Number 120
DEAN PADDOCK spoke on behalf of the Bristol Bay Driftnetters
Association, which is one of the fishermen's organizations
of Bristol Bay. We concur that there is indeed a problem
there at the North Egegik line. We welcome any opportunity
where we can address that problem, especially if we can
reach some sort of a solution. We do appreciate the
concerns which bring us here. He said he had been directed
by many of his members to do something about the North
Egegik line. He had also been told by many of his members
what is proposed here today, is not really going to
accomplish what the sponsor had hoped it would accomplish.
He said he was not trying to run interference for a bunch of
scoff laws. He wondered if the committee was wondering if
he had something at stake. He took the opportunity to pass
on that he refuses to fish the North Egegik line. In twenty
years in Bristol Bay, he has yet to receive a warning. We
are aware Senator Halford's legislation is intended, of
course, for Egegik, but one of our problems is it covers the
whole state. Even so, we might support it if we felt it
would actually accomplish something. Mr. Paddock does not
think it will, and explained why he felt that way. He
displayed a chart of the district, showing that the tide is
falling, because the fish are coming into the district at
that one spot, it is changing very rapidly. He also had an
aerial photograph. Going by the chart, he disagreed that
the line is not five miles, it is a couple of miles at high
tide, but it is fished all the way down to low tide, at
which time it is less than a mile. He said this problem at
this place has been exacerbated, because the regulations
have pushed the fishermen into a shrinking area. The red
line on the chart is our present district. Former districts
were larger. He only showed the most recent one, prior to
the latest restriction. In the photograph, the yellow lines
show the present boundaries. Unfortunately, the fishermen
do not have any yellow lines out there to see. The red
shaded portion of the photograph is sort of a fuzzy area.
You have been exposed to the background that this is a LORAN
boundary. We are aware of some of the deficiencies of LORAN
equipment in precisely marking a district, it falls far
short of being a razor edge, so there is sort of a fuzzy
area there; and fishermen, being the competitive creatures
that they are, will do their darnedest to get outside of the
next guy.
MR. PADDOCK stated for years we have felt this should be
marked visually. We have not been able to get the Board of
Fisheries to do that in the past because of some
personalities that are involved, both in the Department of
Fish and Game, and in the Department of Public Safety. Both
of those personalities are no longer with us, and today we
have concurrence from Colonel Valentine of the Fish and
Wildlife Protection Division that he believes this should be
marked visually; and Director Koenings from the Department
of Fish and Game believes this should be marked visually.
He urged the committee to allow the Board of Fisheries to
have another crack at this. They will be addressing it in
this very next Board cycle, in January of 1995. We probably
cannot get anything in place for 1994, but this problem has
been with us for a number of years.
MR. PADDOCK said it has also been exacerbated by the fact
that we have had increased returns to the Egegik District in
recent years. As a long time biologist in that area, Mr.
Paddock does not really expect those big returns to last
forever. It sure would be great if they would. Dr.
Matieson, from the University, who is sort of the Dean of
Bristol Bay fish scientists, if not Alaskan fish scientists;
also agrees that this is a short time thing, and it is going
to go away. Mr. Paddock said he would hate to see the
fishermen of the entire state of Alaska saddled with
extremely punitive penalties because of the fact that we
have not been able to deal with this boundary line by
regulation in an adequate manner.
MR. PADDOCK once again asked the committee to give the Board
an opportunity to do this, rather than doing it
legislatively. We may be back here next year, asking you
folks to consider some of the things, at least to some
degree that were extracted from this present committee
substitute, because we agree that for one fisherman to
accumulate 18 violations, most of which occurred right at
this spot, is not really something we can accept. Mr.
Paddock has been told that we have got to do something about
it. He supported the bill if he felt it would indeed answer
the goal it appears to have in mind.
REPRESENTATIVE NORDLUND stated that he is a setnetter out in
Bristol Bay, but he did spend the summer on a drift-boat and
fished Egegik, and we were in a fiberglass boat, and we were
fishing on the line. He said he had never been as scared of
losing his life as he was on that North line at Egegik. He
appreciated the fact that Mr. Paddock requested we do a
visual marking, and he requested the committee send along a
letter of intent, encouraging the visual line. He also said
he thought it important that the legislature send a message
that line violations should be taken seriously. It seemed
to him, given the value of the catch in some cases,
especially in Egegik, that these increases are not that
great. He personally does not oppose them.
Number 330
MR. PADDOCK responded this supposed increase is a heck of a
tool to the Department of Law,and the Department of Public
Safety. He described it to be like a kid with a hammer. If
you give him a hammer, everything he sees looks like a nail.
Once again, this is a statewide statute where we are
concerned with something that is fairly localized. He said
he hated to see Bristol Bay be the focus of something that
develops into a statewide tool which is supposedly maximums.
Maximums have a way of growing, just the way cute little
kittens have a way of growing up to be lions and tigers. He
did not agree that this would be good policy, good
legislation.
Number 355
JERRY MCCUNE, President of United Fishermen of Alaska stated
that he has had the Board members look the bill over, and
the majority of the UFA Board agrees with the present form
of the bill, and thanks Senator Halford for dropping all the
other portions they had a problem with. We appreciate that,
so as far as he could tell, the majority of the groups at
UFA support the current bill.
Number 370
KATE TROLL, Executive Director of Southeast Alaska Seiners
said her Board of Directors looked at the original SB 316,
and voted to support it. We do have to support cleaning up
our industry, even though this is not targeted to our area.
We felt, on principle, in support of that notion. Then when
the CS came out, we were very concerned about all the change
of evidence, and penalizing potentially very innocent
fishermen, and we, like other fishing groups,
(indiscernible) to try and take out those parts that really
bothered us, but now we are back to just a portion, which
was in the original bill, and with that, she wanted to let
the committee know they currently do support the CS as
written for SB 316.
ROSELEEN MOORE (SNOOKS), fisherwoman of Homer opposed SB
316. She thought it would severely hurt many fishermen.
She believed this legislation was created for only one area.
She explained that on the Egegik line, 600 - 800 boats have
to take turns setting nets on top of each other, and the
fining will not change this problem. The change needs to be
made in the way this line is fished.
Number 430
DAN HENNICK, Homer resident, opposed the bill. He stated
that it serves no purpose. A $12,000 fine could be a whole
season's income. Fish and Game and Public Safety should be
required to create a physical line. He believed the bill
should die in committee.
Number 534
REPRESENTATIVE DAVIDSON agreed with Mr. Hennick. Without a
greater enforcement presence, it seems we are not really
serious as far as getting the job done out there. It seems
there might be technological capabilities, or opportunities
we could use to shoot a line and do a better job of
enforcement in that way. He said he would vote against
moving the bill out of committee, because doubling these
penalties at a time when the fish prices are like they are,
we know for a fact that often times, because of inadequate
enforcement efforts and overtaxed enforcement presence,
sometimes injustice is done, and $6,000 or $12,000 could
negatively impact a lot of the fishermen's livelihoods. He
urged his colleagues in this committee to put their money
where there vote is, and try to get some enforcement dollars
out there to make an honest effort to deal with the problem,
instead of trying to create the policing activities by the
industry itself, and so he felt the bill should stay in
committee a little longer until they make sure they measure
their true commitment to enforcement of the law.
Number 565
REPRESENTATIVE KOTT moved HCS for CSSB 316 for purposes of
discussing the CS.
CHAIRMAN PORTER asked if there was objection on the motion
to adopt the HCS for CSSB 316, dated 4-28-94. Seeing no
objection, he announced they now had the bill in front of
them for discussion.
Number 570
REPRESENTATIVE JAMES said she had not heard any argument as
to why these fines need to be raised. She has listened to
lots and lots of testimony, and she has not heard any
argument as to why they need to be so high. She thought the
problem, that was a major part of the original bill had no
solution in the CS. The CS deals only with raising the
fines. She agreed with Representative Davidson in that the
higher you raise the "no more than" fees, the higher all the
fines under it are raised. She thought raising the maximum
limit would make all other penalties unnecessarily higher.
She was not comfortable with moving the bill until she could
hear some real good reasons why they need to raise these
fines.
CHAIRMAN PORTER responded to Representative James's
concerns. He said the north Egegik line has the potential
for a considerable amount of take in one set, and an awful
lot of fish. There was discussion during the first
presentation that when the prices were up, there were
fishermen who were consciously going over the line, because
the risk of the catch was so low, that if they did get
nailed, the fine was not sufficient to deter. The original
version contained what could be considered a real hammer,
in terms of deterrent effect on not violating. What he
liked is the fact that this CS represents a compromise that
Jerry and his fishermen have bought into, and some of the
others. On an individual basis, based on how much the catch
was, and the individual violation, it allows a judge to look
at that individual situation and see if it might have been
intentional; and it might have been with this profit motive
involved. Consequently, this would justify a higher fine.
Again, this is a maximum. To use an analogy, we see an
awful lot of signs around saying there is a $1,000 fine for
littering, but there is probably nobody who has every been
fined $1,000 for littering, unless they took a garbage truck
out and intentionally dumped it in a lot. That is why there
needs to be flexibility in fines, so when an exceptional
situation occurs, you have the option of an exceptional
penalty as well.
Number 620
REPRESENTATIVE JAMES thought Chairman Porter was putting an
awful lot of faith in the court system. She had heard
testimony that the court system was not very dependable.
Number 630
CHAIRMAN PORTER said he thought there was some implicit
notion that they have to have some degree of faith in the
system, or maybe they should repeal everything.
Number 632
REPRESENTATIVE JAMES said there was a problem with the
section stating this is for the whole state on every issue.
She thinks it is really to broad. If they want to make the
fine reflect the violation, and we put that in statute, she
would be more comfortable in saying that. Certainly, she
looked, and having been from the timber industry, she knows
for cutting trees that are over the line, the fine is three
times the value of the tree. She asked why they could not
have something like that, instead of having it just be this
great big, not more than, that is just at the whim of
whomever wants to charge it.
Number 645
REPRESENTATIVE DAVIDSON concurred with Representative
James's remarks. He thought they had the little kitty that
is going to turn into a monster cat. He felt they were
going to do a lot of damage to a lot of livelihoods. He
said if we are not going to do the program justice by giving
the resources to the enforcement people in the first place,
why would this help?
Number 660
CHAIRMAN PORTER recognized that this does not propose to be
the specific answer to this specific problem we are dealing
with, although it certainly is the intention of the
committee to write the letter we have discussed regarding
the buoy line. It is very encouraging to hear that Colonel
Valentine, who I spoke to and Deputy Commissioner
Swackhammer, are here to confirm that; and now the
appropriate division of Fish and Game is interested in
working together to establish that line in that fashion.
That, speaks even more to the fact that it would be
appropriate to have this level of fine available, because if
they are able to establish a buoy line, and then there is a
violation, that is somebody who needs to get their
attention.
Number 665
REPRESENTATIVE PHILLIPS move to pass HCS CSSB 316 out of
committee with individual recommendations.
ROLL CALL VOTE Representative Brian Porter Y
Representative Jeannette James N
Representative Gail Phillips Y
Representative Pete Kott Y
Representative Joe Green Y
Representative Cliff Davidson N
Representative Jim Nordlund Y
HCS CSSB 316 was voted out of committee, 5 - 2.
REPRESENTATIVE PHILLIPS moved to add the letter of intent to
the bill.
ROLL CALL VOTE Representative Brian Porter Y
Representative Jeannette James Y
Representative Gail Phillips Y
Representative Pete Kott Y
Representative Joe Green Y
Representative Cliff Davidson N
Representative Jim Nordlund Y
The committee moved the letter of intent with a 6 - 1 vote.
SB 370 - CRUISE SHIP GAMBLING & PROMOTIONS
CHAIRMAN PORTER announced the next bill to be SB 370.
Number 690
KEN RYFKOGEL, Juneau resident, said he has looked over SB
370, and does not have a problem with the bill; however, he
would like to see a couple of additions, particularly when
it comes to the disclosure of the promotions on board the
cruise ships. The cruise ship operator should be required
to publish fees charged and paid by those businesses that
have been included in the on-board promotion to allow all
businesses access to those promotions. The second item is,
the cruise ship operator may not discriminate by only
promoting ports of call that have businesses which subscribe
or have paid for on-board promotions. He gave a couple of
examples where that has happened in the past. Last year,
there was a businessman that came into his jewelry store
here in Juneau, who told him of a situation where he was on
a cruise ship, where in Sitka, the cruise ship line did not
have any businesses that were paying for on-board
promotions. As a result of that, they were told, but they
put it in such a way that it is not called "promotion" or
"infamercial", if you want to call it that; it is called
"guaranteed shops." And we do not have any guaranteed shops
in Sitka. As a result of that, some people were very
reluctant about shopping in Sitka. It sets a mind set that
1) maybe we should not shop at all and 2) it will affect
places like Haines, or Seward, or wherever the cruise ship
lines may go, or wherever the cruise ship lines do decide to
do promotions on board, and get fees for. He thinks this
will force businesses to pay to join.
Number 753
CHAIRMAN PORTER asked Mr. Ryfkogel what he meant by there
were no guaranteed shops in Sitka. He asked if he was
correct in saying that they have not established a guarantee
whereby they will indemnify the purchase with any of these
shops. Is that not the arrangement?
MR. RYFKOGEL replied that was the arrangement.
CHAIRMAN PORTER said that while they are not saying "Don't
shop there," they are saying they will not indemnify the
purchase. Is that correct?
MR. RYFKOGEL said they call it guaranteed shopping.
CHAIRMAN PORTER said what that amounts to is when they
return home, if they find out that for some reason their
item is broken, or it was not the value that they thought,
the cruise line will guarantee that purchase price?
MR. RYFKOGEL said that was right.
CHAIRMAN PORTER asked MR. Ryfkogel if he did not think that
was a fair arrangement.
MR. RYFKOGEL thought it to be a fair arrangement, and is not
opposed to that guarantee at all. Neither is he opposed to
the promotion, because we are going to be faced with that;
however, we are the only community in the United States that
has that. He thinks Alaska is the first place to be tested
on that in the United States. Norwegian Cruise lines is a
heavy hitter. He said he was not saying they were not going
to live with promotions on board ships, but what they were
saying is there is some discrimination in certain
communities whereby the cruise ship line makes it known that
they do not have any shops in those communities. That is a
concern for those communities whereby the merchants say, "I
do not want to participate."
REPRESENTATIVE JAMES stated that in Chicago they used to
call it insurance.
Number 788
REPRESENTATIVE KOTT asked for clarification. He asked Mr.
Ryfkogel if he believed that if the cruise lines knew there
were no shops in that particular community, that they would
not offer that particular community as a stop, per the
cruise arrangement.
MR. RYFKOGEL said they would stop in different ports, and
they would continue to stop in different ports. His concern
is that they would stop in Sitka, as an example, and say
that we do not have any guaranteed shops in Sitka, and as a
result of that, it would have a damaging effect on the town
of Sitka, as an example, by using this guaranteed shop
promotion idea, if you want to call it that. Call it
whatever you want, or "ads" or advertising or whatever. The
point is they have a way of forcing the merchants in Sitka
to join in this scheme. You would have to know this scheme
in order to understand it. It is a scheme where they come
to you, and there is no published fees. It is whatever a
business can pay, or whatever they decide a business can
pay, and they pick the businesses. You do not pick them,
they pick you. That is the way it is and it is a problem,
and if we do not address it today, we are going to be
addressing it sometime in the future.
Number 806
REPRESENTATIVE DAVIDSON asked Mr. Ryfkogel if his business
had been picked, or approached, or if he knew of any
businesses in Juneau that have been approached, and asked
him to explain.
Number 809
MR. RYFKOGEL said his business has not and will not be
picked. He did know of others who had been approached.
Based on the meeting at the Chamber of Commerce, that the
man from Norwegian Cruise Lines attended, they could not
actually talk fees. There were different fees for different
businesses, and there were different arrangements for
different businesses. He thought there should be a fee
schedule that someone could look at to determine if it is
equitable.
Number 834
REPRESENTATIVE KOTT asked if Mr. Ryfkogel had noticed a
difference in the amount of traffic between his shop and
other shops in Juneau.
Number 840
MR. RYFKOGEL said he had not.
Number 841
REPRESENTATIVE KOTT said he always tried to avoid stores
mentioned by cruise ship directors, because he felt like
there was some type of inclusion cost built in; so to avoid
that cost, he went elsewhere, taking just the opposite
approach.
TAPE NO. 94-67, SIDE B
Number 000
REPRESENTATIVE DAVIDSON asked how the illegality could be
measured. By what measurement could enforcement take place
as a result of the illegality of this commercial
discrimination?
MR. RYFKOGEL thought the fees needed to be published, and
the cruise ships should be told they cannot talk down a
community because they do not have people who have signed on
with the cruise ships.
TOM DOW, Vice President of Hotels for Princess Tours
explained that the bill would allow ships to operate on-
board casinos while traveling throughout the inside passage
as part of the entertainment packages offered to passengers.
He said, "essentially we've determined through fairly
extensive public research that there is very little public
opposition to this because there is a recognition that this
activity is offered only to passengers who are paying for a
cruise vacation and that it is come to be accepted as part
of a normal offering of this type and that it never has any
impact on the citizens or communities of Alaska because it
all takes place offshore.
MR. DOW stated, "We have no objection, I will hasten to add,
to a restriction on on-board promotion of gift shops. When
this came up in the Senate Judiciary Committee I testified
that Princess does not support or participate in those kinds
of promotions, nor do the vast, vast majority of the other
permanent, long-term operators, certainly not the ones that
have the kinds of investments landside that Princess and
Holland America have. Two years ago (indiscernible) tried
to initiate a program like this. They were widely
criticized within the cruise line industry in Alaska.
They're not back this year. So the only guys that have ever
done it, aren't here. Norwegian Cruise Lines came in a few
weeks ago with a promotion. This is the first year that
they will sail in Alaska, so I think it's --I don't want to
say that there's no threat as a result of this and that it
shouldn't be something of concern to business owners in
coastal communities in Alaska, because I think there's
always the threat that it could appear because it's fairly
prevalent in the Caribbean and some other trades. But we
certainly recognize the difference in Alaska - we want to
support Alaskan businesses. I understand the very complex
nature of restraint of trade and so on, but I'm not a
lawyer, so I won't try to decipher all of that. I just say
that we would support restricting it or disclosing it. We
don't intend to participate in it on behalf of my company,
and neither do most of the other big companies in Alaska."
Number 150
REPRESENTATIVE DAVIDSON asked what kind of gambling they
have on ships.
Number 152
MR. DOW answered they have crap tables, roulette wheels,
poker tables, blackjack tables, and slot machines.
Number 156
REPRESENTATIVE DAVIDSON asked what percentage of clientele
come to them primarily for the gambling.
Number 158
MR. DOW would say it is zero. His intuitive reaction is
that it is not a primary reason why people choose to take a
cruise to Alaska. If they are hard core gamblers, they can
do it a lot cheaper elsewhere than they can on a cruise to
Alaska. It has become accepted that the large cruise ships
with over 500 passengers have certain amenities on board,
including a theater with live musical Broadway shows, and
that type of thing - a health spa, a casino, some kind of
swimming pool. A lot of them have golf driving off the back
end, and skeet shooting, and other activities as well, in
combination with port calls and other shore excursion
activities.
REPRESENTATIVE DAVIDSON asked what parameters were in place
around the gambling aboard ship.
MR. DOW said the casinos are not open in port, and beyond
that it is based on traffic. Casino activity is heavier in
the Caribbean trades, in Mexico and the Mediterranean where
there is a little bit younger crowd, and people are more
interested in nightlife activities. He presumed most of the
committee members have been in a port where one of their
ships has pulled into port and seen that most of these
people are not late night party animals, for lack of a
better term.
REPRESENTATIVE KOTT asked if there was an age requirement to
enter the casinos.
MR. DOW said yes, there is.
REPRESENTATIVE PHILLIPS commented on how much money she had
lost in cruise ship casinos and stated these fees seemed to
be pretty low.
MR. DOW responded that "Well, we have one basis of
comparison in the United States and I guess I would say that
we have kind of a unique situation here. Most of the other
cruise operators in the United States are either going out -
a few out of the mid-Atlantic coastal areas, mostly though
Miami and Southern California. They go straight out three
miles and then there out, and it doesn't matter. The same
thing, by the way, applies to us when we're in Canadian
waters, when we're coming across the Gulf of Alaska on the
way to Seward, in other areas when we're outside three
miles. So we're talking about inside passage, basically
Ketchikan to Skagway, Haines is the area that's impacted, so
it's not the entire cruise even under the AG's ruling last
year. The one real comparable geographic location in the
United States is the Chesapeake Bay of Maryland, where
you're in inside passage surrounded by state lands on both
sides. Maryland just passed an exemption which was heavily
promoted by the Port of Baltimore to encourage cruise ships
to call there and we just obtained a license - in fact, it
was the first license obtained under this new law this year.
Twenty-five dollars is what it cost. So our proposition is
that per ship, Princess will be paying each year, under this
scenario, $30,000 for most of our ships and $20,000 for some
of them with our fleet deployment plans that are already out
there and available, most of ours will be in the $30,000 -
$40,000 class."
REPRESENTATIVE PHILLIPS questioned if that was per ship.
MR. DOW responded per ship per year.
REPRESENTATIVES PHILLIPS asked if they paid anything for the
transporting section through Canada.
MR. DOW responded no.
REPRESENTATIVE KOTT asked how many ships they had coming to
Alaska.
MR. DOW commented that Princess has six ships deployed to
Alaska at this time.
Number 275
DON STOLWORTHY, Director of the Charitable Gaming Division,
Department of Revenue came forward for questions.
Number 282
CHAIRMAN PORTER said there were questions about the fees.
MR. STOLWORTHY said their records show that in 1994 there
were 19 ships calling. If everybody participated and paid
the fee, that would be $590,000. In 1995, Princess will be
adding a ship, and there is another ship or two scheduled to
come on line after that. So he would say $600,000 -
$700,000 if everybody participates.
Number 293
REPRESENTATIVE PHILLIPS asked if the money was earmarked for
anything specifically, other than going into the general
fund.
Number 295
MR. STOLWORTHY said his knowledge, under this draft, was
that it goes to the general fund.
Number 302
REPRESENTATIVE DAVIDSON asked what kind of costs would be
associated with this exemption certificate.
Number 308
MR. STOLWORTHY explained that the fiscal note attached
stated $38.6 to be the annual cost for a part-time
investigator. That person would probably come in March to
process the exemption certificates the cruise ships
submitted, file the reports, get their paperwork back to
them, be available to answer questions regarding complaints,
et cetera.
Number 328
REPRESENTATIVE NORDLUND asked if these funds would be
separately accounted for.
MR. STOLWORTHY said they could say exactly how much was
received, but once it made it into the general fund, you
would not be able to determine where the specific funds were
spent.
REPRESENTATIVE NORDLUND stated that the Department of
Revenue, at some point may want to use these funds for
tourism promotion. Perhaps the committee would like to
adopt a letter of intent to that effect.
CHAIRMAN PORTER said he would certainly consider it.
Number 345
REPRESENTATIVE JAMES asked about the fiscal note. As a
seasonal investigator, what would be the amount of time this
person would be working?
Number 350
MR. STOLWORTHY stated that without knowing the amount of
effort that would be involved, he estimated one person full
time for five months, March through September. He did not
know if that would be too little or more, he could not tell.
He said Investigator II's make about $63,000 including
benefits.
Number 365
REPRESENTATIVE DAVIDSON made motion to adopt HCS for CSSB
370 (JUD).
CHAIRMAN PORTER asked if there was any objection to
adoption. There was no objection.
Number 375
JERRY LUCKHAUPT, Legislative Council for the Division of
Legal Services. He said he could explain what the HCS was
doing that passed the Senate. There were two changes he
made, working with Daniella. The first change is on page
three, lines 13 - 14. We added a provision that says "the
cruise ship is not to conduct gambling in, or within three
miles of a state port visited by the cruise ship." That was
in the bill as it proceeded through the Senate
Transportation and Judiciary Committees, and was taken out
in the Senate Finance Committee. Adding that provision
back in just does what it says. We are not going to allow
any gambling to occur in port or within three miles, as the
ship is approaching the port. The second change is on page
two, line 23. It clarifies a provision in the definition
"cruise ship" as to what a cruise ship would be. Line 23
explains that a cruise ship provides on board, overnight
accommodations and meals for those passengers. The words
"on board the ship" were added by Mr. Luckhaupt to clarify
that these accommodations must be provided on board the
ship. There was a concern that a little gambling junket
vessel would possibly leave from Juneau or some port,
traveling up to Skagway, allow gambling all the way up, and
then put the passengers off the boat, so they would then be
accommodated in the Great Northern Hotel, or something like
that; and then they would get back on the next day, and
proceed to the next port, letting folks off. He was trying
to carve a narrow exception for these large cruise ships
that provide these accommodations on board the ship.
REPRESENTATIVE PHILLIPS said that was a point that she
wanted to address because out of Homer, there are tour
boats, that are fairly large and have overnight
accommodations, that feed people and take them out on
fishing trips. With everything that has been stipulated,
there is nothing to exempt them from applying for one of the
permits to have gambling on board those boats. They go
outside the three-mile limit for fishing, they have
overnight accommodations, they stay over the weekend or
easily stay 72 hours. So we are opening up a whole new
arena of possibilities in Alaska. These are small ships -
small boats.
MR. LUCKHAUPT responded "That is a possibility to the extent
that they operate 120 days a year and do go on cruises of at
least 72 hours, it would be possible for that to occur.
I've come up with a few possibilities for the committee, if
the committee were to choose to maybe tighten up that
exemption a little more. I see two basic areas where you
can do something with that. Susan Burke, who represents -
who's doing some work from the law firm of Av Gross and
Susan Burke, presented me with a copy of the Maryland
statute a little while ago that Mr. Dow referred to that
Maryland recently adopted along this subject. The Maryland
statute provides that these cruises must originate or
terminate in a foreign port outside the United States. And
that's a possibility. That approach has been broached to me
yesterday evening and today. I have some serious concerns
about doing that on equal protection grounds. In Alaska,
the Alaska Supreme Court doesn't really run their equal
protection analysis under the U.S. Supreme Court's analysis
- the way the U.S. Supreme Court analyzes equal protection
issues. The Alaska Supreme Court has recognized that our
equal protection clause is stronger than the federal equal
protection clause, and the Alaska Supreme Court uses a
sliding scale approach to determine whether or not a
violation of equal protection has occurred. And the courts
identifies a point on this scale - identifies the interest
that's being invaded by the state or the classification that
the state uses and then slides up and down that scale to
find a point where they'll then require a greater or lesser
showing from the state to justify that classification. My
concern is that this classification that the cruise begin or
end outside of the United States, is that why has the
legislature chosen that classification? I can't see a real
strong distinction when I look at it as to why the
legislature should choose that distinction. The rationale
for it is, as it's been explained to me, is that for the
most part, if you have the cruise beginning or ending
outside of the state of Alaska, in this case, that you will
draw in most of the customers for that cruise from out of
state and you'll be encouraging tourism within the state,
but you'll be drawing from people outside of the state.
Now, the trouble with that analysis as I see it is that we
have a number of cruise ships, they're different kinds of
cruise ships, that do operate from - work out of Juneau
here. They begin and end their cruise here in Juneau and go
out for seven days and then come back. For the most part,
those ships - well my understanding is that none of those
ships offer gambling right now - but they do draw the vast
majority - 99 percent or 100 percent - of their passengers
from outside the state also. And I don't necessarily see a
distinction that we'll only be drawing people from outside
the state if the cruise begins or ends outside the state.
Now that's a possibility, but I also see some other
possibilities.
"This Maryland statute also provides that the cruise ship
must provide overnight accommodations - overnight cabin
accommodations - for at least 300 passengers. And that's an
attempt to get at these larger cruise ships and eliminate
the possibility that we can have these small gambling
junkets - a different way to use the term floating crap game
or something like that - than the normal understanding of
the word, you would be able to attack those smaller
operations. A gambling junket that had to provide overnight
accommodations for 300 or 400 or 500 people probably is not
going to be able to do that just on the basis of gambling
alone. That the primary purpose of the cruise would have to
be scenic cruising and port visits, as we require in this
bill already. So that would be one approach.
"Tying in with that, this committee could increase the
length of the tour - that would be longer than 72 hours, but
we would have to be careful of that to determine that the
cruises from Vancouver say up to Juneau that they will do
that in greater than 72 hours or 96 hours or whatever the
legislature were to provide, because there are people that
do - it's my understanding there are people on the big
cruise lines that do join the cruise in Juneau on occasion,
especially earlier in the year and the end of the year, they
have little deals that down in Seattle they advertise for a
little cheaper amount of money to get people to get on those
legs of the cruise.
"Another possibility would be to require a minimum number
of..."
CHAIRMAN PORTER commented that this wording wouldn't
preclude somebody from getting on a ship in one port and
getting off in another port that was not 72 hours in
duration. But what we're talking about was that the cruise
itself was over 72 hours in duration.
MR. LUCKHAUPT said "We also get involved when we get
involved with people getting on in one Alaska port, say in
Juneau, and getting off in Ketchikan, or something like
that. If it's a foreign vessel, they cannot - foreign
vessels are prohibited from transporting domestic passengers
from one domestic port to another without stopping in a
foreign port.
CHAIRMAN PORTER said he understood that, but setting the
Jones Act stuff aside, if that were not the law this still
would not preclude someone getting on in one port and
getting off in another and that not being 72 hours, but
still the exemption would still be valid because the cruise
itself was 72 hours.
MR. LUCKHAUPT said "Technically, that possibility might be
true. The way this is worded, this exemption, is that they
have to provide these cruises for at least 72 hours in
length for their ticketed passengers. But the cruise ship
exemption says that the gambling is conducted by the cruise
ship for its ticketed passengers, so potentially a passenger
has to be ticketed for the cruise and the cruise then would
be 72 hours. There could be situations where someone does
get off early because of some problem, but I don't think
that would be a problem. But the cruise itself would have
to be greater than 72 hours and the passengers would have
to be ticketed for the cruise, is the way I understand the
meaning of the bill. So technically, all the passengers
would be ticketed for at least 72 hours, I would think."
REPRESENTATIVE PHILLIPS said unless we add a provision as to
the number of passengers or passengers boarding out of state
and having to return out of state or something like that,
she could see a whole new arena of halibut charter business
in Homer that is going...the charter operators are going to
be able to offer gambling because these boats do go out,
they have berths for people, they take them out on cruises,
but they're fishing trips, and they're going to be able to
offer gambling as an incentive for people to come on that -
I can just see we're opening up a whole new arena of
businesses or industry or something -- are we ready to get
into that?
REPRESENTATIVE JAMES asked if we want to disallow fishing
charters from doing this and asked if that couldn't be
included.
MR. LUCKHAUPT said "We had defined in cruise that the
purpose of the cruise must have as its main purpose scenic
cruising and port visits at maritime communities in the
state."
REPRESENTATIVE PHILLIPS said that a boat going out of Homer
and traveling to Seldovia - that's a very scenic cruise.
REPRESENTATIVE DAVIDSON said that people are going to do
what they want to do and didn't see how the concerns of
Representative Phillips were directly affected by this. He
said it could be tried and if there are too many loopholes,
the law can always be changed.
CHAIRMAN PORTER said we do have severability in this. If we
adopt a couple of these extra added attractions and someone
were to take the legislature to task and win that this was
somehow unconstitutional, we have not affected the rest of
the bill. He said he was not opposed to putting in these
kinds of restrictions, because we're trying to accommodate
one particular tourist industry and promote that industry in
the state. We're not trying to develop an industry in
Homer.
MR. LUCKHAUPT said "Adding in a requirement that a cruise
ship provide accommodations for at least 300 passengers, I
don't necessarily see the challenge occurring
(indiscernible) if there was one. What I think Chairman
Porter was alluding to was a requirement that the cruise
begin and end outside of the state - begin or end in a port
outside the state. It would be listed as one of the
requirements and under our general severability section in
Title 1, the legislature has set forth that statute that
says that if any part of a statute is found to be
unconstitutional that it is therefore severed from - the
court shall make every opportunity to severe it - to delete
that section and make the rest of the act still apply. That
can occur and the courts have applied that analysis to
separate out those (indiscernible) portions of an act of the
legislature. So that could occur. There is not general
agreement with my analysis - well, with attorneys you can
have a difference of opinion and....Susan Burke is not as
upset about this provision as I am. Meanwhile, I talked to
a representative of the Department of Law who shared my
concerns about the equal protection problem. We may never
ever have a problem because of equal protection because
we'll have to have someone come forward and challenge that.
To challenge that it's going to have to be somebody who
wants to bring a very large cruise ship up to Juneau and
start their cruises in Juneau or something like that and
then operate throughout the state for a week at a time,
return to Juneau without leaving the state. It's not a very
likely thing. The nitch for Juneau in in-state cruises has
been for the most part, smaller cruise ships coming up to
Juneau and operating and grabbing a nitch that the large
cruise ships do not occupy --trying to get a more personal
cruise and one that's - like I said, a more personal cruise,
getting in closer to the local communities possibly, is a
way to describe those cruises. And so we may not ever see a
challenge on those equal protection grounds, but it's
something that you should be aware of and I personally, do
not see the justification the state will have when the
Department of Law has to defend that provision. But that
doesn't mean that we won't lose it or that we won't be
challenged on that, that it won't become an issue or may not
ever become an issue. Also, the state of Maryland has
enacted such a provision and as of, as far as I know and I
just saw the law today, as far as I know, it hasn't been
challenged and struck down as unconstitutional. The state
of Maryland probably does not have an equal protection
clause that is as strong as the Alaska equal protection
clause and does not have a court -- well they possibly might
have an Alaskan Supreme Court that has sometimes been
classified as judicially active in this area. So I guess
I could offer those two provisions as being the two main
ones that you might want to look at to basically solve this
potential problem.
"Mr. Chairman, Representative Nordlund had earlier asked
about program receipts and separate accounting. In 1991 -
1992, the legislature adopted a general program receipts
language that provides for all money that comes into the
state - into the state coffers - that's received by any
state agency, must be separately accounted for. And so that
money is. It's AS 37.05.142 is one of the citations. The
money is separately accounted for now. All money that comes
into the state. There is an account number given to that
money and we can identify that money, even when it gets
deposited in the general fund. We can identify the program
source of that money. The term program receipts gets
confusing at times because of the way we think of it and the
way its used in the budget on the front pages, is the way we
appropriate the money out and it's usually to the same
program. For example, fees that are received by DMV
(Division of Motor Vehicles), a certain amount of that gets
appropriated back to the Department of Public Safety to run
DMV operations. But it's not a program receipt just when it
gets sent back to that same program that collected the
money. It's a program receipt when its collected by the
state and some program - it gets identified with that
particular program that collected the money. The
legislature, then, can without doing anything else, they can
just say that they'll appropriate it back to the agency that
it received it, if they wanted to. There's a way to ease
the pressure on the legislature when they're appropriating
these program receipts. The legislature doesn't have to do
that though. But the money will be separately accounted
for. There was a proposal, I believe, that was discussed
for a little while that had this money be separately
accounted for and then have it be appropriated -- or for the
legislature, basically, to be putting in a little bit of
intent language into the bill to say that the legislature
may use this money every year to partially fund the
operations of ATMC (The Tourism Marketing Council). And
that's not in the bill, at this time. But there's nothing
to stop the legislature from doing that, if they chose to.
There's no way for the legislature to require the
legislature in the future to do that either, because that
would be a dedicated fund and we'd also have problems with
one legislature trying to tie the purse strings of a future
legislature."
Number 730
CHAIRMAN PORTER suggested adopting these two issues
separately, but conceptually, and move two conceptual
amendments. One that would include the requirement as
Maryland has for a capacity of 300 people and foreign port,
and another one that would include the wish that the
legislature may appropriate funds.
REPRESENTATIVE DAVIDSON commented that because it was
getting late in the session, and the committee had not done
well with conceptual amendments, as well as conceptual
letters of intent, and since these are separate issues
questioned why they couldn't come back to the board next
year with these things so they could get this on its way.
REPRESENTATIVE PHILLIPS stated there was not reason why
someone couldn't prepare these amendments overnight and the
committee could meet the next morning to adopt them.
CHAIRMAN PORTER said the committee could adopt what he had
previously stated, conceptually, and pass them and pass it
along tomorrow.
REPRESENTATIVE KOTT thought the committee and heard some
good comments on how to tighten up the language on the
definition and he particularly liked the overnight cabin
accommodations for a minimum of 300. He asked if Mr. Dow
from Princess could give the committee a brief overview as
to who might be applying for these permits within the
parameters -- who could have applied previously.
Number 747
MR. DOW explained who could have applied for these permits
under previous law, per Representative Kott's request. He
said he thought the 300 people limit would resolve the
problem of charters to nowhere from coastal communities. As
far as originating and terminating in a foreign port, all of
the large vessels operating in Alaska right now, are by
definition, doing that. There have been American bottom
vessels operating between Alaskan ports for years and years
in Alaska, coming in and out of Juneau, and so forth, that
could have operated casinos on board for the last 20 years.
None of them ever have. There was no known prohibition
until this Attorney General's Opinion last fall. He
believed it to be a potential or theoretical problem. He
thought the likelihood of it occurring is almost zero.
There is a three year sunset on this bill, and it would take
that long for somebody to purchase and get a vessel in place
and operate it anyway, but the 300 person rule would take
care of a majority of the problems. He is not against small
ship operators going between Alaskan ports on behalf of
Princess. He thinks they certainly have a place in the
trade. There are certainly passengers and customers that
want that kind of an experience, and they deliver a valuable
asset to the industry and to Alaska.
Number 781
REPRESENTATIVE PHILLIPS moved an amendment. She put it as
number 4, under line 16, if nobody has a problem with it
going there. The amendment would read, "This exemption
applies only to cruise ships whose passenger capacity is 300
or greater, and to those whose port of call is outside the
state of Alaska."
Number 786
MR. LUCKHAUPT said he would split those up in two different
spots. He would say, "If the cruise ship operates under an
itinerary that either originates or terminates in a foreign
port outside of the United States," (that is what Maryland
says). Then he said he would take the 300 cabin
accommodations language, and using some language that Susan
Burke likes, on page three, line 20, where we currently say,
"provides on board the ship overnight cabin accommodations,"
he would replace that language with the following language:
"Cruise ship provides on board the ship overnight
accommodations, for at least 300 passengers, and provides
meals for those passengers."
Number 798
REPRESENTATIVE PHILLIPS clarified, "overnight accommodations
and meals for at least 300 passengers."
MR. DOW commented that there are several ships that operate
to Alaska that cruise round-trip San Francisco or round-trip
Seattle. They don't originate or terminate in either
Vancouver, Seward, Anchorage, or Homer or wherever. He
didn't believe it was Representative Phillips' intent to
exclude those ships that are coming from San Francisco,
going all the way up, and then going back to San Francisco,
because the Jones Act or more specifically, the Passenger
Service Act, allows for if they're originating and
terminating in the same port, the foreign bottom vessels can
do that. He knew that Princess had one of those vessels,
but they don't let passengers off until they get the
passengers back to San Francisco, so it's a 10 or 14 day
round trip cruise. So if the language were to read
"originates or terminates outside Alaska"...
REPRESENTATIVE PHILLIPS inquired if that would replace "port
of call outside the state."
MR. LUCKHAUPT clarified, after a brief discussion, that the
language should state, "...the itinerary of the cruise
originates or terminates in a port outside of the state of
Alaska."
REPRESENTATIVE DAVIDSON asked if all of the ships for which
we are seeking exemption are at least 300 passenger vessels,
and if there were any that would be smaller in size.
Number 823
CHAIRMAN PORTER said they were all at least 300 passenger
vessels, and in the past 20 years, there have not been
smaller vessels in that category of boats originating and
terminating outside of Alaska.
CHAIRMAN PORTER asked Mr. Luckhaupt for an explanation of
the amendment, so they could make a motion to move it.
Number 830
MR. LUCKHAUPT said on page 3, following line 16, a new
paragraph four would read, "The cruise ship operates under
an itinerary that either originates or terminates in a port
outside of the state."
Number 844
MR. LUCKHAUPT explained that the second amendment would
occur on page two, page three, and on page four. The
definitions of cruise ship would be amended on page three,
line 20 to read, following the word "provides", delete
through the end of the line, and insert this language:
"...on board the ship, overnight accommodations for at least
300 passengers, and provides meals for its passengers."
Number 858
REPRESENTATIVE PHILLIPS asked why you could not just say
that it provides meals and overnight accommodations for more
that 300 passengers. That is a lot better.
Number 860
MR. LUCKHAUPT stated his concern he had with Susan Burke
about that is that sometimes the vessels will not be full,
and we want to say they have accommodations for 300 people.
But, for example, especially earlier and later in the year,
the cruise ship may not be full, and so, it may only have
250 people on the cruise, but they have accommodations for
300; so we want to word it in that sort of nebulous way.
TAPE NO. 94-68, SIDE A
Number 000
CHAIRMAN PORTER thought it should say, "overnight
accommodations for at least 300 people." He then asked if
the committee understood the amendment.
Number 013
REPRESENTATIVE DAVIDSON said no, he did not understand it.
Number 015
CHAIRMAN PORTER went through the amendment again, explaining
that under line 16 and number 4, on page three; the
amendment would say, "The cruise ship operates under an
itinerary that either originates or terminates outside the
state of Alaska." For the definition of cruise ship, which
appears on three different positions in the bill, we are
adding to the definition, "provides on board ship overnight
accommodations for at least 300 people." We are adding "at
least 300 people" wording to that definition.
Number 035
REPRESENTATIVE DAVIDSON said he suspected they were hoping
that cruise ships will never begin their cruise from Alaska,
and go to San Francisco, and come back to Alaska. This may
never occur, but what are we really discouraging by
inclusions of these kinds? Things change quickly.
Number 069
MR. DOW said he understood the concern, but the language, as
it is presently proposed in the amendment, if it either
originates or terminates at a voyage, then you could
originate a voyage in Alaska, and terminate it someplace
outside the state, or vice versa. There is nothing that
precludes somebody beginning a voyage in Alaska. About half
of ours do, now. We bring up people and drop them off and
then we bring another load south, so we are doing that most
of the time. We only have one vessel that cruises round
trip. He thought this language would accommodate that.
Number 090
REPRESENTATIVE KOTT moved the amendment as described. There
being no objection, the amendment was adopted.
Number 105
REPRESENTATIVE NORDLUND moved amendment number 2. He
described it to state, as we talked about previously, the
fees collected under this section may be appropriated for
tourism promotion, and he did put in the language
"...separately accounted for." He said he knew that was
redundant, and we already have it in law, and do not need to
say it, but he thought it would help people understand what
the intent is here. He suggested they put it in the section
right behind what the fee schedule would be and then the
sections would be renumbered after that.
Number 120
MR. LUCKHAUPT said when we have attempted to do some
language like this, it is probably best for us to say "the
annual estimated balance in the account maintained for
this." Again, it is sort of this technical, in order to
give some leeway to make that change, because he knew Dave
Dierdorf would tell him it is all wrong if he tried to do it
this way. We will then put at the end of the amendment,
"Nothing in this section constitutes a dedicated fund,"
because when we have used the language -- the last time this
issue reached the Alaska Supreme Court, when we used the
language "may" in regards to the Alaska Marine Highway Fund,
the argument was made to the court by saying "may", the
legislature meant "may only" be used. By using the term
"may", that is what the legislature meant. The court did
not find for the state on that issue. The court looked
elsewhere in the Marine Highway Fund Act, and they had some
language that said, "Nothing in this Act creates a dedicated
fund." That is what they hung their hat on, so what we are
now doing to deal with that problem, is every time the
legislature sets up one of these funds that looks like a
dedicated fund, we now say that this is not a dedicated
fund. He asked the committee to allow him to add that, too.
Number 160
SUSAN BURKE, Attorney representing Princess Cruise Lines,
said that substantively, she did not think any of the cruise
lines would have a problem with what Representative Nordlund
wants to do, but a flag went off in her mind about whether
or not the title of this bill is broad enough to cover
funding.
Number 173
REPRESENTATIVE PHILLIPS suggested sending along a Judiciary
letter of intent.
Number 175
MR. LUCKHAUPT said that would be fine, and they recommend a
letter of intent be included, since this language cannot be
mandatory in future legislatures. We are providing an
exemption. We are not really saying in the title of the
bill what we are going to do with these fees. He said he
would have some hesitation on whether or not this amendment
could fit in. The only clause it could fit in is the one
saying that we provide an exemption from gambling laws for
gambling conducted by cruise ships for their ticketed
passengers. Is that something that would fit in there?
Honestly, it does not fit really well.
Number 193
REPRESENTATIVE JAMES said her concern is that this amendment
says nothing. It has no affect, except filling up more
space in the statutes, and for that reason, even though she
supports the intent, and she would support that we recognize
it as so, she felt there is no place for this in the statute
when it has no affect. She thinks the statutes are to be
showing us what we do and how we do it, and not what someone
thinks we might ought to look into. For those reasons, she
thought we should try to get our statutes smaller instead of
bigger, and for that reason she would object to it, even
though she does not have any real problem with the content
of it, as a statement.
Number 213
REPRESENTATIVE DAVIDSON said we were unnecessarily
cluttering up our statutes, and he thought it was important
to keep in mind they have just a few days remaining. If
they get back to the other body with some of these issues,
this bill could easily get lost in the shuffle, and we may
not get a bill like this through in time. He objected to
the amendment and he certainly wanted to support tourism,
but not like this for right now.
Number 227
REPRESENTATIVE NORDLUND withdrew his amendment, not
necessarily because he thought it cluttered the statutes,
but only because it would probably require a title change,
and a concurrent resolution, and it is getting late here.
He hoped the committee would adopt a letter of intent.
Number 235
CHAIRMAN PORTER asked if there was any objection or further
discussion on the amendment.
Number 236
REPRESENTATIVE PHILLIPS wanted to discuss the federal law
issue on this bill.
Number 237
CHAIRMAN PORTER asked Mr. Luckhaupt if he was correct in
summarizing in the following manner: One of the concerns
expressed peripherally to this bill, is its potential affect
relating to the Indian land gaming issue. The gaming issue,
if it exists in Alaska, is already open, because of that
amount of gaming that the state does allow, and this would
have no affect one way or another on that issue.
Number 255
MR. LUCKHAUPT agreed that basically that was his opinion,
but this bill will open the door for sure. He thought there
was some debate as to whether or not the door is currently
open for class three casino type gambling, under the Indian
Gaming Reform Act, the federal law. There are basically two
levels of Indian gaming you have to worry about under the
Indian Gaming Reform Act. One is bingo, pull-tabs and
lottos. The other is full scale casino gambling that
happens to include lotteries. The federal law says that if
the state allows any person to conduct casino gaming in the
state, then they have to allow the Natives or the Indians,
in the case of the term used in the Act, to conduct casino
type gambling on Indian lands. Currently, in Alaska, the
only casino gaming we allow at this time are those conducted
by charitable organizations who are allowed to conduct one
casino night a year. The question was presented that at
those casino nights you do not receive money in return; you
receive script in return, and then you can use that script
to purchase prizes at the end of the evening. It is not
really casino gaming, and so there is the a possibility that
the state could have an argument to preclude casino gaming
by Indians on Indian lands, under that argument. The
problem with that ties in with the fact that the federal
government classifies lotteries as being the same thing as
casino gaming. They do allow lotteries in the state of
Alaska currently by charitable organizations and
municipalities; the Nenana Ice Classic is a perfect example,
to the extent that it opens the door to full scale casino
gaming, the door is already open.
Number 300
CHAIRMAN PORTER said that having had some degree of exposure
to gaming regulations and laws, the [inaudible] met by Monte
Carlo night. It is like sitting down to a commercial poker
game. You walk in with your money, and you buy the chips,
and you play poker with the chips, and then you take your
chips and return them to money. You walk into a charity
night at the soroptimist club, you buy the script, you go
play all these games with the script, and then you turn the
script into something of value, albeit, donated prizes, it
is something of value. That is gambling. We already allow
it.
Number 320
REPRESENTATIVE DAVIDSON said he would like to move the bill.
Number 325
REPRESENTATIVE KOTT asked about section six under required
disclosures, since it might come close to infringing on the
first amendment, commercial speech is now protected. He
asked if this particular section was a reasonable regulation
of speech.
Number 368
MR. LUCKHAUPT said this is what the first speaker was
talking about; the total about face the bill does, basically
to deal with promotions. He said in his personal view, his
office has not had a problem with this. This would be
something reasonable by the state to protect the interest of
the local businesses, and prevent those businesses from
being somewhat unfairly labelled during these on-board
promotions, or being unfairly classified as being
untrustworthy, or something like that. The argument has
been that these promotions, by mentioning certain
businesses, that even though in your mind, it did not work,
it leaves the impression that other businesses that are not
mentioned are not trustworthy; that they have had problems
with those businesses. He did not see this as being, under
the first amendment analysis, that the U.S. Supreme Court
has articulated, he did not necessarily see a problem here.
Again it would be one of those issues that, if it was
presented to the court at some time, potentially, it would
live and die on its merits, and would basically be severed
from this total Act at some point in time. In his review he
could not see this as an unreasonable restriction by the
state on first amendment speech. It can include commercial
speech. He did not know of any other state that had a
similar restriction. He said this type of promotion has not
occurred in any other state yet. Cruise ships have used
this in other foreign ports, but have not attempted to use
it in the U.S. yet, except last year when Coastal Cruises
used it, and they received a lot of grief about using it.
Number 378
REPRESENTATIVE JAMES commented there is not a state in the
lower 48 who would let them get away with this. She said
she felt whatever advertising program the ships have should
have to include anybody that wants to be in it, not
selectively. She said those were just her comments, and she
was not going to make an issue of it.
Number 390
MS. BURKE wanted to make one brief comment on the Indian
Gaming Act issue. She agreed with Chairman Porter that we
are long past the issue of whether Alaska allows class three
gaming activities, and therefore whatever is in this bill is
going to have no affect whatsoever on Indian gaming.
However, much more important than her opinion, but less
important than Chairman Porter's, is that of the Attorney
General's Office. She had spoken with Vince Usera that
morning about this issue. They have already flatly come to
the same conclusion that you, yourself have, and that is
that they are not even going to make an issue out of the
class three's, so he gave her permission to pass that on to
the committee.
Number 410
REPRESENTATIVE DAVIDSON moved with unanimous consent HCS
CSSB 370(JUD) out as amended, with individual
recommendations, and fiscal note as attached, as amended.
There being no objection, the bill was moved from committee.
Number 420
CHAIRMAN PORTER said there was one more bill, and introduced
David Skidmore.
SB 292 - INTERSTATE TRANSFERS OF INMATES
Number 425
DAVID SKIDMORE, staff for Senator Frank stated the bill was
introduced by the Senate Finance Committee. The
Commissioner of the Department of Corrections currently has
statutory authority to transfer inmates out of state. There
are two somewhat contrary standards in statute that
determine whether that transfer may occur. The one standard
says that the commissioner can do it, unless the
rehabilitation or treatment will be negatively impaired.
The other standard says they cannot do it, if the
rehabilitation will be better facilitated in Alaska. In the
past, two or three years ago, the department was thinking
about transferring some inmates out of state. This was
something that their attorneys came up against and it caused
a bit of trouble. This bill just brings these two statutes
into conformity. The former standard that they can transfer
the prisoners out of state, unless their rehabilitation or
treatment will be negatively impaired; that standard is
retained, and the other standard is deleted.
REPRESENTATIVE KOTT presumed this to mean we are just
deleting one conflicting view, and leaving it very clear as
to what we can do.
Number 450
REPRESENTATIVE JAMES made a motion to move the bill out of
committee with individual recommendations and zero fiscal
notes.
There being no objection, SB 292 was moved.
ADJOURNMENT
The House Judiciary Committee adjourned at 5:15 p.m.
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