03/15/1997 11:07 AM House STA

 HB 84 - PULL-TABS LIMITED TO 501(C)(3) OR (19)                              
                                                                               
 The next order of business to come before the House State Affairs             
 Standing Committee was HB 84, "An Act limiting the authority to               
 conduct pull-tab charitable gaming to qualified organizations that            
 are exempt from taxation under 26 U.S.C. 501(c)(3) or (19); and               
 providing for an effective date."                                             
                                                                               
 CHAIR JAMES called on Representative Terry Martin, sponsor of HB
, to present the bill.                                                      
                                                                               
 Number 1806                                                                   
                                                                               
 REPRESENTATIVE MARTIN explained that it had been ten years now                
 since the legislature had legalized slot machines as a way to make            
 money.  They were called pull-tabs and they were used as a way to             
 raise money for charitable purposes that would in turn relieve the            
 state and federal governments of meeting their annual budgets for             
 charities.  Now, it was time to call for the "opening of the books"           
 to see how many of the pull-tab permits were meeting the goals in             
 the name of charity.  He knew that the legislators were being                 
 swamped from phone calls and visitors who were impacted by this               
 bill.  He believed that the state had every right to question what            
 they were doing with the public money.  "They have every right to             
 question my integrity too, if there's any there.  But, in the                 
 meantime to threaten me with votes, I could care less if they                 
 vote."  If they were doing such a good job, they should come to the           
 committee and brag about their great things that they were doing              
 with the millions of dollars that were coming into their coffers in           
 the name of charity.  He suspected that some would not come at all.           
 The legislature had the obligation to challenge them to see what              
 they were doing with the money.  Were they using the money for                
 internal purposes?  Were they using the money for purposes that               
 they had before pull-tabs?  Were pull-tab monies being used to                
 supplement the money of the members of the Moose Club, for example,           
 that was used out of their own pockets?  If the pull-tabs were                
 being used to supplement what the charitable and non-profit                   
 organizations used to do on their own, then they were greatly                 
 misusing the purpose of the program.  He reiterated it was a good             
 time for the individuals to feel proud of what they were doing if             
 it was in the interest of the public.  But, "I suspect that there's           
 many of them not giving the full amount of monies to a charitable             
 purpose, but may be using them for in-house purposes that they had            
 been doing for years."  The Moose Club explained to him that it had           
 been in business for 85 years.  Representative Martin responded,              
 "Wonderful.  Fabulous.  What did you do before pull-tabs came in?"            
 The Moose Club was an honorable, fraternal organization that helped           
 its members.  He wondered, therefore, if the pull-tab monies were             
 only restricted to its members, or was it reaching out to others.             
 The Moose Club explained to him that it gave a scholarship.                   
 Representative Martin replied the club took in $60,000.  What                 
 happened to the rest of the money?  The Moose Club replied it was             
 8,500 members strong statewide.  Representative Martin still                  
 wondered what it was doing for the people.  Was the money just                
 helping its own?  Some of the organizations were going to shine               
 because every penny went to a charitable purpose.  Some                       
 organizations, such as, the Anchorage Baseball Team was on                    
 Representative Martin's back.  He did not consider it a charitable            
 organization because the money helped semi-professional baseball              
 teams.  That was not charity.  He reiterated it was time to find              
 out what was happening with all of the charitable dollars.                    
                                                                               
 Number 2202                                                                   
                                                                               
 REPRESENTATIVE HODGINS asked Representative Martin what would be              
 the chance of doing away with vendors in Sec. 8 (a).?  Would it be            
 possible in this bill?                                                        
                                                                               
 Number 2218                                                                   
                                                                               
 REPRESENTATIVE MARTIN replied that was done in another bill.  It              
 was deliberately split by advise from individuals who knew the                
 gaming industry.  House Bill 84 would help the Internal Revenue               
 Service (IRS) because it did not want to get involved in Alaska's             
 situation, but it realized that gambling laws undercut what it was            
 doing.  Thus, he limited the bill to those permitted under                    
 charities right now by the IRS.  It was possible to add others;               
 such as, the operators and other permits.  That was addressed in HB
.  This bill was to clean up what the state already had.                    
                                                                               
 Number 2296                                                                   
                                                                               
 CHAIR JAMES stated that Representative Martin should not have told            
 the committee members that this bill helped the IRS.  "We hate them           
 with a passion."                                                              
                                                                               
 REPRESENTATIVE MARTIN asked what was worse?  He answered,                     
 professional gamblers.                                                        
 REPRESENTATIVE BERKOWITZ replied the IRS.                                     
                                                                               
 Number 2312                                                                   
                                                                               
 REPRESENTATIVE ELTON stated that he understood the testimony of               
 Representative Martin.  The bill sought to solve the problem of               
 limiting the groups that could do pull-tabs.  He wondered if                  
 another approach would be to redefine what was a charity and what             
 the revenues could be used for in order not to limit the number of            
 groups.  He would be interested in hearing why he chose this route            
 rather than the other.                                                        
                                                                               
 Number 2391                                                                   
                                                                               
 REPRESENTATIVE MARTIN replied it was up to the committee and that             
 was where the challenge was.  Let's look at the charitable law, and           
 let's look at the organizations and how they respond to the bill.             
 It was going to be a hard decision to determine which organizations           
 were charitable and which took advantage of the pull-tabs.