04/07/1995 01:39 PM Senate JUD

          SB 145 CHARIT.GAMING:PRIZES,REPORTS,PENALTY                         
                                                                              
  CHAIRMAN ROBIN TAYLOR  called the Judiciary Committee meeting to             
 order at 1:39 p.m.  The first order of business before the                    
 committee was SB 145.                                                         
                                                                               
 PORTIA BABCOCK, committee aide to the Senate HESS committee, stated           
 the following.  SB 145 makes reporting changes to bingo and pull              
 tab operations, and prohibits operators from cashing public                   
 assistance checks.  The bill creates a mechanism to log and track             
 winners of cash prizes.  Under current law, the winner must sign              
 for the prize money, but is not required to show identification.              
 SB 145 requires permittees, operators or vendors to verify prize              
 recipients identification and report names and prize amounts to the           
 Department of Health and Social Services.                                     
                                                                               
 Number 057                                                                    
                                                                               
 SENATOR ADAMS asked if $1,000 bingo prize winners must provide                
 their names and social security numbers to the permittee.  MS.                
 BABCOCK believed the prize recipient only has to sign for the                 
 prize.                                                                        
                                                                               
 SENATOR ADAMS asked about the penalty provisions contained in SB
.  DENNIS POCHARD, director of the Division of Charitable                  
 Gaming, commented that $1,000 bingo prize winners must provide                
 their names and social security numbers because the IRS requires              
 any gaming activity, when a prize of over $600 is awarded, to be              
 reported to the IRS.  MS. BABCOCK stated a first violation would              
 carry fine of up to $5,000, a second offense would be a class B               
 misdemeanor which carries a fine of up to $10,000 and a prison                
 term.                                                                         
                                                                               
 SENATOR TAYLOR questioned why the current Alaska reporting standard           
 for prize money is $1,000 if the IRS standard is $600.  MR. POCHARD           
 replied there are no provisions for reporting prize winners in                
 statute.  An operator conducting a gaming activity is required to             
 keep records of winners, but is not required to report those names            
 to the Department of Revenue.  The operator is required to keep the           
 records for three years for audit purposes.                                   
                                                                               
 Number 125                                                                    
                                                                               
 SENATOR TAYLOR asked if the records include the actual pull tabs.             
 MR. POCHARD stated the pull tabs are not kept as records.  SENATOR            
 TAYLOR asked if an operator would be required to report a prize               
 award of $650 to the IRS.  MR. POCHARD replied affirmatively.                 
 SENATOR TAYLOR commented the reporting requirement in SB 145 is not           
 a new burden being placed on operators since they are already                 
 reporting larger prizes.  He asked if the prize award will be                 
 treated as income.  MR. POCHARD responded affirmatively.                      
                                                                               
 Number 141                                                                    
                                                                               
 SENATOR ADAMS moved the adoption of a proposed amendment allowing             
 municipalities to limit the number of permittees and licensees                
 within their boundaries.  SENATOR TAYLOR objected to the motion for           
 the purpose of discussion.  SENATOR ADAMS explained the amendment             
 also allows municipalities to limit the number of hours of                    
 operation of bingo and pull-tab games conducted each week.                    
                                                                               
 SENATOR TAYLOR expressed concern that by allowing municipalities to           
 limit the number of permittees and licensees within their                     
 jurisdiction, a franchise on gambling will be created within the              
 city, and businesses would become dependent on who they know on the           
 city council.  SENATOR ADAMS responded the current law allows for             
 all or nothing; the amendment would allow the municipalities to               
 decide which non-profits could operate.                                       
                                                                               
 Number 174                                                                    
                                                                               
 SENATOR GREEN stated she agrees with the amendment in concept, but            
 expressed concern that under such a system, as communities grow in            
 size, they would need to be regulated by an entity that approves              
 the relocation or addition of operators and licensees.  SENATOR               
 TAYLOR stated his concern is that creating the power to limit would           
 be creating the power to kill.  He added the amendment would allow            
 a municipality to favor some operators, and restrict others, and              
 create a limited entry type of system.  He stated he is in favor of           
 the right of municipalities to limit the number of sessions.                  
                                                                               
 SENATOR ADAMS commented the amendment provides for accountability             
 of permittees.  SENATOR GREEN stated the amendment says a                     
 municipality "may" do this by ordinance, it does not say "shall."             
 SENATOR ADAMS noted an ordinance would have to be passed first, so            
 the amendment merely creates an option for the municipality.                  
                                                                               
 Number 220                                                                    
                                                                               
 SENATOR TAYLOR stated he would not vote for the amendment unless              
 lines 10-12 were deleted, and maintained his objection.  A roll               
 call vote was taken with the following result:  Senators Miller,              
 Adams, and Green voted "Yea," and Senator Taylor vote "Nay."  The             
 amendment was adopted.                                                        
                                                                               
 SENATOR ADAMS moved and asked unanimous consent that SB 145, as               
 amended, pass out of committee with individual recommendations.               
 There being no objection, the motion carried.