House Labor & Commerce, 5/13/26, 3:15pm

Good afternoon. This meeting of the House Labor and Commerce Committee will come to order. The time is 3:22 PM on May 13th. Members present are Representative Carrick, Representative Colombe, Representative Freer, Co-Chair Fields, and myself, Co-Chair Hall. We have a quorum.

Please make sure your cell phones are silent. I'd like to, um, thank Andrew Magnuson, the Labor and Commerce Committee Secretary, and Renzo Moises for their support today. Thank you for being here. On the agenda today, we have 3 governor's appointees: Caron Cobden to the Board of Massage Therapists— apologies if I'm butchering your names here— Elise Buchholz to the Real Estate Commission, Judy Kendall to the Board of Social Work Examiners. We're also going to consider 5 bills: SB 249, Virtual Currency Kiosks, by Senator Tilton; SB 111, Digital Product Repair, by Senator Dumberg; HB 385, Simplified Rate Filing for Utilities, by the House Labor and Commerce Committee; HB 197, Dentists Hygienist Board of Dental Examiners by Representative Tomaszewski, and SB 170, Gaming Electronic Pull Tabs by Senator Bjorkman.

Please know that our schedule today is rather fluid, and that order is likely, very likely to change. Also, please be aware that due to our workload, this— we anticipate that this meeting will overflow to tomorrow morning. So that means we will be at an extended recess, but we will get through as much work as we can in the next 60-plus minutes. So number 1, starting off with our governor's appointees on the line, we have Caron Cobden, who's an appointee to the Board of Massage Therapists. Miss Cobden, are you there?

And if so, can you please identify yourself for the record and present yourself to the committee? And apologies in advance if I'm really butchering your name. Hi. Hi. No, you said it perfectly.

No problem at all. I'm Caron Cobden. I'm coming in from Fairbanks, Alaska. Regarding appointment to the Massage Therapy Board.

Great. Ms. Codman, would you please tell us a little bit about yourself and your interest and a little bit about your background?

Sure, of course. I'm a lifelong Alaskan. I grew up in Fairbanks and spent 10 years in Juneau actually working for the legislature, so I know those halls and rooms very well. I am a mother and grandmother. I'm somewhat retired now.

I run a part-time vacation rental business. But over the past 30 years, I've worked in a broad range of fields, including administration, higher education, small business management, and healthcare. For the last 20 or so years, I managed a local orthopedic clinic and medical practice with my husband, who is an orthopedic surgeon. But I'm now at a point in my life I'm exploring new interests and opportunities for growth, and I've always been interested in serving as a state board member. So we missed opportunity came up to do so as a public member, I was enthusiastic to apply, especially having been around orthopedics for so long.

I understand how important massage therapy and other supportive therapies can be for people with musculoskeletal and joint issues, and also how important it is that standards are met to ensure best practices and patient and client care. So, yeah, I'm very excited about this appointment. Great. Thank you, Ms. Compton. Do Committee members have any questions for Ms. Compton?

Okay. All right, seeing none, thank you very much for your time and your willingness to serve, Ms. Cobden. We appreciate it very much. With that—. Thank you for your time.

Appreciate it. Thank you. I do not see the other two governor's appointees online at this moment. Again, that would be Elise Buchholz being appointed to the Real Estate Commission and Judy Kentel being appointed to the Board of Social Work Examiners. Um, so with that, just brief it ease.

Okay, we are back on record. Not seeing the additional governor's appointees online. We will move on in our calendar. So next we will consider SB 249, Virtual Currency Kiosk, by Senator Tilton. This is the companion legislation to HB 324, which the committee heard in April.

Not seeing Senator Tilton here, but I see— oh, there you are, Senator Tilton. My apologies. Would you please come to the table and identify yourself for the record and introduce your— yeah, let's hear about the bill.

Thank you for being here.

All right. My name is Kathy Tilton, Senator for Senate District M, which is in the Matsu. And here with me today is Heath Hilliard, staff to Senator Tilton. So just a brief overview about SB 249. I did bring a paper by to each one of your offices.

This bill, I think many of you heard the story about what had happened with my mom, and it's not an uncommon story around this building. Many of you have received received phone calls and texts and emails that are scams. And in this situation, it was an AI-generated voice message that sounded like my voice, and then, um, pleading for my mom to go and save me from an accident. And then they put a lawyer on, and then the lawyer told her how to go to her bank, get the cash that she had from in her bank, and take that to a cryptocurrency kiosk. And at this kiosk, she was instructed which wallets to put her money in.

They didn't have her buy one specific amount of— the amount that she had was about $8,000, which equaled to about a year of house payments for her. But they didn't have her just put $8,000 in one wallet. They had her buy several wallets. And so she did that, and it was probably about 2 hours after that happened that she finally called me. And she was very embarrassed by the fact that she hadn't thought about calling me or talking to me and that she was My mother is never going to be a victim, but that at this point she was a victim of a scam.

And there was— through all of the avenues that we could think of to help her get her money back, there was really no way for her to get the funds back that she had put into the machine. Because here in Alaska right now, the kiosks are virtually unregulated. So therefore, we came forward with SB 249. This is not an uncommon story. I've heard this story happen not just to my mom, but they do They do seem to prey on the elderly because they tend to have more access to cash and are really at that point, like with my mom, she's alone and when she heard my voice, she just, will tell you herself, she lost her mind and she was like, "I'm going to do whatever it takes to help my family member." And I think that happens quite frequently because they prey on emotions and feelings.

So that led, led to this bill coming forward. It's a straightforward consumer protection bill. It doesn't ban cryptocurrency or technology. It simply closes those dangerous regulatory loopholes that the scammers are exploiting and using to steal from our vulnerable Alaskans. In 2024 alone, Alaskans lost $26 million to online fraud, and the seniors accounted for roughly one-third of those losses.

I will also say that recently I've heard from businesses that have had the same losses happen to them. They probably don't want to have that reported, but I can tell you that they gave me the okay to say that there was one business I was just recently talking to that had the same kind of situation. So, um, the kiosks have become the scammers' favorite tool because the transactions are instant, irreversible, and largely untraceable. The machines are currently operate in kind of a regulatory black hole. Whole.

We don't have a lot of regulation. There's no meaningful safeguards or accountability. So I know that you've heard about this bill in the companion bill, and I'd like to thank Representative Moore for bringing that forward, HB 324. There are just a few differences in HB 249 from, from HB 324. The core provisions, I think, are closely the same.

Licensing is required. Clear warning signs on the kiosks, ID verification, transaction limits. We may have some difference in the two bills, but I think there might be a committee substitute that's going to come forward. Fee caps are an important issue. Fraud blocking— they have to use blockchain analytics to transfer known illicit or overseas wallets refunds.

And then.

Receipts and reporting. So those are the main items in the bill, and I won't take up too much time because I know you have a lot going on in your committee, unless you have any other questions. Thank you, Senator Tilton. Um, I am completely empathetic to, um, the hardship that your family has faced, and I'm very, very glad to see this legislation before the committee. Co-chair Fields, uh, I move to adopt the proposed committee substitute for SB 249, work draft 34-LS1465-T, as a working document.

There has been an objection. I'm happy to speak to that. So, um, uh, there were some differences between the bill that we worked on with Representative Moore in this committee and the bill as it passed the Senate. Basically, the CS meets in the middle, um, on some of those ranges of daily withdrawals, weekly withdrawals, with holding money so it can be returned to a victim of fraud. And the specifics in terms of what's in the CS precisely align with what AARP recommended.

And we worked with the bill sponsor on these, as well as the bill sponsor from the House. Okay. So, all right. So the House version, those caps were really high— or really low. Yeah.

And so that was lowered. The CS— the— The Senate version was the opposite of that, and you're saying this is meeting the middle? Is that basically—. That's correct. And maybe I might suggest that we turn to the bill sponsor.

Exactly. Thank you, Co-Chair Field. Senator Tilton, do you have a response or any— anything you'd like to share to the committee? Um, yes, thank you. Um, Senator— uh, excuse me, I'm making you a senator now.

Representative Colon, through the chair, um, the bill that was passed through the Senate had a $1,500 daily amount limit, which was in between the AARP had we requested a $1,000 limit, and the people who are the kiosk owners— there's 6 of those who do not reside here in Alaska— but we're looking at a $2,000 to $2,500 limit. So we had put a $1,500 to meet in that middle. The CS would go back to the $1,000. I know the, the 324 had, I think, a $500 limit in it. So again, we're meeting in the middle between 324 and what we had in what we had in— have in 249, and that would be kind of a meeting in the middle, and it's by the request of Alaska AARP.

And then I believe there's also in the CS, it's a $10,000 monthly limit, dollar for month limit. In 249, it was a $10,500, so a $500 difference there. That was to get to the $10,000 so that it's federally recordable— reportable. And then I believe that the fee cap that you had in 324 was a really low fee cap, and the fee cap in 249, which passed through the Senate, was set at 10%. The reason for that was because after going back through the documents and I listened to a court reporting in— what state was that?

I believe it was Iowa. In Iowa. There was a lawsuit that was brought up in Iowa, and I was reading through that lawsuit. And in that lawsuit, when they first created the kiosk, they had indicated that they could do business at 12% and make money. And now, that was several years ago, and now there's— they've expanded business.

They should be able to do business at less expense than they did then. Although, reported from the kiosk owners, they will say that they need 20% to 50% sometimes, depending on on the transaction. Again, we were looking at kind of meeting in that middle ground somewhere. So through the chair—. Representative Kolumb—.

So the 10% is in this version or the Senate version or both? In the Senate version, and I'm going to have to look to my—. Through the chair, staff to Heath Hilliard, staff to Senator Tilton, correct, the proposed committee substitute and the version that passed the Senate yesterday both include 10%. Also, Representative Klobuchar, through the Chair, the reason that that 10% would be acceptable to AARP and to myself as a sponsor is because in the case of a fraudulent transaction, the fees are returned. So the fees would be for people who are doing— who are the unbanked and underbanked.

There is a section of folks who are— who do use them for for their— for paying their bills and things like that. And that would be the fee. And it is commensurate with what they might pay through Western Union. Okay. Awesome.

Thank you. Okay. Representative Kari. So I think this is to the co-chair, but I thought there was something additional about the reporting requirements in this version versus the prior version as well.

Am I wrong about that? Through the chair, I don't think so, or maybe I'm misunderstanding the question. Yeah, I thought there was something about in version T, and I'm not seeing the change. I guess we put licensing reporting in one section and it was previously broken out into two. I guess my intention here would be that some of the reporting information that's required in this bill would lead to, um, just corroboration of the data we'd heard from advocates that 94% of the transactions at these kiosks is fraudulent, and that the legislature would use that information coming back to, um, the department as potentially reason to ban these in the future.

And I, I recognize we're taking a step here, but I'm hoping that the reporting information required here leads us to actually taking further action and possibly just eliminating altogether these Bitcoin kiosks that are stealing money from seniors. So I don't—. Maybe there's no change in the CS on that front, but through the chair, I don't think so. Hopefully I'm not missing something. Okay, Representative Carrick, through the chair, I don't believe that there is any change.

Thank you. Okay, further questions from the committee? Representative Colon, do you maintain your objection? Oh, I withdraw my objection. Okay.

Seeing no further objection, the committee has adopted committee substitute for SB 249, work draft 34-LS1465/T as our working document.

Yeah, we are now— since we had some discussion about the changes between the previous version and the CS version T that is before us, We will now consider amendments. We received one amendment from Representative Fields. Do you have a motion, Co-Chair Fields? I move Amendment T.1. I'll object for purposes of discussion.

Um, this is a pretty simple amendment. Uh, members are aware that we just passed Senate Bill 86 across the House floor. Amendment T.1 conforms this bill with the definition of cryptocurrency in SB 86, uh, money transmission.

Any questions from the committee? Seeing none, I will remove my objection. Not seeing additional—. Representative Klum, can I hear from the bill sponsor to make sure it's a friendly amendment? Of course.

Pardon me, Senator Tilton. Thank you, Representative Klum. Through the chair, it is a friendly amendment. It was— the amendment was adopted in SB 249 on the Senate floor. When the CS was created, it was before the amendment was adopted in 249, and so it was the easiest way to bring that back together was to just add an amendment to the CS here.

What that amendment does, it just conforms it to the SB 89, which is the virtual money currency transmission bill, so that we don't have different definitions going into statute. It's going into SB 249 first because there's different dates of when— effective dates. So 249 has an earlier effective date, and then when 89 comes in, it'll lay over it. Okay, all right, thank you. Okay, seeing no further committee discussion nor objections, Amendment Number 1, labeled T.1, has been adopted.

Is there any final discussion about— Representative Sadler? Thank you, Madam Chair. I'm going to take a slightly unexpected turn, possibly, but That's not unusual. I'm going to move a conceptual amendment to CS for SB 249. That conceptual amendment number 1 would be to add in all elements of HB 281, which would be LS 1281 backslash A, page 1, line 1 through page 2, line 5.

And it is, you know, honestly, it's the entirety of House Bill 281, which is the penny rounding bill for cash transactions. Cash is a currency. This is an issue that we need to address timely. This is a good vehicle for that. I offer this conceptual amendment.

For the committee's consideration. Thank you. I will object to hear from the bill sponsor about that proposal. I don't know anything about it.

Ah, through the chair, um, and, uh, represent— or Representative Sadler, I appreciate your conceptual amendment, although I would say that we haven't had a discussion on that at this point in time. And so, um, SB 249 is specific on kiosks and on fraud, fraudulent things happening with kiosks. So At this time, I would prefer that we don't add another bill to it. Okay. Co-chair Fields?

I'll maintain my objection. And Representative Carrick? Um, yeah, thank you, Madam Co-chair.

So I, because the bill sponsor has not, um, reviewed this proposal being added to Senate Bill 249, I'm going to oppose it. But I do agree with Rep. Sadler that it does fit within the title. So I'm hoping maybe there can be some corroboration prior to this bill moving forward, because the, the bill that Rep. Sadler is mentioning is in State Affairs. We are planning to pass it on Thursday. It is actually a really important, um, business and consumer protection bill as well.

It turns out there's a lot of good merits to it, and we're not going to have another opportunity to get it across this session. So it possibly does have merit to add here, but because the sponsor is not supportive of that currently, I don't, I don't want to add it at this time. And we have an excellent bill before us, so I think that might take a little time to just digest. So I'm going to oppose it too. Representative Sadler.

Thank you, Ben. I'll consider wrap-up. Yeah, the currency world is changing. Digital currency, cryptocurrency, and kiosks world, but a world without pennies is a world in which we're going to have to live with too. So understanding, certainly I had not had time to bring it forward to the sponsor.

Things are moving quickly in these last days. I did think it was appropriate to raise and socialize. If we can raise the awareness of this issue and maybe some support for the underlying legislation, I sure appreciate that. And don't mind having the vote though. Thank you.

Okay, uh, will the clerk please call the roll?

Representative Freer? No. Representative Carrick? No. Representative Nelson?

Not present. Representative Colombe? No. Representative Sadler? Yes.

Co-chair Fields? No. Co-chair Hall? No. 1 Yay, 5 nays.

With a vote of 1 yay and 5 nays, conceptual amendment number 1 is, uh, failed to be adopted. We just round it down to 7-0. Co-chair Fields, do we have a motion? Yes, I move to report SB 249, work order 34-LS1465-T, out of committee as amended with individual recommendations and accompanying fiscal notes. Okay, seeing no objection, SB 249, work order 34-LS1465-T As amended, is reported out of committee with individual recommendations and accompanying fiscal notes.

We are going to take a very brief at ease to transition and sign the committee paperwork. At ease.

Okay, House Labor and Commerce is back on record at 3:55 PM. We have SB 170 by Senator Bjorkman. On our agenda. It is companion legislation to HB 386, which we heard numerous times in this committee, and most recently we heard it on Monday. Thank you, Senator Bjorkman and staff Conrad Jackson, for being here.

We provided committee members with a copy of committee substitute version E, and I believe that is in front of each committee member at this, at this time. Mr. Co-chair, do I have a motion to bring the CS before the committee? I move to adopt the proposed committee substitute for SB 170, work draft 34-LS0213/e, as the working document. Okay. Seeing and hearing no objection, we now have the committee substitute for SB 170, that is work order 34-LS0213/e, in front of us as our working document.

Senator Bjorkman, would you or your staff, Mr. Conrad Jackson, please introduce yourself for the record and walk us through the committee substitute. Thank you very much, Co-Chair Hall. For the record, my name is Senator Jesse Bjorkman, and I represent the northern and central portions of the Kenai Peninsula.

The version before you goes through and makes the Following changes.

My apologies, Madam Co-Chair. Quite all right, Senator Bjorkman.

Very good. Makes the following changes. Section 1 dealing with the Marine Highway System is deleted and then following sections are renumbered. Section 2 reassigns the responsibility for notifying the local municipality of a new permit application to the Department of Revenue.

That also happens in Section— I'm sorry, that just happens in Section 2. The rest are renumbered. Section 5 is renumbered Section 7. It requires operators to continue to have to report certain expenses for accountability. Sections 6 through 14 are renumbered.

Section 15 adds a requirement that a sign be posted where pull tabs are being played so that people know what charities they're supporting when they're playing those pull tab games. Sections 16 through 30 are renumbered. Section 31 narrows a prohibition on a point-of-sale system for accepting credit cards to say that they may not be used to purchase pull tabs.

Can I get clarification? Sure. Representative Klonk. Through the chair, so you're saying that they cannot use credit cards? They have to use cash?

Through the Chair to Representative Colon, yes, ma'am. That is the case for pull tabs currently, and we're extending that prohibition from using credit cards to electronic pull tabs. So we don't want people using their credit card and accumulating debt to enjoy this form of entertainment, which makes money for charity. It's designed to be a cash transaction. So just one more clarifying.

Representative Klum, I guess I assumed with the e-tabs that they'd be paying, like there would be a slot they have to pay the owner, or they have to— they have a person in front of them to pay cash with. It's not on the machine. Thank you for that question. Through the chair to Representative Klum, yes, that's correct. That's one of the many safeguards that we have built into the bill to make sure that people have cash for the pull tabs that they're playing.

So those transactions are going to look almost identical to how they look now when people purchase paper pull tabs. You would go to a counter or a bar and you would hand cash over to the attendant, whether that be a bartender or whomever, and they would then, they would then load the electronic pull tabs onto the machine for however much you paid for. And then they would give you the tablet. Okay. Yep.

Okay. Yes. So yeah, no credit card purchases are available. We have a question from Representative Sadler. Thank you.

Senator Bjorkman, you say that's in Section 31, you said?

Of the version E we have just adopted? Because I'm looking there, I'm not seeing reference to credit cards unless it's perhaps on line 19 of page 15. You referenced Section 31.

It's in Section 32.

Very good. Take a few minutes to leaf through, does it not? Yep. Yep. Very good.

Thank you for that, Representative Sadler. Yes, that is in Section 32. My apologies. 32. Okay.

Yes, that's correct. That's why— okay, now. Yeah. Very good. That makes more sense because— okay.

Excuse me. Okay.

Senator Bjorkman, if you would proceed with the summary changes. Very good. Um, moving forward, we have in kind of a brief at ease, Madam Co-Chair. At ease.

Okay, we are back on record. Senator Bjorkman, did you want to continue with a summary of changes? Thank you very much, Co-chair Hall. I apologize, uh, for the delay. Um, jumping back just a minute to Section 28.

Section 28, it separates a list of 10 distributor prohibitions from the former Section 30 and relocates them to this new section to allow for an immediate effective date to those prohibitions. It's just a drafting convention change that was, was changed in the bill. The reason for the change in effective date was to ensure that protections against monopolistic activities would be stronger. But just to flag for your attention, in talking with additional stakeholders, I have an amendment to adjust this further, and I can talk about that when we get to that portion, and I'll explain the importance of what those effective dates do and how they affect the marketplace.

So we talked about Section 32 and ensuring that credit cards are not used to purchase electronic pull tabs. The next change happens in Section 40 in regards to vendors, and anytime the word vendor is used in this legislation, that's referring to a bar that sells pull tabs. So we clarified because in the previous version of the bill, adjusted gross income and gross receipts less prizes. Those two terms were used interchangeably. We simply streamlined that to gross receipts less prizes, and now taxes paid or owed are no longer subtracted before calculating the, the vendor's share or the amount dispersed to the permittee.

This means that more money will go to the charities. Section 41 through 44 are renumbered. Section 45.

This removes more language having to do with the ferry system.

Sections 46 and 47 are simply renumbered, and now they are 50 and 51.

Section 48.

Adjusts some repealers. We retained, meaning we're going to not repeal, some reporting requirements about operators, and we are— and make other conforming changes that we've already made in the bill.

Section 49 is the renumbered Section 55 and adds a new section about exclusivity. And again, we will talk about this in another amendment, talking about the transition period, about the "sell all" language for paper pull tabs. Again, this is a protection against monopolistic activity by manufacturer, and so that we can make sure charities and nonprofits are making the most money from this system.

Other sections— Section 50 is a renumber. Section 51 implements an immediate effective date, as we discussed a little bit earlier, for Sections 28 and 50.

Section 52 is a delayed effective date. For Section 14 on page 22, and Section 53 is a conforming change due to renumbering of other sections. Okay, thank you, Senator Bjorkman. With that, I believe we're going to turn to amendments. We're going to start with Amendment E.18, uh, Co-chair Fields, do you have a motion?

I move Amendment E.18. I'll object for purposes of discussion. Would you like to explain the amendment? Uh, I would actually like the bill sponsor and/or his staff to help explain why we are offering this amendment. And I can also explain.

Brief it is.

We are back on record and the committee has before us Amendment E.18, and we're going to hear from Senator Bjorkman, his thoughts on Amendment E.18.

Thank you, Co-Chair Hall, and members of the highly esteemed House Labor and Commerce Committee. Again, for the record, my name is Senator Jesse Bjorkman. I represent the northern and central portions of the Kenai Peninsula. This amendment we crafted in consultation with Representative Carrick as well as, um, Mr. Lambert from Alaska Loto, and We discussed having a good cause, a rationale for having people sign for prizes, and this rationale is to make sure that people might get a break from play for a little bit, they'd be able to cash out, tip the people who are helping them. And so this simply returns the signer level for paper pull tab back to 50 as it is in current statute and then places the signer level for a prize at 100 for electronic pull tabs.

And so if people win a prize of that amount, they would have to simply sign a receipt for the money that they receive for that winning ticket, and then they could choose to cash out at that time, or they could do anything else with their winnings. Co-chair Fields. Uh, yeah, this, this idea of thinking about what is the effect on wages for someone working at a bar or another facility is important to me. Um, and I was hoping— we have some stakeholders, I think, online for questions, and I was actually hoping we could go just briefly to Dave Lambert to talk about why was this the stakeholder feedback that he offered in terms of signing for prizes and how that affects tips and wages for workers. I'm sorry, which one was it?

Mr. Lambert, um, could you please identify yourself for the record and offer your thoughts to Representative Field's question?

Yes, yes, this is David Lambert. I am a charitable gaming operator and I previously owned bars and worked as a vendor. And in the industry, the dealers, pole cap dealers, and bartenders, their income depends on tips. The profit margins on charitable gaming is so small with the money going to the nonprofits that they can't be paid a livable wage. And they do very well on tips.

Raising it to $100, there's a lot more $50 winners than there are anything else. And in the industry, for the workers in the industry, this is the biggest issue of anything else. They don't care about anything else. They depend on the tips to survive. And the concern with electronics, um, if there's not a signer, which is a prize receipt, there will be no stop and play.

It doesn't give a player time to reconsider whether they want to reinvest the money or walk away with it. It's in the best interest of the players, best interest of the workers, and best interest of the industry. Coach Airfield, I just want to thank the bill sponsor and Representative Carrick for working on this amendment. Okay, Representative Sadler followed by Representative Carrick. Thank you, Madam Chair.

Uh, to the sponsor here, uh, the On page 18 of page 1 of Amendment E.18, the definition of the term to turn over a prize. My basic question is if it's important for bartenders to receive tips, and I've heard that as well, when you get a cash award, it's easy to peel off a little bit of cash. But if someone's playing an electronic game, an eTab, do they actually have to— at the receipt, do they get cash in hand? They do receive cash in hand. So turn over— okay.

I mean, means actually deliver cash, not just deliver electronic credit. Through the chair to Representative Sadler, yes. No, that is absolutely correct. The prize has to be paid out in cash. That's deliberate, and that's a deliberate policy choice that we made very early on in the creation of the bill, so that if you receive an electronic credit or a voucher, then it's, it's kind of less like fun charitable gaming and more like something else.

Is this a follow-up? Representative Sadler. Thank you. Yeah, cash has its own tactile, tactile rewards too. So, um, no, that's what my question would be.

So, bop-a-da, nope, I guess I'm gonna lose it. Oh yeah, my question was, is the necessity to stop and get the receipt signed and do the cash transaction, is is that going to be onerous? We've heard that one of the benefits of e-tabs is that it does relieve the bartender, the vendor's employee, of some of the cash handling. Is this not too much of a burden on them? Thank you.

Through the chair to Representative Sadler. You've touched on the exact tension of the policy choice and why the bill did not reflect this policy choice previously. Because bars specifically will make money from the percentage of winnings that they get to retain, bars in states like Minnesota and other places, their— the salaries for their workers is quite a bit higher than places who don't have that opportunity. And so the tips would be a trade-off for salary that they would make per hour or an hourly wage.

For a bar's experience, having more signers, that is going to require additional work for the bartender or whoever is the pull-tab person. But that comes at a trade-off of them having an opportunity to get tips as well as an opportunity for a person to stop playing. So that's a policy choice that we're making with this amendment if the committee adopts it. Why the language was not in the bill previously is because it would have been less work for whomever is the pull tab person at an establishment. And then the idea being that the money that they would receive in tips would be paid to them in salary.

But that's not setting it out in law either. It's a choice. Thank you. Okay, Representative Carrick. Um, thank you, Madam Co-Chair.

Yeah, I strongly support Amendment E.18. It's more comprehensive than a later amendment that I was going to offer, E.5, which would have gone from the $100 signing back to $50. And just as the bill sponsor just mentioned, you know, dealers in this industry make most of their wages, like many other service industry employees, on tips. And so when you require more interactions for signing out, you also therefore facilitate more interactions with the folks that are most directly responsible for keeping track of players. And that was a big motivation to offer this, this way.

And I, I support the additions to this amendment too compared to E5. Going from 500 to 100 has a similar effect. So I'd encourage people to support it. Okay. Representative Kolumb, through the chair, um, do you have any sense of how much it— how much time it takes to get 50 as opposed to 100?

Like, I'm trying to figure out, is this person running back and forth like every 15 minutes, or does it take an hour? Do you have any idea, like, on average?

Through the chair to Representative Colon, I don't know the answer to that, but Matt Fisher is online who might be able to answer that question. Okay. Mr. Fisher, are you available to answer Representative Colon's question? If so, please identify yourself for the record.

Yes. Yes, my name is Matt Fisher. I'm with Alaska Wholesale. I just—. I need one clarification for this.

I do not have this in front of me. I only have up to 17 showing. I believe on paper the question was how long does it take? It takes a couple of minutes. I'm not sure on the ETABS of this amendment is talking about on just on cash out or every time there's a payment over $100.

I think my question was how long does it take to get a $50 cash out as opposed to $100 on average?

It'll be the— about the exact same. Oh, okay. So if it's the same— okay, so now the right question— Senator Bjorkman, do you want to rephrase the question through Co-Chair Hall to Mr. Fischer? I believe the question was how much player time— how much time playing does a player have to play typically before they might get a winner of $100 on an eTab or $50 on a paper pull tab?

How many tickets maybe on average?

So I need one clarification. I got— I'm sorry, are you talking a single winner or cumulative of that amount?

Thank you. Through the chair to Co-Chair Hall, a single winner, a single winning ticket.

That would require a signature?

Yeah, if it's a single winning ticket on the eTabs, this is going to be a difficult thing. If it's on payout, that's different because you're going to have a lot of winners. With a 90% payout, it's going to be quite often that they're going to be trying to get up and go sign and come back to their table. It's quite different than on paper because paper has a whole lot lower payouts.

Representative Kolumb, did you have a follow-up? Oh no, I don't think so. I'm just, you know, I'm just trying to weigh what Senator Bjorkman was talking about. So if we're trying to get more interaction and hopefully more tips, this seems like it's going to be a lot more work. There is a possibility they don't get any tips either.

So I'm just, I was just pondering the the pluses and minuses of the policy. Okay, thank you. Seeing no further committee discussion, I will remove my objection. Is there further objection to Amendment E.18? Seeing none, Amendment E.18 has been adopted.

Coach Airfield, do you have a move— a motion? I move Amendment E.19. I'll object for purposes of discussion. I would ask through the chair that the bill sponsor talk about this amendment, please. Senator Bjorkman.

Thank you very much. Through the chair— through Co-Chair Hall to Co-Chair Fields, this amendment takes care of concern that was brought by many stakeholders about the sell-all provisions and their implementation. There was significant concern raised by some folks about how soon the sell-all provisions would kick in. In the previous version of the bill, we had the sell-all provisions that would kick in immediately, essentially, and that manufacturers would have and distributors would have 30 days to kind of remove their games from the market.

Rep. Sadler, do you have a question? If I may, through the chair. Yeah, I'm not familiar with the terminology. What is a sell-all provision, please? Yeah, thank you.

Thank you. Yep. So as we— that's, that's a great question. So sell-all provision applies for— in the purpose of this Bill applies to paper pull tabs only, and what that means is that if a pull tab series, a box of paper pull tabs, is offered for sale by a manufacturer, that they would have to sell that series of paper pull tabs to all distributors and make it available to everybody. The reason for that policy choice is to limit non-competitive practices in a way that would drive up prices by limiting the market of, of what games are available.

And then if exclusive games are, are to remain exclusive, then it allows the manufacturers to charge more for that game because it might be the new thing, it might be a thing that they can charge more for because it is exclusive. The changes made in this section allow for some runway between manufacturers and distributors to figure out, with the games that are currently in play, how it is that they are going to meet their print runs and order demands to accommodate for a new environment where manufacturers have to sell to anyone who wants to purchase that game.

Representative Sadler? I do apologize, sir. I don't know changes runway how they—. Please. Yeah.

I'll continue to respond. So in the bill previously, there was a provision that would require all paper pull-tab games to be sold to anyone, any distributor who wants to buy them. And that exclusive games for games already in play would no— for all intents and purposes would no longer exist. Having a sell-all provision apply that quickly would be very hard for the market to adjust to because when the sell-all would go into place, the pricing structure would likely change and then a manufacturer's market forces in determining whether or not they fulfill those orders at that price might change their— the manufacturer's incentive to actually make that game. Meaning, if they're forced to make the game and sell it for less money, it becomes less profitable, and so they're not going to make that game.

The concern brought by manufacturers and some distributors was that if we do that, many games that charities, nonprofits, vendors, and consumers are used to playing and that people like would be removed from the market in favor of exclusive games that people can charge a higher price for. And it also would cause market upset because people would begin ordering games that they are required to sell to everyone, but they would not have the inventory to do that. Changing the effective date of the sell-all provision for games that are currently in play allows for the market to adjust so that they can experience benefits— so charities and nonprofits can experience benefits from the new price environment hopefully lower prices, but in an orderly way and not something that is going to cause people to say, hey, I want to buy that game, but it not be available.

Thank you, Senator Beer. Further questions from the committee? Seeing none, I will remove my objection to E.19. And seeing no further objection Amendment E.19 has been adopted. Next, we will turn to Amendment E.1.

Representative Carrick, do you have a motion? Uh, thank you, Madam Co-Chair. I'm not going to offer E.1 or E.2. Okay, hearing that, we will move ahead to Amendment E.17. Representative Carrick, do you have a motion?

Thank you, Madam Co-Chair. I am going to move E.17. I will object, object for purposes of discussion. Ms. Rosen of Carrick, would you like to share information about E.17? Yes.

Thank you, Madam Co-Chair. So E.17— sorry, had to get my talking points in front of me. So Section E in the bill currently requires charitable gaming operators to have their financial records reviewed annually by a certified public accountant or CPA. This is costing potential— this is costing our operators to pay upwards of tens of thousands in CPA fees at the end of the year. And there was adequate justification for CPA review in the '90s when this provision was initially implemented, but at this time, the Department of Revenue has much more sophisticated online tracking and reporting systems.

So with all reports today being automated and filed through RevenueOnline, the requirement to have a full CPA review is not any more necessary, and it is costing operators. The current quarterly and annual reports that do have to be filed are advanced enough that they don't allow a report to actually be filed. You can't hit submit if it's even a penny off, and the system automatically identifies issues with the report. So the reporting system on the Department of Revenue's website essentially functions in the way that an audit used to function for these charitable gaming operators, and therefore removal of this provision will prevent this onerous requirement. We're going to take a brief—.

A tease.

Okay, we are back on record. We have Amendment E.17 in front of the committee. It was put forth by Representative Carrick. I object— checked it for discussion, and she explained the amendment. Senator Bjorkman, do you have anything that you'd like to add about Amendment E.17?

Item repealer for just that. Yes, through the chair, my comment on this item is this has never been a part of this draft legislation before. It adds a repealer, and what it would repeal is it would repeal the section there listed, and that reads, "An operator shall have its financial records reviewed annually by a certified public accountant. The operator shall submit the results of the review to the department by February 28th of the year following the year for which the review is conducted." It is true that the Department of Revenue can and indeed should do this. And that a CPA review would be duplicative.

It's a safeguard for charities and nonprofits to have that CPA review, but I recognize that it is additional cost for an operator. But it's a policy call for the committee. It's not an overall killer for the bill.

But it's a, it's a policy contemplation that we have not had in the bill previously. So it's up to you guys. The Department of Revenue, as they are looking at financials and can do audits, they can and should undertake this activity. Excusing operators from the CPA review would just take away the safeguard that exists currently under the law. I think Representative Carrick's remarks on the amendment likely are accurate, and— but it's— so that just points to it being a policy call.

Okay. Representative Sadler. Thank you, Madam Chair. Um, because I didn't have the amendment in front of me while the, uh, maker of the amendment was introducing it, I just want to clarify. So the effect of Amendment E17 is to— by including language in a repealer, this amendment would eliminate the requirement that there be an annual CPA review of an operator's financial activity.

Is that correct? Through the co-chair to Rep. Sadler, yes, that's correct. Okay, further committee question or discussion?

I'm Representative Carrick. I am likely a no vote on this amendment for the reason that this policy has not been discussed or considered previously by the bill sponsor. So I appreciate where you're going with it, but I think because of the unknown potential policy implications, I'm probably going to vote no. I don't know if other committee members would like to chime in. Madam Co-Chair, Senator Bjorkman.

I just want to clarify one thing I said. So This concept has been discussed by stakeholders before, and they have talked to me about it, but it had never been included in a bill before. So it's concepts that stakeholders as a group have discussed and that I've heard about.

And as I mentioned, if this requirement went away, it wouldn't be the end of the world. It would be a cost savings and a streamlining for operators, and that's okay, but we are putting— then the tradeoff is you're putting trust in the Department of Revenue to do their due diligence and do their job to make sure that they are holding operators accountable. So like that's the policy tension and the policy call in the bill. I just wanted to clarify. That it's something that the stakeholder group has discussed.

I've been made aware of, but I don't recall it being in the bill before. Senator Bjorkman, is there a reason why it wasn't put in the bill before?

Thank you for that question, Co-Chair Hall.

I— with a new, new system of electronic pull tabs I think that I did not make a decision to include it in the bill because of the unknown, but as we look at other policy selections that we've made in the bill and thinking about it as we talk through them and talk about the expectations that we have on vendors as well, if I had to make a different choice, I probably would include this repealer in the bill. Thinking about how we balance expectation for all businesses that are involved in charitable gaming, I think I probably would make that decision now. Sarcasm or clarification? Coach Hairfield has a clarifying question. Through the chair, so you're saying you're comfortable with it then?

If I— I just didn't quite.

I understand the recommendation. Through the Chair to Coach Airfields, yes, I'm rather comfortable with the idea that if the operator knows that they're responsible, they're required to have an insurance and a bond, they're required to have significant safeguards in place if things go badly, then if they would like to be excused from the CPA review, then I think that kind of follows along the line of How do we have safeguards in place without having additional unnecessary cost?

And just for clarity in that, so through the Chair, just to be clear, so that this amendment works then in your view? Yes, Co-Chair Fields through Co-Chair Hall, yes, I believe it does. Okay. I appreciate through the Chair the explanation discussion. Yes, I appreciate the discussion as well.

Representative Sadler, did you have a question? Thank you. No, statement. You had made an inquiry, kind of a straw. I'm inclined not to support this.

My understanding is that the ETAB system, one of its advantages is to make it easier to do accounting, and so I don't see this requirement as excessively onerous, and I would oppose the amendment to review that CPA review of the annual financial records. So that's my question. Okay. Well, I am going to remove my objection. Is there further objection?

I'll object. Okay. Seeing no further committee question, will the clerk please call the roll?

Representative Klum? Yes. Representative Sadler? No. Representative Freer?

Yes. Representative Carrick? Yes. Co-chair Fields? Yes.

Co-chair Hall? Yes.

5 Yea, 1 nay. With a vote of 5 yea and 1 nay, Amendment E.17 has been adopted. Adopted. Next up we have Amendment E.3. Representative Carrick, do you have a motion?

Um, thank you, Madam Co-Chair. I'm going to move E.3. I'll object for purposes of discussion. Representative Carrick. Thank you.

So this amendment removes in Section 40, subsections N, O, and Q from the bill. If this amendment were to be adopted, vendors, which again, as the bill sponsor mentioned earlier, includes bars and restaurants. So vendors that purchase directly from the nonprofit and charity would have to pay the nonprofit and charity upfront before electronic tabs are loaded, which mirrors the current law for paper pull tabs. So the concern around this amendment that led to its drafting is that if the legislation passes in its current form, these vendors are essentially acting as operators without some of the same safeguards and accountability in place. As currently written, a vendor— again, that's a bar or restaurant— is able to bypass a nonprofit or charity and pay the distributor directly, removing the upfront payment being made to nonprofits and charities.

This is something that only operators are able to do currently, and that's due to the safeguards that operators have to follow, like having quarterly reporting, annual reporting, etc., etc. And one of those things is upfront payment. Not having this additional safeguard in place for when and if these bars and restaurants purchase directly from distributors means that there's just less, a little bit less of a guarantee that nonprofits and charities would receive their payments. If this amendment is adopted, there's no additional requirement for the vendor that is necessary to ensure nonprofits and charities are protected and can receive all of their expected payments. So again, Section N allows a distributor to provide sophisticated accounting services to a vendor.

Section Q allows vendors to bypass nonprofit permittees entirely. And basically, the momentum for this amendment is that for the last 40 years, the system has worked in part because vendors are paying upfront. And so maintaining this clear separation between the payment in the payment structure is seen as vital to ensuring the charitable gaming industry has parity in both the paper and the electronic pull tabs markets going forward. Thank you, Madam Co-Chair. Thank you, Representative Carrick.

Senator Bjorkman. Thank you, Co-Chair Hall. I strongly oppose this amendment. The reason why I oppose this amendment is that this would significantly disadvantage bars from being able to have electronic pull tabs in their facility because they would have to pay for them up front. An electronic pull tab series as laid out in the bill is 15,000 tickets sold at a dollar apiece.

That's $15,000 per game. That is a very, very large amount of money for a bar to have to invest up front to have electronic pull tabs in their place. The safeguards for charities to make sure that they get paid from the sale of electronic pull tabs at a vendor location or a bar is that if a bar does not pay and does not remit the money that they— that those charities and nonprofits have coming to them, that, which is 75% of the ideal net, which is gross less prices and less the vendor portion. So 75% of that, if they don't pay, the bar can lose their liquor license. That's their bond, the same as the insurance bond that operators— it's very similar— are required to have.

In many cases, that liquor license is worth more than the bond that an operator is required to purchase under the law. Also, if they are 14 days late in payment, the distributor will turn off their electronic pull-tab system and not allow for any further playing of electronic pull-tabs at that location if they have not paid. Those are the two important safeguards that ensure that nonprofits are paid by bars who have electronic pull tabs. This is very similar, if not exactly, how the system works under the successful execution in Minnesota. Percentages are a little different, as we've heard, but that is how the system works.

They do not have upfront payment for electronic pull tabs in Minnesota, and the system works quite well.

Mr. Jackson? Thank you, Madam Chair. For the record, Conrad Jackson, staff to Senator Bjorkman. I would just like to emphasize that if you look on page— pardon me— page 19, line 19, the shutting off, the disabling of the electronic pull-tab system is not an option. When a distributor is late, it says the distributor shall disable— or the vendor is late, I apologize— the distributor shall disable the vendor's electronic pull-tab games.

There's no option. They're shut off, period.

Thank you, Mr. Jackson. Madam Co-Chair, I would also point out that in subsection N, where we lay out the 30% for paper pull tabs and 25% for electronic pull tabs, would also be deleted by this amendment. Thank you, Mr. Jackson. Are there additional questions or comments? From the committee?

Seeing none, I maintain my objection. Will the clerk please call the roll?

Representative Freer. Pass. Representative Carrick. Yes. Representative Sadler.

Yes. Representative Kellom. No.

Representative Freer. No. Co-chair Fields? No. Co-chair Hall?

Nope. 2 Yays, 4 nays. With a vote of 2 yays and 4 nays, Amendment Number E.3 has not been adopted. We're going to take a brief at ease.

Okay, we are back on record. Representative Carrick, do you have an amendment to offer? Is it E.4? Yes, so Madam Co-Chair, I'm not going to offer E.4. E.5 E.6 or E.7.

I'll just note that I had intended to offer E.5, but with adoption of earlier E.18.

Which was more comprehensive. I'm not offering E.5 at this time. And so that, Madam Co-Chair, should bring us to E.20, and I am offering E.20. Great. We have E.20 in front of us.

Representative Carrick, do you have a motion? Madam Co-Chair, I move E.20. I'll object for purposes of discussion. Representative Carrick? Okay, so Madam Co-Chair, E.20.

We had some discussion about this in committee, and currently in the legislation, any venue, no matter its size, can have 10 tablets as a minimum threshold and— or up to that as their threshold. And then depending on square footage of the business, they are allowed to add as many more as they would like. And there was some discussion in committee about having an upper limit or on the number of tablets that a business may have. So what Amendment E.20 does is it says the 10-tablet current allowed bare minimum is, is still available. After that, it's by square footage up to a maximum of 25 tablets in an establishment.

So anywhere in the delta of 0 to 25 tablets would be allowed in an establishment. But you couldn't have, say, a Costco-size establishment and have 100 tablets. And that is what I'm trying to put a sidebar on, is the upper thresholds here while maintaining the rest of the language in the bill. Thank you, Representative Carrick. Senator Bjorkman.

Thank you. Through the chair— or to, to the chair by way of commentary on Amendment E.20.

Essentially what this amendment does in, I guess, Board of Fish parlance, this would be an allocative proposal, meaning the policy has ramifications for facilities that have large square footage. So this is who this would affect. So large— larger bingo halls and others would lose out on some ability to have a number of tablets over 25. So that's the policy choice that is contemplated by this amendment. Currently in the bill, there is no upper limit.

And just also to clarify, the, the limit that were put out in the bill previously, that applied to tablets in play, not total tablets on the premises, just to clarify for the legislative record. So this really is a policy choice on behalf of the committee And it would cut down on the number of tablets that would specifically be available in bigger venues. And so that's the choice. Okay, Coach Airfield. Yeah, I think I broadly support having an upper end limit, um, but I just wonder, and I would ask the bill sponsor for guidance, I mean, could we bring it down just a little bit, like to 20, or should we not go lower than 25?

Through the Chair to Representative Fields.

I think having an upper limit is good. My sense in thinking about bingo halls and if you had a full bingo hall and people wanted the ability to play electronic pull tabs in between rounds of bingo or other things My natural inclination would be to offer an upper limit that was actually higher than 25. Okay. To make sure that anybody who wanted to play an electronic pull-tab in between or during a round of bingo or elsewhere in the bingo hall, that they would have that ability.

The question then becomes— so the question then becomes, You could also have a consideration of— yeah, there's, there's probably not a consideration of parity though if you have it at, if you have it at 25. You, you, you disadvantage the bigger bingo halls from being filled to their capacity because there would be an incentive to seek out smaller halls where you likely would have space to have a tablet. That's kind of how I'm thinking about, about this number. Um, but not that it's an inherently bad policy call. It's— it really is an allocative proposal.

So, and this would be a good— like, Jerry Lewis might be able to talk. I mean, this is his business. I would ask him if he had a— if he had an opinion on this number. Mr. Lewis, if you're still online, will you please put yourself on the record and offer your thoughts on Amendment E.20?

Oh, excuse me. Sorry, this is Jerry Lewis. I don't believe that that policy refers to operators, and I run a single mall in Anchorage, so I don't know that I can speak to it. I would hate to have an upper limit. On tablets offered at a bingo hall, yes.

And secondly, I would hate to see bars have hundreds of units, so I guess that would be my concern. Coach Airfields? Yeah, I guess, uh, my impression is this is a tough one, but I think I'm going to support the amendment as written and kind of a down-the-middle sort of compromise. Representative Sadler, do you still have a question? Okay, Representative Carrick, then Representative Calhoun, and we need to wrap up.

Um, thank you, Madam Coach. I just wanted to note that, uh, Mr. Lewis is correct that this is related to permittee, licensee, vendor. It's not, um, is not including an operator. So this is, this is limited. So we are talking about, we are talking about those listed establishments.

Um, and I, I do feel like setting some kind of upper limit threshold is important because While this bill doesn't provide for cabinet gaming, I am broadly opposed to cabinet gaming, and I am a little concerned about a future scenario where there's no upper limit and we authorize cabinet gaming thinking that's great just to continue what's currently ongoing, and then it suddenly allows for casino-style gaming. So I'm, I'm trying to kind of get at that potential concern, and that's where E.20 is coming from. Representative Klum. Yeah, so, so this only, this only refers to bars, it's not bingo halls? Because I kept hearing bingo halls.

So is this limiting, um, tablets in bingo halls too, or just the bars? Because I can see limiting in the bars, but I'm sure why you would limit it in a bingo hall. I mean, everybody has a card, everybody's playing something. Anyway, so Representative Carrick, do you have clarity on that? Um, so I think it might be better to ask the bill sponsor, Mr. Lewis, here, but I'm pretty sure permittee, licensee, and vendor don't include bingo halls, but I think it's worth double-checking that.

Okay, Senator Bjorkman.

Do you need an addies, Senator Bjorkman? No, thank you. Okay. Um, I think we should ask, um, Matt Fisher about their interpretation of what this amendment does. Okay.

And, and probably Mr. Lambert too. Okay. Mr. Fisher, are you able to provide any detail on this amendment?

Yeah, I will—. Thank you, Madam Chair. I'll give you this, that scarcity is actually a good thing in e-tabs. It's kind of a strange thing when I talked with the people of Minnesota. They have a cap near 12 or so for bars.

And what they find is players play when they're scarce. If there's an overabundance, they just sit and it causes some issues. Okay, Mr. Lambert, do you have any additional thoughts you'd like to share with the committee?

Yeah, this is Dave Lambert. I think it's important to have a cap on it, and there's some concern— nobody wants the bars to become casinos with multiple games. And if you keep it as proposed, there's a lot of bars that have 300 capacity or higher So they could have 100, 150 machines, and that's not something that we want. Yeah, okay. Miss Powers, I see Sandy Powers with Big Valley, Big Valley Bingo, Bingo.

You're online, Miss Powers. Do you have any, uh, thoughts on this amendment?

Okay, all right. Not hearing from Ms. Powers, um, is there additional committee discussion on this amendment? I mean, I guess I have a question. Co-chair Fields, I have a question for the bill sponsor slash Representative Carrick.

I mean, would it make sense to have a slightly lower limit for bars and clarify that it's unlimited for operators? I mean, is that logical? I'm just trying to parse this out with the different ways that people play.

Through the chair.

To co-chair Fields, I think setting a different, a different limit for different user groups is fraught. I've tried hard to like keep everybody the same. I've tried hard not to have different people treated differently. So that I would encourage us not to do that. Okay.

Um, it's okay, good clarification. Representative Kline, the amendment sponsor. So originally it was 1 per 6, but you say 1 tablet for 6 people up to 25, but they didn't— you didn't— the original bill didn't have the 25, but it did have the 1 per 6, right? Okay, so On number 2, it says, or 10 tablets. What does that mean?

Greater. At the very last, on line 7. Greater. I can explain that. Co-chair Fields?

I believe that's for a smaller capacity establishment.

Oh, so it is two different—. Well, it's not representative column because there's both a, you know, different facilities are different sizes. So maybe a smaller facility has a fire limit capacity of, say, 30 people, there's a cap of 10 for a smaller facility like that. So it's not, it's not inequitable based on operator type. Okay.

It's just based on space. So I think it is a logical, like, the 10 for the smaller facility, no more than 25, is equitable across different types. It just adjusts for the square footage differences that may exist. Given that we have robust and thoughtful committee discussion. I'm going to put a pause in this for now because we have floor to get to and caucus to get to.

So we will pick up this discussion on, on this particular amendment tomorrow. At this point, I believe we are going to be recessing until 8 AM tomorrow in Davis Room 106. So with that, we are going to recess at 5:03 PM.