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 of article twenty,
chapter forty-seven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; to further amend said
article twenty by adding thereto a new section, designated
section twenty-three-a; to amend and reenact sections two,
three, four, eight, twelve, fifteen, sixteen and twenty-two,
article twenty-one of the said chapter; and to further amend
said article twenty-one by adding thereto a new section,
designated as section twenty-one-a, 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; permitting amnesty;
setting forth limiting conditions and applicable time limits
for amnesty; 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 gross proceeds amount that requires a compilation, review
or audit by a certified or licensed accountant; 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 of article twenty, chapter forty-seven of
the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that said article twenty be
further amended by adding thereto a new section, designated section
twenty-three-a; that sections two, three, four, eight, twelve,
fifteen, sixteen, and twenty-two, article twenty-one of said
chapter be amended and reenacted; and that said article twenty-one
be further amended by adding thereto a new section, designated
section twenty-one-a, 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;
(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 one hundred twenty-five 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.
§47-20-23a. Amnesty; application; limiting conditions; time period.
The tax commissioner is authorized to establish an amnesty
program for those licensees who committed violations of the
provisions of this article solely in regard to unauthorized
expenditures in relation to the determination of net proceeds which
occurred prior to the first day of January, one thousand nine
hundred ninety-nine. This program may be established by an
emergency legislative rule promulgated pursuant to chapter twenty- nine-a of this code. Amnesty may be available to those licensees who voluntarily admit violations, as well as to those licensees who
have been determined by the tax commissioner to have violated the
provisions of this article or the conditions of their license:
Provided, That said amnesty shall only apply to items not
authorized as expenditures in determining net proceeds. Amnesty
may be available for a time period beginning the first day of
September, one thousand nine hundred ninety-nine and ending the
thirty-first day of December, one thousand nine hundred ninety- nine.
§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 one 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 paper-trail 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.
§47-21-21a. Amnesty; application; limiting conditions; time period.
The tax commissioner is authorized to establish an amnesty
program for those licensees who committed violations of the
provisions of this article solely in regard to unauthorized
expenditures in relation to the determination of net proceeds which
occurred prior to the first day of January, one thousand nine
hundred ninety-nine. This program may be established by an
emergency legislative rule promulgated pursuant to chapter twenty- nine-a of this code. Amnesty may be available to those licensees
who voluntarily admit violations, as well as to those licensees who
have been determined by the tax commissioner to have violated the
provisions of this article or the conditions of their license:
Provided, That said amnesty shall only apply to items not
authorized as expenditures in determining net proceeds. Amnesty
may be available for a time period beginning the first day of
September, one thousand nine hundred ninety-nine and ending the
thirty-first day of December, one thousand nine hundred ninety-nine.
§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.