SENATOR TAYLOR introduced SB 76 (CHARITABLE GAMING RESTRICTIONS) and invited the sponsor, SENATOR DRUE PEARCE, to testify. SENATOR JACKO moved to adopt CS FOR SENATE BILL NO. 76(JUD), 8-LSO279\U, Luckhaupt, 4/1/93, as a work draft. Without objections, so ordered. SENATOR PEARCE explained as SB 76 came from the Labor and Commerce Committee it had a felony exclusion and a prohibition against using pull-tab and bingo proceeds as direct political contributions. In addition, she said the committee substitute contains a section prohibiting the use of pull-tab and bingo proceeds for direct payment for lobbying fees. SENATOR PEARCE explained the previous administration disallowed third party vendors as a point of sale for pull- tabs, but in this bill, this will be allowed only in mechanical vending machines. She described the use of these in the State of Washington. Number 075 SENATOR PEARCE explained the committee substitute specified a return to the non-profit organizations 30% on pull-tabs and 10% on bingo. She also explained it allows multi- beneficiary permits, which SENATOR ZHAROFF had been trying to do for Native corporations. SENATOR PEARCE referred to some technical amendments presently being drafted by MR. LUCKHAUPT, and suggested by JOHN HANSEN, Gaming Manager for the Division of Occupational Licensing, after he read the bill. She explained it would give the administration more latitude to manage gaming in the state. SENATOR PEARCE review some past legislation that would allow the Alaska Public Radio Network (APRN) to use gaming on a state-wide basis to raise funds for both public radio and television. Last year, the legislature budgeted about $1,000 to APRN to do a study to select the best sort of game for them to use state-wide to raise money. She explained that APRN wanted to create an endowment that would enable them to become self-sufficient, but they found there needed to be a change to the statutes to allow them to use the game as determined by their study - an on-line lotto. SENATOR JACKO asked SENATOR PEARCE if the legislation would include gambling on ferries. Number 160 SENATOR PEARCE said that it would not, but she had discussed it with REPRESENTATIVE CARL MOSES, and he has a House bill that would allow gaming videos such as black jack on the ferries. She said they had an agreement to support each others bills. SENATOR JACKO commented he was in favor of a mechanism by which APRN could generate its own revenue. SENATOR TAYLOR referred to an amendment authorizing the Alaska Public Radio Network to conduct the game of on-line lotto and asked SENATOR PEARCE if it was hers. She explained her amendment was on the table, and she noted that DIANE KAPLAN, President/CEO of APRN, was present to testify. SENATOR JACKO, SENATOR HALFORD, and SENATOR PEARCE discussed the proposed amendment to the legislation. SENATOR TAYLOR asked MS. KAPLAN to testify on the amendment. Number 228 MS. KAPLAN gave some history on the enabling legislation in 1990 to assist public radio to be self-sufficient. She explained the difficult in funding public broadcasting with the declining revenues, praised SENATOR TED STEVENS for helping them on the federal level, and conveyed a request from the Department of Commerce to seek specific legislation to issue the regulations and give them a permit. MS. KAPLAN said APRN had received a $50 thousand capital appropriation, supported by the administration, to obtain the best possible assistance from experts who know about state-wide games, hence, the on-line lotto game. She said the game was not prohibited in state law, but she quoted the Department of Commerce that it should be specifically authorized. MS. KAPLAN reported that APRN had set up a public broadcasting endowment trust, and she outlined the organization of the trust. She predicted in about 10 years the endowment would be able to support a significant part of the operating cost of public broadcasting. SENATOR DONLEY questioned the limitations of time of activity, and MS. KAPLAN quoted the existing limitations in the statute as 12 hours per year, maximum. She explained there was a prohibition against any operators being involved and that 100% of the net proceeds, after expenses, would go to public broadcasting. SENATOR DONLEY asked who had drafted the amendment, and MS. KAPLAN explained it had been drafted by their attorney, JEFF BUSH. SENATOR PEARCE explained the amendment would have to be accepted conceptually and formally drafted by MR. LUCKHAUPT. She explained a conceptual amendment to SENATOR LITTLE, and SENATOR TAYLOR further pointed out the differences in drafting. He discussed the use of the on-line lotto game as specific to APRN. Number 283 MR. HANSEN testified the current statutes define "bingo" and "lotto" as the same thing. SENATOR TAYLOR discussed it as being the drafting form, but questioned what was to be accomplished. MR. HANSEN expanded on his definition to specifically define on-line lotto. SENATOR JACKO voiced his support for the amendment in that it did not use funds from the general fund. Number 325 SENATOR DONLEY continued to question the need for the specific change in the amendment, and MR. HANSEN outlined the previous legislation, which was legal under current statute. He explained the amendment would provide for on- line lotto, a lottery. SENATOR DONLEY argued that current law allowed lotteries, but MR. HANSEN said there were raffles but no state-wide lotteries as conducted by other states. SENATOR DONLEY wanted to know the difference in the proposed lottery and a broadcast raffle. There ensued a discussion with all participants about the difference in gaming, on-line games, computer game terminals, multiple locations, and simultaneous games state- wide. Number 400 SENATOR TAYLOR questioned MS. KAPLAN about the 12 hours of on-air time, and she explained that would be the time used in the drawings. SENATOR TAYLOR asked about spreading out the time, and she explained it would be a drawing of the tickets that people had purchased from around the state. SENATOR JACKO asked how much money the game would generate, and she had been given to expect about $5 million net per year. SENATOR DONLEY asked about a limit on prizes, and MS. KAPLAN explained the prize limits on each permit. He questioned closely as to the prize limits, people involved, and multi- million dollars. He explained it would be a state lottery, which has always been voted down in the past. SENATOR DONLEY became agitated at what he saw as the magnitude of the proposal and asked for a written description. SENATOR TAYLOR asked for the pleasure of the committee on Amendment #1. SENATOR LITTLE moved to table the motion until input was received from the legislative bill drafter. Without objections, so ordered. SENATOR JACKO asked for clarification on the tabling motion. Number 474 SENATOR LITTLE said she was waiting to hear if the amendment would fit under the law, and she wanted a position paper from the department. SENATOR TAYLOR and SENATOR HALFORD discussed the fate of the amendment, which SENATOR HALFORD opposed. SENATOR HALFORD objected to the motion to table the amendment, and the tabling motion was upheld. Without objections, so ordered. SENATOR PEARCE referred the committee to two of her additional amendments and chose 8-LSO279\0.1, Luckhaupt, 3/5/93. SENATOR TAYLOR designated the next amendment as Amendment #2. SENATOR PEARCE explained the intent of the bill was to prevent a person convicted of a crime of extortion from participating in gaming for life, but the draft allows gaming 10 years after the person's conviction. SENATOR DONLEY asked for clarification. SENATOR PEARCE explained the bill, as presently drafted, extortionists can return to gaming after 10 years, and she further explained that was not her intent. She claimed Amendment #2 would ban extortionists from gaming for life. SENATOR DONLEY said he had the Labor & Commerce version of the bill, and SENATOR PEARCE said MR. LUCKHAUPT would put the amendment where it should go. Number 560 SENATOR TAYLOR said MR. LUCKHAUPT was bringing an updated version of the Judiciary committee substitute. SENATOR PEARCE discussed with SENATOR DONLEY and SENATOR JACKO as to where the amendment fit. SENATOR TAYLOR moved to adopt Amendment #2, the version as previously described. He opened the committee to discussion on the amendment. SENATOR DONLEY expressed concern the department was being given the authority to adopt regulations, and he questioned why this was being done. SENATOR PEARCE explained the Department of Commerce had set up a three tier system to prohibit felons from gaming for different time periods and would allow the department the discretion to determine when the felon could return to gaming. Number 628 SENATOR TAYLOR thought there might be more flexibility by allowing the department to write the regulations. MR. HANSEN explained under current law, any crime of theft or dishonesty is a lifetime ban, and he gave the example of shop-lifting to explain his point. He further explained the amendment would provide some discretion for a person who has paid their debt to society, and after 10 years, that person could be re-evaluated for participation in gaming. He gave a true example where the crime of trespassing was keeping a bingo caller from working, and he viewed the amendment as allowing flexibility as to who should have the life-time ban. SENATOR DONLEY was astonished that the crime of trespassing was considered a crime of dishonesty, but MR. HANSEN said it was under Alaska statutes. There was some discussion on the subject. SENATOR TAYLOR asked for movement on the amendment. SENATOR DONLEY referred to (2)(A) of Amendment #2 to question when a felon has become a "person of good character, honesty, and integrity." MR. HANSEN defended the provision as being common in states that allow gaming and is a right rather than a privilege. He explained the criteria in the regulations would provide more of an intent and latitude in crimes that are not felonies. SENATOR DONLEY referred to line 2, under (b), and moved to insert "of that person" after "conviction." Number 696 SENATOR PEARCE reminded SENATOR DONLEY the phrase was given at the beginning of line 2, but SENATOR DONLEY argued for the inclusion. There was no objection to SENATOR DONLEY's amendment to Amendment #2. SENATOR TAYLOR found no objections to Amendment #2, which was to be adopted conceptually. Without objections, so ordered. SENATOR TAYLOR asked SENATOR PEARCE to review her Amendment places in the bill. SENATOR TAYLOR asked MR. HANSEN to explain the amendment. Number 740 There was a discussion on the amendment, as well as which committee substitute was being used, by SENATOR TAYLOR and SENATOR DONLEY. MR. HANSEN explained the amendment would add fund raiser and consultant to the licensee and to the title of the bill which refers to definitions in the bill. They discussed the reason for the amendment and the placement in the legislation. SENATOR DONLEY moved to adopt Amendment #3, and SENATOR TAYLOR explained to MR. LUCKHAUPT the reasons for the amendment. Number 792 MR. LUCKHAUPT explained the amendment, previously passed, dealing with banning extortionists from any involvement in charitable gaming at any time. SENATOR TAYLOR directed MR. LUCKHAUPT's attention to Amendment #3, and MR. LUCKHAUPT explained it was an attempt at defining fund raisers and consultants, as related to the managerial and supervisory positions. He said it would fit these people into the restrictions for those persons to get a permit or license. SENATOR TAYLOR said Amendment #3 was adopted conceptually. Without objections, so ordered. SENATOR TAYLOR asked MR. LUCKHAUPT for his second Judiciary committee substitute, and he offered his 8-LSO279\X version, which incorporated the changes made by the staff members from Judiciary, SENATOR PEARCE, and JOHN HANSEN. SENATOR TAYLOR asked if Amendments #2 and #3 had been incorporated into the latest committee substitute, and MR. LUCKHAUPT assured him they had. SENATOR TAYLOR asked MR. LUCKHAUPT if the amendment dealing with public broadcasting and on-line lotto had also been incorporated, and MR. LUCKHAUPT said it had not. MR. HANSEN offered to review the changes from the Labor & Commerce version, and he used the X draft to explain Section 13. SENATOR DONLEY protested he didn't know what was in the first Judiciary version. MR. HANSEN offered to give a sectional analysis, and SENATOR TAYLOR asked that it be brief. Number 854 SENATOR JACKO moved to remove Amendment #1 from the table. Without objections, so ordered. SENATOR JACKO then moved Amendment #1, and in a 3-2 vote the amendment failed. TAPE 93-36, SIDE B Number 001 MR. LUCKHAUPT began by explaining Section 1 added provisions for vendor registration that was not in the previous version, and in a later section a pull-tab permittee could arrange to have a vendor sell pull-tabs for them through a contractual arrangement. SENATOR DONLEY asked to hear from the department as to why this was a good idea, and he protested it would cause more gambling. COMMISSIONER FUHS asked to speak to his concerns. MR. FUHS described seeing pull-tabs in most bar in Alaska, but he explained the legislation would allow the charities to go directly to a vendor, without going through an operator, to increase the amount which goes to the charity. He claimed that 50% of the pull-tab money would go directly to the charities, which is higher than the other provisions of the bill, which are 30% - with an operator. Number 080 MR. FUHS explained, in addition, when the pull-tabs are delivered, the vendor writes a check, up front, for 50% of the pull-tabs. He quoted SENATOR PEARCE as wanting the pull-tabs to be dispensed from a machine to increase accountability, and he reviewed the difficulty with the present accountability. SENATOR DONLEY asked for the statutory authority currently used in pull-tab operations, and MR. HANSEN explained, under current law, permittees or operators can sell pull-tabs. These permittees can lease space and have their employees sell pull-tabs, or under regulations, if the bar owner volunteers that space, they can operate. He explained that was the "hole" in the law. He said the legislation would direct the bar owner to pay the money up front and clean up the regulatory mess. MR. LUCKHAUPT explained all of the vendor provisions in the Labor & Commerce version are different, so Sections 1, 9, 19, 21, 22, 24, and 26 of the X version all deal with vendors, and none of the provisions were in the L&C version. SENATOR DONLEY asked where licensing provisions for vendors appears, and MR. LUCKHAUPT explained they appear in Section 22 on pages 10 through 12 of the X version. Number 143 There was some discussion between SENATOR DONLEY and MR. HANSEN, and MR. LUCKHAUPT explained it was the same language added through SB 6 last year, which went through House Judiciary. MR. LUCKHAUPT explained the multiple permittee game Sections 3, 5, 6, 7, 12, 16, 17, 18 and 20 all deal with the idea that several municipalities and organizations can join together to offer a bigger pot. He said these provisions were not in the L&C version. SENATOR DONLEY thought it would mean more permittees could get together. MR. HANSEN said he was correct, and he described current regulations in relation to the legislation. Number 206 SENATOR DONLEY expressed concern that among the multiple groups, one group could become dominate, and he asked about the safeguards to prevent such domination. MR. HANSEN explained, under the current draft, there would be the same filing requirements for each group, but he wasn't sure the domination could ever be prohibited. SENATOR DONLEY said he was worried the dominate group would bring in "paper" organizations, add them to their group, increase their activity level, and never return the money to the paper organizations. MR. HANSEN explained why they couldn't under the current law as well as the X version. SENATOR DONLEY clarified the groups would have to maintain individual checking accounts to prevent collective accounting. MR. LUCKHAUPT explained that Sections 4, 11, and 26 all deal with the prohibition of involvement in charitable gaming by those with criminal records. He said those provisions were all in the L&C version of the bill and were discussed earlier. He said Sections 5, 6, and 7 are all multiple permittee sections, and Section 8 is a new section, which would require the department to approve contracts between permittees and operators. Number 261 MR. LUCKHAUPT explained that current law instructed the permittee to submit the contract, but did not allow the department to approve or disapprove the contract. He also explained how the department could be caught in a Catch 22 situation and not be able to stop the contract, but the problem would be solved by Section 8. MR. LUCKHAUPT explained Section 9 of the bill deals with vendors again, and Sections 10, 14, and 29 deal with the percentage that must be paid by operators to the permittees. He said these provisions were not in the L&C version of the bill. He explained Section 10, page 6, lines 8 through 12, would require the permittee, each quarter, to pay the permittee 30% of the adjusted gross income from the pull-tab activity and 10% of the adjusted gross income from a gaming activity other than pull-tabs. These percentages are related to those in Section 14, and he said Section 29 would changed the calendaring for the year. SENATOR DONLEY said he has always wanted the department to have the authority to increase the percentage and had disagreed with the court decision that denied the authority. He gave some history on this attempt and asked if it could be included in the legislation. Number 314 MR. FUHS said his department supports the numbers as given by MR. LUCKHAUPT, and he supported it in combination with bingo, which is used as a lost leader and written off against the pull-tab activity. By his computations, the bill doubles the amount going to charities. SENATOR DONLEY questioned whether the rates could be raised in a pull-tab parlor, where only pull-tabs are sold. MR. FUHS defended the legislation as providing a fair return, and SENATOR DONLEY continued to argue for a higher number. (SENATOR TAYLOR recessed the meeting for 20 minutes so committee members could attend other meetings.) Number 362 SENATOR TAYLOR reconvened the meeting on SB 76, and he explained that Amendments #2 and 3#, previously passed, are incorporated within the new X version. SENATOR HALFORD moved to adopt CS FOR SENATE BILL NO. 76(JUD), 8-LSO279\X, LUCKHAUPT, 4/1/93, as the current committee substitute work draft. Without objections, so ordered. SENATOR TAYLOR asked COMMISSIONER FUHS if he wished to make further comments. MR. FUHS reviewed the importance of the legislation because it prohibits gambling proceeds to be used for campaign contributions or for lobbyists, and he described what he considered a disturbing trend to see the political parties dependent on gaming money. He said the legislation picked up felons such a murderers, who presently hold permits, but would give some relief to those who commit misdemeanors. Number 411 SENATOR DONLEY expressed confusion at the over-all philosophy of gaming and the dichotomy of allowing alcohol around certain types of gaming and not others. He asked for the position of the department if he offered an amendment to prohibit alcohol where any gaming takes place. MR. FUHS explained why he supported the CS for SB 76(JUD) as presently drafted. There ensued a lengthy, and sometimes heated, discussion between SENATOR DONLEY and MR. FUHS on the subject of mixing alcohol and pull-tabs. SENATOR TAYLOR interrupted the debate and moved on to some concerns from SENATOR PEARCE. Number 506 SENATOR PEARCE reviewed her opening remarks on the legislation and expressed concern that previous language requiring third party vendors to sue mechanical vending machines was not in the new committee substitute. She asked to entertain a motion to have a committee member introduce a conceptual amendment to that effect. She discussed the benefits of regulating the industry through the use of the machines and suggested that MR. HANSEN could provide additional information. SENATOR TAYLOR moved a conceptual amendment, Amendment #4, to require third party vendors to use the mechanical vending machines to disperse pull-tabs. Without objections, so ordered. MR. FUHS gave his support to both the amendment and the committee substitute for SB 76. SENATOR DONLEY questioned MR. FUHS as to whether the increased activity was reflected in a fiscal note, as well as the use of program receipts from taxation. MR. FUHS explained the department uses the program receipts, and the Finance Committee had added some additional positions for enforcement. He also explained how the new procedures would require less enforcement. SENATOR DONLEY clarified the need for additional personnel, and MR. FUHS continued to contend it would be a much simpler operation. Number 600 SENATOR TAYLOR next invited CHIP Thoma from Juneau, to testify. MR. Thoma explained he had testified on the bill in Labor & Commerce, and thought he had more understanding of the bill. He objected to COMMISSIONER FUHS' description of prohibiting gambling money from going to politicians, and he objected to it being characterized as a moral issue. He thought the moral issue was selling pull-tabs in liquor establishments, and he gave his experience of being a bartender to describe what he considers the moral climate leading to the breakup of families. MR. Thoma argued the figures for gambling money funneled into political campaigns was not an accurate statement, and he didn't think it was a moral problem. He thought the use of pull-tabs for political parties was the closest thing there was to public financing and would eliminate the need to use money from lobbyists. He said he was not aware of any problems with politicians using pull-tabs. He thought the legislation was a war between the two chief operators of pull-tabs and bingo parlors throughout the state, and he accused the legislators of participating in the war. He deplored the lack of public participation in the discussion of the bill, and he suggested holding the bill until more public testimony could be given. Number 687 SENATOR TAYLOR invited DIANE KAPLAN to return for some additional comments. MS. KAPLAN reviewed the objectives in finding alternative sources of funding for public broadcasting aside from the general fund and the recommendations from their consultants. She asked for the consideration of a different amendment to allow them to do some sort of a state-wide game this year. She deferred the explanation to their attorney, JEFF BUSH. MR. BUSH explained the proposed amendment would allow a state-wide series of pull-tabs, and using the pull-tab as a ticket to participate in a state-wide drawing on the air, under the previous legislation which allows up to 12 hours a year of broadcast time to play a game. MS. KAPLAN described how the game would play, and how it would fit into the present statutes - with some changes. SENATOR JACKO questioned the confusion with their previous proposal, and MS. KAPLAN explained there was a million dollar limit on any one permit. SENATOR JACKO moved to adopt a conceptual amendment, Amendment #5, to allow APRN to raise money outside of the general fund. SENATOR TAYLOR asked for discussion on the amendment, and SENATOR DONLEY suggested it should be redrafted. SENATOR HALFORD wanted to know what it would generate, and MS. KAPLAN explained the provisions. SENATOR HALFORD asked to hear from the Department of Commerce on their position. MR. HANSEN explained the amendment would allow pull-tabs of the same series to be sold in more than one location, and it would allow for an additional drawing if they posted an additional bond of $250,000 and have approval from the attorney general. He spoke for both himself and COMMISSIONER FUHS in not opposing the amendment. Number 780 SENATOR HALFORD asked how much money it would generate, and MR. HANSEN talked about the limits of paying out no more than $1 million in prizes per year. The prize percentage would determine the amount they would make, and he gave some possible figures. MS. KAPLAN said their enabling legislation prohibited the use of operators, so all of the proceeds would go to APRN. MR. BUSH offered some rough figures on the possible amount of about $3 million that could be generated. MR. HANSEN added that APRN would be allowed to use retail outlets to sell those games for them. MR. BUSH qualified his previous figures as being the gross receipts for APRN and does not take into account expenses. Without objections, Amendment #2 passed. SENATOR PEARCE asked if the last amendment would require a title change, and MR. LUCKHAUPT explained why it would not. SENATOR HALFORD and MR. LUCKHAUPT discussed what would happen to the bill if sent to the House. SENATOR LITTLE suggesting holding the bill to allow for more public testimony, but it was not acted upon. SENATOR DONLEY moved to adopt Amendment #6 which would allow the Department of Commerce to license pull-tab manufacturers outside the State of Alaska. He said all other states do this, and it generates considerable revenue. MR. HANSEN explained why the department absolutely supported the amendment. Number 855 SENATOR JACKO asked for some information on the amendment, and SENATOR DONLEY said it was because the state licenses in-state manufacturers so they can monitor their activity to meet quality standards to protect the public. MR. HANSEN provided some additional information on collecting money on the licenses from Outside manufacturers, and he quoted SENATOR DONLEY as saying all other states have that regulatory control. TAPE 93-37, SIDE A Number 001 MR. HANSEN said some licensing fees amount to $10,000 in this state, and SENATOR HALFORD asked if it would add a fiscal note and Finance Committee referral. MR. HANSEN said $5,000 would come to the state. SENATOR TAYLOR said Amendment #6 passed without objections. SENATOR DONLEY moved to adopt Amendment #7 which would accept the same standard used by the State of Washington involving pull-tabs. SENATOR DONLEY explained the problems with the present standard as being the lowest common denominator among the industries, and he explained the benefits of the new standard. MR. HANSEN said SENATOR DONLEY was correct, and he urged the adoption of the higher standard. He explained why he supported the amendment. SENATOR TAYLOR stated Amendment #7 passed without objections. Number 095 SENATOR HALFORD moved a conceptual amendment, Amendment #8, to tighten up the title to reflect the requirements as outlined. SENATOR TAYLOR asked MR. LUCKHAUPT if he understood the changes. He said he did, including "An Act relating to charitable gaming;" which opens the door. SENATOR DONLEY began his proposed amendment by explaining what he saw as the lack of knowledge on the part of permittees in understanding the laws under which they comply. He advocated a minimal testing program on the basic knowledge of the statutes and regulations, before people are allowed to have the permits. SENATOR TAYLOR said Amendment #8 would have to be a conceptual amendment regarding training and licensees. SENATOR DONLEY continued to explain how it would fit into the legislation and how it could be implemented. SENATOR TAYLOR objected for purposes of discussion. SENATOR PEARCE didn't know if the amendment was a worthy goal, and she explained gaming was being moved from the Department of Commerce to the Department of Revenue, which would make it difficult for the Department of Commerce to do any testing. She suggested that SENATOR DONLEY work with the Department of Revenue on his proposal. Number 193 MR. HANSEN explained the previous legislature provided the incentive to conduct training seminars and educational programs. The training seminars have been started with one in Homer, and he reported positive results from the Kenai Chamber of Commerce and Kenai Bicentennial Committee. SENATOR TAYLOR clarified that training would be mandated for permittees, but he expressed concern that the gaming activity would cease until everyone was trained. SENATOR DONLEY said his conceptual amendment could have an effective date of 1995, and he stressed the fairness of his amendment. SENATOR TAYLOR asked whether it could be done by regulation, and MR. HANSEN deferred the answer to GARY AMENDOLA, from the Civil Division of the Department of Law. MR. AMENDOLA reviewed the statute that gives the department broad authority to adopt regulations to carry out its responsibilities under charitable gaming, and he read the pertinent parts of the law. Number 272 SENATOR TAYLOR reported Amendment #8 had failed on a 2-1 vote. SENATOR DONLEY proposed an amendment, Amendment #9, to raise the percentage of profits to the charities to 80%, and he explained the vendors would have zero overhead, especially with the machines. There ensued a discussion of gaming in relation to the machine use. MR. FUHS thought the number was too high, citing his experience in the area, but he left it to the pleasure of the committee. SENATOR TAYLOR referred to page 11, line 29 to confirm the "permittee shall receive no less than 50% of the ideal net." SENATOR DONLEY argued against the justification of 50% of the net and explained the reasons for the low overhead with the machine concept. SENATOR JACKO asked the sponsor, SENATOR PEARCE, for her opinion on the proposed change in percentage, SENATOR PEARCE objected for the same reasons as given by MR. FUHS. SENATOR TAYLOR reported Amendment #9 had failed on a 2-1 vote. SENATOR DONLEY asked if there was any increased percentage any of the senators would support, and he reviewed his reasons for maximizing funding to the charities. SENATOR TAYLOR suggested he take his objections to the Finance Committee, the next committee of referral, or to the floor when the bill is heard. SENATOR TAYLOR agreed more information was needed, and SENATOR DONLEY continued his appeal for a higher percentage, citing again the lower overhead with machine playing and accounting. SENATOR DONLEY moved a conceptual amendment, Amendment #10, to allow the department to increase, or decrease, the percentages for pull-tab activities by regulation and explained his justification. SENATOR TAYLOR asked MR. LUCKHAUPT if he understood the concept put forth by SENATOR DONLEY, and he discussed with SENATOR TAYLOR flexibility through regulation just for pull- tabs. SENATOR HALFORD questioned why just pull-tabs, and SENATOR DONLEY explained the increase in profit ratio with pull- tabs, especially with the emergence of pull-tab parlors. Number 460 SENATOR PEARCE expressed concern that any commissioner, governor, or gaming director could jack-up the percentages so high that no once could operate. She preferred the percentage be set in statute and changed by the legislature as needed. SENATOR DONLEY withdrew Amendment 10, and he proposed a replacement Amendment #10, which would allow the department to raise the percentage for all forms of gaming. He defended the department's ability to promulgate regulations for the changing of the percentage given to charities and citing the restriction in statute that must be followed by the departments. SENATOR PEARCE explained SENATOR DONLEY was partially correct, but she said lawyers could take the regulations to court if they didn't like the percentages. She again stressed putting the percentages in statute. SENATOR DONLEY continued his defense of his amendment. SENATOR TAYLOR reported Amendment #10 had failed on a 3-2 vote. Number 503 SENATOR DONLEY expressed concern the meeting would end before people on the teleconference network had a chance to testify, and SENATOR TAYLOR explained that SENATOR PEARCE, Co-Chair of Finance, assured him there would be a chance for further testimony. SENATOR DONLEY proposed Amendment #11 which would insert "prohibiting charitable gaming from occurring more than once a year at any place selling or dispensing alcoholic beverages;". SENATOR HALFORD objected to the amendment. SENATOR DONLEY explained his amendment. SENATOR TAYLOR reported Amendment #11 had failed on a 3-2 vote. SENATOR HALFORD moved to pass CS FOR SENATE BILL NO. 76(JUD) (CHARITABLE GAMING RESTRICTIONS) from committee with individual recommendations. SENATOR LITTLE objected for purposes of questioning SENATOR PEARCE on her promise of a teleconference, and SENATOR PEARCE indicated a possible time. SENATOR TAYLOR moved the bill with individual recommendations. Without objections, so ordered.