Senate Bill No. 496
(By Senator Snyder)
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[Introduced March 24, 1997; referred to the Committee
on Finance.]
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A BILL to amend and reenact section ten, article twenty-two-a,
chapter twenty-nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
distribution of revenues of video lottery net terminal
income.
Be it enacted by the Legislature of West Virginia:
That section ten, article twenty-two-a, chapter twenty-nine
of the code of West Virginia, one thousand nine hundred thirty- one, as amended, be amended and reenacted to read as follows:
ARTICLE 22A. RACETRACK VIDEO LOTTERY.
§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, 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 such deduction shall be the net terminal income. The amount deducted for administrative costs and expenses of the
commission may not exceed four percent of gross terminal income.
(c) Net terminal income shall be divided as set out in this
subsection. The licensed racetrack's share shall be 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 general revenue
fund of the state to be appropriated by the Legislature;
(1) The commission shall receive twenty-five and one-half
percent of net terminal income from those thoroughbred racetracks
at which the licensee has participated in the West Virginia
thoroughbred development fund created under section thirteen-b,
article twenty-three, chapter nineteen of this code for a period
of more than four consecutive calendar years prior to the thirty- first day of December, one thousand nine hundred ninety-two,
twenty-nine and one-half percent of the net terminal income of
all other licensed racetracks;
(2) 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;
(3) The county where the video lottery terminals are located
shall receive two one and one-half percent of the net terminal
income;
(4) One-half percent of the net terminal income shall be
distributed, on a per-capita basis, to the various municipalities
in the county;
(4) (5) 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) (6) 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, article twenty-three,
chapter nineteen of this code shall receive an equal share of a
total of not less than one and one-half percent of the net
terminal income: Provided, That for any racetrack which does not
have a breeder's program supported by the thoroughbred
development fund or the greyhound breeding development fund, the
one and one-half percent provided for in this subdivision 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 subdivision (2) of this subsection and article
twenty-three, chapter nineteen of this code: Provided, however,
That the thoroughbred development fund shall also receive the
additional four percent of the net income referred to in
subdivision (1) of this subsection from those thoroughbred
racetracks at which the licensee has participated in the West
Virginia thoroughbred development fund for a period of more than
four consecutive years prior to the thirty-first day of December,
one thousand nine hundred ninety-two;
(6) (7) The West Virginia thoroughbred breeders classic
shall receive one percent of the net terminal income which shall
be used for purses. The moneys shall be deposited in the
separate account established for the classic under section
thirteen, article twenty-three, chapter nineteen of this code;
(7) (8) A licensee shall receive forty-seven percent of net
terminal income;
(8) (9) The tourism promotion fund established in section
nine, article one, chapter five-b of this code shall receive
three percent of the net terminal income; and
(9) (10) 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
twenty thousand dollars of the one percent of net terminal income
provided for 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. The remainder
of the one percent of terminal income shall then continue to 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 and to pay the salary and
benefits of a director of monuments. The director of monuments
shall be responsible for restoring and maintaining all monuments
and memorials situated upon the grounds of the capitol in
Charleston, West Virginia, and, to the extent there are moneys
remaining in this fund thereafter, the director of monuments may
use the balance to landscape the capitol grounds. The director
of monuments shall be under the supervision of and report to the
commissioner of the division of culture and history. The
provisions of this subdivision relating to the creation of the
position of director of monuments shall be effective the first
day of January, one thousand nine hundred ninety-seven.
(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, which 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 must 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 such 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 must 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.
NOTE: The purpose of this bill is to provide additional
moneys (4%) for the West Virginia Thoroughbred Development Fund.
The additional four percent comes from new moneys to be generated
by the video lottery moneys generated at the one track in the
state which participates in the Thoroughbred Development Fund.
This additional four percent is necessary to make the fund
viable.
The bill also increases the moneys paid into the pension
fund for all employees of a racetrack by one-half percent.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.