ENGROSSED
H. B. 3039
(By Delegate Michael)
(Originating in the Committee on Finance)
[March 3, 1999]
A BILL to amend and reenact sections two, three, seven, eleven,
twelve-a, fifteen, sixteen and twenty-four, article twenty,
chapter forty-seven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to amend
and reenact sections two, three, four, eight, twelve,
fifteen, sixteen and twenty-two, article twenty-one of said
chapter, all relating to charitable bingo and charitable
raffles; defining the terms manager-operator and operator;
changing the sixty-day filing period for both bingo and
raffle licenses to twenty days; amending two-year
membership requirement as it pertains to individuals
charged with the overall responsibility of conducting
charitable bingo and raffle occasions and the workers
involved therein; increasing the maximum allowable wages
that may be paid to workers at charitable bingo and raffle occasions, and increasing the number of allowable paid
workers for both bingo and raffle at super bingo occasions;
specifying allowable expenditures of net proceeds;
correcting technical errors; requiring the use of bingo or
raffle cash registers or a verifiable method of record
keeping for charitable bingo and raffle licensees with
gross proceeds in excess of one hundred twenty-five
thousand dollars annually; requiring the filing of
quarterly financial reports by raffle licensees; increasing
the dollar amounts regarding exempt raffles; setting forth
definitions; specifying content of annual and quarterly
reports; increasing the prize amount that requires personal
information of prize winners in financial reports; and
increasing the amount of gross proceeds before a license is
required.
Be it enacted by the Legislature of West Virginia
That sections two, three, seven, eleven, twelve-a,
fifteen, sixteen and twenty-four, article twenty, chapter
forty-seven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; and
that sections two, three, four, eight, twelve, fifteen,
sixteen and twenty-two, article twenty-one of said chapter be
amended and reenacted, all to read as follows:
ARTICLE 20. CHARITABLE BINGO.
§47-20-2. Definitions.
For purposes of this article, unless specified otherwise:
(a) "Bingo" means the game wherein participants pay
consideration for the use of one or more cards bearing several
rows of numbers in which no two cards played in any one game
contain the same sequence or pattern. When the game
commences, numbers are selected by chance, one by one, and
announced. The players cover or mark those numbers announced
as they appear on the card or cards which they are using. The
player who first announces that he or she has covered a
predetermined sequence or pattern which had been preannounced
for that game is, upon verification that he or she has covered
the predetermined sequence or pattern, declared the winner of
that game.
(b) "Bingo occasion" or "occasion" means a single
gathering or session at which a series of one or more
successive bingo games is conducted by a single licensee.
(c) "Charitable or public service activity or endeavor"
means any bona fide activity or endeavor which directly
benefits a number of people by:
(1) Assisting them to establish themselves in life as
contributing members of society through education or religion;
or
(2) Relieving them from disease, distress, suffering, constraint, or the effects of poverty;
(3) Increasing their comprehension of and devotion to the
principles upon which this nation was founded and to the
principles of good citizenship;
(4) Making them aware of or educating them about issues
of public concern so long as the activity or endeavor is not
aimed at influencing legislation or supporting or
participating in the campaign of any candidate for public
office;
(5) By lessening the burdens borne by government or
voluntarily supporting, augmenting or supplementing services
which government would normally render to the people;
(6) Providing or supporting nonprofit community
activities for youth, senior citizens or the disabled; or
(7) Providing or supporting nonprofit cultural or
artistic activities.
(d) "Charitable or public service organization" means a
bona fide, not-for-profit, tax-exempt, benevolent,
educational, philanthropic, humane, patriotic, civic,
religious, fraternal, or eleemosynary incorporated or
unincorporated association or organization; or a volunteer
fire department, rescue unit or other similar volunteer
community service organization or association; but does not
include any nonprofit association or organization, whether incorporated or not, which is organized primarily for the
purposes of influencing legislation or supporting or promoting
the campaign of any candidate for public office.
For the purposes of this article, An organization or
association is "tax-exempt" if it is, and includes, but is not
limited to, those organizations or associations which has have
received from the Internal Revenue Service a determination
letter that is currently in effect stating that the
organization is, exempt from federal income taxation under
subsection 501(a) and described in subsection 501(c)(3),
501(c)(4), 501(c)(8), 501(c)(10), 501(c)(19) or 501(d) of the
Internal Revenue Code.
(e) "Commissioner" means the state tax commissioner.
(f) "Concession" means any stand, booth, cart, counter or
other facility, whether stationary or movable, where
beverages, both alcoholic and nonalcoholic, food, snacks,
cigarettes or other tobacco products, newspapers, souvenirs or
any other items are sold to patrons by an individual operating
the facility. Notwithstanding anything contained in
subdivision (2), subsection (a), section twelve, article
seven, chapter sixty of this code to the contrary,
"concession" includes beverages which are regulated by and are
subject to the provisions of chapter sixty of this code:
Provided, That in no case may the sale or the consumption of alcoholic beverages or nonintoxicating beer be permitted in
any area where bingo is conducted.
(g) "Conduct" means to direct the actual playing of a
bingo game by activities including, but not limited to,
handing out bingo cards, collecting fees, drawing the numbers,
announcing the numbers, posting the numbers, verifying winners
and awarding prizes.
(h) "Expend net proceeds for charitable or public service
purposes" means to devote the net proceeds of a bingo occasion
or occasions to a qualified recipient organization or as
otherwise provided by this article and approved by the
commissioner pursuant to section fifteen of this article and
includes use of up to forty percent of the net proceeds for
the operation and maintenance of the association or
organization holding the license.
(i) "Gross proceeds" means all moneys collected or
received from the conduct of bingo at all bingo occasions held
by a licensee during a license period; this term shall not be
considered to include any moneys collected or received from
the sale of concessions at bingo occasions.
(j) "Joint bingo occasion" means a single gathering or
session at which a series of one or more successive bingo
games is conducted by two or more licensees.
(k) "Licensee" means any organization or association granted an annual, limited occasion or state fair bingo
license pursuant to the provisions of this article.
(l) "Manager-operator" means and includes any individual
who is charged with the overall responsibility for the
licensee's charitable bingo operation. The responsibility
includes, but is not limited to: (1) Maintaining the fiscal
integrity of the charitable bingo operation and proper
maintenance and handling of all funds and revenues derived
therefrom, of all accounts related thereto; (2) the timely
filing of all required financial and operational reports; (3)
obtaining required financial compilations, reviews or audits;
(4) maintaining the integrity of the gaming process and fair
gaming operations; (5) assuring the prompt payment of gaming
prizes which have been legitimately won; (6) assuring that all
gaming operations are free of fraud or misrepresentation; (7)
scheduling bingo occasions; (8) supervising the bingo
occasion; (9) supervising volunteer and paid workers at the
bingo occasion; (10) supervising the preparation of
charitable bingo daily report forms; and (11) any other
managerial duties that may be performed in connection with the
conduct of charitable bingo occasions.
(l)(m)"Net proceeds" means all moneys collected or
received from all the conduct of bingo at bingo occasions held
by a licensee during a license period after payment of expenses authorized by sections ten, thirteen, fifteen and
twenty-two of this article, including use of up to forty
percent of the net proceeds for the operation and maintenance
of the association or organization holding the license. The
term "net proceeds" does not include moneys collected or
received from the sale of concessions at bingo occasions.
(n) "Operator" means any individual, either volunteer or
paid, who is responsible only for specific duties in
connection with the actual conduct of bingo occasions.
(m)(o) "Person" means any individual, association,
society, incorporated or unincorporated organization, firm,
partnership or other nongovernmental entity or institution.
(n)(p) "Patron" means any individual who attends a bingo
occasion other than an individual who is participating in the
conduct of the occasion or in the operation of any concession,
whether or not the individual is charged an entrance fee or
plays any bingo games.
(o)(q)"Qualified recipient organization" means any bona
fide, not-for-profit, tax-exempt, as defined in subdivision
(d) of this section, incorporated or unincorporated
association or organization which is organized and functions
exclusively to directly benefit a number of people as provided
in subparagraphs (1) through (7), subdivision (c) of this
section. "Qualified recipient organization" includes without limitation any licensee which is organized and functions
exclusively as provided in this subdivision.
(p)(r) "Venue" means the location in which bingo
occasions are held.
§47-20-3. Who may hold bingo games; application for
license; licenses not transferable.
Any charitable or public service organization which has
been in existence in this state two years prior to filing an
application for a bingo license issued pursuant to section
four or five of this article may hold bingo occasions in
accordance with the provisions of this article during the time
it holds a valid license.
Application for a bingo license shall be made to the tax
commissioner and shall be on a form which shall be supplied by
him or her. The application shall contain the information
required by section seven of this article and any other
information which the commissioner considers necessary. An
application shall be filed not less than sixty twenty days
before the date when the applicant intends to hold its first
bingo occasion. No bingo occasion may be held until an
application filed in accordance with this article has been
approved by the tax commissioner, and the bingo license has
been received: Provided, That unless a license has been
issued by the tax commissioner and received by the applicant, under no circumstances may a licensee organization an
applicant conduct a bingo occasion before the sixty twenty day
filing period between the filing of the application and date
of the first bingo occasion has elapsed: Provided, however,
That the date the application is received by the tax
commissioner shall begin the sixty twenty day filing period.
The tax commissioner shall send the applicant its license
within five three days after approval of the bingo
application. If the filing period has elapsed, and the
application has not been denied by the tax commissioner, and
the license has not been received by the applicant, the
applicant may consider the application approved and begin to
hold bingo occasions. The tax commissioner shall send a bingo
license to the applicant within five days after the expiration
of the filing period if the application has not been otherwise
denied.
No bingo license issued pursuant to this article may be
transferred.
§47-20-7. Information required in application.
An application for a bingo license shall include the
following information:
(a) Name of the applicant and name and headquarter's
address of any state or national organization of which it is
a local branch or lodge;
(b) The address and telephone number of the applicant
organization, if any. If the applicant organization has no
telephone, then the address and telephone number of the person
applying on behalf of such organization shall be supplied;
(c) For a limited occasion license, the names and
addresses of two or more bona fide active members, supporters,
volunteers or employees of the applicant organization who have
been active members in good standing of the licensee
organization or its authorized auxiliary organization or who
have been meaningfully affiliated with the licensee
organization for at least two years prior to the date of
filing of the application for a charitable bingo license or
the most recent filing of an application for renewal of the
license and of the applicant organization who are charged with
overall responsibility for the applicant's bingo operations,
at least one of whom shall be present and function as a
manager-operator for the applicant's bingo operations at all
times bingo is conducted; and the names and addresses of the
highest elected officer of the licensee and his officially
appointed designee, one of whom shall be present at all times
bingo is conducted; for an annual license, the names,
addresses and telephone numbers of three or more bona fide
active members supporters, volunteers or employees of the
applicant organization who have been active members in good standing of the licensee organization or its authorized
auxiliary organization or who have been meaningfully
affiliated with the licensee organization for at least two
years prior to the date of filing of the application for a
charitable bingo license or the most recent filing of an
application for renewal of the license and of the applicant
organization who are charged with overall responsibility for
the applicant's bingo operations, at least one of whom shall
be present and function as a manager-operator for the
applicant's bingo operations at all times bingo is conducted;
and the names and addresses and telephone numbers of the
highest elected officer of the licensee and his officially
appointed designee designees, one of whom shall be present at
all times bingo is conducted;
(d) The address or location of the premises where
licensed bingo games are to be held;
(e) Information as may be required by the commissioner to
satisfy him that the applicant meets the requirements of:
(1) Being a charitable or public service organization as
required by this article; and
(2) Being in existence in this state two years prior to
filing an application for a bingo license.
(f) The day or days of the week, and the time or times
when the bingo occasions will be held;
(g) The name of the owner of the premises where the bingo
occasions are to be held and a copy of all rental agreements
involved if leased or subleased by the applicant from the
owner or lessee;
(h) A statement as to whether the applicant has ever had
a previous application for any bingo license refused, or
whether any previous license has been revoked or suspended;
(i) A statement of the charitable or public service
purpose or purposes for which the bingo proceeds will be
expended;
(j) A statement or statements to the effect that the
individuals specified in subdivision (c) of this section and
the officers of the applicant understand:
(1) That it is a violation of this article to allow any
persons other than those authorized by this article to conduct
any part of the bingo games or concessions operated in
conjunction therewith;
(2) That it is required to file the reports and keep the
records as provided by this article; and
(3) That it is a crime to violate the provisions of this
article and, in addition, that a violation may result in
suspension or revocation of its license and denial of
applications for subsequent licenses;
(k) A sworn statement by an authorized representative of the applicant that the information contained in the
application is true to the best of his knowledge;
(l) A list and description of estimated expenses to be
incurred in connection with the holding of the bingo occasions
and any concessions operated and the name and address of each
payee. If a concession is operated in accordance with the
provisions of section thirteen of this article, a copy of any
written agreement or an explanation of any oral agreement
providing for any type of remuneration to be received by the
concession operator shall be attached to the application;
(m) A list of the names and addresses of all officers and
members of the board of directors, governors or trustees, if
any, of the applicant organizations; and
(n) Any other necessary and reasonable information which
the commissioner may require.
§47-20-11. Operator of bingo games and related concessions.
Except as provided in sections thirteen and twenty-two of
this article, only persons, as defined in section two of this
article, who are residents of this state and who are active
members of the licensee organization or its authorized
auxiliary organization and who have been active members in
good standing of the licensee organization or its authorized
auxiliary for at least two years prior to the date of filing
of the application for a charitable bingo license or the most recent filing of an application for renewal of the license may
participate in any manner in the conduct of any bingo game or
operate any concession in conjunction with a bingo occasion:
Provided, That notwithstanding anything contained in this
article to the contrary, no individual under the age of
eighteen years may directly or indirectly participate in the
conduct of a bingo game except for junior firefighters, in
accordance with the provisions of this article.
§47-20-12a. Compensation of bingo operator; number of
employees.
(a) Within the guidelines set forth in subsections (b),
(c) and (d) of this section, a licensee may pay a salary, the
minimum of which shall be established at the federal minimum
wage, and the maximum being six ten dollars and fifty cents
per hour, to operators of bingo games who are active members
of the licensee organization and who have been active members
in good standing for at least two years prior to the date of
filing of the application for a charitable bingo license or
the most recent filing of an application for renewal of the
license.
(b) If the licensee's gross receipts from bingo occasions
equal or exceed one hundred thousand dollars for the
licensee's most recently filed annual financial report, a
salary may be paid to not more than eight operators.
(c) If the licensee's gross receipts from bingo occasions
are less than one hundred thousand dollars, but equal or
exceed fifty thousand dollars for the licensee's most recently
filed annual financial report, a salary may be paid to not
more than five operators.
(d) If the licensee's gross receipts from bingo occasions
are less than fifty thousand dollars for the licensee's most
recently filed annual financial report, a salary may be paid
to not more than three operators.
(e) If the licensee also possesses a super bingo license,
it may pay a salary to not more than fifteen twenty-five
operators during the super bingo occasion.
(f) In the case of a licensee lawfully holding a
charitable bingo occasion simultaneously with a charitable
raffle occasion, the number of paid charitable bingo operator
employees allowed under this limitation for bingo licensees
shall be in addition to the number of charitable raffle
operator employees allowed under section fifteen, article
twenty-one of this chapter. Licensees holding simultaneous
occasions shall pay bingo operators from the proceeds of bingo
operations and shall pay raffle operators from the proceeds of
raffle operations, and the charitable bingo fund and the
charitable raffle fund and payments from the funds shall not
be commingled.
(g) For purposes of the limitations set forth in this
section, the term "operator" or "bingo operator" or "raffle
operator" shall not include concession stand workers. Wages
paid to concession workers shall not exceed six ten dollars
and fifty cents per hour.
§47-20-15. Payment of reasonable expenses from proceeds; net
proceeds disbursement.
(a) The reasonable, necessary and actual expenses
incurred in connection with the conduct of bingo occasions,
not to exceed twenty-five percent of the gross proceeds
collected during a license period, may be paid out of the
gross proceeds of the conduct of bingo, including, but not
limited to:
(1) Rent paid for the use of the premises: Provided,
That a copy of the rental agreement was filed with the bingo
license application and any changes to the rental agreement
were filed within ten days of being made: Provided, however,
That in no event may the rent paid for the use of any premises
exceed the fair market value of rent for the premises;
(2) The cost of custodial services;
(3) The cost to the licensee organization for equipment
and supplies used to conduct the bingo occasion;
(4) The cost to the licensee organization for advertising
the bingo occasion;
(5) The cost of hiring security personnel, licensed
pursuant to the provisions of article eighteen, chapter thirty
of this code; and
(6) The cost of providing child care services to the
raffle bingo patrons: Provided, That any proceeds received
from the provision of child care services shall be handled the
same as raffle bingo proceeds.
(b) The actual cost to the licensee for prizes, not to
exceed the amounts as specified in section ten of this
article, may be paid out of the gross proceeds of the conduct
of bingo.
(c) The cost of any refreshments, souvenirs or any other
item sold or otherwise provided through any concession to the
patrons may not be paid for out of the gross proceeds from the
bingo occasion. The licensee shall expend all net bingo
proceeds and any interest earned on the proceeds for the
charitable or public service purposes stated in the
application within one year after the expiration of the
license under which the bingo occasions were conducted. A
licensee which does not qualify as a qualified recipient
organization may apply to the commissioner at the time it
applies for a bingo license or as provided in subsection (e)
of this section for permission to apply any or all of its net
proceeds to directly support a charitable or public service activity or endeavor which it sponsors.
(d) No gross proceeds from any bingo operation may be
devoted or in any manner used by any licensee or qualified
recipient organization for the construction or acquisition of
real or personal property except that which is used
exclusively for one or more charitable or public service
purposes or as provided in subdivision (3), subsection (a) of
this section, except as provided in subsection (e) of this
section.
(e) Each licensee may expend up to forty percent of the
net proceeds in order to maintain and operate the licensee
association or organization, including, but not limited to,
any costs associated with the acquisition, development,
improvement, maintenance, construction and repair of any real
property occupied by the licensee.
(e)(f) The tax commissioner has the authority to
disapprove any contract for sale of goods or services to any
charitable bingo licensee for use in or with relation to any
charitable bingo operation or occasion, or any lease of real
or tangible personal property to any charitable bingo licensee
for use in or with relation to any charitable bingo operation
or occasion, if the contract or lease is unreasonable or not
representative of fair market value. Contracts or leases
which are disapproved shall be considered to be in contravention of this article, and are void. Any attempt by
any charitable bingo licensee to engage in transactions under
the terms of any lease or contract that has been disapproved
is grounds for revocation or suspension of the charitable
bingo license and for refusal by the tax commissioner to renew
the charitable bingo license.
(f)(g) If a property owner or lessee, including his or
her agent, has entered into a rental contract to hold super
bingo occasions on his or her premises, the premises shall be
rented, for super bingo occasions, to not more than four super
bingo licensees during any period of four consecutive calendar
weeks: Provided, That each of the charitable or public
service organizations desiring to hold a super bingo occasion
must possess its own super bingo license. Subject to this
limitation, the premises may be used for super bingo occasions
during two consecutive days during a conventional weekend.
For purposes of this subsection, the term "conventional
weekend" means Saturday and Sunday: Provided, however, That
the super bingo occasions may occur at the same facility no
more often than alternating weekends during a calendar month.
(g)(h) Any licensee which, in good faith, finds itself
unable to comply with the requirements of this provision shall
apply to the commissioner for permission to expend its net
proceeds for one or more charitable or public service purposes other than that stated in its license application or for
permission to expend its net proceeds later than the one-year
time period specified in this section. The application shall
be on a form furnished by the commissioner and shall include
the particulars of the requested changes and the reasons for
the changes. The application shall be filed no later than
sixty days before the end of the one-year period specified in
this section. In the case of an application to extend the
time in which the net proceeds are to be expended for a
charitable or public service purpose, the licensee shall file
such periodic reports with the commissioner as the
commissioner directs until the proceeds are so expended.
.§47-20-16. Records; commissioner audit.
Any licensee which holds a bingo occasion as provided by
this article shall maintain a separate checking account and
separate bookkeeping procedure for its bingo operations.
Money for expenses shall be withdrawn only by checks having
preprinted consecutive numbers and made payable to a specific
person, firm or corporation and at no time shall a check be
made payable to cash. A licensee with gross proceeds in
excess of two hundred fifty thousand dollars per year is
required to utilize an electronic cash register specifically
designed for bingo operations and to maintain detailed
receipts therefrom as a part of their record keeping process, or maintain an accurate record keeping system with sufficient
detail so as to permit a paper trail which is easily
verifiable and which may be easily audited. A licensee shall
maintain all records required by this article for at least
three years and the records shall be open to the commissioner
for reasonable inspection. Whenever the tax commissioner has
reasonable cause to believe a licensee has violated any of the
provisions of this article, he or she may perform or cause to
be performed an audit of the licensee's books and records:
Provided, That the tax commissioner shall perform or cause to
be performed an audit of the books and records of any licensee
that has awarded total prizes in excess of one hundred
seventy-five thousand dollars. The tax commissioner shall
file a copy of the completed audit with the county commission
of the county wherein the licensee holds bingo occasions.
§47-20-24. Filing of reports.
Each licensee holding an annual license or a super bingo
license or both an annual license and a super bingo license
shall file with the tax commissioner a quarterly and an annual
financial report summarizing its bingo operations for the time
period covered by the report: Provided, That the annual
report and the last quarterly report shall be made in one
report and contain a summary of all operations for the year.
Each quarterly report shall be filed within twenty days after the end of the quarter which it covers. The annual report
shall be filed within thirty days after the expiration of the
license under which the operations covered by the report were
held. The time period covered by the annual report is the
full license year or, at the election of a licensee receiving
state or federal funding, the most recently ended state or
federal fiscal year.
Each licensee holding a limited occasion license or state
fair license shall file with the tax commissioner a financial
report summarizing its bingo operations for the license period
within thirty days after the expiration of the license under
which the operations covered by the report are held.
The report shall contain the name, address and social
security number of any individual who receives, during the
course of a bingo occasion, prizes, the aggregate value of
which exceeds one six hundred dollars, and other information
required by the commissioner: Provided, That any licensee
failing to file the report when due is liable for a penalty of
twenty-five dollars for each month or fraction of a month
during which the failure continues, the penalty not to exceed
one hundred dollars: Provided, however, That annual financial
reports must contain either a compilation or review of the
financial report by a certified or licensed public accountant,
or may be audited by a certified or licensed public accountant, if a licensee's gross receipts exceed fifty five
hundred thousand dollars.
ARTICLE 21. CHARITABLE RAFFLES.
§47-21-2. Definitions.
For purposes of this article, unless specified otherwise:
(a) "Charitable or public service activity or endeavor"
means any bona fide activity or endeavor which directly
benefits a number of people by:
(1) Contributing to educational or religious purposes; or
(2) Relieving them from disease, distress, suffering,
constraint or the effects of poverty; or
(3) Increasing their comprehension of and devotion to the
principles upon which this nation was founded and to the
principles of good citizenship; or
(4) Making them aware of or educating them about issues
of public concern so long as the activity or endeavor is not
aimed at supporting or participating in the campaign of any
candidate for public office; or
(5) By lessening the burdens borne by government or
voluntarily supporting, augmenting or supplementing services
which government would normally render to the people; or
(6) Providing or supporting nonprofit community
activities for youth, senior citizens or the disabled; or
(7) Providing or supporting nonprofit cultural or artistic activities; or
(8) Providing or supporting any political party executive
committee.
(b) "Charitable or public service organization" means a
bona fide, not for profit, tax-exempt, benevolent,
educational, philanthropic, humane, patriotic, civic,
religious, fraternal or eleemosynary incorporated or
unincorporated association or organization; or a volunteer
fire department, rescue unit or other similar volunteer
community service organization or association; but does not
include any nonprofit association or organization, whether
incorporated or not, which is organized primarily for the
purposes of influencing legislation or supporting or promoting
the campaign of any single candidate for public office.
(c) "Commissioner" means the state tax commissioner.
(d) "Concession" means any stand, booth, cart, counter or
other facility, whether stationary or movable, where
beverages, both alcoholic and nonalcoholic, food, snacks,
cigarettes or other tobacco products, newspapers, souvenirs or
any other items are sold to patrons by an individual operating
the facility. Notwithstanding anything contained in
subdivision (2), subsection (a), section twelve, article
seven, chapter sixty of this code to the contrary,
"concession" includes beverages which are regulated by and shall be subject to the provisions of chapter sixty of this
code.
(e) "Conduct" means to direct the actual holding of a
raffle by activities including, but not limited to, handing
out tickets, collecting money, drawing the winning numbers or
names, announcing the winning numbers or names, posting the
winning numbers or names, verifying winners and awarding
prizes.
(f) "Expend net proceeds for charitable or public service
purposes" means to devote the net proceeds of a raffle
occasion or occasions to a qualified recipient organization or
as otherwise provided by this article and approved by the
commissioner pursuant to section fifteen of this article and
includes use of up to forty percent of the net proceeds of a
raffle occasion or occasions for the operation and maintenance
of the association holding the license.
(g) "Gross proceeds" means all moneys collected or
received from the conduct of a raffle or raffles at all raffle
occasions held by a licensee during a license period; this
term shall not be deemed to include any moneys collected or
received from the sale of concessions at raffle occasions.
(h) "Joint raffle occasion" means a single gathering or
session at which a series of one or more successive raffles is
conducted by two or more licensees.
(i) "Licensee" means any organization or association
granted an annual or limited occasion license pursuant to the
provisions of this article.
(j) "Manager-operator" means and includes any individual
who is charged with the overall responsibility for the
licensee's charitable raffle operation. The responsibility
includes, but is not limited to: (1) Maintaining the fiscal
integrity of the charitable raffle operation and proper
maintenance and handling of all funds and revenues derived
therefrom, of all accounts related thereto; (2) the timely
filing of all required financial and operational reports; (3)
obtaining required financial compilations, reviews or audits;
(4) maintaining the integrity of the gaming process and fair
gaming operations; (5) assuring the prompt payment of gaming
prizes which have been legitimately won; (6) assuring that all
gaming operations are free of fraud or misrepresentation; (7)
scheduling raffle occasions; (8) supervising the raffle
occasion; (9) supervising volunteer and paid workers at the
raffle occasion; (10) supervising the preparation of
charitable raffle daily report forms; and (11) any other
managerial duties that may be performed in connection with the
conduct of charitable raffle occasions.
(j)(k) "Net proceeds" means all moneys collected or
received from the conduct of raffle or raffles at occasions held by a licensee during a license period after payment of
the raffle expenses authorized by sections eleven, thirteen
and fifteen of this article, including use of up to forty
percent of the net proceeds for the operation and maintenance
of the association or organization holding the license; this
term shall not be deemed to include moneys collected or
received from the sale of concessions at raffle occasions.
(k)(l) "Operator" means any individual, either volunteer
or paid, who is responsible only for specific duties in
connection with the actual conduct of raffle occasions.
(l)(m) "Person" means any individual, association,
society, incorporated or unincorporated organization, firm,
partnership or other nongovernmental entity or institution.
(l)(n) "Patron" means any individual who attends a raffle
occasion other than an individual who is participating in the
conduct of the occasion or in the operation of any concession,
whether or not the individual is charged an entrance fee or
participates in any raffle.
(m)(o) "Qualified recipient organization" means any bona
fide, not-for-profit, tax-exempt, as defined in subdivision
(p)(r) of this section, incorporated or unincorporated
association or organization which is organized and functions
exclusively to directly benefit a number of people as provided
in subparagraphs (1) through (7), subdivision (a) of this section. "Qualified recipient organization" includes, without
limitation, any licensee which is organized and functions
exclusively as provided in this subdivision.
(n)(p) "Raffle" means a game involving the selling or
dispensing of tickets to participate in such game entitling
the holder or holders to a chance on a prize or prizes.
(o)(q) "Raffle occasion" or "occasion" means a single
gathering or session at which a series of one or more
successive raffles is conducted by a single licensee.
(p)(r)"Tax-exempt association or organization" means
includes, but is not limited to, an association or
organization which is, and has received from the "Internal
Revenue Service" a determination letter that is currently in
effect stating that the organization is exempt from federal
income taxation under subsection 501(a) and described in
subsection 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10),
501(c)(19) or 501(d) of the Internal Revenue Code of 1986, as
amended; or is exempt from income taxes under subsection
527(a) of said code.
§47-21-3. Authorizing the conduct of certain raffles without
a license.
Notwithstanding any other provisions of this article to
the contrary, any charitable or public service organization
which has been in existence in this state for at least one year is hereby authorized to conduct raffles without
compliance with the licensing provisions of this article:
Provided, That any prize awarded in any single raffle at a
raffle occasion may not exceed in value the sum of one two
thousand five hundred dollars: Provided, however, That the
cumulative gross proceeds derived from the conduct of raffle
occasions by any such charitable or public service
organization shall may not exceed seven ten thousand five
hundred dollars during any calendar year: Provided further,
That any such organization shall not be subject to the record
keeping provisions of section sixteen of this article but
shall maintain a separate accounting for the operation of
raffles. All records required by this section shall be
maintained for at least three calendar years and shall be
available for reasonable inspection by the commissioner.
§47-21-4. Who may hold raffles; application for license;
licenses not transferable.
(a) Except as provided in section three of this article,
only persons, as defined in section two of this article, who
are residents of this state and who are active members of any
charitable or public service organization which has been in
existence in this state for at least two years prior to filing
an application for a raffle license issued pursuant to section
five or six of this article may hold raffle occasions in accordance with the provisions of this article during the time
it holds a valid license.
(b) Application for a raffle license shall be made to the
tax commissioner and shall be on a form supplied by him or
her. The application shall contain the information required
by section eight of this article and any other information
which the commissioner considers necessary. No raffle may be
held and no tickets may be sold pursuant to this article until
the raffle application has been approved by the tax
commissioner and the license has been received by the
applicant: Provided, That unless a license has been issued by
the tax commissioner and received by the applicant no raffle
occasion may be held and no raffle tickets may be sold until
a sixty twenty day filing period, which is that time period
between the receipt of that application by the tax
commissioner and the first raffle occasion, has expired:
Provided, however, That the tax commissioner shall send the
applicant its license within five days after the application
is approved. If the sixty twenty day filing period has
expired and the application has not been denied and the raffle
license has not been received by the applicant, the applicant
may consider the application approved and begin to sell
tickets for the raffle or hold the raffle occasion. The tax
commissioner shall send the applicant its license within five days after the expiration of the filing period if the
application has not been otherwise denied.
(c) For purposes of this article, any application for an
annual license or a limited occasion license received prior to
the effective date of this article is considered filed on the
effective date.
(d) No raffle license issued pursuant to this article may
be transferred.
d.§47-21-8. Information required in application.
An application for a raffle license shall include the
following information:
(a) Name of the applicant and name and headquarter's
address of any state or national organization of which the
applicant is a local branch or lodge;
(b) The address and telephone number of the applicant
organization, if any, and if the applicant organization has no
telephone, then the address and telephone number of the person
applying on behalf of such organization shall be supplied;
(c) For a limited occasion license, the names and
addresses of two or more bona fide active members, supporters,
volunteers or employees of the applicant organization who have
been active members in good standing of the licensee
organization or its authorized auxiliary organization or who
have been meaningfully affiliated with the licensee organization for at least two years prior to the date of
filing of the application for a charitable raffles license or
the most recent filing of an application for renewal of the
license and of the applicant organization who are charged with
overall responsibility for the applicant's raffle operations,
at least one of whom shall be present and function as a
manager-operator when the winning numbers or names are drawn,
announced, posted and verified and the prizes are awarded; and
the names and addresses of the highest elected officer of the
licensee and his officially appointed designee designees, one
of whom shall be present when the winning numbers or names are
drawn, announced, posted and verified and the prizes are
awarded; for an annual license, the names, addresses and
telephone numbers of three or more bona fide active members,
supporter, volunteers or employees s of the applicant
organization who are residents of this state and who have been
active members in good standing of the licensee organization
or its authorized auxiliary organization for at least two
years prior to the date of filing the application for a
charitable raffle license or the most recent filing of an
application for renewal of the license and are charged with
overall responsibility for the applicant's raffle operations,
at least one of whom shall be present and function as a
manager-operator when the winning numbers or names are drawn, announced, posted and verified and the prizes are awarded; and
the names and addresses and telephone numbers of the highest
elected officer of the licensee and his officially appointed
designee, one of whom shall be present when the winning
numbers and names are drawn, announced posted and verified and
the prizes are awarded;
(d) The address or location of the premises where
licensed raffles are to be held;
(e) Information as may be required by the commissioner to
satisfy him that the applicant meets the requirements of:
(1) Being a charitable or public service organization as
defined by this article; and
(2) Being in existence in this state for at least one
year two years prior to filing an application for a raffle
license.
(f) Designate the date or dates and the time or times
when the raffle occasions will be held;
(g) The name of the owner of the premises where the
raffle occasions are to be held and a copy of all rental
agreements involved if such premises are leased or subleased
by the applicant from the owner or lessee;
(h) State whether the applicant has ever had a previous
application for any raffle license refused, or whether any
previous raffle license has been revoked or suspended;
(i) State the charitable or public service purpose or
purposes for which the raffle proceeds will be expended;
(j) Provide statements to the effect that the individuals
specified in subdivision (c) of this section and the officers
of the applicant understand:
(1) That it is a violation of this article to allow any
persons other than those authorized by this article to conduct
the raffle or concessions operated in conjunction therewith;
(2) That it is required to file the reports and keep the
records as provided by this article; and
(3) That it is a crime to violate the provisions of this
article and, that a violation of such provisions may result in
suspension or revocation of the raffle license and denial of
applications for subsequent raffle licenses;
(k) Provide a sworn statement by an authorized
representative of the applicant that the information contained
in the application is true to the best of his knowledge;
(l) Provide a list and description of estimated expenses
to be incurred in connection with the holding of the raffle
occasions and any concessions operated and the name and
address of each payee. If a concession is operated in
accordance with the provisions of section thirteen of this
article, a copy of any written agreement or an explanation of
any oral agreement providing for any type of remuneration to be received by the concession operator shall be attached to
the application;
(m) A list of the names and addresses of all officers and
members of the board of directors, governors or trustees, if
any, of the applicant organizations; and
(n) Any other necessary and reasonable information which
the commissioner may require.
§47-21-12. Compensation.
(a) A licensee may pay a salary, the minimum of which
shall be established at the federal minimum wage, and the
maximum which shall be six is ten dollars and fifty cents per
hour, to operators of charitable raffle games who are active
members of the licensee organization and who have been active
members in good standing for at least two years prior to the
date of filing of the application for a charitable raffle
license or the most recent filing of an application for
renewal of the license.
(b) If the licensee's gross receipts from raffle
occasions equal or exceed one hundred thousand dollars for the
licensee's most recently filed annual financial report, a
salary may be paid to not more than eight operators.
(c) If the licensee's gross receipts from charitable
raffle occasions are less than one hundred thousand dollars,
but equal or exceed fifty thousand dollars for the licensee's most recently filed annual financial report, a salary may be
paid to not more than five operators.
(d) If the licensee's gross receipts from charitable
raffle occasions are less than fifty thousand dollars for the
licensee's most recently filed annual financial report, a
salary may be paid to no more than three operators.
(e) If the licensee also possesses a super bingo
license, it may pay a salary to not more than twenty-five
raffle operators during the super bingo occasion.
(e)(f) In the case of a licensee lawfully holding a
charitable bingo occasion simultaneously with a charitable
raffle occasion, the number of paid charitable raffle operator
employees allowed under this limitation for charitable raffle
licensees is in addition to the number of charitable bingo
operator employees allowed under section twelve-a, article
twenty of this chapter. Licensees holding simultaneous
occasions shall pay bingo operators from the proceeds of bingo
operations and shall pay raffle operators from the proceeds of
raffle operations, and the charitable bingo fund and the
charitable raffle fund and payments from the funds shall not
be commingled.
(f)(g) For purposes of the limitations set forth in this
section, the term "operator" or "bingo operator" or "raffle
operator" shall not include concession stand workers. Wages paid to concession workers shall not exceed six ten dollars
and fifty cents per hour.
§47-21-15. Payment of reasonable expenses from proceeds; net
proceeds disbursement.
(a) The reasonable, necessary and actual expenses
incurred in connection with the conduct of raffle occasions,
not to exceed twenty-five percent of the gross proceeds
collected during a license period, may be paid out of the
gross proceeds of the conduct of raffle, including, but not
limited to:
(1) Rent paid for the use of the premises: Provided,
That a copy of the rental agreement was filed with the raffle
license application with any modifications to the rental
agreement to be filed within ten days of being made:
Provided, however, That in no event may the rent paid for the
use of any premises exceed the fair market value of rent for
the premises;
(2) The cost of custodial services;
(3) The cost to the licensee organization for equipment
and supplies used to conduct the raffle occasion;
(4) The cost to the licensee organization for advertising
the raffle occasion;
(5) The cost of hiring security personnel, licensed
pursuant to the provisions of article eighteen, chapter thirty of this code; and
(6) The cost of providing child care services to the
raffle patrons: Provided, That any proceeds received from the
provision of child care services shall be handled the same as
raffle proceeds.
(b) The actual cost to the licensee for prizes, not to
exceed the amounts as specified in section eleven of this
article, may be paid out of the gross proceeds of the conduct
of raffle.
(c) The cost of any refreshments, souvenirs or any other
item sold or otherwise provided through any concession to the
patrons may not be paid for out of the gross proceeds from the
raffle occasion. The licensee shall expend all net raffle
proceeds and any interest earned on the net raffle proceeds
for the charitable or public service purposes stated in the
application within one year after the expiration of the
license under which the raffle occasions were conducted. A
licensee which does not qualify as a qualified recipient
organization may apply to the commissioner at the time it
applies for a raffle license or as provided in subsection (e)
of this section for permission to apply any or all of its net
proceeds to directly support a charitable or public service
activity or endeavor which it sponsors.
(d) No gross proceeds from any raffle operation may be devoted or in any manner used by any licensee or qualified
recipient organization for the construction, acquisition, or
improvement, of real or personal property except that which is
used exclusively for one or more charitable or public service
purposes or as provided in subdivision (3), subsection (a) of
this section, except as provided in subsection (e) of this
section.
(e) Each licensee may expend up to forty percent of the
net proceeds in order to maintain and operate the licensee
association or organization, including, but not limited to,
any costs associated with the acquisition, development,
improvement, maintenance, construction and repair of any real
property occupied by the licensee.
(e)(f)The tax commissioner has the authority to
disapprove any contract for sale of goods or services to any
charitable raffle licensee for use in or with relation to any
charitable raffle operation or occasion, or any lease of real
or tangible personal property to any charitable raffle
licensee for use in or with relation to any charitable raffle
operation or occasion, if the contract or lease is
unreasonable or not representative of fair market value.
Disapproved contracts or leases shall be considered to be in
contravention of this article, and are void. Any attempt by
any charitable raffle licensee to engage in transactions under the terms of any disapproved lease or contract is grounds for
revocation or suspension of the charitable raffle license and
for refusal by the tax commissioner to renew the charitable
raffle license.
(f)(g) Any licensee which, in good faith, finds itself
unable to comply with the requirements of the subsections (a)
through (e) of this section shall apply to the commissioner
for permission to expend its net proceeds for one or more
charitable or public service purposes other than that stated
in its license application or for permission to expend its
net proceeds later than the one-year time period specified in
this section. The application shall be on a form furnished by
the commissioner and shall include the particulars of the
requested changes and the reasons for the changes. The
application shall be filed no later than sixty days before the
end of the one-year period specified in this section. In the
case of an application to extend the time in which the net
proceeds are to be expended for a charitable or public service
purpose, the licensee shall file such periodic reports with
the commissioner as the commissioner directs until the
proceeds are expended.
§47-21-16. Records; commissioner audit.
Any licensee which holds a raffle occasion as provided by
this article shall maintain a separate account and separate bookkeeping procedure for its raffle operations. A licensee
with annual gross proceeds in excess of two hundred fifty
thousand dollars is required to utilize an electronic cash
register specifically designed or programmed for raffle
operations and to maintain detailed receipts therefrom as part
of their record keeping process or maintain an accurate record
keeping system with sufficient detail so as to permit a
papertrail which is easily verifiable and which may be easily
audited. All records required by this article shall be
maintained for at least three years and shall be open to the
commissioner for reasonable inspection. Whenever the
commissioner has reasonable cause to believe a licensee has
violated any of the provisions of this article, he may perform
or cause to be performed an audit of the licensee's books and
records.
§47-21-22. Filing of reports.
Each licensee holding an annual license shall file with
the tax commissioner a quarterly and an annual financial
report summarizing its raffle operations for the time covered
by the report. Each quarterly report and annual report must
be filed within thirty days following the end of the quarter
or year to which it applies: Provided, That the annual report
and the last quarterly shall be made in one report and contain
a summary of all operations for the year.
Each licensee holding an annual, a limited or state fair
license shall file with the commissioner a financial report
summarizing its raffle operations within thirty days after the
expiration date of the license. The time period covered by an
annual report is the full license year or, at the election of
a licensee receiving state or federal funding, the most
recently ended state or federal fiscal year.
The reports required by this section shall contain the
name, address and social security number of any individual who
received during the course of a raffle occasion prizes the
aggregate value of which exceeded one six hundred dollars, and
other information required by the commissioner: Provided,
That any licensee failing to file the report when due is
liable for a penalty of twenty-five dollars for each month or
fraction of a month during which the failure continues, the
penalty not to exceed one hundred dollars: Provided, however,
That annual financial reports must contain either a
compilation or review of such financial report by a certified
or licensed public accountant, or may be audited by a
certified or licensed public accountant, if a licensee's gross
receipts exceed fifty five hundred thousand dollars.