HOUSE BILL NO. 509 An Act relating to establishing the Alaska Gaming Commission.   Co-Chair Harris MOVED to ADOPT Work Draft 23-LS1768, Version U. There being NO OBJECTION, it was so ordered. Representative Croft asked for explanation of the changes. SUE STANCLIFF, STAFF TO REPRESENTATIVE KOTT explained that the new changes in Version U have resulted from working with the gaming industry. On page 2, "Creation of commission," the commission would still consist of five voting members, but would now include two non-voting members from the industry. Addressing a question that arose during a previous hearing, she stated that one voting member must have five years' experience in law enforcement. One of the industry members must hold a permit or license under AS 05.15, and the other ex-officio nonvoting member must hold a license or permit under AS 04.11. The voting members elect the chair. Ms. Stancliff noted that in Subsection (b), page 2, the voting members serve staggered terms of three years and it is already defined in AS 39.05.55. The nonvoting members serve a non-staggered three-year term. The change on page 3, (f) sets out that an ex officio member may not serve if the person has been convicted of a crime In response to a question by Representative Croft, Ms. Stancliff advised that ex officio members can hold permits for charitable gaming, must submit to a criminal background check, and cannot serve on the commission if they have a criminal record. She stated that there would be five voting members and two non-voting members. Ms. Stancliff referred to page 4, explaining that the provision that the commission may participate with other states in multi-gaming activities was moved from "Duties and powers of the commission" in Version S to "Gaming activities" in Version U. Ms. Stancliff pointed out a change on page 5, "Duties of director." The director now would be exempt but not the director's employees. This change resulted from a concern that the seven current non-exempt employees in the Department of Revenue would gain exempt status by moving to the commission. Ms. Stancliff referred to page 5, line 8, "Duties of director," and explained that the contractual questions with agents have been removed in the current version because no gaming is allowed under AS 05.18. On page 6, "Gaming activities," language has been removed that stated, "the commission may not authorize a charitable gaming activity unless that activity is authorized under AS 05.15." The language was unnecessary because this section speaks only to AS 05.18. Ms. Stancliff pointed out a change on page 6, "Prohibited acts," which removed price fixing from the previous version because it would be inappropriate for the state to set prices on raffle tickets. She added that it was confusing language that doesn't apply to AS 05.15. PETE ECKLUND, STAFF TO REPRESENTATIVE BILL WILLIAMS, clarified that AS 05.15 is the charitable gaming statute. Most of this bill would create a new section of law, AS O5.18, for future new gaming. He noted existing confusion over how AS 05.15 and AS 05.18 interplay, and he pointed out that these are totally separate sections of law. Ms. Stancliff noted that page 6, "Prohibited acts," (b) does not reflect a change but speaks only to AS 05.18 under which no gaming is allowed. The Governor and his staff can still buy a raffle ticket under AS 05.15. Ms. Stancliff explained one requested change that was not made to Version U. The Department of Law asked for added language on page 8,(C), stating "expressly authorized under AS 05.15 or 05.18." The legal drafter thought it would apply to specific activities like Blackjack and that it was unnecessary. Representative Hawker MOVED to ADOPT Amendment 1. Co-Chair Williams OBJECTED for purposes of discussion. Amendment 1 reads: Page 3, following line 25: Insert a new subsection to read: "(c) The voting members of the commission may exclude the ex officio members from executive sessions otherwise permitted by law." Ms. Stancliff explained that Am#1 would give only the voting non-industry members the authority to go into executive session. Co-Chair Williams WITHDREW his OBJECTION. Representative Hawker MOVED to ADOPT Amendment 2. Co-Chair Williams OBJECTED for purposes of discussion. Amendment 2 reads: Page 6, line 5, following "if": Insert "that participation and those activities are" Ms. Stancliff explained that Am#2 was recommended by the gaming industry and the sponsor does not object to the change. Representative Stoltze asked for examples of these types of activities. Ms. Stancliff replied that Am#2 falls under AS 05.18, which currently has no gaming activities, so the expansion of new gaming could not take place without the authority of the legislature. Co-Chair Williams WITHDREW his OBJECTION. LARRY MEYERS, DEPUTY DIRECTOR, DIVISION OF FINANCE, DEPARTMENT OF REVENUE, VIA TELECONFERENCE, ANCHORAGE, provided background on staffing of the charitable gaming unit. He explained that it is a regulatory unit that oversees 1200 permittees who, in FY 03, paid about $2.6 million in taxes and fees to the state. While gambling is illegal and falls outside the gaming unit's regulatory authority, charitable gaming is the exception. STEVEN BORCHERDING SR., GENERAL MANAGER, GOLD CASH BINGO, VIA TELECONFERENCE, ANCHORAGE, expressed that he's been in the industry for fourteen years, and that this bill is nothing more than a springboard for full scale gambling in the future. He stated that charitable gaming is currently working very well, with enforcement and regulatory statutes in place. The majority of the gaming industry is truly charitable and non-profit. BOB LOESCHER, ALASKA NATIVE BROTHERHOOD (ANB), JUNEAU, explained that he has worked with a number of charitable permittees, including the ANB and the Tlingit-Haida Community Council. The ANB has worked with the legislature for two years on charitable gaming legislation. He expressed the ANB's support of HB 509; in particular, the restructuring that would move the Department of Revenue commission to a new commission, and separation of charitable gaming and any new gaming in the future. He stated that he has received assurances that any changes to statute and regulation would come before the legislature. He expressed support that the industry is included in an advisory role as part of the commission. He expressed that the issue of taxes and fees is an important condition of his support for HB 509 because the ANB believes the legislature should establish taxes and fees. Representative Foster MOVED to report CSHB 509, Version U out of committee with the accompanying fiscal note and individual recommendations. Representative Stoltze OBJECTED. A roll call vote was taken on the motion to move the bill from committee. IN FAVOR: Moses, Chenault, Croft, Fate, Foster, Hawker, Joule, Harris, Williams OPPOSED: Stoltze Vice-Chair Meyer was not present for the vote. The MOTION PASSED (9-1). Representative Foster commented that he does not object to the concept of the bill, but he expressed concerns over creating another commission that would come to the legislature with additional funding requests. CSHB 509(FIN) was REPORTED out of Committee with individual recommendations and one fiscal note.