HOUSE BILL NO. 146 "An Act relating to sled dog race classics." Co-chair Halford invited Leo Rasmussen to join the committee. Mr. Rasmussen spoke to the words "mushing classics". He expressed that within five years this would potentially provide a revenue stream for Iditarod. He is convinced that it would take away the financing problems that have plagued Iditarod in the past. Iditarod is responsible for making Alaska an internationally known race. It has become a premiere event in Alaska which will increase tourism. Mr. Rasmussen testified that he has been an official checker for Iditarod. He retired from the Board in 1991 after 19 years, but is still actively involved in trail mail. Senator Rieger asked if he thought the increasing competitiveness of the race has improved the character of the race. He testified as to the negativity of the race back in 1973 as compared to now. Mr. Rasmussen said that there is much to be proud of in spite of what the humane society is saying. Co-chair Halford agreed to obtaining and maintaining the volunteer support as much as possible. The flavor of the race has changed. It is now able to pay its bills, it does a better job economically, but along the way it has lost the earlier attitudes of the 70's. Mr. Rasmussen indicated that it takes 10,000-20,000 volunteers to make the race work. He estimates that perhaps a third receives some compensation. He noted that there were people all over the world who took place in the race this year. This allows the locals to take a break and come back at another time fresh and new. The turnover has happened this year and is an on-going trend every three to four years. Co-chair Halford asked what could be done to safeguard this race from abuse? Mr. Rasmussen supported regulation. He stated that there is history with the All-Alaska Sweepstakes. There was extensive discussion regarding prior abuses in the race along with possible solutions. Co-chair Halford stated that this legislation has been slowed down to find a way to safeguard this game. He stated that there must be a mechanism between the department and the committee that guarantees the ability to safeguard. Various methods of protection were discussed to keep a black mark from occurring on the Iditarod. Mr. Rasmussen assured that he did not have an answer, but does support the reasoning. Senator Frank interjected that it is important to keep it from becoming a game of chance, but to keep the game interesting. He does not want it to become a lottery, he likes the idea of trying to guess when the musher is going to cross the line. He supports placing sanctions on the musher or any other person attempting to defraud the situation. He suggests language that says, "mushers can't bet or be involved in the betting, nor is it legal for anyone to ensnare or entangle a musher in a betting situation." He elaborated on the language and said that when sanctions are placed on the mushers the abuse will be limited. Co-chair Halford suggested placing bets on the combined time of the top three or four finishers, maintaining a historical perspective of past races. He suggested that the committee wanted to respond to this bill, the legislature wants to help the Iditarod, but that safeguards are needed and that the sponsors and the trail committee need to come back to the committee with something that gives a level of confidence needed on how it will happen. Co-chair Halford invited Mr. Edgmon to join the committee. He stated that he did not have any solutions to safeguarding against abuse, but that his office would be glad to research it and come back with language which could be amended into the bill. Co-chair Halford stressed that the participants are also the volunteers and supporters of the Iditarod. Therefore, he advocated not eliminating them from betting. He indicated that the direct participants and family members of mushers on the trail, as well as race officials and staff, should not be betting on the race. Senator Donley reiterated all the variables and does not know how to attack the problem. He suggested deferring it to someone who has the level of expertise to deal with it. He felt that deferring the problem to the division would require a fiscal note. Co-chair Halford suggested adding a sunset of 4 years to the bill and with a fiscal note of $25.0 along with a letter of intent that provides criteria to protect the integrity of this lottery. Co-chair Frank suggested a fiscal note from program receipts. Senator Zharoff raised his concern over the term "mushing sweepstakes" and that soon there will be other activities around the state like the Beaver Roundup, Yukon Quest, etc. that want to participate too. The definition that is in the bill is rather narrow. Mr. Edgmon stated the intention of the Division of Gaming, is that there is statutory authority for the race organizations to conduct the game activity. Some of the interior race organizations do conduct lottery game activity. The intent of this bill is to put this language specifically in the statute that entitles the Iditarod Trail Committee to sell tickets. The sponsor of the bill, after speaking to legislative legal council, the Gaming Division, and the Department of Law, has specific questions as to the activity of wagering on the arrival, check-point and finish line, and that it may not be allowed. Co-chair Halford suggested a fiscal note of $25.0 in program receipts, and pass the bill out with a 4-year sunset. This gives the trail committee 4 years to work with the department. If approved now, they will have it next year. Senator Sharp expressed his agreement. He said it would behoove the Iditarod Committee to maintain the highest integrity in the checks. Mr. Rasmussen agreed that with time the race is going to have to be handled much more professional than in the past. Co-chair Halford asked for a motion to add a program receipt fiscal note of $25.0, recognizing that it will be reviewed when the budget is closed out and the information is provided by the department. Discussion was had on the amount of the fiscal note. Senator Donley reiterated that gambling makes people behave differently. There have been few things in the statutes that have encouraged and encountered as much litigation over the precise meaning of them as gambling. The lawsuits come rapid fire. When there is money involved there is a pecuniary interest to file law-suits. An activity such as this, paying 1% tax on gross, has the potential for immense profits. Careful thinking and well-thought out planning is urged. He associated the complexity of this race with the intricate regulations for parimutuel horse betting. Senator Rieger said that the concern over human interference can cause potential abuse to the race. He suggested that the more elements of uncertainty introduced into the race, the harder it is for someone to control. He introduced an amendment that would indicate that the sweepstakes must include at least three variables. For example, in submitting a guess, it might include the names of the top ten teams that finish, the winning time and perhaps the time between the arrival of the first and second teams. It would be impossible to rig that sort of complexity of guessing. This might take away Senator Donley's concern. Co-chair Halford said that Senator Rieger's language leaves a lot up to the trail committee. The existing language says that the only thing they can bet on is the winning finish time. He stated that with Mr. Rasmussen supporting a concern, it validates the need to address the problem now. He also supports making the betting easy as stated by Co- chair Frank, and likes the language introduced by Senator Rieger. Senator Rieger asked Mr. Edgmon if he as in agreement with the intent of the amendment? Mr. Edgmon indicated that he didn't think the sponsor of the bill would be opposed to the amendment. The bill did pass the House 30 to 5. Senator Rieger moved to adopt the Amendment. Senator Frank OBJECTED to the amendment. He withdrew his debate but not his objection. Co-chair Halford asked, "Shall the Rieger Amendment be adopted?" The Rieger Amendment passed 5 to 2 and was ADOPTED. Senator Donley MOVED for passage of a $25.0 fiscal note to the department of program receipts with a 4 yr sunset provision. No objection having being raised, it was ADOPTED. Senator Sharp MOVED for passage of SCSCSHB 146 (FIN) out of committee with individual recommendations with accompanying fiscal note. No objection having been raised, SCSCSHB 146 (FIN) was REPORTED OUT of committee with the accompanying $25.0 program receipt fiscal note from the Department of Revenue.