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State Roundup: February 4, 1999
Will Y2K Crash Tax Rates, Too?
    The New York State Assembly is ushering in its new term, and already it's saying the two words all small business owners love to hear: tax break.
    In an effort to encourage small businesses to catch up with many of their Y2K compliant larger neighbors, assemblyman Robin Schimminger D-Erie has proposed a 25 percent tax cut for those who spend money to update their own systems. The bill has already garnered support in the Senate and is expected to be amended this week. Personal home computers might be the next to receive a break, say aides in the assembly.
    "This will have a dramatic impact on the growth of many smaller and emerging companies as their limited resources will be spent combating the Year 2000 problem rather than on growing their businesses and creating jobs," said Schimminger, the chairman of the Committee on Economic Development, Job Creation, Commerce and Industry in a release.
    The Business Council of New York State, a small business itself with 70 employees, was instrumental in helping the assembly draft the bill. Diana Gianakos, a legislative analyst for the Council, said that many small companies can't afford the latest technologies and have purchased older computers that probably aren't Y2K compliant.
    "They think 'it's not going to affect me,'" Gianakos said. "But we did our own Y2K program here and my own computer crashed."


    After prosecuting 30 online pedophiles in three years, the Wisconsin Attorney General's office has been awarded a grant from the U.S. Justice Department for almost $300,000 for a task force to target such criminals. The group will train law enforcement officers to deal with child pornography crimes special to the Internet, and will eventually conduct online investigations, sometimes entering into child-oriented chat rooms to monitor for unusual behavior.
    Pedophiles often go online masquerading as children to search for victims, said Jim Haney, a spokesman for state Attorney General Jim Doyle. A chat room relationship can build to one where a face-to-face meeting is the next step, where additional victimization takes place. Sometimes pedophiles use the email relationship to send children pornography as a way to reduce their inhibitions. That can cultivate a relationship to lead to physical encounters down the road.
    "Police officers must patrol neighborhoods and schoolyards to protect children, and there does need to be a law enforcement presence on Internet so [criminals] are not preying on internet," Doyle said, adding that within three years almost 78 million children will be online daily. "With that much time that kids are spending with this communication vehicle, we need to understand there are some people online not for good reasons; some are there to commit criminal activity."
    The Attorney General's office has prosecuted an increasing number of computer crimes in the past few years, with cases ranging from drug trafficking to embezzlement. With the increase in pedophilia cases, the office filed for the grant in the fall and was awarded $297,000 to start its initiative, which will include both reactive prosecutions of crimes as well as investigations to prevent them from occurring. The task force is being developed in a partnership with the Milwaukee police, and some of the money will go towards expanding the city's computer resources. The AG's office plans on expanding the movement statewide to develop partnerships with other localities.


    State governments, always looking to distinguish their jurisdiction from that of the federal government, have traditionally jumped at the chance to legislate gambling. And now, as Internet gambling legislation in the Senate is delayed by the impeachment trial backlog, at least three states have new legislation pending that would prohibit their residents from placing bets online.
    New York state Sen. Joseph Holland R-Rockland has introduced such legislation twice before, and again has drafted a bill that would prohibit online betting that has been moved to committee. Holland, who said he is against gambling completely (except for horseracing, which he believes combines entertainment and sport) has voted against all aspects of gaming. "I don't believe the government should be financed through gambling income," Holland said. "I just think it's the wrong thing to do."
    Indiana state Rep. Earl Harris D-East Chicago has introduced a similar bill in his state, but insiders say that action on it may be a long time coming. The state has lifted its prohibition on lotteries and expanded its legal gambling to include riverboat and horsetrack betting, and some say representatives are wary of legislating anything else in the industry. John Schorg, media relations director for the Indiana House Democrats, said that now the legislature is spending time looking at potential benefits and hazards of the gaming already in place. While there is a good chance the bill would pass if Harris could prove Internet gambling is a large threat, the mood in the state is that most are content with the status quo.
    "There also may be a belief that if we open it up, then people are going to start moving in and start banning other things," Schorg said. "There's also some legitimate constitutional questions about the ability to enforce something like this. That's something Harris would have to address. How the hell do you regulate it?"
    Internet Gaming Coalition executive director Alan Schneider wonders if actions such as these are going to be effective when the government is still struggling with the issue of federal or state regulation. "We are trying to work with international governments to create a regulatory system," said Schneider, who lives in Canada. "When you look at the structure of the U.S. with respect to state and federal [governments] they're not on the same page, and because of that we'll see very interesting results. I know states have a large say in gaming and to look at it as a federal situation it's complicated."
    Complications have also come within states for the drafting of specific legislation. Illinois state Sen. Dick Klemm R-Crystal Lake has seen his newest bill prohibiting Internet gambling delayed while he works out the specific language dealing with the intention of the bill, and other states are grappling with gambling advocates who say their laws don't specifically address Internet wagering.
    Wisconsin law states that it is illegal to make or take a bet in the state, regardless of the medium, said Attorney General Doyle's spokesman Jim Haney. Doyle, an outspoken opponent of Internet gambling in the state, has been successful in three lawsuits that proved companies were targeting Wisconsin residents for online gambling.
    "I don't know how much clearer the laws can be," Haney said. "Just because we have laws that pertain to driving a car, and just because now you have a new model in new color, we don't have to rewrite the laws concerning vehicular traffic. The same is true for Internet gambling."
- by Stephanie Lash




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