Legislature(1995 - 1996)
04/26/1995 01:17 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
HB 307 - PULL-TABS PROHIBITED CHAIRMAN BRIAN PORTER described the Judiciary Committee substitute (CS) for HB 307. There was a large number of people wishing to testify, and he suspected that they were interested in testifying on the original bill. The prohibition of pull-tabs, which was the main provision in the original bill, is now not a part of the CS and will not be considered by this committee. The CS, which has been faxed to all of the teleconference sites, goes back to the concept of trying to take the proceeds of gaming out of politics. It precludes people who have received proceeds in gaming, that have permits, to contribute any portion of those proceeds to political candidates or political parties or groups. He said those who were in attendance to testify about the fact that they would lose the ability to fund their charity function from pull-tabs, the heat is off. He then entertained a motion to adopt the CS. REPRESENTATIVE GREEN made a motion to adopt the CS for HB 307, Version F, dated 4/24/95, as the committee's working document. Hearing no objection, Version F of the CS for HB 307 was adopted as the work draft. REPRESENTATIVE BUNDE asked the sponsor to read the new title. REPRESENTATIVE CYNTHIA TOOHEY read the new title for the CS: "An Act providing that a political use is not an authorized use of charitable gaming proceeds; prohibiting the contribution of charitable gaming proceeds, other than proceeds from raffles 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; other than raffles; relating to raffles; and providing for an effective date." REPRESENTATIVE TOOHEY explained that this bill would directly prohibit the misdirection of gambling proceeds from being funnelled to political use. She does not believe that anyone can legitimately consider politicians or their attempt to influence the electoral process a legitimate use of charity money. Raffles are exempt from this prohibition. When raffle tickets are sold, the purchaser has full knowledge of the cause that the raffle represents. There is a zero fiscal note from the Department of Revenue. She urged support for the bill. CHAIRMAN PORTER mentioned that if someone was intending to testify on the previous version of the bill, and their testimony no longer applies, they should let him know. STEPHEN EARLY, Alaska Native Brotherhood (ANB), Camp 2, said that on the original bill you were keeping track of funds, watching where the net proceeds went and how much it cost to rent such and such. He asked if that was still included in the CS. CHAIRMAN PORTER believed that was current law. MR. EARLY answered that he was sure it was. He wondered if the Governor has a task force on gaming. He suggested if there was a task force the committee might review some of the testimony that has been given on gaming. REPRESENTATIVE TOOHEY asked how that would relate. The bill only says there will be no political contributions. MR. EARLY asked if that is all this bill does. REPRESENTATIVE TOOHEY answered that yes, that is all this bill does. It mentions nothing else. WARREN COLVER, Representative, American Legion, Disabled American Veterans, and Veterans of Foreign Wars, testified via teleconference from Anchorage. He opposed the first version, but supported the CS. He continued to discuss the amounts of money used for community projects. EARL MICKELSON testified via teleconference from Kodiak in support of the CS. He read from page 3 of the bill, "including a group that seeks to influence the opinions of voters." He asked if there was any relation of a candidate for public office. He stated that the American Legion has no problem with the CS. CHAIRMAN PORTER said the CS doesn't preclude any organization from being involved in politics. It only says that you should not use those proceeds for that purpose. The proceeds from gaming have to be accounted for individually so that it is easy to track what organizations do with those proceeds. The bill says you should use those proceeds for the stated purpose by statute. If you have other reasons to contact legislators, you certainly may. If you have other funds in which to support political candidates or activities, you certainly may. Number 300 WILLIAM HELMS, American Legion, Post 57, testified via teleconference, in support of the CS. REPRESENTATIVE DAVID FINKELSTEIN indicated confusion between the original version of the bill and the CS. REPRESENTATIVE TOOHEY said the bill prohibits any political entity from receiving money from pull-tabs. She indicated it does not affect raffles. PAT VINCENT, Executive Officer, Kenai Peninsula Builders Association, testified via teleconference in support of the CS. She appreciated the changes in the CS, as the original version had caused quite a stir. She felt that the only way you can keep politics and gaming separate, is to do it. Do not allow anyone to profit from nonprofit gaming, including operators and lobbyists. She asked the committee to please take time to listen to those who are involved on a daily basis with nonprofit gaming. Number 450 JEANIE BERGER, American Legion Auxiliary, testified via teleconference. She thanked the representatives who were presenting this bill for negotiating and being aware of the necessity for the true nonprofits who operate and give back to the communities. These programs are so needed, and without this, the concerns of the expanded welfare program would be astronomical. Gaming is so important to the nonprofit groups. JESSE EUBANKS, American Legion, testified via teleconference in support of CSHB 307(JUD). He had called and found out how much the five different posts gave to charity this year, and was told that it amounted to $175,000. He wanted to make sure the committee knew how much charity money was generated from gaming. CHARLES MCKEE testified via teleconference. He did not see much difference between this bill and what they are doing in New York which is holding people hostage through contract negotiations. As you all should know, the Security Exchange Commission considers each American citizen as a master in this country. He is a member of the biggest organization in this whole entire country. CHAIRMAN PORTER concluded the public testimony on CSHB 307(JUD). He announced that Anne Carpeneti would go through the sectional analysis. ANNE CARPENETI, Committee Aide, House Judiciary Aide, explained that the work draft prohibits charitable gaming as a method of raising funds for political purposes, except that the proceeds from raffles may be used for political purposes. Section 1 provides that the department may issue permits to political organizations to conduct raffles only, and it provides that a political organization may not participate in a multi-beneficiary permit. Section 2 prohibits a political organization from contracting with an operator to conduct raffles. Section 3 revises AS 05.15.105 to clarify that political organizations may not receive proceeds from any type of gaming activities except raffles. It prohibits any part of the proceeds from other gaming activities to be given to a candidate for public office, state, or subdivision of the state, or a candidate's campaign organization, a political party, a group organized under, or affiliated with a political party or a political group or a group as defined in AS 15.30.130, paragraph 4, which is the elections title. Proceeds from all raffles for political purposes must be used within one year of their collection, with an exception provision that is addressed in another section of the bill. MS. CARPENETI described Section 4, which amends AS 05.15.150 to state that net proceeds from raffles may be dedicated to political purposes. It defines political uses as those aiding candidates for public office or groups that support candidates. Section 5 adds a new section that states that political organizations may hold raffles for political purposes, or for other purposes allowed in this statutory scheme for charitable gaming. That is a political group can hold a raffle and give the money to another charitable organization if it wants to. It again states the proceeds must be used within a year, unless the organization gets special permission from the department after a showing of good cause. Section 6 modifies the definition of political organization for charitable gaming, to require that the organization must have been in existence for three years before it may apply for a license. Section 7 is a conforming amendment, and Section 8 is the effective date clause, which is January 1, 1996. REPRESENTATIVE FINKELSTEIN asked Mr. Prather if Section 6 was referring to regulations that are already in place. No one gets a gaming permit unless they have been in existence for three years. Number 650 JEFF PRATHER, Revenue Audit Supervisor, Division of Charitable Gaming, Department of Revenue, answered yes, it is already in statute that you have to be in existence for three years. REPRESENTATIVE FINKELSTEIN asked if there was any reason we would be putting it in statute again since it already is. MR. PRATHER did not know. MARVINE COGGINS, Legislative Assistant to Representative Toohey, clarified the question. She explained that since there is a new section, Section 5, addressing political organization raffles, we include that just to address that new section, and it will keep this new section on raffles consistent with existing law. In response to the question regarding the need for the language in Section 6, the bill drafter has explained that if you look in Section 8, we are taking "political" out of "qualified organization," and therefore, the drafter put that back in up in Section 6. REPRESENTATIVE FINKELSTEIN offered a conceptual amendment that would allow political parties to hold gaming licenses for all uses other than direct or indirect contributions to candidates. REPRESENTATIVE TOOHEY objected. TAPE 95-53, SIDE B Number 000 A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representative Toohey, Bunde, Green and Porter voted no. Representative Vezey had stepped out. Amendment Number 1 failed, four to two. REPRESENTATIVE FINKELSTEIN offered a second amendment which would include additional reporting requirements that can be found in HB 44(FIN) am. This mandates that these permittees provide access by the department to those accounts to insure the proceeds are not diverted or transferred to any purpose other than permitted by this chapter. MR. PRATHER mentioned that the Division of Charitable Gaming is very concerned about these types of requirements because they place an impossible paperwork burden on them. These are not the reporting requirement he referred to earlier. CHAIRMAN PORTER said they would hold the bill for a few moments, as Representative Finkelstein went to look for a previous version of the bill that had language in it that he remembered Mr. Prather agreeing to. HB 307 - PULL-TABS PROHIBITED CONTINUED MR. PRATHER said he had previously testified in regard to HB 44 that we needed a report that would identify all of the accounts that gaming proceeds went into. We need a statute which clearly allows us access to those accounts. That is a type of report we were interested in seeing in regard to political contributions. CHAIRMAN PORTER asked if he believed this amendment would provide that. MR. PRATHER answered that yes, the amendment was certainly what we were looking for. REPRESENTATIVE BUNDE moved Amendment 2. CHAIRMAN PORTER described the amendment to change page 4, line 1: Insert a new subsection to read: The department shall adopt regulations to identify all accounts that charitable gaming proceeds are transferred into by permittees and providing for access by the department to those accounts to ensure that proceeds are not diverted or transferred to any purpose or use not permitted by this chapter. Hearing no objection Amendment 2 was adopted. REPRESENTATIVE BUNDE made a motion to move CSHB 307(JUD) out of the House Judiciary Committee, as amended, with zero fiscal notes as attached. REPRESENTATIVE FINKELSTEIN objected. He did not believe that we were treating all of these things equally and he had attempted to address these things in his amendment. We should not take parties, which are civic nonprofit organizations and not allow them the same kind of activities we are allowing other groups, such as free association. His second objection is that he did not believe the bill was properly, procedurally, before the committee, and that it will not be allowed on the House floor. CHAIRMAN PORTER requested a roll call vote. Representative Finkelstein voted no. Representatives Toohey, Bunde, Davis, Green and Porter voted yes. CSHB 307(JUD) passed out of committee.
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