01/23/1997 08:03 AM House STA

 HB 20 - DOG MUSHING CONTESTS                                                
                                                                               
 TAPE 97-1, SIDE B                                                             
 Number 0001                                                                   
                                                                               
 The next order of business to come before the House State Affairs             
 Standing Committee was HB 20, "An Act relating to dog mushers'                
 contests."                                                                    
                                                                               
 CHAIR JAMES called on Thomas W. Wright, Legislative Assistant to              
 Representative Ivan Ivan, to present the sponsor statement.                   
                                                                               
 Number 0023                                                                   
                                                                               
 MR. WRIGHT, Legislative Assistant to Representative Ivan Ivan,                
 Alaska State Capitol, read the following sponsor statement into the           
 record:                                                                       
                                                                               
 "House Bill 20 would authorize dog mushers' associations, which run           
 races recognized by the Division of Charitable Gaming, to conduct             
 statewide games of change.  The division recognizes those                     
 associations which have been in existence for at least three years,           
 have at least 25 Alaskan members and be a not for profit                      
 organization.  Prizes may be awarded for the closest guesses of at            
 least three elements of uncertainty about a sled dog race that                
 cannot be determined before the start of the race.  The intent is             
 to provide a mechanism to assist race organizing committees to                
 become financially self-sufficient.                                           
                                                                               
 "High profile protests from animal rights activists have caused               
 important corporate sponsors to withdraw financial support.  House            
 Bill 20 would create a sweepstakes similar to that currently being            
 used by the Iditarod Race Committee and, hopefully, allow sled dog            
 races which do not have strong financial backing to continue.                 
                                                                               
 "House Bill 20 will allow contestants to purchase raffle tickets on           
 which the contestant would guess the checkpoints and finish line              
 arrival times, the temperature when the a particular team crosses             
 the finish line, total number of dogs that finish the race, etc.              
 The dog mushers' association will administer the mushers' contests            
 in conjunction with state regulatory authority."                              
                                                                               
 MR. WRIGHT announced Dennis Poshard, Department of Revenue, was               
 present to answer any questions from the committee members                    
 regarding the logistics of the bill, and he would be available to             
 answer any questions directly related to the bill.                            
                                                                               
 Number 0100                                                                   
                                                                               
 REPRESENTATIVE ELTON asked Mr. Wright if a similar bill was passed            
 last year?                                                                    
                                                                               
 Number 0109                                                                   
                                                                               
 MR. WRIGHT replied a similar bill was passed out of the House State           
 Affairs Standing Committee last year.  It was, however, stopped in            
 the House Finance Committee.                                                  
                                                                               
 Number 0130                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ wondered if the list of organizations                
 provided to the committee members was exhaustive.                             
                                                                               
 MR. WRIGHT replied it was a list of organizations that were                   
 recognized by the Charitable Gaming Division of the Department of             
 Revenue.                                                                      
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Wright if it was required that             
 dog mushing organizations register with the Charitable Gaming                 
 Division?                                                                     
                                                                               
 MR. WRIGHT deferred the question to Dennis Poshard, Department of             
 Revenue.                                                                      
                                                                               
 Number 0161                                                                   
                                                                               
 DENNIS POSHARD, Director, Central Office, Charitable Gaming                   
 Division, Department of Revenue, replied, "Yes." He explained any             
 organization that wanted to conduct a charitable gaming activity              
 was required to apply for a permit with the division.                         
                                                                               
 Number 0177                                                                   
 CHAIR JAMES explained the list provided to the committee members              
 were the organizations that already had a raffle permit with the              
 division.                                                                     
                                                                               
 Number 0187                                                                   
                                                                               
 REPRESENTATIVE BERKOWITZ asked Mr. Poshard if a race and bet with             
 a neighbor, for example, fell under the preview of the bill?                  
                                                                               
 Number 0192                                                                   
                                                                               
 MR. POSHARD responded it would only fall under the preview of the             
 division if it was a large race.  It did not preclude a person from           
 getting together with neighbors for a poker game, for example.                
 That was considered a social activity.                                        
                                                                               
 Number 0232                                                                   
                                                                               
 CHAIR JAMES commented this statute continued to be revisited.  The            
 statute listed the contests that were covered and to add a new                
 contest legislation was necessary.                                            
                                                                               
 Number 0264                                                                   
                                                                               
 MR. WRIGHT explained when the bill was introduced last session it             
 was intended only for Iditarod qualifying races.  However, there              
 was such support from the other dog mushing races that it was                 
 decided to include them as well.                                              
                                                                               
 Number 0296                                                                   
                                                                               
 REPRESENTATIVE ELTON asked Mr. Poshard to explain the controls                
 surrounding the proceeds generated from a raffle, for example?                
                                                                               
 Number 0311                                                                   
                                                                               
 MR. POSHARD replied a dog mushing association would first have to             
 meet certain qualifications to receive a permit.  It was the                  
 responsibility of the association to file on an annual basis a                
 financial statement that listed the gross income from the activity,           
 the prizes awarded, any expenses associated with that activity, the           
 net profits, and how the profits were used.  There was a statutory            
 requirement that the association had to spend the profits within              
 one year of earning them.  The division checked the reports for               
 accuracy and conducted audits when necessary.                                 
                                                                               
 Number 0367                                                                   
                                                                               
 REPRESENTATIVE ELTON asked Mr. Poshard if the filings made by the             
 associations were open to the public?                                         
                                                                               
 Number 0373                                                                   
 MR. POSHARD replied, "Yes."  The Department of Law ruled any filing           
 reports were considered public information.                                   
                                                                               
 Number 0401                                                                   
                                                                               
 REPRESENTATIVE ELTON stated he was concerned that the department              
 would not have the additional resources to conduct more audits                
 because staff was recently lost.                                              
                                                                               
 Number 0420                                                                   
                                                                               
 MR. POSHARD replied the division received approximately 1,100                 
 reports each year.  A substantial portion of those reports were not           
 complicated to audit, however.  The remaining reports were                    
 primarily from pull tabs and bingo activities requiring more                  
 concentrated audit efforts.  He reiterated the division did not               
 conduct an audit on every charitable organization that received a             
 permit.  An order of priority was established of those associations           
 that the division deemed necessary to audit.  The bill addressed              
 only dog mushing associations of which most already filed a                   
 financial statement with the division.  He did not anticipate an              
 increase in paperwork for the division as a result of the bill.               
                                                                               
 Number 0517                                                                   
                                                                               
 REPRESENTATIVE ELTON asked Mr. Poshard if the proceeds could only             
 be used in the same way that the proceeds for pull tabs could be              
 used?                                                                         
                                                                               
 Number 0530                                                                   
                                                                               
 MR. POSHARD replied, "That's correct."  He explained there was a              
 statutory requirement that limited the use of net proceeds for                
 every activity that a permit had been issued.                                 
                                                                               
 Number 0553                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked for clarification regarding the                    
 definition of an "element of chance."                                         
                                                                               
 Number 0580                                                                   
                                                                               
 MR. POSHARD replied the elements of uncertainty were determined by            
 the association conducting the activity.  The bill only required              
 three elements of chance.  He cited it could be the total number of           
 dogs to cross the finish line, the winning time, or the time of the           
 last place musher, as examples.  It could be anything, as long as,            
 three were chosen to determine the winner.  Of the three chosen,              
 one would have to be the primary determinant while the remaining              
 two would be the secondary and tertiary determinants.  The                    
 secondary and tertiary determinants would be used only when                   
 necessary to determine a winner.                                              
 Number 0710                                                                   
                                                                               
 REPRESENTATIVE VEZEY asked Mr. Poshard if "time" was one or two               
 elements of chance?                                                           
                                                                               
 Number 0715                                                                   
                                                                               
 MR. POSHARD replied, "One."                                                   
                                                                               
 Number 0717                                                                   
                                                                               
 REPRESENTATIVE VEZEY stated other testimony indicated time was two            
 elements of chance - hour and minute.  He reiterated the elements             
 of chance were vague.  He was not sure if it would make any                   
 difference, however.                                                          
                                                                               
 Number 0750                                                                   
                                                                               
 CHAIR JAMES called for a motion to pass the bill from the                     
 committee.                                                                    
                                                                               
 Number 0766                                                                   
                                                                               
 REPRESENTATIVE DYSON moved that HB 20 move from the committee with            
 individual recommendations and attached fiscal note(s).                       
                                                                               
 Number 0772                                                                   
                                                                               
 REPRESENTATIVE ELTON objected.  He stated he would vote no on this            
 bill because he was concerned about placing a value on the activity           
 of dog mushing over youth baseball, for example.  There was a                 
 limited amount of money available.  He had a difficult time                   
 understanding that a dog mushing association could be considered a            
 charitable organization.                                                      
                                                                               
 There was no further discussion so a roll call vote was taken.                
 Representatives James, Berkowitz, Dyson, Hodgins and Vezey voted in           
 favor of the motion.  Representative Elton voted against the                  
 motion.  House Bill 20 was so moved from the House State Affairs              
 Standing Committee.