Legislature(1993 - 1994)
04/10/1993 10:15 AM Senate FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 10, 1993
10:15 a.m.
TAPES
SFC-93, #50, Side 2 (end-000)
SFC-93, #52, Side 1 (355-end)
SFC-93, #52, Side 2 (end-000)
SFC-93, #56, Side 1 (000-135)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 10:15 a.m.
PRESENT
In addition to Co-chair Pearce, Senators Kelly, Jacko and
Sharp were present. Senator Kerttula arrived while the
meeting was in progress. Senators Frank and Rieger were
absent.
ALSO ATTENDING: Senators Randy Phillips, Robin Taylor, and
Rick Halford; John Hansen, Jr., Gaming Manager, Department
of Commerce & Economic Development; Paul Fuhs, Commissioner,
Department of Community & Economic Development; Randall
Hines, Program Officer, Division of Family & Youth Services,
Department of Health & Social Services; Annette Kreitzer,
Aide to Senator Leman, prime sponsor of SB 91; Dave
Williams, Department of Health & Social Services Planner,
Project Choice, Department of Health & Social Services; Kaye
Kanne, Certified Direct-Entry Midwife; Marilyn Holmes,
Midwifery Consumers; Don Hitchcock, Director, Department of
Administration; Mike Greany, Director, and other analysts,
Legislative Finance Division; and aides to committee
members.
SUMMARY INFORMATION
SB 51 - An Act providing for establishment of work
camps for juveniles adjudicated delinquent,
and extending to all cities and to nonprofit
corporations authority to maintain facilities
for juveniles.
Senator Phillips, sponsor of SB 51, and
Randall Hines, Program Officer, Division of
Family & Youth Services, Dept. of Health &
Social Services, testified in support of SB
51. Discussion was had by Senators Kerttula,
Phillips and Mr. Hines regarding a previous
state program for youth. SB 51 was REPORTED
OUT of committee with a fiscal note for the
Dept. of Health & Social Services for $9.3.
CSSSSB 91 - An Act prohibiting unfair discrimination
against
(HES) direct-entry midwives who perform services
within the scope of their certification;
providing for coverage of midwife services
under Medicaid; reordering the priority of
optional services provided by the state under
Medicaid; and providing for an effective
date.
Annette Kreitzer, Aide to Senator Leman,
sponsor of SB 91, spoke in support of the
bill. Kaye Kanne, Certified Direct-Entry
Midwife, and Marilyn Holmes of Midwifery
Consumers, also spoke in support of the bill.
Dave Williams, Dept. of Health & Social
Services Planner, Project Choice, Dept. of
Health & Social Services, spoke to the fiscal
notes. CSSSSB 91(HES) was REPORTED OUT of
committee with fiscal notes for DH&SS
(Medical Assistance, Medicaid Non-facility)
of $65.0, DH&SS (Medical Assistance, Claims
Processing) of $41.2, and DH&SS (Medical
Assistance, Medicaid Facility) of $(180.0).
CSSB 45(HES) - An Act relating to persons under 21 years of
age; providing for designation of shelters
for runaway minors; relating to the detention
and incarceration of minors; and providing
for an effective date.
Senator Phillips, Randall Hines, Program
Officer, Division of Family & Youth Services,
Dept. of Health & Social Services, and Donna
Schultz and Pat O'Brien, testified in support
of the bill. Senator Taylor voiced his
opposition to the bill. CSSB 45(HES) was
HELD in committee until April 13, 1993.
CSSB 141(L&C)- An Act relating to workers' compensation
coverage for certain high school students in
uncompensated work-study programs.
Senator Kelly, sponsor of SB 141, testified
in support of the bill. Don Hitchcock,
Director, Dept. of Administration, spoke to
the fiscal notes. CSSB 141(L&C) was REPORTED
OUT of committee with fiscal notes for Dept.
of Education of $24.0, Dept. of
Administration of $24.0, and a zero fiscal
note for the Dept. of Labor.
CSSB 153(RES)- An Act relating to the exchange of certain
fish for seafood products, custom processing
of certain fish, and use of certain fish for
charitable purposes.
Senator Taylor, sponsor of SB 153, testified
in support of the bill. Senator Jacko voiced
his concern that this bill allowed easier
export of sport caught fish. CSSB 153(RES)
was REPORTED OUT of committee with a fiscal
note for DEC of $5.0, and a zero fiscal note
for DF&G.
CSSB 76(JUD) - An Act requiring regulations relating to
pull-tabs adopted by the Department of
Commerce and Economic Development to be
consistent with the North American Gaming
Regulators Association standards on
pull-tabs; allowing permittees to contract
with vendors to sell pull-tabs on behalf of
the permittee; restricting the purchase of
pull-tabs by certain persons; requiring the
sale of pull-tabs by vendors to be solely by
a pull-tab ticket dispensing machine;
requiring receipts before certain prizes may
be paid; prohibiting distributors from
supplying pull-tabs to vendors; relating to
registration of vendors; requiring the
licensing of out-of-state manufacturers;
allowing public or nonprofit broadcasting
stations to sell pull-tabs at more than one
location; preventing persons with certain
convictions from being involved in charitable
gaming activities as a permittee, licensee,
vendor, person responsible for an activity,
fund raiser or consultant of a licensee, or
employee in a managerial or supervisory
capacity and providing exceptions for certain
persons whose convictions are at least 10
years old; relating to multiple-beneficiary
charitable gaming permits and door prizes for
charitable gaming; requiring Department of
Commerce and Economic Development approval of
contracts between charitable gaming
permittees and operators before gaming may
occur; limiting the amount of authorized
expenses to a percentage of adjusted gross
income for a charitable gaming activity;
relating to the reporting and payment of a
percentage of the adjusted gross income by
operators to permittees; requiring Department
of Commerce and Economic Development approval
of contracts between permittees and
operators; allowing the commissioner of
commerce and economic development to issue
orders prohibiting violations of state gaming
laws; relating to the authority of the
commissioner of commerce and economic
development to suspend or revoke a permit,
license, or registration; relating to the
uses to which charitable gaming proceeds may
be put; relating to `political uses' and
`political organizations' as those terms are
used in the charitable gaming statutes; and
providing for an effective date.
Co-chair Pearce announced that CSSB 76(FIN)
work draft "M" was before the committee.
Discussion was had by Co-chair Pearce,
Senator Kelly, Commissioner Paul Fuhs, and
John Hansen, Jr., Gaming Manager, Dept. of
Commerce & Economic Development. CSSB
76(JUD) was HELD in committee until April 12,
1993.
Bills scheduled but not heard:
SB 88 - Capital Project Grants
SB 89 - Approp: Capital Project Matching Grants
SB 148 - Alaska Railroad Corporation, would not be
heard and held in committee.
SENATE BILL NO. 51:
An Act providing for establishment of work camps for
juveniles adjudicated delinquent, and extending to all
cities and to nonprofit corporations authority to
maintain facilities for juveniles.
CO-CHAIR DRUE PEARCE invited Senator Randy Phillips, sponsor
of SB 51, to join the committee at the table and speak to
the bill.
SENATOR RANDY PHILLIPS said similar legislation had been
introduced several years ago. He said that the work camp
facility would be used only by minors. The individuals
placed in the work camp could be required to do labor on
buildings or perform other duties including educational
projects. SB 51 would authorize the Department of Health &
Social Services (DH&SS) to establish regulations for the
operation of these work camps and would place delinquents
into work camps instead of detention facilities. It would
also provide that a city or non-profit organization could
maintain a juvenile work camp under regulations to be
adopted by DH&SS. There are 23 states that have some kind
of boot or work camps as an alternative for young adult
offenders. He said the bill carried a fiscal note for DH&SS
in the amount of $9.3 to set up regulations. He said he
provided the committee with a sectional analysis, and a
handout describing a successful boot camp in Nevada (copy on
file).
SENATOR JAY KERTTULA said that state work camps had been
established right after statehood. It seemed to work very
well until special interest groups began to provide full-
cost-of-care. The result was that full-cost-of-care
services for the least of the delinquents cost the state
more per person per day than it did after the program was
decreased to half and only the incorrigibles were being
served. He warned that this well-meaning program could turn
into a disaster.
Senator Phillips pointed out that SB 51 had passed through
the Health & Social Services and Judiciary Committee with no
changes.
Co-chair Pearce invited Randall Hines, Program Officer,
Division of Family & Youth Services, Department of Health &
Social Services, to join the committee at the table.
RANDALL HINES spoke to the fiscal note in the amount of $9.3
which would fund the design of the regulations establishing
the work camp as outlined in SB 51. He said that the
department was in support of the legislation.
SENATOR TIM KELLY asked if this facility could be contracted
out. Mr. Hines said that it would not have to operated by
the state.
Senator Kerttula spoke in support of SB 51 but felt the
fiscal note would not cover the total expense of starting
this program. He reiterated his support but advised that
this was a multi-million dollar program. Possibly it was
the least expensive way to handle youth problems but felt
the department should be more realistic about the real cost.
Mr. Hines said the department was just beginning to develop
the program, and had not decided what individuals would fit
into it. He said that money is being spent on these
individuals now and hopefully that same money would be
transferred to this program.
Senator Phillips said that the department could draw
sufficient information from the work camps in other states.
He felt the intention was to go slowly and do it right. He
pointed out Sec. 4 outlined who could run a work camp.
Senator Kelly MOVED for passage of SB 51 from committee with
individual recommendations. No objections being heard, SB
51 was REPORTED OUT of committee with individual
recommendations and with a fiscal note for the Department of
Health & Social Services for $9.3. Co-chair Pearce,
Senators Kelly and Sharp signed "do pass." Senators
Kerttula and Jacko signed "no recommendation." Senator
Frank had left the meeting and did not sign.
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 91(HES):
An Act prohibiting unfair discrimination against
direct-entry midwives who perform services within the
scope of their certification; providing for coverage of
midwife services under Medicaid; reordering the
priority of optional services provided by the state
under Medicaid; and providing for an effective date.
Co-chair Pearce invited Annette Kreitzer, Aide to Senator
Loren Leman, prime sponsor of SB 91, to join the committee
at the table and give an overview of the bill.
ANNETTE KREITZER said that SB 91 would add certified direct
entry midwives to the optional services covered by Medicaid.
It would reorder the priority of optimum services provided
by the State under Medicaid which would make midwives the
first to be dropped from the list in case there was not
enough coverage for all services. It was amended in the
Health & Social Services Committee to add certified direct
entry midwives to the statute that prohibits unfair
discrimination by insurance companies against midwives
providing midwifery services. She explained that this bill
would not add to the numbers of pregnant women who do
presently qualify for Medicaid. She wanted it to be clear
that this bill would not expand Medicaid roles, but instead
would allow the state to stretch its dollars for services
provided under Medicaid.
DAVE WILLIAMS, Department of Health & Social Services
Planner, Project Choice, Department of Health & Social
Services, said the fiscal note for Medicaid Facility showed
a projected savings to the department of $180.0 under SB 91.
The department projected that 250 women would use certified
direct entry midwives, and that half of these women would be
Medicaid eligible. It was suggested that it may be higher
than the projection. He said the department felt that more
mothers would seek care and seek it earlier in their
pregnancy if midwifery was an option. That cost was shown
on the Medicaid non-facility fiscal note for $65.0. The
fiscal note for claims processing was in the amount of
$41.2.
KAYE KANNE, Certified Direct-Entry Midwife, said that in
addition to the savings pointed out by Dave Williams,
because midwifes see their patients more often, better
educate their patients, and stress the need for self care,
healthier babies are born providing even more savings to the
state.
MARILYN HOLMES of Midwifery Consumers said that the
midwifery group costs run about 37 percent of the medical
group. If women go to doctors because they do not have
access to midwives through Medicaid the fee is $5,000
(physician and hospital combined). She pointed out that
midwifery births result in 50-70 percent less c-sections
which cost about $8,000. She pointed out that midwifery
care is more comprehensive and includes information about
nutrition and breast feeding. Midwives also visit the home
at least four times after the birth. This results in less
costs after the birth because the infants receive extra care
that they would not receive in a medical setting. By
reading the fiscal notes, she said that by the end of the
decade, SB 91 could save the state a quarter of a million
dollars a year.
Co-chair Pearce asked how many communities in Alaska had
licensed midwives. Ms. Kanne said that she did not know but
approximately 15 communities.
Senator Kelly MOVED for passage of SB 91 from committee with
individual recommendations. No objections being heard, SB
91 was REPORTED OUT of committee with individual
recommendations, and three fiscal notes for the Department
of Health & Social Services for $65.0 -- Medicaid Non-
facility, $41.2 -- Claims Processing and $(180.0) --
Medicaid Facility. Co-chair Pearce, Senators Kelly and
Sharp signed "do pass." Senator Jacko signed "no
recommendation." Senators Frank and Kerttula had left the
meeting and did not sign.
CS FOR SENATE BILL NO. 45(HES):
An Act relating to persons under 21 years of age;
providing for designation of shelters for runaway
minors; relating to the detention and incarceration of
minors; and providing for an effective date.
Senator Randy Phillips said that SB 45 dealt with runaway
youth under the age of 21. According to the Department of
Health & Social Services, there are about 3,500 runaway
youth in Alaska every year. He noted that a sectional
analysis and a position paper by the Department of Health &
Social Services had been provided to the committee (copy on
file). He said that this bill focuses on some problems of
youth by changing the statutes relating to persons under the
age of 21 as well as providing a mechanism for licensing
shelters. It would also change the definition of
contributing to the delinquency of a minor. Current
statutes provide that a person over the age of 19 may not
aid, induce, cause or encourage a child under the age of 16
to be absent from the custody of a parent or legal guardian.
The bill raises that age from 16 to 18. It also would
prohibit an unemancipated minor from working without the
permission of the minor's legal guardian after 10:00 p.m. or
9:00 p.m. on school nights if the minor is under age 16.
The bill would also allow parents of a minor child to file
an emancipation petition with the court on behalf of the
minor. It would allow parents who cannot compel a child to
remain in their custody and control, to initiate the process
that would make the child solely accountable for his/her own
actions. It would require parents to take steps to work
with the child before a minor could be emancipated. He said
that this bill also would add sections from SB 25, sponsored
by Senator Jim Duncan. He said that SB 45 was intended as a
one-step comprehensive look at statutes that pertain to
minor children. As a result of a conference held in Wasilla
in December 1991, the "Children's Crisis Booklet" had been
written and was offered to the committee.
Senator Phillips noted that the committee had before them an
amendment that provided an exemption for runaway shelters.
He said the amendment was at the request of Covenant House
Alaska, a runaway crisis center in Anchorage.
RANDALL HINES, Program Officer, Division of Family & Youth
Services, Department of Health & Social Services, introduced
Donna Schultz, Associate Coordinator and Pat O'Brien,
Program Officer, both from the Department of Health & Social
Services. Mr. Hines confirmed that the department had been
working with Senator Phillips on the issue of runaway and
homeless youth in his district and had developed
recommendations that came out of the aforemen-tioned runaway
and homeless youth conference. Another conference was held
this year and additional recommendations would be available
soon.
Senator Phillips asked for an explanation of sections taken
from SB 25. DONNA SCHULTZ, Associate Coordinator,
Department of Health & Social Services, said that those
sections would prohibit the confinement of youth in lockup
jails and correctional facilities except under special
conditions. The conditions that would allow the lockup
would be that a juvenile could be held on a criminal offense
for up to six hours before being transferred to a juvenile
facility. They may be held longer if transportation to a
juvenile facility is not possible. Such a situation could
happen in the bush if a plane or weather made it impossible
to transport the juvenile. Or a juvenile could be held in
protective custody if the juvenile was intoxicated.
Senator Kelly said that six hours seemed too short a time.
Ms. Schultz said that the six hour restriction had to do
with federal regulations that the state was required to
monitor. Senator Kelly asked if an exception was made if a
juvenile was under the influence of drugs. Ms. Schultz said
she did not know but if the juvenile was incapacitated it
seemed that would apply. She also said another exception
was made that a juvenile could be held for longer than six
hours if they had been waived to adult jurisdiction. She
said that since 1990 work was being done so the state could
receive federal funding money in this area. She said that
the state received about $325.0 a year to deal with the
juvenile justice program, and for the last few years the
state has had to seek waivers since it has not met the
federal mandates. The jail removal legislation was
dependent upon the state receiving those federal dollars.
SENATOR ROBIN TAYLOR voiced his concern that SB 45 did not
have a Judiciary Committee referral. He cited the long
battle regarding juvenile legislation. He felt there was a
series of problems with SB 45 that would further confiscate
the opportunity of a parent or the police to reasonably act
in regard to minors. He pointed out that there is not a
juvenile facility in Ketchikan.
Ms. Schultz said that one option since 1989 in Ketchikan as
well as other communities is a non-secured shelter where
juveniles can be placed instead of a lock-up or jail
facility. She said that it cost $171.0 to set up these
shelters. If the police cannot find the parents then
juveniles can be placed in these shelters and arrangements
can be made to find the parents or the juvenile can be taken
to another detention facility.
Senator Taylor raised a question regarding private
residences not being able to be used for shelters for
runaway minors, unless they are designated as a shelter for
runaways by a non-profit corporation that is licensed to do
that work. He did not think there was one home established
in the area he represented.
PAT O'BRIEN, Program Officer, Department of Health & Social
Services, said that those shelters Senator Taylor spoke to
were not available currently, but that this legislation
would create shelters. These shelters differ from the non-
secured shelters that Ms. Schultz described. She said that
in Wrangell and Craig, eight or nine people were on call to
care for juveniles.
Co-chair Pearce said that Sec. 3 through 8 changed the way
juveniles could be emancipated and allowed a parent or legal
custodian to petition to emancipate a juvenile. She asked
what happened to a minor that was emancipated by his/her
parent or guardian. Ms. Schultz said that although this
would allow a parent or guardian to file a petition to
emancipate a juvenile it would not change the standards by
which the judge would base that decision. Ms. Schultz said
the judge would have to look a the juvenile's ability to
support him/her self because the juvenile would be
considered as an adult in all aspects from the point he/she
is emancipated.
End SFC-93 #50, Side 1
Begin SFC-93 #52, Side 1
SENATOR BERT SHARP voiced his objection to the inclusion of
Sec. 13 in SB 45. Senator Kelly asked why SB 45 had not
gone to the Judiciary Committee. Co-chair Pearce suggested
that the committee pass the bill out of committee with a
recommendation of referral to the Judiciary Committee.
Senator Taylor said that he would be willing to work with
Senator Phillips regarding some of the issues raised.
Recess 11:05am
Reconvene 11:11am
End SFC-93 #52, Side 1
Begin SFC-93 #52, Side 2
Senator Kelly MOVED for adoption of an amendment by Senator
Phillips dated March 22, 1993 "8-LS0355\J.1 (copy on file)
amended to change "47.10.350(a) or" to "47.10.350(c) or".
Co-chair Pearce asked for a show of hands. The amendment as
amended was adopted on a vote of 4 to 1. (Senators Pearce,
Jacko, Kelly, and Sharp were in support. Senator Kerttula
was opposed.)
Co-chair Pearce announced that CSSB 45(FIN) would be HELD in
committee until Tuesday, April 13, 1993, enabling Senators
Phillips and Taylor to develop amendments on the areas of
concern.
CS FOR SENATE BILL NO. 141(L&C):
An Act relating to workers' compensation coverage for
certain high school students in uncompensated
work-study programs.
Senator Kelly said that SB 141 sponsored by Representative
Bettye Davis was designed to provide workers compensation
for work study students receiving vocational training for a
profit employer. The employers will not hire the students
because they are liable and the students are not eligible
for workers compensation. This legislation would provide
workers compensation taking the liability away from the
employer. Since the students do not receive any
compensation for the work study program, they would not
receive any compensation if they were injured. Only their
medical expenses would be covered.
Discussion followed between Senators Sharp and Kelly
regarding the coverage provided under this legislation.
Senator Taylor voiced his support of SB 141, and felt
similar legislation should be passed providing coverage for
prisoners on work programs.
SENATOR GEORGE JACKO MOVED for passage of CSSB 141(L&C) from
committee with individual recommendations. No objections
being heard, CSSB 141(L&C) was REPORTED OUT of committee
with a do pass, with a zero fiscal note for the Department
of Labor, and fiscal notes for the Department of
Administration for $24.0, and for the Department of
Education for $24.0. Co-chair Pearce, Senators Kelly, Jacko
and Sharp signed "do pass." Co-chair Frank, Senators
Kerttula and Rieger did not sign.
CS FOR SENATE BILL NO. 153(RES):
An Act relating to the exchange of certain fish for
seafood products, custom processing of certain fish,
and use of certain fish for charitable purposes.
Senator Robin Taylor, prime sponsor of SB 153, said that
this bill would allow sport caught fish to be brought to a
seafood processor where it could be smoked or canned. He
pointed out that a tremendous volume of seafood leaves the
state every year as whole fish either frozen or fresh. If
those fish were processed in Alaska, it could mean more jobs
for Alaskans. Most sport fishermen are on a tight time
frame and they cannot wait for their fish to be processed in
Alaska. This bill would allow for an exchange of sport
caught fish for already processed fish. A fee would be
charged for processing. The processor could use
commercially caught fish to provide the exchange but the
sport caught fish could not be sold commercially. He said
that this arrangement is already being done in Alaska
illegally. He also felt that SB 153 would provide a way to
assess the amount of sport caught salmon leaving the state,
besides providing more jobs in Alaska. Ketchikan had
estimated that SB 153 would provide a minimum of $1M worth
of additional employment the first year. He said other
areas of the state would benefit also. The Alaska Troller's
Association had voiced its concern over SB 153. He said
that a letter of intent had been adopted in the Resources
Committee which spoke to concerns regarding export
limitations and possession limits, and asked the Board of
Fish to consider these concerns at their next regularly
scheduled meeting.
Senator Jacko voiced his concern regarding SB 153. He felt
that it would make it easier for sport caught fish to leave
the state. Discussion was had by Senators Taylor and Jacko
regarding the procedure for processing and the export of
sport caught fish. Senator Jacko said that the tension
between sport and commercial fishermen was on the increase
and felt that SB 153 would aggravate it even more. Senator
Taylor argued that this legislation would allow the
Department of Fish and Game to keep track of the amount of
sport caught fish leaving the state, and through analysis
decide whether more limitations on sport fish should be
established.
Senator Kelly MOVED for passage of CSSB 153(RES) from
committee with individual recommendations. Senator Jacko
OBJECTED. Co-chair Pearce announced that CSSB 153(RES)
would be held in committee until April 12, 1993.
At the end of the meeting, Senator Kelly again MOVED for
passage of CSSB 153(RES) from committee with individual
recommendations. No objections being heard, CSSB 153(RES)
was REPORTED OUT of committee with individual
recommendations, with a zero fiscal note for the Department
of Fish & Game, a fiscal note for the Department of
Environmental Conservation for $5.0, and a letter of intent
from the Resources Committee. Co-chair Pearce, Senators
Kelly, and Sharp signed "do pass." Senator Jacko signed "no
recommendation." Co-chair Frank, Senators Kerttula and
Rieger did not sign.
CS FOR SENATE BILL NO. 76(JUD):
An Act requiring regulations relating to pull-tabs
adopted by the Department of Commerce and Economic
Development to be consistent with the North American
Gaming Regulators Association standards on pull-tabs;
allowing permittees to contract with vendors to sell
pull-tabs on behalf of the permittee; restricting the
purchase of pull-tabs by certain persons; requiring the
sale of pull-tabs by vendors to be solely by a pull-tab
ticket dispensing machine; requiring receipts before
certain prizes may be paid; prohibiting distributors
from supplying pull-tabs to vendors; relating to
registration of vendors; requiring the licensing of
out-of-state manufacturers; allowing public or
nonprofit broadcasting stations to sell pull-tabs at
more than one location; preventing persons with certain
convictions from being involved in charitable gaming
activities as a permittee, licensee, vendor, person
responsible for an activity, fund raiser or consultant
of a licensee, or employee in a managerial or
supervisory capacity and providing exceptions for
certain persons whose convictions are at least 10 years
old; relating to multiple-beneficiary charitable gaming
permits and door prizes for charitable gaming;
requiring Department of Commerce and Economic
Development approval of contracts between charitable
gaming permittees and operators before gaming may
occur; limiting the amount of authorized expenses to a
percentage of adjusted gross income for a charitable
gaming activity; relating to the reporting and payment
of a percentage of the adjusted gross income by
operators to permittees; requiring Department of
Commerce and Economic Development approval of contracts
between permittees and operators; allowing the
commissioner of commerce and economic development to
issue orders prohibiting violations of state gaming
laws; relating to the authority of the commissioner of
commerce and economic development to suspend or revoke
a permit, license, or registration; relating to the
uses to which charitable gaming proceeds may be put;
relating to `political uses' and `political
organizations' as those terms are used in the
charitable gaming statutes; and providing for an
effective date.
Co-chair Pearce announced that CSSB 76(FIN) work draft "M"
was before the committee. Senator Jacko MOVED for adoption
of the "M" version of CSSB 76(FIN). Hearing no objections,
IT WAS SO ORDERED.
Co-chair Pearce, prime sponsor of SB 76, spoke to the bill.
She said the original bill excluded some felons from access
to gaming in Alaska in terms of acting as supervisory or
management personnel. Secondly, it prevented proceeds from
gaming to be used for direct contributions to political
candidates. She said the Department of Commerce & Economic
Development had requested some additions to the legislation.
She explained that the finance version would still include a
prohibition against using net proceeds to pay registered
lobbyists. It also added third party vendor language which
allows charitable organizations direct profitable
alternatives by placing their permits with profit operators.
Permittees who operate their own permits often double their
net proceeds. It allows these permittees to contract with
vendors to sell pull tabs for them. It also adds multiple
beneficiary permit language which allows the department to
issue permits authorizing two to six permittees to jointly
operate under one permit. This enables the permittees to
band together and allows them to hire a management team to
run their games that is answerable only to them. The
permittees would have the direct hire and fire authority.
The Department of Commerce & Economic Development also asked
to approve contracts between operators and permittees.
Language has been included that allows the department to
revoke a permit license or vendor registration upon proof
that insider information was given or acted upon. She said
that language has also been included that gives the
department discretion over mandating the use of ticket
dispensing machines for pull tabs. There is a requirement
that the department would license out of state manufacturers
of pull tabs. She also stated that Alaska Public Radio
Network had asked for a statewide on-line game. The
language in the bill clarifies the type of game APRN could
run. The proceeds from that game would then fund an
endowment that would eliminate the need for APRN to continue
receiving general funds from the state.
Co-chair Pearce said that a teleconference had been held on
SB 76 and two main concerns had been raised and addressed in
this legislation. First, because of problems with
dispensing machines, their use has been left to the
discretion of the department. Secondly, language in the
bill has been changed to say that direct payment from gaming
cannot be made to a registered lobbyist or a political
candidate.
Senator Kelly voiced his opinion that SB 76 allowed a
statewide lottery for public radio. JOHN HANSEN, JR.,
Gaming Manager, Department of Commerce & Economic
Development, said that this legislation would allow APRN to
sell a larger series pull tab game in more than one location
on a given day. It would also provide them with the
opportunity to have that game extended to include a drawing.
The provisions of the drawing are currently in the state
regulations.
Senator Kelly asked if this was not the same as authorizing
a statewide lottery. Mr. Hansen said that there were
significant differences between this legislation and a
statewide lottery, but confirmed that there had been a
similar game without the drawing that had been shut down
some years back.
PAUL FUHS, Commissioner, Department of Community & Economic
Development, said he wanted it to be clear that the Governor
was not in support of the section of the bill that applied
to the APRN gaming. Co-chair Pearce said that section had
been added in the Judiciary Committee by Senator Jacko.
Senator Kelly asked where the provision was that provided
for an endowment with the proceeds of the APRN game.
Senator Kelly voiced his concern that APRN would be the only
organization that could profit from such a statewide game.
Co-chair Pearce asked if Senator Kelly would be in favor of
APRN paying a portion of their proceeds into the general
fund. Discussion was had by Senators Kelly, Pearce and Mr.
Fuhs regarding the APRN game.
Commissioner Fuhs also pointed out that CSSB 76(FIN) was
different than the Judiciary CS in that it removes as third
party vendor outlets, retail and eating establishments. He
said that the department was strongly in support of that
action because gaming is an adult activity. Discussion was
had by Senator Kelly, Mr. Hansen and Mr. Fuhs regarding
vendors, operators, and the percentage of profit outlined in
the bill.
End SFC-93 #52, Side 2
Begin SFC-93 #56, Side 1
Senator Sharp asked for clarification regarding the adjusted
gross income in regard to gaming. Mr. Fuhs explained that
the adjusted gross income is the total amount of proceeds
minus prizes and taxes. After that, the overhead of running
the operation is subtracted, and according to this
legislation, only 70 percent of that can be subtracted as
overhead. Mr. Hansen said that there are two acceptable
accounting methods in the statutes. One method is the
actual cash method where every night sales are reported.
The other method is the ideal method, where a number of pull
tabs are considered for sale and the accounting is done
around that number. The only difference between the ideal
net and the adjusted gross are the taxes owed -- a three
percent pull tab tax and any federal income tax.
Senator Kelly MOVED amendment #1 that would add a new
section to read "Section 1. SHORT TITLE. This act may be
known as the Gaming Reform Act 1993" (copy on file). No
objections being raised, it was ADOPTED.
In answer to Senator Sharp, Mr. Hansen said that the percent
required by operators to pay permittees each quarter was
reduced from 15 to 10 percent for non-pull tabs. He said
that about 80 percent of the gaming activity is pull tab
activity. Of that remaining 20 percent about 17 percent is
bingo. In the past, many operations have used other non-
pull tab expenses to reduce pull tab income. The
percentages in this version of legislation are significant
because they no longer allow the losses of other activities
to offset the pull tab activity. Mr. Fuhs said that in the
some village operations 15 percent is too high. If bingo is
even one percent it helps a lot on the pull tab because they
can't write the losses off. He felt 10 percent was
reasonable.
Senator Jacko MOVED for passage of CSSB 76(FIN) from
committee with individual recommendations. Senator Kelly
OBJECTED. Co-chair Pearce announced that CSSB 76(FIN) would
be HELD in committee until April 12, 1993.
ADJOURNMENT
The meeting was adjourned at approximately 12:12 a.m.
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