Kula holds hearings on Small Games of Chance law
Will the Small Games of Chance law force many smaller and medium volunteer organizations to fold or will the law be amended to allow them to continue operating?
State Rep. Deberah Kula, D-52nd District, which includes Fayette and Westmoreland counties, said the law — Act 2, approved in 2012 — has caused problems for local veterans organizations, volunteer fire departments and even entities such as youth sports leagues.
A one-year moratorium was enacted to allow corrective legislation to be completed.
Kula hosted a public hearing Thursday at Penn State Fayette, The Eberly Campus, in North Union, to take testimony from representatives of the various organizations and from law enforcement. She also invited several state representatives and senators to hear testimony and offer input.
Kula and the representatives at the hearing, all Democrats — Peter J. Daley, Washington/Fayette; Mark Longietti, Mercer; Brandon Newman, Washington; Pam Snyder, Fayette/Greene/Westmoreland; Tim Mahoney, Fayette; and Ted Harhai, Fayette/Westmoreland — said the bill to make changes in Act 2 will not be done by June 30.
But Sen. Kim Ward, R-Westmoreland, in a telephone interview Thursday afternoon, said the bill to make the changes will be approved by that time.
The hearing's focus was on House Act 290, which would amend the law to reduce reporting requirements for smaller nonprofit groups. The act passed the state House in February, but has not been acted on in the state Senate.
Kula said she wants to get input to bring the legislation into line with the needs of the organizations as well as handling problems that might promote someone taking funds for their own personal use.
The first to testify was Fayette County District Attorney Jack R. Heneks Jr.
Heneks said HB 290 seems a good compromise to help the smaller organizations. He said removing the 70/30 split (70 percent for community charitable purposes and 30 percent for the organization) for the licenses making less than $40,000 a year was “an attempt at a fair compromise.”
Heneks worried, though, that organizations might stop fundraising as they approached the $40,000 threshold. He also supported changes that would allow organizations to expend the funds 12 months after fundraising, instead of the current calendar year requirement. Also, the $100 requirement for winners to report earnings should be increased to $600 to fall in line with federal requirements.
“In summary, I am generally in support of amendments making it less burdensome and stressful to the local organizations in the community which do much good for the community,” he said. But he worried a blanket endorsement free of oversight and reporting requirements would work against those organizations.
“In recent years, we have had a number of prosecutions in Fayette County for embezzlement and fraud by officers and members of these organizations. These organizations have lost significant monies through their schemes.”
Russell Miller, American Legion Post 301 commander in Connellsville and also for Fayette County, said the economy and the requirements of the bill are squeezing the American Legion and VFW operations.
American Legion Posts in Brownsville and Derry already closed and others were on the verge of folding, he said. And requirements, set by Congress for American Legion membership, have reduced the available pool of members. Only veterans who served during wartime can be members.
Miller presented the representatives with a list of the bills to operate the post. He showed where the operation of the bar area actually lost money. The cost of operating the Connellsville post for a year was $151,832.88.
“I'm (Post 301) barely surviving,” Miller said. “I'm operating on a shoestring and every day I go to that club I'm worried that shoestring is going to break.”
He is upset with the Republican-controlled state Senate and with Gov. Tom Corbett, a veteran who he said should be ashamed. Miller said he would lead the state's 375,000 veterans to fight to put them (Republicans) out of office.
He also made a strong statement to the legislators, taking a stack of paperwork out of his briefcase and slamming it down on the table. He said the stack represents the seven to nine hours of paperwork per week the new law requires.
“We're not CPAs,” Miller emphasized, adding one of the main needs for the veterans' groups is to simplify the reporting requirements.
He said the Connellsville post used to give the American Legion baseball team $5,000 a year. This year it would not be able to give anything.
A.J. Boni, assistant fire chief for the Perry Township Volunteer Fire Department and a Perry Township supervisor, said the VFD is having trouble fundraising because of the requirement to report gifts given to the department and used as prizes, which have to be reported in dollar amounts.
He gave the example of a high-end purse. If won on a raffle ticket, the purse would have to be reported so that the winner would have to pay taxes, he said. Yet, he could buy the same purse for his wife, give it to her for Christmas, and not have to pay taxes on it.
He said he would like to see the $40,000 threshold increased to the $150,000 range. Fire companies, he said, have to pay up to a half-million dollars for a new truck, plus fuel and equipment bills and increased training costs.
“I also forgot to mention that the state requires us to give back our precious fundraising money in the form of licensing fees,” he said.
Another problem is the requirement to report names, addresses, Social Security numbers and personal histories. Boni worried that having to keep the Social Security numbers on file would cause security problems.
The last to testify was Trevor Waligura, president of the R.W. Clark Youth Baseball League in North Union.
The added responsibilities for keeping records and paperwork might scare away those willing to volunteer as well as keeping people away from the events the organization sponsors, he said.
The Democratic legislators took aim at Ward and Corbett for what they claimed was inaction on HB 240.
Ward said Thursday afternoon that the Senate version of the bill “is being worked on as we speak.”
According to Ward, the Senate version will take the modifications even further, reducing the reporting requirements and possibly changing the 70/30 split requirement to begin at a higher level than $40,000. The Senate version would also allow for “Night at the Races” games and similar events.
As far as the fire departments are concerned, Ward pointed out that the law allows fire companies to keep all of the money they make.
“Will we have it passed by the end of June? Absolutely,” she said.
Karl Polacek is a staff writer for Trib Total Media. He can be reached at email@example.com or 724-626-3538.
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