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Introduced Version Senate Bill 455 History

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sb455 intr
Senate Bill No. 455

(By Senators Green, Edgell, Fitzsimmons, D. Hall and Yost)

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         [Introduced March 6, 2013; referred to the Committee on the Judiciary; and then to the Committee on Finance       .]                            

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A BILL to amend and reenact §19-23-6, §19-23-7, §19-23-9 and §19- 23-12b of the Code of West Virginia, 1931, as amended; to amend and reenact §29-22A-3, §29-22A-10 and §29-22A-10b of said code; and to amend and reenact §29-22C-8, §29-22C-10 and §29-22C-26 of said code, all relating to providing that within the minimum and maximum set by the commission, the number of horse races or dog races to be held on a racing day be set by the licensee; providing for use of funds paid to Horsemen's Benevolent and Protective Association from special fund for payment of regular purses; decreasing the number of dates required for a horse or dog race meeting license application; decreasing the number of live racing dates required for receiving telecasts and accepting wagers on horse and dog race meetings; decreasing the number of dates on which live racing must be conducted by racetrack table games licensee; providing for distribution of certain amounts of net terminal income derived from racetrack video lottery terminals; providing for annual racetrack table games license renewal fee; and decreasing percentage of table games privilege tax.
Be it enacted by the Legislature of West Virginia:
    That §19-23-6, §19-23-7, §19-23-9 and §19-23-12b of the Code of West Virginia, 1931, as amended, be amended and reenacted; that §29-22A-3, §29-22A-10 and §29-22A-10b of said code be amended and reenacted; and that §29-22C-8, §29-22C-10 and §29-22C-26 of said code be amended and reenacted, all to read as follows:
CHAPTER 19. AGRICULTURE.
ARTICLE 23. HORSE AND DOG RACING.
§19-23-6. Powers and authority of Racing Commission.

    The Racing Commission has full jurisdiction over and shall supervise all horse race meetings, all dog race meetings and all persons involved in the holding or conducting of horse or dog race meetings and, in this regard, it has plenary power and authority:
    (1) To investigate applicants and determine the eligibility of the applicants for a license or permit or construction permit under the provisions of this article;
    (2) To fix, from time to time, the annual fee to be paid to the Racing Commission for any permit required under the provisions of section two of this article;
    (3) To promulgate reasonable rules implementing and making effective the provisions of this article and the powers and authority conferred and the duties imposed upon the Racing Commission under the provisions of this article, including, but not limited to, reasonable rules under which all horse races, dog races, horse race meetings and dog race meetings shall be held and conducted, all of which reasonable rules shall be promulgated in accordance with the provisions of article three, chapter twenty- nine-a of this code except that the Racing Commission shall promulgate separate rules, in accordance with article three, chapter twenty-nine-a, pertaining to the kinds of legal combination wagers which may be placed in connection with the pari-mutuel system of wagering authorized by this article;
    (4) To register colors and assumed names and to fix, from time to time, the annual fee to be paid to the Racing Commission for any such registration;
    (5) To fix and regulate the minimum purse to be offered during any horse or dog race meeting;
    (6) To fix a minimum and a maximum number of horse races or dog races to be held on any respective racing day: Provided, That within the parameters established, the licensee or permit holder may set the actual number of races to be held on any respective racing day;
    (7) To enter the office, horse racetrack, dog racetrack, kennel, facilities and other places of business of any licensee to determine whether the provisions of this article and its reasonable rules are being complied with, and for this purpose, the Racing Commission, its executive director, representatives and employees may visit, investigate and have free access to any such office, horse racetrack, dog racetrack, kennel, facilities and other places of business;
    (8) To investigate alleged violations of the provisions of this article, its reasonable rules, orders and final decisions and to take appropriate disciplinary action against any licensee or permit holder or construction permit holder for a violation or institute appropriate legal action for enforcement or take disciplinary action and institute legal action;
    (9) By reasonable rules, to authorize stewards, starters and other racing officials to impose reasonable fines or other sanctions upon a person connected with or involved in any horse or dog racing or any horse or dog race meeting and to authorize stewards to rule off the grounds of any horse or dog racetrack any tout, bookmaker or other undesirable individual determined inimical to the best interests of horse and dog racing or the pari-mutuel system of wagering in connection therewith;
    (10) To require at any time the removal of any racing official or racing employee of any licensee for the violation of any provision of this article, any reasonable rule of the Racing Commission or for any fraudulent practice;
    (11) To acquire, establish, maintain and operate, or to provide by contract for the maintenance and operation of, a testing laboratory and related facilities for the purpose of conducting saliva, urine and other tests on the horse or dog or horses or dogs run or to be run in any horse or dog race meeting and to purchase all equipment and supplies considered necessary or desirable in connection with the acquisition, establishment, maintenance and operation of any testing laboratory and related facilities and all such tests;
    (12) To hold up, in any disputed horse or dog race, the payment of any purse pending a final determination of the results thereof;
    (13) To require each licensee to file an annual balance sheet and profit and loss statement pertaining to the licensee's horse or dog racing activities in this state together with a list of each licensee's stockholders or other persons having any beneficial interest in the horse or dog racing activities of the licensee;
    (14) To issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of any books, records and other pertinent documents and to administer oaths and affirmations to such witnesses, whenever, in the judgment of the Racing Commission, it is necessary to do so for the effective discharge of its duties under the provisions of this article;
    (15) To keep accurate and complete records of its proceedings and to certify the same as may be appropriate;
    (16) To take any other action that may be reasonable or appropriate to effectuate the provisions of this article and its reasonable rules;
    (17) To provide breeders' awards, purse supplements and moneys for capital improvements at racetracks in compliance with section thirteen-b of this article; and
    (18) To mediate on site, upon request of a party, all disputes existing between the racetrack licensees located in this state and representatives of a majority of the horse owners and trainers licensed at the track which threaten to disrupt any scheduled racing event or events. The Racing Commission shall, upon the request of a party, mediate on site all disputes existing between racetrack licensees and representatives of pari-mutuel clerks which threaten to disrupt any scheduled racing event or events. When a request for mediation is made, the commission shall designate from among its members one person to act as mediator in each dispute that arises. Each opposing party involved in any dispute shall negotiate in good faith with the goal of reaching a fair and mutual resolution. The mediator may issue recommendations designed to assist each side toward reaching a fair compromise. No owner or operator or any horse owner or trainer or any pari-mutuel clerk licensed at the track is required to abide by any recommendation made by any mediator acting pursuant to this subsection.
    The Racing Commission shall not interfere in the internal business or internal affairs of any licensee.
§19-23-7. Application for license; forms; time for filing; disclosure required; verification; bond; application for permit.
  (a) Any racing association desiring to hold or conduct a horse or dog race meeting, where the pari-mutuel system of wagering is permitted and conducted, during any calendar year, shall file with the Racing Commission an application for a license to hold or conduct such horse or dog race meeting. A separate application shall be filed for each separate license sought for each horse or dog race meeting which such applicant proposes to hold or conduct. The Racing Commission shall prescribe blank forms to be used in making such application. Such application shall be filed on or before a day to be fixed by the Racing Commission and shall disclose, but not be limited to, the following:
  (1) If the applicant be an individual, the full name and address of the applicant;
  (2) If the applicant be a partnership, firm or association, the full name and address of each partner or member thereof, the name of the partnership, firm or association and its post-office address;
  (3) If the applicant be a corporation, its name, the state of its incorporation, its post-office address, the full name and address of each officer and director thereof, and if a foreign corporation, whether it is qualified to do business in this state;
  (4) The dates, totaling not less than two hundred one hundred fifty, such applicant intends to hold or conduct such horse or dog race meeting (which may be on any day including Sundays);
  (5) The location of the horse or dog racetrack, place or enclosure where such applicant proposes to hold or conduct such horse or dog race meeting;
  (6) Whether the applicant, any partner, member, officer or director has previously applied for a license under the provisions of this article or for a similar license in this or any other state, and if so, whether such license was issued or refused, and, if issued, whether it was ever suspended or revoked; and
  (7) Such other information as the Racing Commission may reasonably require which may include information relating to any criminal record of the applicant, if an individual, or of each partner or member, if a partnership, firm or association, or of each officer and director, if a corporation.
  (b) Such application shall be verified by the oath or affirmation of the applicant for such license, if an individual, or if the applicant is a partnership, firm, association or corporation, by a partner, member or officer thereof, as the case may be. When required by the Racing Commission, an applicant for a license shall also furnish evidence satisfactory to the Racing Commission of such applicant's ability to pay all taxes due the state, purses, salaries of officials and other expenses incident to the horse or dog race meeting for which a license is sought. In the event the applicant is not able to furnish such satisfactory evidence of such applicant's ability to pay such expenses and fees, the Racing Commission may require bond or other adequate security before the requested license is issued.
  (c) Any person desiring to obtain a permit, as required by the provisions of section two of this article, shall make application therefor on a form prescribed by the Racing Commission. The application for any such permit shall be accompanied by the fee prescribed therefor by the Racing Commission. Each applicant for a permit shall set forth in the application such information as the Racing Commission shall reasonably require.
§19-23-9. Pari-mutuel system of wagering authorized; licensee authorized to deduct commissions from pari-mutuel pools; retention of breakage; auditing; minors.
  (a) The pari-mutuel system of wagering upon the results of any horse or dog race at any horse or dog race meeting conducted or held by any licensee is hereby authorized if, and only if, such pari-mutuel wagering is conducted by the licensee within the confines of the licensee's horse racetrack or dog racetrack and the provisions of section one, article ten, chapter sixty-one of this code relating to gaming shall not apply to the pari-mutuel system of wagering in manner and form as provided in this article at any horse or dog race meeting within this state where horse or dog racing is permitted for any purse by any licensee. A licensee shall permit or conduct only the pari-mutuel system of wagering within the confines of the licensee's racetrack at which any horse or dog race meeting is conducted or held.
  (b) A licensee is hereby expressly authorized to deduct a commission from the pari-mutuel pools as follows:
  (1) The commission deducted by any licensee from the pari- mutuel pools on thoroughbred horse racing, except from thoroughbred horse racing pari-mutuel pools involving what is known as multiple betting in which the winning pari-mutuel ticket or tickets are determined by a combination of two or more winning horses, shall not exceed seventeen and one-fourth percent of the total of the pari-mutuel pools for the day. Out of the commission mentioned in this subdivision, the licensee: (i) Shall pay the pari-mutuel pools tax provided in subsection (b), section ten of this article; (ii) shall make a deposit into a special fund to be established by the licensee and to be used for the payment of regular purses offered for thoroughbred racing by the licensee, which deposits out of pari-mutuel pools for each day during the months of January, February, March, October, November and December shall be seven and three hundred seventy-five one-thousandths percent of the pari-mutuel pools and which, out of pari-mutuel pools for each day during all other months, shall be six and eight hundred seventy- five one-thousandths percent of the pari-mutuel pools, which shall take effect beginning fiscal year 1990; (iii) shall pay one tenth of one percent of the pari-mutuel pools into the General Fund of the county commission of the county in which the racetrack is located, except if within a municipality, then to the Municipal General Fund; and (iv) Any licensee which has participated in the West Virginia Thoroughbred Development Fund for a period of more than four consecutive calendar years prior to December 31, 1992, shall make a deposit into a special fund to be established by the Racing Commission and to be used for the payment of breeders awards, restrictive races and stakes purses as authorized by section thirteen-b of this article, which deposits out of pari- mutuel pools shall, from the effective date of this section, be two percent of the pools. The remainder of the commission shall be retained by the licensee.
  Each licensee that permits or conducts pari-mutuel wagering at the licensee's thoroughbred horse racetrack shall annually pay $500,000 from the special fund required by this section to be established by the licensee for the payment of regular purses offered for thoroughbred racing by the licensee into a special fund established by the Racing Commission for transfer to a pension plan established by the Racing Commission for all back stretch personnel, including, but not limited to, exercise riders, trainers, grooms and stable forepersons licensed by the Racing Commission to participate in horse racing in this state and their dependents.
  Each thoroughbred racetrack licensee is authorized to enter into an agreement with its local Horsemen's Benevolent and Protective Association under which an agreed upon percentage of up to two percent of purses actually paid during the preceding month may be paid to the local Horsemen's Benevolent and Protective Association from the special fund required by this section for their respective medical trusts for backstretch personnel and administrative fees specifically related to such medical trusts for backstretch personnel: Provided, That such administrative fees may not include payments for legal actions; legal fees; lobbying expenses; reimbursement of expenses of board members of such associations; reimbursement for travel and meals of staff and employees of such associations; or administrative costs, wages and expenses incurred other than those incurred specifically in administration of medical trusts for backstretch personnel. The foregoing expenses set forth as ineligible administrative fees may be paid from membership dues paid to or contributions made to a Horsemen's Benevolent and Protective Association, or any other lawful source.
  The commission deducted by any licensee from the pari-mutuel pools on thoroughbred horse racing involving what is known as multiple betting in which the winning pari-mutuel ticket or tickets are determined by a combination of two winning horses shall not exceed nineteen percent and by a combination of three or more winning horses shall not exceed twenty-five percent of the total of such pari-mutuel pools for the day. Out of the commission, as is mentioned in this paragraph, the licensee: (i) Shall pay the pari- mutuel pools tax provided in subsection (b), section ten of this article; (ii) shall make a deposit into a special fund to be established by the licensee and to be used for the payment of regular purses offered for thoroughbred racing by the licensee, which deposits out of pari-mutuel pools for each day during the months of January, February, March, October, November and December, for pools involving a combination of two winning horses shall be eight and twenty-five one-hundredths percent and out of pari-mutuel pools for each day during all other months shall be seven and seventy-five one-hundredths percent of the pari-mutuel pools, and involving a combination of three or more winning horses for the months of January, February, March, October, November and December the deposits out of the fund shall be eleven and twenty-five one- hundredths percent of the pari-mutuel pools, and which, out of pari-mutuel pools for each day during all other months, shall be ten and seventy-five one-hundredths percent of the pari-mutuel pools; (iii) shall pay one tenth of one percent of the pari-mutuel pools into the General Fund of the county commission of the county in which the racetrack is located, except if within a municipality, then to the Municipal General Fund; and (iv) any licensee which has participated in the West Virginia Thoroughbred Development Fund for a period of more than four consecutive calendar years prior to December 31, 1992, shall make a deposit into a special fund to be established by the Racing Commission and to be used for the payment of breeder awards, for restrictive races and stakes purses which deposits out of pari-mutuel pools shall, from the effective date of this section, be two percent of the pools. The remainder of the commission shall be retained by the licensee.
  The commission deducted by the licensee under this subdivision may be reduced only by mutual agreement between the licensee and a majority of the trainers and horse owners licensed by subsection (a), section two of this article or their designated representative. The reduction in licensee commissions may be for a particular race, racing day or days or for a horse race meeting. Fifty percent of the reduction shall be retained by the licensee from the amounts required to be paid into the special fund established by the licensee under the provisions of this subdivision. The Racing Commission shall promulgate any reasonable rules that are necessary to implement the foregoing provisions.
  (2) The commission deducted by any licensee from the pari- mutuel pools on harness racing shall not exceed seventeen and one-half percent of the total of the pari-mutuel pools for the day. Out of the commission the licensee shall pay the pari-mutuel pools tax provided in subsection (c), section ten of this article and shall pay one tenth of one percent into the General Fund of the county commission of the county in which the racetrack is located, except if within a municipality, then to the Municipal General Fund. The remainder of the commission shall be retained by the licensee.
  (3) The commission deducted by any licensee from the pari- mutuel pools on dog racing, except from dog racing pari-mutuel pools involving what is known as multiple betting in which the winning pari-mutuel ticket or tickets are determined by a combination of two or more winning dogs, shall not exceed sixteen and thirty one-hundredths percent of the total of all pari-mutuel pools for the day. The commission deducted by any licensee from the pari-mutuel pools on dog racing involving what is known as multiple betting in which the winning pari-mutuel ticket or tickets are determined by a combination of two winning dogs shall not exceed nineteen percent, by a combination of three winning dogs shall not exceed twenty percent and by a combination of four or more winning dogs shall not exceed twenty-one percent of the total of such pari-mutuel pools for the day. The foregoing commissions are in effect for the fiscal years 1990 and 1991. Thereafter, the commission shall be at the percentages in effect prior to the effective date of this article unless the Legislature, after review, determines otherwise. Out of the commissions, the licensee shall pay the pari-mutuel pools tax provided in subsection (d), section ten of this article and one tenth of one percent of such pari-mutuel pools into the General Fund of the county commission of the county in which the racetrack is located. In addition, out of the commissions, if the racetrack is located within a municipality, then the licensee shall also pay three tenths of one percent of the pari-mutuel pools into the Municipal General Fund; or, if the racetrack is located outside of a municipality, then the licensee shall also pay three tenths of one percent of the pari-mutuel pools into the State Road Fund for use by the Division of Highways in accordance with the provisions of this subdivision. The remainder of the commission shall be retained by the licensee.
  For the purposes of this section, "municipality" means and includes any Class I, Class II and Class III city and any Class IV town or village incorporated as a municipal corporation under the laws of this state prior to January 1, 1987.
  Each dog racing licensee, when required by the provisions of this subdivision to pay a percentage of its commissions to the State Road Fund for use by the Division of Highways, shall transmit the required funds, in such manner and at such times as the Racing Commission shall by procedural rule direct, to the State Treasurer for deposit in the State Treasury to the credit of the Division of Highways State Road Fund. All funds collected and received in the State Road Fund pursuant to the provisions of this subdivision shall be used by the Division of Highways in accordance with the provisions of article seventeen-a, chapter seventeen of this code for the acquisition of right-of-way for, the construction of, the reconstruction of and the improvement or repair of any interstate or other highway, secondary road, bridge and toll road in the state. If on July 1, 1989, any area encompassing a dog racetrack has incorporated as a Class I, Class II or Class III city or as a Class IV town or village, whereas such city, town or village was not incorporated as such on January 1, 1987, then on and after July 1, 1989, any balances in the State Road Fund existing as a result of payments made under the provisions of this subdivision may be used by the State Road Fund for any purpose for which other moneys in the fund may lawfully be used and in lieu of further payments to the State Road Fund, the licensee of a racetrack which is located in the municipality shall thereafter pay three tenths of one percent of the pari-mutuel pools into the General Fund of the municipality. If no incorporation occurs before July 1, 1989, then payments to the State Road Fund shall thereafter continue as provided under the provisions of this subdivision.
  A dog racing licensee, before deducting the commissions authorized by this subdivision, shall give written notification to the Racing Commission not less than thirty days prior to any change in the percentage rates for the commissions. The Racing Commission shall prescribe blank forms for filing the notification. The notification shall disclose the following: (A) The revised commissions to be deducted from the pari-mutuel pools each day on win, place and show betting and on different forms of multiple bettings; (B) the dates to be included in the revised betting; and (C) such other information as may be required by the Racing Commission.
  The licensee shall establish a special fund to be used only for capital improvements or long-term debt amortization or both: Provided, That any licensee, heretofore licensed for a period of eight years prior to the effective date of the amendment made to this section during the regular session of the Legislature held in the year 1987, shall establish the special fund to be used only for capital improvements or physical plant maintenance, or both, at the licensee's licensed facility or at the licensee's commonly owned racing facility located within this state. Deposits made into the funds shall be in an amount equal to twenty-five percent of the increased rate total over and above the applicable rate in effect as of January 1, 1987, of the pari-mutuel pools for the day. Any amount deposited into the funds must be expended or liability therefor incurred within a period of two years from the date of deposit. Any funds not expended shall be transferred immediately into the state General Fund after expiration of the two-year period.
  The licensee shall make a deposit into a special fund established by the licensee and used for payment of regular purses offered for dog racing, which deposits out of the licensee's commissions for each day shall be three and seventy-five one- hundredths percent of the pari-mutuel pools.
  The licensee shall further establish a special fund to be used exclusively for marketing and promotion programs; the funds shall be in an amount equal to five percent over and above the applicable rates in effect as of January 1, 1987, of the total pari-mutuel pools for the day.
  The Racing Commission shall prepare and transmit annually to the Governor and the Legislature a report of the activities of the Racing Commission under this subdivision. The report shall include a statement of: The amount of commissions retained by licensees; the amount of taxes paid to the state; the amounts paid to municipalities, counties and the Division of Highways Dog Racing Fund; the amounts deposited by licensees into special funds for capital improvements or long-term debt amortization and a certified statement of the financial condition of any licensee depositing into the fund; the amounts paid by licensees into special funds and used for regular purses offered for dog racing; the amounts paid by licensees into special funds and used for marketing and promotion programs; and such other information as the Racing Commission may consider appropriate for review.
  (c) In addition to any commission, a licensee of horse race or dog race meetings shall also be entitled to retain the legitimate breakage, which shall be made and calculated to the dime, and from the breakage, the licensee of a horse race meeting (excluding dog race meetings), shall deposit daily fifty percent of the total of the breakage retained by the licensee into the special fund created pursuant to the provisions of subdivision (1), subsection (b) of this section for the payment of regular purses.
  (d) The director of audit, and any other Auditors employed by the Racing Commission who are also certified public accountants or experienced public accountants, shall have free access to the space or enclosure where the pari-mutuel system of wagering is conducted or calculated at any horse or dog race meeting for the purpose of ascertaining whether or not the licensee is deducting and retaining only a commission as provided in this section and is otherwise complying with the provisions of this section. They shall also, for the same purposes only, have full and free access to all records and papers pertaining to the pari-mutuel system of wagering and shall report to the Racing Commission in writing, under oath, whether or not the licensee has deducted and retained any commission in excess of that permitted under the provisions of this section or has otherwise failed to comply with the provisions of this section.
  (e) No licensee shall permit or allow any individual under the age of eighteen years to wager at any horse or dog racetrack, knowing or having reason to believe that the individual is under the age of eighteen years.
  (f) Notwithstanding the foregoing provisions of subdivision (1), subsection (b) of this section, to the contrary, a thoroughbred licensee qualifying for and paying the alternate reduced tax on pari-mutuel pools provided in section ten of this article shall distribute the commission authorized to be deducted by subdivision (1), subsection (b) of this section as follows: (i) The licensee shall pay the alternate reduced tax provided in section ten of this article; (ii) the licensee shall pay one tenth of one percent of the pari-mutuel pools into the General Fund of the county commission of the county in which the racetrack is located, except if within a municipality, then to the Municipal General Fund; (iii) the licensee shall pay one half of the remainder of the commission into the special fund established by the licensee and to be used for the payment of regular purses offered for thoroughbred racing by the licensee; and (iv) the licensee shall retain the amount remaining after making the payments required in this subsection.
  (g) Each kennel which provides or races dogs owned or leased by others shall furnish to the commission a surety bond in an amount to be determined by the commission to secure the payment to the owners or lessees of the dogs the portion of any purse owed to the owner or lessee.
§19-23-12b. Televised racing days; merging of pari-mutuel wagering      pools.
          (a) For the purposes of this section:
          (1) "Televised racing day" means a calendar day, assigned by the commission, at a licensed racetrack on which pari-mutuel betting is conducted on horse or dog races run at other racetracks in this state or at racetracks outside of this state which are broadcast by television at a licensed racetrack and which day or days have had the prior written approval of the representative of the majority of the owners and trainers who hold permits required by section two of this article; and
          (2) "Host racing association" means any person who, pursuant to a license or other permission granted by the host governmental entity, conducts the horse or dog race upon which wagers are placed.
          (b) A licensee conducting not less than two hundred twenty one hundred fifty live racing dates for each horse or dog race meeting may, with the prior approval of the state Racing Commission, contract with any legal wagering entity in this state or in any other governmental jurisdiction to receive telecasts and accept wagers on races conducted by the legal wagering entity: Provided, That at those thoroughbred racetracks the licensee, in applying for racing dates, shall apply for not less than two hundred ten one hundred fifty live racing dates for each horse race meeting: Provided, however, That at those thoroughbred racetracks that have participated in the West Virginia Thoroughbred Development Fund for a period of more than four consecutive calendar years prior to December 31, 1992, the licensee may apply for not less than one hundred fifty-nine fifty live racing dates during the calendar year 1997. If, thereafter, for reasons beyond the licensee's control, related to adverse weather conditions, unforeseen casualty occurrences or a shortage of thoroughbred horses eligible to compete for purses, the licensee concludes that this number of racing days cannot be attained, the licensee may file a request with the Racing Commission to reduce the authorized live racing days. Upon receipt of the request the Racing Commission shall within seventy-two hours of the receipt of the request notify the licensee and the representative of a majority of the owners and trainers at the requesting track and the representative of the majority of the mutuel clerks at the requesting track that such request has been received and that if no objection to the request is received within ten days of the notification the request will be approved: Provided further, That the commission shall give consideration to whether there existed available unscheduled potential live racing dates following the adverse weather or casualty and prior to the end of the race meeting which could be used as new live racing dates in order to maintain the full live racing schedule previously approved by the Racing Commission. If an objection is received by the commission within the time limits, the commission shall, within thirty days of receipt of such objection, set a hearing on the question of reducing racing days, which hearing shall be conducted at a convenient place in the county in which the requesting racetrack is located. The commission shall hear from all parties concerned and, based upon testimony and documentary evidence presented at the hearing, shall determine the required number of live racing days: And provided further, That the commission shall not reduce the number of live racing days below one hundred eighty-five fifty days for a horse race meeting unless the licensee requesting such reduction has: (i) Filed with the commission a current financial statement, which shall be subject to independent audit; and (ii) met the burden of proving that just cause exists for such requested reduction in live racing days. The telecasts may be received and wagers accepted at any location authorized by the provisions of section twelve-a of this article. The contract must receive the approval of the representative of the majority of the owners and trainers who hold permits required by section two of this article at the receiving thoroughbred racetrack.
          (c) The commission may allow the licensee to commingle its wagering pools with the wagering pools of the host racing association. If the pools are commingled, the wagering at the licensee's racetrack must be on tabulating equipment capable of issuing pari-mutuel tickets and be electronically linked with the equipment at the sending racetrack. Subject to the approval of the commission, the types of betting, licensee commissions and distribution of winnings on pari-mutuel pools of the sending licensee racetrack are those in effect at the licensee racetrack. Breakage for pari-mutuel pools on a televised racing day must be calculated in accordance with the law or rules governing the sending racetrack and must be distributed in a manner agreed to between the licensee and the sending racetrack. For the televised racing services it provides, the host racing association shall receive a fee to be paid by the receiving licensee racetrack which shall be in an amount to be agreed upon by the receiving licensee racetrack and the host racing association.
          (d) The commission may assign televised racing days at any time. When a televised racing day is assigned, the commission shall assign either a steward or an auditor to preside over the televised races at the licensee racetrack.
          (e) (1) From the licensee commissions authorized by subsection (c) of this section, the licensee shall pay one tenth of one percent of each commission into the General Fund of the county, in which the racetrack is located and at which the wagering occurred and there is imposed and the licensee shall pay, for each televised racing day on which the total pari-mutuel pool exceeds $100,000, the greater of either: (i) The total of the daily license tax and the pari-mutuel pools tax required by section ten of this article; or (ii) a daily license tax of $1,250. For each televised racing day on which the total pari-mutuel pool is $100,000, the licensee shall pay a daily license tax of $500 plus an additional license tax of $100 for each $10,000, or part thereof, that the pari-mutuel pool exceeds $50,000, but does not exceed $100,000. The calculation of the total pari-mutuel pool for purposes of this subsection shall include only one half of all wagers placed at a licensed racetrack in this state on televised races conducted at another licensed racetrack within this state. Payments of the tax imposed by this section are subject to the requirements of subsection (e), section ten of this article.
          (2) From the licensee commissions authorized by subsection (c) of this section, after payments are made in accordance with the provisions of subdivision (1) of this subsection, the licensee shall pay, for each televised racing day, one fourth of one percent of the total pari-mutuel pools for and on behalf of all employees of the licensed racing association by making a deposit into a special fund to be established by the Racing Commission and to be used for payments into the pension plan for all employees of the licensed racing association.
          (3) From the licensee commissions authorized by subsection (c) of this section, after payments are made in accordance with the provisions of subdivisions (1) and (2) of this subsection, thoroughbred licensees shall pay, one-half percent of net simulcast income and for each televised racing day on or after July 1, 1997, an additional five and one-half percent of net simulcast income into the West Virginia Thoroughbred Development Fund established by the Racing Commission according to section thirteen-b of this article: Provided, That no licensee qualifying for the alternate tax provisions of subsection (b), section ten of this article shall be required to make the payments unless the licensee has participated in the West Virginia Thoroughbred Development Fund for a period of more than four consecutive calendar years prior to December 31, 1992. For the purposes of this section, the term "net simulcast income" means the total commission deducted each day by the licensee from the pari-mutuel pools on simulcast horse or dog races, less direct simulcast expenses, including, but not limited to, the cost of simulcast signals, telecommunication costs and decoder costs.
          (f) After deducting the tax and other payments required by subsection (e) of this section, the amount required to be paid under the terms of the contract with the host racing association and the cost of transmission, the horse racing association shall make a deposit equal to fifty percent of the remainder into the purse fund established under the provisions of subdivision (1), subsection (b), section nine of this article. After deducting the tax and other payments required by subsection (e) of this section, dog racetracks shall pay an amount equal to two tenths of one percent of the daily simulcast pari-mutuel pool to the "West Virginia Racing Commission Special Account-West Virginia Greyhound Breeding Development Fund".
          (g) The provisions of the "Federal Interstate Horseracing Act of 1978", also known as Public Law 95-515, Section 3001-3007 of Title 15, U.S. Code, as amended, controls in determining the intent of this section.
CHAPTER 29. MISCELLANEOUS BOARDS AND OFFICERS.
ARTICLE 22A. RACETRACK VIDEO LOTTERY.
§29-22A-3. Definitions.

          As used in this article:
          (a) "Applicant" means any person applying for any video lottery license or permit.
          (b) "Associated equipment" means any hardware located on a licensed racetrack's premises which is connected to the video lottery system for the purpose of performing communication, validation or other functions, but not including the video lottery terminals or the communication facilities of a regulated public utility.
          (c) "Background investigation" means a security, criminal and credit investigation of a person, as defined in this section, who has applied for a video lottery license or permit, or who has been granted a video lottery license or permit.
          (d) "Central computer," "central control computer" or "central site system" means any central site computer provided to and controlled by the commission to which video lottery terminals communicate for purposes of information retrieval and terminal activation and to disable programs.
          (e) "Commission" or "state Lottery Commission" means the West Virginia Lottery Commission created by article twenty-two of this chapter.
          (f) "Control" means the authority to direct the management and policies of an applicant or a license or permit holder.
          (g) "Costs" means the expenses incurred by the commission in the testing and examination of video lottery terminals and the performance of background investigations and other related activities which are charged to and collected from applicants or license or permit holders.
          (h) "Director" means the individual appointed by the Governor to provide management and administration necessary to direct the State Lottery Office.
          (i) "Disable" or "terminal disable" means the process of executing a shutdown command from the central control computer which causes video lottery terminals to cease functioning.
          (j) "Display" means the visual presentation of video lottery game features on a video lottery terminal in the form of video images, actual symbols or both.
          (k) "EPROM" and "erasable programmable read-only memory chips" means the electronic storage medium on which the operation software for all games playable on a video lottery terminal resides and which can also be in the form of CD-ROM, flash RAM or other new technology medium that the commission may from time to time approve for use in video lottery terminals. All electronic storage media are considered to be the property of the State of West Virginia.
          (l) "Floor attendant" means a person, employed by a licensed racetrack, who holds a permit issued by the commission and who corrects paper jams and bill jams in video lottery terminals and also provides courtesy services for video lottery players.
          (m) "Gross terminal income" means the total amount of cash, vouchers or tokens inserted into the video lottery terminals operated by a licensee, minus the total value of coins and tokens won by a player and game credits which are cleared from the video lottery terminals in exchange for winning redemption tickets.
          (n) "License" or "video lottery license" means authorization granted by the commission to a racetrack which is licensed by the West Virginia Racing Commission to conduct thoroughbred or greyhound racing meetings pursuant to article twenty-three, chapter nineteen of this code permitting the racetrack to operate video lottery terminals authorized by the commission.
          (o) "Lottery" means the public gaming systems or games established and operated by the State Lottery Commission.
          (p) "Manufacturer" means any person holding a permit granted by the commission to engage in the business of designing, building, constructing, assembling or manufacturing video lottery terminals, the electronic computer components of the video lottery terminals, the random number generator of the video lottery terminals, or the cabinet in which it is housed, and whose product is intended for sale, lease or other assignment to a licensed racetrack in West Virginia, and who contracts directly with the licensee for the sale, lease or other assignment to a licensed racetrack in West Virginia.
          (q) "Net terminal income" means gross terminal income minus an amount deducted by the commission to reimburse the commission for its actual costs of administering racetrack video lottery at the licensed racetrack. No deduction for any or all costs and expenses of a licensee related to the operation of video lottery games shall be deducted from gross terminal income.
          (r) "Noncash prize" means merchandise which a video lottery player may be given the option to receive in lieu of cash in exchange for a winning redemption ticket and which shall be assigned a redemption value equal to the actual cost of the merchandise to the licensed racetrack.
          (s) "Own" means any beneficial or proprietary interest in any property or business of an applicant or licensed racetrack.
          (t) "Pari-mutuel racing facility," "licensed racetrack," "racetrack" or "track" means a facility where horse or dog race meetings are held and the pari-mutuel system of wagering is authorized pursuant to the provisions of article twenty-three, chapter nineteen of this code: Provided, That for the purposes of this article, "pari-mutuel racing facility," "licensed racetrack," "racetrack" or "track" includes only a facility which was licensed prior to January 1, 1994, to hold horse or dog race meetings, and which conducts not less than two hundred twenty one hundred fifty live racing dates for each horse or dog race meeting or such other number of live racing dates as may be approved by the Racing Commission in accordance with the provisions of section twelve-b, article twenty-three, chapter nineteen of this code.
          (u) "Permit" means authorization granted by the commission to a person to function as either a video lottery manufacturer, service technician or validation manager.
          (v) "Person" means any natural person, corporation, association, partnership, limited partnership, or other entity, regardless of its form, structure or nature.
          (w) "Player" means a person who plays a video lottery game on a video lottery terminal at a racetrack licensed by the commission to conduct video lottery games.
          (x) "Service technician" means a person, employed by a licensed racetrack, who holds a permit issued by the commission and who performs service, maintenance and repair on licensed video lottery terminals in this state.
          (y) "Video lottery game" means a commission approved, owned and controlled electronically simulated game of chance which is displayed on a video lottery terminal and which:
          (1) Is connected to the commission's central control computer by an on-line or dial-up communication system;
          (2) Is initiated by a player's insertion of coins, currency, vouchers or tokens into a video lottery terminal, which causes game play credits to be displayed on the video lottery terminal and, with respect to which, each game play credit entitles a player to choose one or more symbols or numbers or to cause the video lottery terminal to randomly select symbols or numbers;
          (3) Allows the player to win additional game play credits, coins or tokens based upon game rules which establish the random selection of winning combinations of symbols or numbers or both and the number of free play credits, coins or tokens to be awarded for each winning combination of symbols or numbers or both;
          (4) Is based upon computer-generated random selection of winning combinations based totally or predominantly on chance;
          (5) In the case of a video lottery game which allows the player an option to select replacement symbols or numbers or additional symbols or numbers after the game is initiated and in the course of play, either: (A) Signals the player, prior to any optional selection by the player of randomly generated replacement symbols or numbers, as to which symbols or numbers should be retained by the player to present the best chance, based upon probabilities, that the player may select a winning combination; (B) signals the player, prior to any optional selection by the player of randomly generated additional symbols or numbers, as to whether such additional selection presents the best chance, based upon probabilities, that the player may select a winning combination; or (C) randomly generates additional or replacement symbols and numbers for the player after automatically selecting the symbols and numbers which should be retained to present the best chance, based upon probabilities, for a winning combination, so that in any event, the player is not permitted to benefit from any personal skill, based upon a knowledge of probabilities, before deciding which optional numbers or symbols to choose in the course of video lottery game play;
          (6) Allows a player at any time to simultaneously clear all game play credits and print a redemption ticket entitling the player to receive the cash value of the free plays cleared from the video lottery terminal; and
          (7) Does not use the following game themes commonly associated with casino gambling: Roulette, dice, or baccarat card games: Provided, That games having a display with symbols which appear to roll on drums to simulate a classic casino slot machine, game themes of other card games and keno may be used.
          (z) "Validation manager" means a person who holds a permit issued by the commission and who performs video lottery ticket redemption services.
          (aa) "Video lottery" means a lottery which allows a game to be played utilizing an electronic computer and an interactive computer terminal device, equipped with a video screen and keys, a keyboard or other equipment allowing input by an individual player, into which the player inserts coins, currency, vouchers or tokens as consideration in order for play to be available, and through which terminal device the player may receive free games, coins, tokens or credit that can be redeemed for cash, annuitized payments over time, a noncash prize or nothing, as may be determined wholly or predominantly by chance. "Video lottery" does not include a lottery game which merely utilizes an electronic computer and a video screen to operate a lottery game and communicate the results of the game, such as the game "Travel", and which does not utilize an interactive electronic terminal device allowing input by an individual player.
          (bb) "Video lottery terminal" means a commission-approved interactive electronic terminal device which is connected with the commission's central computer system, and which is used for the purpose of playing video lottery games authorized by the commission. A video lottery terminal may simulate the play of one or more video lottery games.
          (cc) "Wager" means a sum of money or thing of value risked on an uncertain occurrence.
§29-22A-10. Accounting and reporting; commission to provide communications protocol data; distribution of net terminal income; remittance through electronic transfer of funds; establishment of accounts and nonpayment penalties; commission control of accounting for net terminal income; settlement of accounts; manual reporting and payment may be required; request for reports; examination of accounts and records.
     (a) The commission shall provide to manufacturers, or applicants applying for a manufacturer's permit, the protocol documentation data necessary to enable the respective manufacturer's video lottery terminals to communicate with the commission's central computer for transmitting auditing program information and for activation and disabling of video lottery terminals.
     (b) The gross terminal income of a licensed racetrack shall be remitted to the commission through the electronic transfer of funds. Licensed racetracks shall furnish to the commission all information and bank authorizations required to facilitate the timely transfer of moneys to the commission. Licensed racetracks must provide the commission thirty days' advance notice of any proposed account changes in order to assure the uninterrupted electronic transfer of funds. From the gross terminal income remitted by the licensee to the commission:
     (1) The commission shall deduct an amount sufficient to reimburse the commission for its actual costs and expenses incurred in administering racetrack video lottery at the licensed racetrack and the resulting amount after the deduction is the net terminal income. The amount deducted for administrative costs and expenses of the commission may not exceed four percent of gross terminal income: Provided, That any amounts deducted by the commission for its actual costs and expenses that exceeds its actual costs and expenses shall be deposited into the State Lottery Fund.
For the fiscal years ending June 30, 2011, through June 30, 2020, the term "actual costs and expenses" may include transfers of up to $10 million in surplus allocations for each fiscal year, as calculated by the commission when it has closed its books for the fiscal year, to the Licensed Racetrack Modernization Fund created by subdivision (2), subsection (b) of this section. For all fiscal years beginning on or after July 1, 2001, the commission shall not receive an amount of gross terminal income in excess of the amount of gross terminal income received during the fiscal year ending on June 30, 2001, but four percent of any amount of gross terminal income received in excess of the amount of gross terminal income received during the fiscal year ending on June 30, 2001, shall be deposited into the fund established in section eighteen-a, article twenty-two of this chapter; and
     (2) A Licensed Racetrack Modernization Fund is created within the lottery fund. For all fiscal years beginning on or after July 1, 2011, and ending with the fiscal year beginning July 1, 2020, the commission shall deposit such amounts as are available according to subdivision (1), subsection (b) of this section into a separate facility modernization account maintained within the Licensed Racetrack Modernization Fund for each racetrack. Each racetrack's share of each year's deposit shall be calculated in the same ratio as each racetrack's apportioned contribution to the four percent administrative costs and expenses allowance provided for in subdivision (1), subsection (b) of this section for that year. For each $2 expended by a licensed racetrack for facility modernization improvements at the racetrack, having a useful life of three or more years and placed in service after July 1, 2011, the licensed racetrack shall receive $1 in recoupment from its facility modernization account. If the licensed racetrack's facility modernization account contains a balance in any fiscal year, the unexpended balance from that fiscal year will be available for matching for one additional fiscal year, after which time, the remaining unused balance carried forward shall revert to the lottery fund. For purposes of this section, the term "facility modernization improvements" includes acquisitions of new and unused video lottery terminals and related equipment. Video lottery terminals financed through the recoupment provided in this subdivision must be retained by the licensee in its West Virginia licensed location for a period of not less than five years from the date of initial installation.
     (c) The amount resulting after the deductions required by subsection (b) of this section constitutes net terminal income that shall be divided as set out in this subsection. For all fiscal years beginning on or after July 1, 2001, any amount of net terminal income received in excess of the amount of net terminal income received during the fiscal year ending on June 30, 2001, shall be divided as set out in section ten-b of this article. The licensed racetrack's share is in lieu of all lottery agent commissions and is considered to cover all costs and expenses required to be expended by the licensed racetrack in connection with video lottery operations. The division shall be made as follows:
     (1) The commission shall receive thirty percent of net terminal income, which shall be paid into the State Lottery Fund as provided in section ten-a of this article;
     (2) Until July 1, 2005, fourteen percent of net terminal income at a licensed racetrack shall be deposited in the special fund established by the licensee, and used for payment of regular purses in addition to other amounts provided for in article twenty- three, chapter nineteen of this code, on and after July 1, 2005, the rate shall be seven percent of net terminal income;
     (3) The county where the video lottery terminals are located shall receive two percent of the net terminal income: Provided, That:
     (A) Beginning July 1, 1999, and thereafter, any amount in excess of the two percent received during the fiscal year 1999 by a county in which a racetrack is located that has participated in the West Virginia Thoroughbred Development Fund since on or before January 1, 1999, shall be divided as follows:
     (i) The county shall receive fifty percent of the excess amount; and
     (ii) The municipalities of the county shall receive fifty percent of the excess amount, said fifty percent to be divided among the municipalities on a per capita basis as determined by the most recent decennial United States census of population; and
     (B) Beginning July 1, 1999, and thereafter, any amount in excess of the two percent received during the fiscal year 1999 by a county in which a racetrack other than a racetrack described in paragraph (A) of this proviso is located and where the racetrack has been located in a municipality within the county since on or before January 1, 1999, shall be divided, if applicable, as follows:
     (i) The county shall receive fifty percent of the excess amount; and
     (ii) The municipality shall receive fifty percent of the excess amount; and
     (C) This proviso shall not affect the amount to be received under this subdivision by any other county other than a county described in paragraph (A) or (B) of this proviso;
     (4) One percent of net terminal income shall be paid for and on behalf of all employees of the licensed racing association by making a deposit into a special fund to be established by the Racing Commission to be used for payment into the pension plan for all employees of the licensed racing association;
     (5) The West Virginia Thoroughbred Development Fund created under section thirteen-b, article twenty-three, chapter nineteen of this code and the West Virginia Greyhound Breeding Development Fund created under section ten of said article shall receive an equal share of a total of not less than one and one-half percent of the net terminal income;
     (6) The West Virginia Racing Commission shall receive one percent of the net terminal income which shall be deposited and used as provided in section thirteen-c, article twenty-three, chapter nineteen of this code.
     (7) A licensee shall receive forty-six and one-half percent of net terminal income.
     (8)(A) The Tourism Promotion Fund established in section twelve, article two, chapter five-b of this code shall receive three percent of the net terminal income: Provided, That for the fiscal year beginning July 1, 2003, the tourism commission shall transfer from the Tourism Promotion Fund $5 million of the three percent of the net terminal income described in this section and section ten-b of this article into the fund administered by the West Virginia Economic Development Authority pursuant to section seven, article fifteen, chapter thirty-one of this code, $5 million into the Capitol Renovation and Improvement Fund administered by the Department of Administration pursuant to section six, article four, chapter five-a of this code and $5 million into the Tax Reduction and Federal Funding Increased Compliance Fund; and
     (B) Notwithstanding any provision of paragraph (A) of this subdivision to the contrary, for each fiscal year beginning after June 30, 2004, this three percent of net terminal income and the three percent of net terminal income described in paragraph (B), subdivision (8), subsection (a), section ten-b of this article shall be distributed as provided in this paragraph as follows:
     (i) 1.375 percent of the total amount of net terminal income described in this section and in section ten-b of this article shall be deposited into the Tourism Promotion Fund created under section twelve, article two, chapter five-b of this code;
     (ii) 0.375 percent of the total amount of net terminal income described in this section and in section ten-b of this article shall be deposited into the Development Office Promotion Fund created under section three-b, article two, chapter five-b of this code;
     (iii) 0.5 percent of the total amount of net terminal income described in this section and in section ten-b of this article shall be deposited into the Research Challenge Fund created under section ten, article one-b, chapter eighteen-b of this code;
     (iv) 0.6875 percent of the total amount of net terminal income described in this section and in section ten-b of this article shall be deposited into the Capitol Renovation and Improvement Fund administered by the Department of Administration pursuant to section six, article four, chapter five-a of this code; and
     (v) 0.0625 percent of the total amount of net terminal income described in this section and in section ten-b of this article shall be deposited into the 2004 Capitol Complex Parking Garage Fund administered by the Department of Administration pursuant to section five-a, article four, chapter five-a of this code;
     (9)(A) On and after July 1, 2005, seven percent of net terminal income shall be deposited into the Workers' Compensation Debt Reduction Fund created in section five, article two-d, chapter twenty-three of this code: Provided, That beginning on July 1, 2013, and thereafter, the first $6 million generated by this subdivision shall be deposited into the Community-Based Services Fund for use as set forth in section twenty-seven of article twenty-two-c, chapter twenty-nine of this code: Provided, however, That in any fiscal year when the amount of money generated by this subdivision totals $11 $17 million, with $6 million having been deposited into the Community-Based Services Fund and $11 million having been deposited into the Workers' Compensation Debt Reduction Fund, all subsequent distributions under this subdivision shall be deposited in the special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;
     (B) The deposit of the seven percent of net terminal income into the Worker's Compensation Debt Reduction Fund pursuant to this subdivision shall expire and not be imposed with respect to these funds and the first $6 million of such funds shall thereafter be deposited into the Community-Based Services Fund for use as set forth in section twenty-seven of article twenty-two-c, chapter twenty-nine of this code, and any additional amounts shall be deposited in the special fund established by the licensee and used for payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code, on and after the first day of the month following the month in which the Governor certifies to the Legislature that: (i) The revenue bonds issued pursuant to article two-d, chapter twenty-three of this code, have been retired or payment of the debt service provided for; and (ii) that an independent certified actuary has determined that the unfunded liability of the old fund, as defined in chapter twenty-three of this code, has been paid or provided for in its entirety; and
     (10) The remaining one percent of net terminal income shall be deposited as follows:
     (A) For the fiscal year beginning July 1, 2003, the veterans memorial program shall receive one percent of the net terminal income until sufficient moneys have been received to complete the veterans memorial on the grounds of the State Capitol Complex in Charleston, West Virginia. The moneys shall be deposited in the State Treasury in the Division of Culture and History special fund created under section three, article one-i, chapter twenty-nine of this code: Provided, That only after sufficient moneys have been deposited in the fund to complete the veterans memorial and to pay in full the annual bonded indebtedness on the veterans memorial, not more than $20,000 of the one percent of net terminal income provided in this subdivision shall be deposited into a special revenue fund in the State Treasury, to be known as the "John F. 'Jack' Bennett Fund". The moneys in this fund shall be expended by the Division of Veterans Affairs to provide for the placement of markers for the graves of veterans in perpetual cemeteries in this state. The Division of Veterans Affairs shall promulgate legislative rules pursuant to the provisions of article three, chapter twenty-nine-a of this code specifying the manner in which the funds are spent, determine the ability of the surviving spouse to pay for the placement of the marker and setting forth the standards to be used to determine the priority in which the veterans grave markers will be placed in the event that there are not sufficient funds to complete the placement of veterans grave markers in any one year, or at all. Upon payment in full of the bonded indebtedness on the veterans memorial, $100,000 of the one percent of net terminal income provided in this subdivision shall be deposited in the special fund in the Division of Culture and History created under section three, article one-i, chapter twenty- nine of this code and be expended by the Division of Culture and History to establish a West Virginia veterans memorial archives within the Cultural Center to serve as a repository for the documents and records pertaining to the veterans memorial, to restore and maintain the monuments and memorial on the Capitol grounds: Provided, however, That $500,000 of the one percent of net terminal income shall be deposited in the State Treasury in a special fund of the Department of Administration, created under section five, article four, chapter five-a of this code, to be used for construction and maintenance of a parking garage on the State Capitol Complex; and the remainder of the one percent of net terminal income shall be deposited in equal amounts in the Capitol Dome and Improvements Fund created under section two, article four, chapter five-a of this code and Cultural Facilities and Capitol Resources Matching Grant Program Fund created under section three, article one of this chapter.
     (B) For each fiscal year beginning after June 30, 2004:
     (i) Five hundred thousand dollars of the one percent of net terminal income shall be deposited in the State Treasury in a special fund of the Department of Administration, created under section five, article four, chapter five-a of this code, to be used for construction and maintenance of a parking garage on the State Capitol Complex; and
     (ii) The remainder of the one percent of net terminal income and all of the one percent of net terminal income described in paragraph (B), subdivision (9), subsection (a), section ten-b of this article shall be distributed as follows: The net terminal income shall be deposited in equal amounts into the Capitol Dome and Capitol Improvements Fund created under section two, article four, chapter five-a of this code and the Cultural Facilities and Capitol Resources Matching Grant Program Fund created under section three, article one, chapter twenty-nine of this code until a total of $1,500,000 is deposited into the Cultural Facilities and Capitol Resources Matching Grant Program Fund; thereafter, the remainder shall be deposited into the Capitol Dome and Capitol Improvements Fund.
     (d) Each licensed racetrack shall maintain in its account an amount equal to or greater than the gross terminal income from its operation of video lottery machines, to be electronically transferred by the commission on dates established by the commission. Upon a licensed racetrack's failure to maintain this balance, the commission may disable all of a licensed racetrack's video lottery terminals until full payment of all amounts due is made. Interest shall accrue on any unpaid balance at a rate consistent with the amount charged for state income tax delinquency under chapter eleven of this code. The interest shall begin to accrue on the date payment is due to the commission.
     (e) The commission's central control computer shall keep accurate records of all income generated by each video lottery terminal. The commission shall prepare and mail to the licensed racetrack a statement reflecting the gross terminal income generated by the licensee's video lottery terminals. Each licensed racetrack shall report to the commission any discrepancies between the commission's statement and each terminal's mechanical and electronic meter readings. The licensed racetrack is solely responsible for resolving income discrepancies between actual money collected and the amount shown on the accounting meters or on the commission's billing statement.
     (f) Until an accounting discrepancy is resolved in favor of the licensed racetrack, the commission may make no credit adjustments. For any video lottery terminal reflecting a discrepancy, the licensed racetrack shall submit to the commission the maintenance log which includes current mechanical meter readings and the audit ticket which contains electronic meter readings generated by the terminal's software. If the meter readings and the commission's records cannot be reconciled, final disposition of the matter shall be determined by the commission. Any accounting discrepancies which cannot be otherwise resolved shall be resolved in favor of the commission.
     (g) Licensed racetracks shall remit payment by mail if the electronic transfer of funds is not operational or the commission notifies licensed racetracks that remittance by this method is required. The licensed racetracks shall report an amount equal to the total amount of cash inserted into each video lottery terminal operated by a licensee, minus the total value of game credits which are cleared from the video lottery terminal in exchange for winning redemption tickets, and remit the amount as generated from its terminals during the reporting period. The remittance shall be sealed in a properly addressed and stamped envelope and deposited in the United States mail no later than noon on the day when the payment would otherwise be completed through electronic funds transfer.
     (h) Licensed racetracks may, upon request, receive additional reports of play transactions for their respective video lottery terminals and other marketing information not considered confidential by the commission. The commission may charge a reasonable fee for the cost of producing and mailing any report other than the billing statements.
     (i) The commission has the right to examine all accounts, bank accounts, financial statements and records in a licensed racetrack's possession, under its control or in which it has an interest and the licensed racetrack shall authorize all third parties in possession or in control of the accounts or records to allow examination of any of those accounts or records by the commission.
§29-22A-10b. Distribution of excess net terminal income.
     (a) For all years beginning on or after July 1, 2001, any amount of net terminal income generated annually by a licensed racetrack in excess of the amount of net terminal income generated by that licensed racetrack during the fiscal year ending on June 30, 2001, shall be divided as follows:
     (1) The Commission shall receive forty-one percent of net terminal income, which the commission shall deposit in the State Excess Lottery Revenue Fund created in section eighteen-a, article twenty-two of this chapter;
     (2) Until July 1, 2005, eight percent of net terminal income at a licensed racetrack shall be deposited in the special fund established by the licensee and used for payment of regular purses in addition to other amounts provided in article twenty-three, chapter nineteen of this code; on and after July 1, 2005, the rate shall be four percent of net terminal income;
     (3) The county where the video lottery terminals are located shall receive two percent of the net terminal income: Provided, That:
     (A) Any amount by which the total amount under this section and subdivision (3), subsection (c), section ten of this article is in excess of the two percent received during fiscal year 1999 by a county in which a racetrack is located that has participated in the West Virginia Thoroughbred Development Fund since on or before January 1, 1999, shall be divided as follows:
     (i) The county shall receive fifty percent of the excess amount; and
     (ii) The municipalities of the county shall receive fifty percent of the excess amount, the fifty percent to be divided among the municipalities on a per capita basis as determined by the most recent decennial United States census of population; and
     (B) Any amount by which the total amount under this section and subdivision (3), subsection (c), section ten of this article is in excess of the two percent received during fiscal year 1999 by a county in which a racetrack other than a racetrack described in paragraph (A) of this proviso is located and where the racetrack has been located in a municipality within the county since on or before January 1, 1999, shall be divided, if applicable, as follows:
     (i) The county shall receive fifty percent of the excess amount; and
     (ii) The municipality shall receive fifty percent of the excess amount; and
     (C) This proviso shall not affect the amount to be received under this subdivision by any county other than a county described in paragraph (A) or (B) of this proviso;
     (4) One half of one percent of net terminal income shall be paid for and on behalf of all employees of the licensed racing association by making a deposit into a special fund to be established by the Racing Commission to be used for payment into the pension plan for all employees of the licensed racing association;
     (5) The West Virginia Thoroughbred Development Fund created under section thirteen-b, article twenty-three, chapter nineteen of this code and the West Virginia Greyhound Breeding Development Fund created under section ten of said article shall receive an equal share of a total of not less than one and one-half percent of the net terminal income.
     (6) The West Virginia Racing Commission shall receive one percent of the net terminal income which shall be deposited and used as provided in section thirteen-c, article twenty-three, chapter nineteen of this code;
     (7) A licensee shall receive forty-two percent of net terminal income;
     (8) The Tourism Promotion Fund established in section twelve, article two, chapter five-b of this code shall receive three percent of the net terminal income: Provided, That for each fiscal year beginning after June 30, 2004, this three percent of net terminal income shall be distributed pursuant to the provisions of paragraph (B), subdivision (8), subsection (c), section ten of this article;
     (9) (A) On and after July 1, 2005, four percent of net terminal income shall be deposited into the Workers' Compensation Debt Reduction Fund created in section five, article two-d, chapter twenty-three of this code: Provided, That beginning on July 1, 2013, and thereafter, the first $6 million generated by this subdivision, together with the total allocation transferred by the operation of subdivision (9), subsection (c), section ten of this article, shall be deposited into the Community-Based Services Fund for use as set forth in section twenty-seven of article twenty-two- c, chapter twenty-nine of this code: Provided, however, That in any fiscal year when the amount of money generated by this subdivision together with the total allocation transferred by the operation of subdivision (9), subsection (c), section ten of this article totals $11,000,000 $17 million, with $6 million having been deposited into the Community-Based Services Fund and $11 million having been deposited into the Workers' Compensation Debt Reduction Fund, all subsequent distributions under this subdivision (9) during that fiscal year shall be deposited in the special fund established by the licensee and used for payment of regular purses in addition to other amounts provided in article twenty-three, chapter nineteen of this code;
     (B) The deposit of the four percent of net terminal income into the Worker's Compensation Debt Reduction Fund pursuant to this subdivision shall expire and not be imposed with respect to these funds, which and the first $6 million of such funds shall thereafter be deposited into the Community-Based Services Fund for use as set forth in section twenty-seven of article twenty-two-c, chapter twenty-nine of this code, and any additional amounts shall be deposited in the special fund established by the licensee and used for payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code on and after the first day of the month following the month in which the Governor certifies to the Legislature that: (i) The revenue bonds issued pursuant to article two-d, chapter twenty-three of this code have been retired or payment of the debt service is provided for; and (ii) that an independent certified actuary has determined that the unfunded liability of the old fund, as defined in chapter twenty-three of this code, has been paid or provided in its entirety; and
     (10) (A) One percent of the net terminal income shall be deposited in equal amounts in the Capitol Dome and Improvements Fund created under section two, article four, chapter five-a of this code and Cultural Facilities and Capitol Resources Matching Grant Program Fund created under section three, article one of this chapter; and
     (B) Notwithstanding any provision of paragraph (A) of this subdivision to the contrary, for each fiscal year beginning after June 30, 2004, this one percent of net terminal income shall be distributed pursuant to the provisions of subparagraph (ii), paragraph (B), subdivision (9), subsection (c), section ten of this article.
     (b) The commission may establish orderly and effective procedures for the collection and distribution of funds under this section in accordance with the provisions of this section and section ten of this article.
ARTICLE 22C. WEST VIRGINIA LOTTERY RACETRACK TABLE GAMES ACT.
§29-22C-8. License to operate a racetrack with West Virginia Lottery table games.

  (a) Racetrack table games licenses. -- The commission may issue up to four racetrack table games licenses to operate West Virginia Lottery table games in accordance with the provisions of this article. The Legislature intends that no more than four licenses to operate a racetrack with West Virginia Lottery table games in this state shall be permitted in any event.
  (b) Grant of license. -- Upon the passage of a local option election in a county in accordance with the provisions of section seven of this article, the commission shall immediately grant a West Virginia Lottery table games license, and a license for the right to conduct West Virginia Lottery table games as assignee to the intellectual property rights of the state, to allow the licensee to conduct West Virginia table games at the licensed pari- mutuel racetrack identified on the local option election ballot, provided that racetrack holds a valid racetrack video lottery license issued by the commission pursuant to article twenty-two-a of this chapter and a valid racing license granted by the West Virginia Racing Commission pursuant to the provision of article twenty-three, chapter nineteen of this code and has otherwise met the requirements for licensure under the provisions of this article and the rules of the commission.
  (c) Location. -- A racetrack table games license authorizes the operation of West Virginia Lottery table games on the grounds of the particular licensed facility identified in the racetrack video lottery license issued pursuant to article twenty-two-a and the license to conduct horse or dog racing issued pursuant to article twenty-three, chapter nineteen of this code.
  (d) Floor plan submission requirement. -- Prior to commencing the operation of any table games in a designated gaming area, a racetrack table games licensee shall submit to the commission for its approval a detailed floor plan depicting the location of the designated gaming area in which table games gaming equipment will be located and its proposed arrangement of the table games gaming equipment. Any floor plan submission that satisfies the requirements of the rules promulgated by the commission shall be considered approved by the commission unless the racetrack table games licensee is notified in writing to the contrary within one month of filing a detailed floor plan.
  (e) Management service contracts. --
  
(1) Approval. -- A racetrack table games licensee may not enter into any management service contract that would permit any person other than the licensee to act as the commission's agent in operating West Virginia Lottery table games unless the management service contract is: (A) With a person licensed under this article to provide management services; (B) is in writing; and (C) the contract has been approved by the commission.
  (2) Material change. -- The licensed racetrack table games licensee shall submit any material change in a management service contract previously approved by the commission to the commission for its approval or rejection before the material change may take effect.
  (3) Prohibition on assignment or transfer. -- A management services contract may not be assigned or transferred to a third party.
  (4) Other commission approvals and licenses. -- The duties and responsibilities of a management services provider under a management services contract may not be assigned, delegated, subcontracted or transferred to a third party to perform without the prior approval of the commission. Third parties must be licensed under this article before providing service. The commission may by rule clarify application of this subdivision and provide exceptions to its application. The commission shall license and require the display of West Virginia Lottery game logos on appropriate game surfaces and other gaming items and locations as the commission considers appropriate.
  (f) Coordination of licensed activities. -- In order to coordinate various licensed activities within racetrack facilities, the following provisions apply to licensed racetrack facilities:
  (1) The provisions of this article and of article twenty-two-a of this chapter shall be interpreted to allow West Virginia Lottery table games and racetrack video lottery operations under those articles to be harmoniously conducted in the same designated gaming area.
  (2) On the effective date of this article, the provisions of section twenty-three of this article apply to all video lottery games conducted within a racetrack facility, notwithstanding any inconsistent provisions contained in article twenty-two-a of this chapter to the contrary.
  (3) On and after the effective date of this article, vacation of the premises after service of beverages ceases is not required, notwithstanding to the contrary any inconsistent provisions of this code or inconsistent rules promulgated by the Alcohol Beverage Control Commissioner with respect to hours of sale of those beverages, or required vacation of the premises.
  (g) Fees, expiration date and renewal. --
  (1) An initial racetrack table games license fee of $1,500,000 shall be paid to the commission at the time of issuance of the racetrack table games license, regardless of the number of months remaining in the license year for which it is issued. All licenses expire at the end of the day on June 30 each year.
  (2) The commission shall annually renew a racetrack table games license as of July 1, of each year provided the licensee:
  (A) Successfully renews its racetrack video lottery license under article twenty-two-a of this chapter before July 1;
  (B) Pays to the commission the annual license renewal fee of $2,500,000 required by this section at the time it files its application for renewal of its license under article twenty-two-a of this chapter: Provided, That beginning July 1, 2013, and thereafter, the annual license renewal fee required by this section shall be $1 million due at the time of filing such application for renewal of a license under article twenty-two-a of this chapter; and
  (C) During the current license year, the licensee complied with all provisions of this article, all rules adopted by the commission and all final orders of the commission applicable to the licensee.
  (3) Annual license surcharge for failure to construct hotel on premises. -- It is the intent of the Legislature that each racetrack for which a racetrack table games license has been issued be or become a destination tourism resort facility. To that end, it is important that each racetrack for which a racetrack table games license has been issued operate a hotel with significant amenities. Therefore, in addition to all other taxes and fees required by the provisions of this article, there is hereby imposed, upon each racetrack for which a racetrack table games license has been issued an annual license surcharge, payable to the commission in the amount of $2,500,000 if that racetrack does not operate a hotel on its racing property that contains at least one hundred fifty guest rooms with significant amenities within three years of the passage of the local option election in its county authorizing table games at the racetrack, provided the time for completion of the hotel shall be extended by the same number of days as the completion of the hotel is delayed by a force majeure events or conditions beyond the reasonable control of the racetrack licensee. The surcharge shall be paid upon each renewal of its racetrack table games license made after the expiration of the three year period, and may be extended by the above force majeure events or conditions, until the racetrack opens a qualifying hotel.
  (4) If the licensee fails to apply to renew its license under article twenty-three, chapter nineteen and article twenty-two-a, chapter twenty-nine of this code until after the license expires, the commission shall renew its license under this article at the time it renews its license under article twenty-two-a of this chapter provided the licensee has paid the annual license fee required by this section and during the preceding license year the licensee complied with all provisions of this article, all rules adopted by the commission and all final orders of the commission applicable to the licensee.
  (h) Facility qualifications. -- A racetrack table games licensee shall demonstrate that the racetrack with West Virginia Lottery table games will: (1) Be accessible to disabled individuals in accordance with applicable federal and state laws; (2) be licensed in accordance with this article, and all other applicable federal, state and local laws; and (3) meet any other qualifications specified in rules adopted by the commission.
  (i) Surety bond. -- A racetrack table games licensee shall execute a surety bond to be given to the state to guarantee the licensee faithfully makes all payments in accordance with the provisions of this article and rules promulgated by the commission. The surety bond shall be:
  (1) In the amount determined by the commission to be adequate to protect the state against nonpayment by the licensee of amounts due the state under this article;
  (2) In a form approved by the commission; and
  (3) With a surety approved by the commission who is licensed to write surety insurance in this state. The bond shall remain in effect during the term of the license and may not be canceled by a surety on less than thirty days' notice in writing to the commission. The total and aggregate liability of the surety on the bond is limited to the amount specified in the bond.
  (j) Authorization. -- A racetrack table games license authorizes the licensee act as an agent of the commission in operating an unlimited amount of West Virginia Lottery table games while the license is active, subject to subsection (d) of this section. A racetrack table games license is not transferable or assignable and cannot be sold or pledged as collateral.
  (k) Audits. -- When applying for a license and annually thereafter prior to license renewal, a racetrack table games licensee shall submit to the commission an annual audit, by a certified public accountant, of the financial transactions and condition of the licensee's total operations. The audit shall be made in accordance with generally accepted accounting principles and applicable federal and state laws.
  (l) Commission office space. -- A racetrack table games licensee shall provide to the commission, at no cost to the commission, suitable office space at the racetrack facility for the commission to perform the duties required of it by this article and the rules of the commission.
§29-22C-10. Duties of racetrack table games licensee.
  (a) General. -- All racetrack table games licensees shall:
  (1) Promptly report to the commission any facts or circumstances related to the operation of a racetrack with West Virginia Lottery table games which constitute a violation of state or federal law;
  (2) Conduct all table games activities and functions in a manner which does not pose a threat to the public health, safety or welfare of the citizens of this state and which does not adversely affect the security or integrity of the operation of West Virginia Lottery table games;
  (3) Hold the commission and this state harmless from and defend and pay for the defense of any and all claims which may be asserted against a racetrack licensee, the commission, the state or employees thereof, arising from the licensee's actions or omission while acting as an agent of the commission by operation of West Virginia Lottery table games pursuant to this article;
  (4) Assist the commission in maximizing table games revenues;
  (5) Give preference in hiring to existing employees who have expressed an interest in transferring to an entry level West Virginia Lottery Table games job and who have demonstrated the potential to succeed in that job. To enable these employees to develop the skills necessary to fill an entry level West Virginia Lottery table games position, a licensee shall provide customary industry training for entry level West Virginia Lottery table games jobs. The dates, times, place and manner of providing such training, the appropriate qualifications and certifications, the number of existing employees to be trained, the determination of standards for evaluating successful performance in live auditions for such positions and the determination of who shall be given West Virginia Lottery table game jobs shall be within the sole business discretion of the licensee's management, provided that among equally qualified applicants, as determined by the licensee, length of service shall be the determining factor;
  (6) Maintain all records required by the commission;
  (7) Upon request by the commission, provide the commission access to all records and the physical premises where the licensee's table games activities and related activities occur, for the purpose of monitoring or inspecting the licensee's activities and the table games, gaming equipment and security equipment;
  (8) Keep current in all payments and obligations to the commission; and
  (9) Conduct no less than two hundred twenty one hundred fifty live racing dates for each horse or dog race meeting or such other number of live racing dates as may be approved by the Racing Commission in accordance with the provisions of section twelve-b, article twenty-three, chapter nineteen of this code, and otherwise keep in good standing, all licenses and permits granted by the Racing Commission pursuant to section six, article twenty-three, chapter nineteen of this code, and any rules promulgated thereunder.
  (b) Specific. -- All racetrack table games licensees shall:
  (1) Acquire West Virginia Lottery table games and gaming equipment by purchase, lease or other assignment and provide a secure location for the placement, operation and play of the table games and gaming equipment;
  (2) Permit no person to tamper with or interfere with the operation of any West Virginia Lottery table game;
  (3) Ensure that West Virginia Lottery table games are within the sight and control of designated employees of the licensed racetrack with West Virginia Lottery table games and under continuous observation by security equipment in conformity with specifications and requirements of the commission;
  (4) Ensure that West Virginia Lottery table games are placed and remain placed in the specific locations within designated gaming areas at the licensed racetrack which have been approved by the commission. West Virginia Lottery table games at a licensed racetrack shall only be relocated in accordance with the rules of the commission;
  (5) Maintain at all times sufficient cash and gaming tokens, chips and electronic cards or other electronic media;
  (6) Install, post and display conspicuously at locations within or about the licensed racetrack with West Virginia Lottery table games, signs, redemption information and other promotional material as required by the commission; and
  (7) Assume liability for stolen money from any table game.
§29-22C-26. Tax on the privilege of holding a license to operate West Virginia Lottery table games.
  (a) Imposition and rate of tax. -- For the privilege of holding a license under this article to operate table games, there is levied and shall be collected from the racetrack table games licensee the annual privilege tax imposed by this section. The tax shall be thirty-five twenty-five percent of the licensee's adjusted gross receipts from the operation of West Virginia Lottery table games. For purposes of calculating the amount of tax due under this section, the licensee shall use the accrual method of accounting.
  (b) Tax returns and payment of tax. --
  (1) The annual tax levied by subsection (a) of this section is due and payable to the commission in weekly installments on or before the Wednesday of the calendar week following the week in which the adjusted gross receipts were received and the tax accrued.
  (2) The racetrack table games licensee shall, on or before Wednesday of each week, make out and submit by electronic communication to the commission, a return for the preceding week, in the form prescribed by the commission, showing:
  (A) The total gross receipts and adjusted gross receipts from operation of West Virginia Lottery table games during that week;
  (B) The amount of tax for which the racetrack table games licensee is liable; and
  (C) Any additional information necessary in the computation and collection of the tax required by the commission.
  (3) The amount of tax shown to be due on the return shall be remitted by electronic funds transfer simultaneously with the filing of the return. All payments received pursuant to this section shall be deposited in the Racetrack Table Games Fund in accordance with the provisions of section twenty-seven of this article.
  (4) When adjusted gross receipts for a week is a negative number because the winnings paid to patrons wagering on the racetrack's West Virginia Lottery table games exceeds the racetrack's gross receipts from the purchase of table game tokens, chips or electronic media by patrons, the commission shall allow the licensee to, pursuant to rules of the commission, carry over the negative amount of adjusted gross receipts to returns filed for subsequent weeks. The negative amount of adjusted gross receipts may not be carried back to an earlier week and the commission is not required to refund any tax received by the commission, except when the licensee surrenders its license to act as agent of the commission in operating West Virginia lottery table games under this article and the licensee's last return filed under this section shows negative adjusted gross receipts. In that case, the commission shall multiply the amount of negative adjusted gross receipts by the applicable rate of tax and pay the amount to the licensee, in accordance with rules of the commission.
  (c) Tax imposed by this section is in lieu of other taxes. --
  (1) With the exception of the ad valorem property tax collected under chapter eleven-a of this code, the tax imposed by this section is in lieu of all other state taxes and fees imposed on the operation of, or the proceeds from operation of West Virginia Lottery table games, except as otherwise provided in this section.
  The Consumers Sales and Services Tax imposed pursuant to article fifteen, chapter eleven of this code, shall not apply to the licensee's gross receipts from any wagering on West Virginia Lottery table games authorized pursuant to this article or to the licensee's purchase of gaming equipment, supplies or services directly used in operation of the table games authorized by this article. These purchases are also exempt from the Use Tax imposed by article fifteen-a, chapter eleven of this code.
  (2) With the exception of the ad valorem property tax collected under chapter eleven-a of this code, the tax imposed by this section is in lieu of all local taxes and fees levied on or imposed with respect to the privilege of offering West Virginia Lottery table games to the public, including, but not limited to, the municipal business and occupation taxes and amusement taxes authorized by article thirteen, chapter eight of this code, and the municipal sales and service tax and use taxes authorized by article thirteen-c, chapter eight of this code.
  (d) Prohibition on credits. -- Notwithstanding any other provision of this code to the contrary, no credit may be allowed against the tax imposed by this section or against any other tax imposed by any other provision of this code for any investment in gaming equipment, or for any investment in real property, or in improvements to the real property, that is used in the operation of West Virginia Lottery table games.


     
  NOTE: The purpose of this bill is to provide that the number of horse races or dog races held on a racing day be set by the licensee. The bill reduces the number of racing dates required for a horse or dog racing meeting license application. The bill provides for use of funds paid to Horsemen's Benevolent and Protective Association from special fund for payment of regular purses. The bill further decreases the number of live racing dates required for receiving telecasts and accepting wagers on horse and dog race meetings. The bill further decreases the number of dates on which live racing must be conducted by racetrack video lottery and racetrack table games licensee. The bill provides for distribution of certain amounts of net terminal income derived from racetrack video lottery terminals to Community-Based Services Fund to offset reduced racetrack table games license renewal fee and decrease in table game privilege tax. The bill further provides for annual racetrack table games license renewal fee and to decrease percentage of table games privilege tax.


  Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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