02/21/1995 08:04 AM House STA

 HSTA - 02/21/95                                                               
 HB 44 - GAMING PROCEEDS/DEFINE CHARITABLE ORGNS                             
                                                                               
 MR. ANDERSON stated that he was there to represent Representative             
 Martin, who could not attend; however, because of a subcommittee              
 conflict, Mr. Anderson gave it over to Representative Porter.                 
                                                                               
 Number 171                                                                    
                                                                               
 REPRESENTATIVE PORTER stated that the subcommittee met last week              
 and basically tried to amalgamate the two bills they had to                   
 consider.  The consensus of the committee succeeded in doing that             
 and came forward with this bill.  It does four things.  The                   
 committee excluded raffles from the consideration, when restricting           
 gaming proceeds.  As opposed to bingo and pull tabs, anyone buying            
 a raffle ticket can make an intelligent choice about who or what              
 they are supporting on an individual basis.  So, raffles are                  
 unchanged.  Another consideration was about who should have these             
 gaming permits.  They left in place those who currently qualify for           
 permits.  The intent was to get gaming proceeds out of politics, so           
 the bill provides, first, that political parties or political                 
 groups cannot have permits, and, secondly, they cannot receive from           
 those who do, the proceeds of gaming.  With assistance to that, the           
 bill provides that anyone with a license who also makes political             
 contributions, is prohibited from giving those proceeds to                    
 candidates or political parties or groups.  They must also report             
 to the Division of Gaming what their contributions are.                       
                                                                               
 Number 230                                                                    
                                                                               
 VICE-CHAIR OGAN said that he had calls from various people in his             
 district over the concern of 501-Cs losing their gambling permits.            
 He asked if this will affect them in any way.                                 
                                                                               
 REPRESENTATIVE PORTER noted that the only people who had gaming               
 permits who now cannot are political parties, political groups, and           
 political candidates.                                                         
                                                                               
 VICE-CHAIR OGAN asked about the reporting methods that will be used           
 to keep from co-mingling funds.  His concern was if there is a                
 reasonable reporting method for groups that make political                    
 contributions; for instance, separate checking accounts.                      
                                                                               
 REPRESENTATIVE PORTER explained that gaming proceeds have to be               
 maintained in a separate account.  Disbursements in that account              
 must be reported to the Division of Gaming.  If someone with a                
 permit has a net return of $50,000, the report has to show where              
 the $50,000 went.  The intent is for charity, so the disbursement             
 must be to charitable organizations or they risk being audited.               
 The expenses allowed before this bill came into existence are the             
 same.                                                                         
                                                                               
 REPRESENTATIVE ROBINSON said that once they passed this bill there            
 will probably be new regulations drafted that would set out those             
 parameters.  There are accounting rules on how you do not co-mingle           
 funds.  She thought they might need to ask the department.                    
                                                                               
 Number 301                                                                    
                                                                               
 JEFF PRATHER, Acting Director of Charitable Gaming, Department of             
 Revenue, came forward to answer questions about HB 44, and to                 
 explain the procedure used to record proceeds from gaming.                    
 Currently, they require all profits from gaming to be deposited in            
 a separate bank account.  Profits could be transferred from a                 
 gaming account to the organizations bank account, then donated to             
 politicians or political parties.  Consequently, they would have to           
 implement a regulation, which allowed the department to examine the           
 organizations operating accounts.  This was to assure that the                
 proceeds were not used for unintended purposes.                               
                                                                               
 REPRESENTATIVE WILLIS expressed curiosity about the percentage of             
 the proceeds that actually go to the charities compared to the                
 percentage used by the operators.                                             
                                                                               
 MR. PRATHER replied that the operators often do not report their              
 proceeds or fees to the department.  Fees and expense categories              
 such as rent, are hidden, and the department has not yet succeeded            
 in getting them to report what they are actually making.  In answer           
 to Representative Robinsons question about a fiscal note, Mr.                 
 Prather said there is a zero fiscal note.                                     
                                                                               
 Number 356                                                                    
                                                                               
 REPRESENTATIVE ROBINSON mentioned hearing from somewhere that the             
 Governor will be establishing a committee to research issues                  
 regarding the amount of money going to charities.                             
                                                                               
 MR. PRATHER verified that which Representative Robinson heard,                
 saying the Governor had established a charitable gaming task force            
 to investigate the money going into charities.  The first meeting             
 of the task force will be March 16, 1995, and a final report is due           
 to the Governor on May 16, 1995.                                              
                                                                               
 Number 361                                                                    
                                                                               
 REPRESENTATIVE PORTER shared a comment, saying that this is one               
 reason the subcommittee did not delve too deeply into the statute.            
 The committees mission was to preclude contributions going to                 
 politicians from gaming proceeds, which they succeeded in doing.              
                                                                               
 Number 376                                                                    
                                                                               
 REPRESENTATIVE IVAN asked for an at ease, and VICE-CHAIR OGAN                 
 allowed him a few minutes.                                                    
                                                                               
 Number 382                                                                    
                                                                               
 REPRESENTATIVE PORTER added for the record that the only people who           
 will be excluded from having a gambling permit are political groups           
 formed for the purpose of electing candidates.  Political                     
 subdivisions can retain their permits for raising funds for their             
 political entities.                                                           
                                                                               
 VICE-CHAIR OGAN pointed out that he received a letter from the                
 Alaska State Home Builders Association whose concern was that they            
 are 501-C and whether they would be ineligible to have charitable             
 gaming permits.                                                               
                                                                               
 REPRESENTATIVE PORTER said the original version of HB 44 limited              
 the people who would qualify to get a permit.  Except for political           
 parties, the subcommittee did not altered that.                               
                                                                               
 Number 408                                                                    
                                                                               
 REPRESENTATIVE ROBINSON said, for the record, she appreciated                 
 Representatives Ivan, Porter and James for their willingness to               
 take another direction on this bill.  She believes this takes care            
 of the concern about what most legislators felt, and about the                
 perception of politicians receiving gaming money.  She appreciated            
 the work the subcommittee did; it is now a better bill.                       
                                                                               
 Number 430                                                                    
                                                                               
 REPRESENTATIVE GREEN moved to accept the CS for HB 44, Version C,             
 LS023-3, as the working document.  There were no objections, so the           
 motion passed.  Then he moved that the committee move the CS for HB
, the charitable gaming bill, with individual recommendations and           
 fiscal note.  Hearing no objection, the motion passed.