Legislature(1995 - 1996)
03/14/1995 01:45 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 44
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"An Act providing that a political use is not an
authorized use of charitable gaming proceeds;
prohibiting the contribution of charitable gaming
proceeds to candidates for certain public offices,
their campaign organizations, or to political groups;
providing that a political group is not a qualified
organization for purposes of charitable gaming;
relating to what is a qualified organization for the
purpose of charitable gaming permitting; and providing
for an effective date."
Representative Martin provided background information on the
HB 44. He stated that the legislation was introduced in
order to remove politics from gambling. He pointed out that
Alaska was the only state which allowed a political party
and candidates to have their own permits. He provided the
Committee with a handout titled "Spenard Lawyer-Protector,
Promoter and Profiteer of Gam(bl)ing". [Attachment #1].
TOM ANDERSON, STAFF TO REPRESENTATIVE TERRY MARTIN,
explained that the legislation would disallow and prohibit
any political group or organization from holding a
charitable gaming permit. Although, those entities could
legally hold a raffle permit. The proceeds then received
from the raffle could be distributed to a political entity
or organization.
He continued that an additional element of the legislation
would prohibit any permit holders from distributing their
money for political use. He stated that language was
defined as:
".....benefiting persons through aiding candidates for
public office or groups that support candidates for
public office".
Mr. Anderson clarified the technical differences between the
House State Affairs and the House Judiciary version of the
original legislation. He said that the language was more
definitive clarifying when a group would go through the
Division of Charitable Gaming rather than Alaska Public
Offices Commission (APOC). The group at that time would
itemize the source of revenue from which the contribution
originated.
Representative Mulder asked if the interpretation would make
it mandatory to include each contribution made to a
political fund within an organization regardless of the
dollar amount. Representative Martin summarized that the
$100 dollar limit would exist regardless of the donator.
Representative Mulder summarized Subsection (11) which would
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require disclosure of contributions and also sources of
income, locations and the individuals from which funds were
disbursed.
Representative Brown voiced a conflict of interest with the
legislation in that she was a member of the House Democratic
Campaign Committee. Representative Mulder disclosed his
conflict of interest.
Representative Brown pointed out that the language on Page
3, Line 4, requires that "all" donations or contributions by
permittees be identified. She asserted that the $100 dollar
exemption did not exist in the language of the current
proposed legislation. Representative Mulder agreed.
Representative Brown interjected that the public understood
that if their donation is under $100, their name would not
be disclosed. She requested that policy be kept consistent.
Representative Therriault ascertained that tracking should
be reported on all donations.
Representative Brown asked if a personal source of income
would be tracked through the proposed legislation.
Representative Martin stated that vendors and operators
should be tracked regardless of the donation.
Representative Brown emphasized that the language did not
separate the vendors in their capacity as individuals from
contributing personal funds. She asked how the legislation
would differ from the current APOC requirements.
Representative Martin responded that everyone should be
responsible to report even if the funds were taken from
their personal pocket.
Mr. Anderson reiterated that the House Judiciary Committee
recommended that accounts be disclosed regardless of the
source they are contributed from. The intent of that
language would prevent any co-mingling of distributed
proceeds. He suggested further amending the language to
clarify any pull tab or bingo permittee must disclose from
which account they are making contributions. That
clarification would then address the concern to guarantee
that funds given were not distributed from those raised for
charitable gaming.
Representative Brown asked the moral difference between pull
tabs and raffles. Mr. Anderson specified that Section 4
itemizes the types of games from which a permittee can
apply.
(Tape HFC 95-45, Side 2).
Representative Martin thought that raffle money could be
used for political contributions, although that was not his
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original intent. Mr. Anderson stated that a political
entity could have a charitable gaming permit under type (B),
in order to hold a raffle. If the entity has a gaming
permit, then funds earned from a raffle can be donated
within a year to those on the list. A non political entity
legally could not donate to a political organization or
candidate, regardless whether or not the money was earned by
a raffle.
Representative Brown questioned the language on Page 4, Line
7, "other than raffles". Mr. Anderson replied, that
language referenced a political entity holding a permit.
Representative Mulder considered that language to apply to
all individuals and not just a political entity.
Representative Kohring supported eliminating gambling and
raffling. Mr. Anderson replied that during the House
Judiciary Committee proceedings, testimony by both parties
indicated that raffles generated a less significant amount
of income, and often times are not a substantial portion of
the operations. Mr. Anderson pointed out that the language
from that version of the legislation was a compromise.
Committee members discussed results from district surveys
regarding gambling contributions. Mr. Anderson pointed out
that in raffles, the donor knows where the money will go,
whereas, in a pull tab situation, the player does not know
where the proceeds go. Representative Therriault agreed.
He stated that raising money should affect a political
philosophy process. With pull tabs, there is no link
between the flow of money and the understanding that you are
supporting a particular philosophy. Representative Kelly
echoed Representative Therriault's concern.
DENNIS POFHARD, DIRECTOR, DIVISION OF CHARITABLE GAMING,
DEPARTMENT OF REVENUE, stated that the Division is neutral
on the proposed legislation, although they have questions on
the requirements of the reports. He asked for further
clarification of the Legislative intent. The Department's
first concern results from past budget cuts, which has left
the Division with fewer field audits and investigations.
The requirement of an additional report affecting more than
one thousand permittees to file, will need further
processing creating an additional burden to the Division.
He stated that responsibility would potentially take away
from the enforcement ability. Consequently, Mr. Pofhard
urged fully funding the Division's FY96 Operating Budget
request in order to adequately address the legislative
concern.
Representative Mulder referenced subsection (11) Page 3,
asking if all collected funds would be required to be
reported to APOC. Mr. Pofhard stated it would.
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Representative Mulder thought that information would provide
APOC a clearer understanding of where those funds were
going. He understood that the information required to be
gathered from subsection (11) was currently also required by
the APOC report. He asked if there would be difficultly in
distinguishing between pull tab and raffle reports. Mr.
Pofhard replied that would not be a problem for the
Division.
Discussion followed regarding a report shared between
Representative Brown and Representative Martin. The
Department offered to provide that report to the Committee
at a later date.
Representative Mulder asked if the Division had information
available on the amount of contributions given to campaigns
other than political. Mr. Pofhard explained that to date
the Division has had no reason to track that information.
The permittee would be required to report income as
submitted to the Division. He added that it would be more
organized to have the reports in the Division rather that
receiving that info from APOC. He emphasized that there
would be 1200-1300 reports filed each year resulting from
the passage of the legislation. The information would be
imputed, tracked, and then a determination would be made if
that information was useful. APOC reports are currently
used to track the prohibitive uses of proceeds for lobbying.
He stated that the State could use the APOC reports for
tracking the political contributions.
Representative Brown asked if it was required that a pull
tab operator disclose information on where the proceeds were
to be dispersed. Mr. Pofhard explained the distinction,
when a raffle ticket is printed, it is required that the
permit be referenced. However, in a vendor or operator pull
tab place of business, normally the only way to tell whose
game you are playing would be displayed by a permit hanging
on the wall. That information is not posted directly on the
tab played.
Representative Brown questioned why the gross receipts have
increased dramatically, whereas, the net proceeds have not.
Mr. Pofhard speculated that the percentages have not
changed. He added, that pull tabs were legalized in 1988,
and that the net proceeds result from the amount of money
returned to the charities. Representative Brown inquired
where the net profit would be listed.
JEFF PRATHER, CHIEF OF AUDIT AND EXAMS, DIVISION OF
CHARITABLE GAMING, DEPARTMENT OF REVENUE, replied those
figures would not show up anywhere. Most operators do not
disclose the profits to the Department although those
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figures are usually deducted from the expense column.
Representative Martin asked if the legislation would
prohibit lobbyists from receiving funds from receipts
generated by pull tabs.
PAT SMUTZ, LEGISLATIVE DIRECTOR, ALASKA STATE AFL-CIO,
JUNEAU, stated that his organization does have a pull tab
permit and a raffle permit. The raffle permit is used for
generating funds for lobbying purposes.
(Tape Change, HFC 95-46, Side 1).
Representative Brown questioned the distinction of funds
being used for the public process. Representative Martin
reiterated that Alaska is the only State in the Nation which
allows gaming money to be used for political candidates. He
stressed that use of those funds was fuel for corruption and
that money should be given to charities.
HB 44 was HELD in Committee for further consideration.
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