Legislature(1997 - 1998)
02/04/1997 01:35 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 20
"An Act relating to dog mushers' contests."
TOM WRIGHT, STAFF, REPRESENTATIVE IVAN IVAN, explained that
HB 20 would authorize the dog mushers' associations to
conduct statewide games of chance. The Division recognizes
those associations which have been in existence for at least
three years, with at least 25 Alaskan members and are a "not
for profit" organization. Prizes would be awarded for the
nearest guess of three uncertain elements in a sled dog race
which were not determined before the start of the race. The
intent would be to provide a mechanism to assist race
organizing committees to become financially self-sufficient.
Passage of HB 20 would also allow participants to purchase
raffle tickets in which the contestant would guess the
checkpoints, finish line arrival times, temperature when a
particular team crosses the finish line, and the total
number of dogs that finish the race, etc. The dog mushers'
association would administer the contests in conjunction
with State regulatory authority.
Co-Chair Therriault distributed Amendment #1. [Copy on
file-Attachment #1]. Mr. Wright spoke to the amendment,
noting that it had been brought to the attention of
Representative Ivan that the language in Section #2 was
unclear and could possibly prohibit the conducting of sled
dog races. He stressed that this was not the intent of
Representative Ivan.
Representative Martin asked if "raffle" referred to prizes
or money. Mr. Wright replied that would depend on the
association. Representative Martin suggested that "could"
be a play on words and recommended the language be
consistent. He questioned why the language "raffle tickets"
was being used. Co-Chair Therriault identified that the
only language being added was to Section #1, "dog mushers
contest". Raffle tickets would not be included as the
prize. Representative Martin felt that the bill could
encourage "gambling". Mr. Wright clarified that the
language used in the sponsor statement was not intended to
confuse anyone. He agreed that use of the word "ticket"
would be adequate terminology for the raffle.
(Tape Change, HFC 97-17, Side 2).
Representative Martin spoke to the zero fiscal note,
5
suggesting that the legislation could add an additional
twelve races. He asked how the Department would oversee
"above-board" operations of the legislation.
DENNIS POSHARD, DIRECTOR, DIVISION OF CHARITABLE GAMING,
DEPARTMENT OF REVENUE, responded that the activities would
fall under the same minimum charity provisions and expense
limitations of the ten percent adjusted gross income that
other activities must adhere to. The amount of time that
the Division would spend on enforcing provisions would be
insignificant. He noted that pull-tabs, bingo and raffles
provide ninety-nine percent of charity money in Alaska.
Mr. Poshard reiterated that he did not anticipate additional
costs for the Department to implement the legislation. The
Department currently is implementing a new computer system
which will free-up a significant amount of time for data
entry work and processing applications.
Co-Chair Hanley asked if an entity would need to be non-
profit in order to qualify. Mr. Poshard advised, in order
to receive a permit for any charitable gaming activity, the
association must be a non-profit organization, having at
least twenty-five Alaskan members, and having been in
existence for at least three years before the time the
application was filed. An additional requirement exists for
the type of gaming that is proposed in Section #B, limiting
that contest to a "dog mushers association".
Co-Chair Hanley asked if the new games would fit into the
cap of a gross amount an organization would need to have to
qualify to receive a permit. Mr. Poshard thought that would
fall under the cap as would any gaming activity. A cap is
based on prize limit awards.
Representative Grussendorf asked if there would be a limit
to the number of races conducted. Mr. Poshard noted
currently, statute provides a yearly $1 million dollar
limitation. The limitation is determined through the award
of prizes. The Division requires every charitable gaming
activity to provide a financial statement including a
detailed listing of expenses associated directly with gaming
activities and a listing of how profits were spent. Each
statement is reviewed closely by the Division.
Mr. Poshard continued, the cap is established on the prize
award up to $1 million dollars and including all activities.
There is no language indicating that the activities can not
be statewide; this does not differ from what currently is in
statute. Presently, AS 05.15.690(12) states that: "Prizes
can be awarded for the correct guess of the racing time of a
6
dog team". There is no language which limits it to being a
statewide contest.
Representative Martin reiterated his concern with the
potential fiscal impact on the Department. He asked if an
association could hire an operator. Mr. Poshard commented
that there exists no prohibition from an association hiring
an operator. The Division could issue an operators license
if necessary, although, the operator would be required to
"put up" a $25 thousand dollar bond. Representative Martin
stressed his concern in bringing a new element to gaming and
"gambling".
In response to Representative John Davies, Mr. Poshard
stated that the agencies would have to register and receive
a permit with the Division in order to award prizes. Those
activities are subject to the same provisions that any other
gaming activities are subject to. He added, there is a 10%
minimum contribution, although there exists no maximum award
amount. On raffle type activities, the expected norm return
would be 30% to 40% of the adjusted gross.
Representative Gary Davis asked about the amount of revenue
the Department would expect to receive through tax
associated with the legislation. Mr. Poshard explained, the
main income received would be generated through a 3% tax
associated with pull tabs and collected from those
distributors. There is a 1% tax fee placed on any
organizations net proceeds. The Department issues few
mushing permits and little money is associated with these as
they tend to award more prizes than funds received.
Representative Davis commented that each year there is a lot
of time taken with this type legislation. He suggested that
the Legislature should not be involved with permitting
decisions; instead it should be handled directly by the
Division which has the expertise and regulations already in
place.
In response to Co-Chair Hanley, Mr. Poshard explained that
"raffles and lotteries" were defined in AS 05.615.690.37.
They are basically defined in the same way: "The selling of
rights to participate in the awarding of prizes in a game of
chance, conducted by the drawing for prizes, by lot". He
agreed that the line between a raffle and a lottery was
gray.
Representative Martin stated that the legislation did not
meet the definition of a raffle, but rather a lottery. Mr.
Poshard explained that it was different because of the
distinction between having an active guess on the part of
the participant rather than a drawing by lot. Co-Chair
Hanley added that the result would be different.
7
Representative Grussendorf referenced Section #1, pointing
out the discrepancy between the five year snow machine
licensure requirements, and those of the dog mushers'
contests. Mr. Poshard emphasized that if an organization or
dog mushing association formed at this time, they would have
to wait three years before eligibility to any gaming
activity. The five year limit was placed on snow machines
and resulted from an amendment by Senator Frank last year in
Senate Finance.
Co-Chair Therriault commented that Mr. Lambert of Fairbanks
disclosed concerns with the legislation. Amendment #1 would
address these concerns by deleting the language, "conducted
by a dog mushers' association,". [Copy on file].
DAVE LAMBERT, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS,
noted his support for Amendment #1. He said that the Dog
Mushers' Association had been near extinction until three
years ago when they implemented pull tabs. He observed that
the proposed legislation would give the public a "personal"
interest in dog racing.
(Tape Change, HFC 97-18, Side 1).
Representative Martin voiced concern with passage of
Amendment #1. He felt it would open the market to
professional gambling. Mr. Lambert pointed out that many of
the current dog mushing races would be eliminated if that
language remained in the bill. Representative Martin asked
if contests were limited to those that were in the system
before 1959. Mr. Poshard explained that the Division may
issue permits or licenses to conduct any of the activities
listed in Section #B. Any other activities can be listed as
permits, if they existed prior to 1959.
Representative Grussendorf recommended that snow machine
classics be included in the amendment. Co-Chair Therriault
stated that by making an additional deletion to the
amendment, would allow other entities to operate races. Mr.
Poshard added, Amendment #1 would take (12)A back to the
current language as it exists in statute.
Co-Chair Hanley MOVED to adopt Amendment #1. Representative
Martin OBJECTED for purposes of discussion. Discussion
followed regarding elimination of language in Section (12)A
and the effect that would have on the language in Section
(12)B. Representative Martin agreed that only the dog
mushing association should have exclusive rights. Mr.
Lambert commented that the three year eligibility quota
could affect dog mush racing. Representative Martin
WITHDREW his OBJECTION to Amendment #1. There being NO
8
additional OBJECTION, Amendment #1 was adopted.
Representative Grussendorf suggested adding language to Page
1, Line 9, indicating dog mushing activities. Co-Chair
Hanley summarized that the new games of chance in Section
(B) would need to be in existence for at least five (5)
years rather than the current three (3) years before contest
permitting. Co-Chair Therriault recommended referencing AS
05.15.690(12)B in that language change. Co-Chair Hanley
suggested making the motion a conceptual amendment for Legal
Services to draft. Mr. Wright recommended the language
change be inserted on Page 1, Line 9.
Representative J. Davies asked why the change was needed.
Representative Grussendorf thought that three (3) years
could make this a more viable option. Representative
Grussendorf MOVED to adopt the conceptual amendment.
Representative G. Davis OBJECTED.
A roll call vote was taken on the MOTION.
IN FAVOR: Grussendorf, Martin, Moses, Therriault,
Hanley
OPPOSED: Davis, Foster, Kelly, Mulder, Davies
The MOTION FAILED (5-5).
Representative Foster MOVED to report CS HB 20 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. Representative Martin OBJECTED.
A roll call vote was taken on the MOTION.
IN FAVOR: Foster, Grussendorf, Moses, Mulder, J.
Davies, G. Davis, Hanley, Therriault
OPPOSED: Kelly, Martin
The MOTION PASSED (8-2).
CS HB 20 (FIN) was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Revenue dated 1/24/97.
| Document Name | Date/Time | Subjects |
|---|