Legislature(1997 - 1998)
03/15/1997 11:07 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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 84, 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 56. 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.