SB 175-MUNICIPAL PROTESTS OF GAMING PERMITS    SENATOR ELTON, bill sponsor and Senator from district B, said the bill addressed a problem that has arisen in his community. SB 175 gives municipalities the opportunity to protest or recommend conditions on the issuance or renewal of a gaming permit similar to the way municipalities now protest or ask for conditions on alcoholic beverage control (ABC) licenses. Under the bill provisions, a municipality or applicant may, after a hearing, make a defense and then protest the permit or ask for conditions. One provision would, under certain circumstances, preclude municipalities from doing that. For example, if the municipality holds gaming permits, they could hold a hearing and protest a permit for non-payment of taxes. The Department of Revenue would then review the protest by the municipality and if they determine that it is a reasonable protest they could deny the issuance of a permit. They too would have to hold a hearing and go through a process before they could deny the permit thus giving the applicant another chance to present their case. Without the bill, municipalities may only have a local option election that would allow them to ban all gaming or just pull-tabs or, by ordinance, they may prohibit a vendor or operator from managing a permit. The permit would then go to another vendor or operator. The situation is Juneau was that three operators did not pay taxes and over a three year period, their tax liability grew to $627,000 plus $300,000 in attorney and other costs. There was no way for the municipality to protest the issuance of the permits even though they are issued on a yearly basis. Since the operators have no assets to attach, there is no way of recovering the liability. In doing nothing to the operators who are flaunting the law, the municipality is giving them a competitive advantage over the operators who are paying the taxes. This sets in place a system to give municipalities control over the operations of the permits. Other situations in which a community might want to have a hearing before protesting a license are fire safety or public nuisance issues. Side B This solution is reserved for organized municipalities. CHAIRMAN TORGERSON commented that public nuisance is in the eye of the beholder and he does not like the idea of a municipality having to define nuisance and then place conditions on the activity. He looks upon the tax as a good policy but the nuisance bothers him. He recommended tightening the definition a bit. SENATOR ELTON responded arbitrary, capricious and unreasonable are definitions lifted from the ABC statutes and there is precedent behind those issues so new definitions should not be necessary. CHAIRMAN TORGERSON asked whether anyone from the Department of Revenue was present. SENATOR ELTON said the Deputy Commissioner showed up for the previous hearing that was canceled and his arrival was anticipated. CHAIRMAN TORGERSON said he could not get there in time. He asked for the next committee of referral. SENATORS LINCOLN AND PHILLIPS said it was Labor and Commerce. CHAIRMAN TORGERSON said he had some problems with the bill but he would entertain a motion to move the bill. He wants to continue to work with Senator Elton to narrow the focus to taxes. He wasn't sure about fire hazard. He thought perhaps they could come up with an amendment to offer. SENATOR ELTON asked to be advised of which staff member to work with and he would get any information that was needed. CHAIRMAN TORGERSON indicated his Community and Regional Affairs staff person, Mary Jackson. SENATOR LINCOLN moved SB 175 from committee with individual recommendations and accompanying fiscal note. There were no objections.