COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 430

(By Senator Snyder)

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[Originating in the Committee on the Judiciary;

reported March 1, 2000.]

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A BILL to amend and reenact sections two, three and eight, article twenty-three, chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said article by adding thereto a new section, designated section ten-a, all relating to charitable raffle boards and games; redefining terms; increasing certain fees; providing for the calculation and quarterly payment of fees; establishing administrative remedies; and providing for the deposit of civil penalties.

Be it enacted by the Legislature of West Virginia:
That sections two, three and eight, article twenty-three, chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that said article be further amended by adding thereto a new section, designated section ten-a, all to read as follows:
ARTICLE 23. CHARITABLE RAFFLE BOARDS AND GAMES.

§47-23-2. Definitions.

For purposes of this article, unless specified otherwise:
(a) "Commissioner" means tax commissioner of the state of West Virginia, or his delegate.
(b) "Retail value" means the actual consideration paid to the wholesaler by the retailer for any raffle boards or games or, in the absence of consideration paid, the actual cost to the wholesaler of the raffle boards or games.
(c) "Person" means any individual, association, society, incorporated or unincorporated organization, firm, partnership or other nongovernmental entity or institution.
(d) "Retailer" means every person engaged in the business of making retail sales of raffle chances except a charitable or public service organization authorized to conduct raffles without a license pursuant to section three, article twenty-one of this chapter the provisions of this code governing charitable raffles.
(e) "Charitable raffle board" or "charitable raffle game" means: (1) A board or other device that has many folded printed slips to be pulled from the board or otherwise distributed without a board on payment of a nominal sum in an effort to obtain a slip or chance that entitles the player to a designated prize; (2) a series of paper cards with perforated break-open tabs, a face value of which is covered or otherwise hidden from view to conceal one or more numbers, letters or symbols, which, on payment of a nominal sum, entitles the player to obtain a chance to a designated prize; or (3) such other similar game which may be defined by the state tax commissioner by legislative rule.
(f) "Sale" means the transfer of the ownership of tangible personal property for a consideration.
(g) "Verification" means a unique manufacture identifiable serial number which is required to be printed on each ticket in a charitable raffle board or charitable raffle game or such other form of identification as may be prescribed by the tax commissioner upon a showing of undue hardship by the taxpayer: Provided, That such other form of identification shall be prescribed by rule in accordance with the provisions of article three, chapter twenty-nine-a of this code.
(h) "Wholesaler" or "distributor" means any person or entity engaged in the wholesale distribution of charitable raffle boards or games or similar boards or devices, as defined by the commissioner, and licensed under the provisions of this article, to distribute said devices to charitable raffle boards or games retailers as defined in this article. It also includes anyone who is engaged in the manufacturing, packaging, preparing or repackaging of charitable raffle boards or games for distribution in this state: Provided, That no license taxes or other fees provided for in this section may be charged to any newspaper or other printing or duplicating operation not regularly engaged in the business of manufacturing, packaging, preparing or repackaging charitable raffle boards or games where the gross sales of such printing or duplicating operation from such activity does not exceed seven thousand five hundred dollars per calendar year and who is donating such items or services to a nonprofit entity without compensation may not be considered a "wholesaler" or "distributor" under this article.
§47-23-3. Fees.
(a) Wholesalers or distributors of charitable raffle boards and games to retailers shall be licensed and a license fee in the amount of five hundred dollars shall be paid to the commissioner by each wholesaler or distributor for an annual license.
(b) Wholesalers and distributors shall also pay a fee of twenty cents on each dollar of retail value of each charitable raffle board or games game sold to a retailer before the first day of July, two thousand. Effective the first day of July, two thousand, wholesalers and distributors shall pay a fee of one hundred percent of retail value of each charitable raffle board or game sold to a retailer. This fee shall be in addition to any tax imposed pursuant to the provisions of article fifteen, chapter eleven of this code.
(c) The fees imposed by this article shall be deposited in accordance with the provisions of section two-a, article nine, chapter eleven of this code: Provided, That effective the first day of July, two thousand, eighty percent of the fees collected on charitable raffle boards and games sold shall be deposited into the general revenue fund of this state.
§47-23-8. How fee paid; reports required; due date; records to be kept; inspection of records and stocks; examination of witnesses, summons, etc.

(a) The retail value fee imposed by section three of this article shall be paid by each licensed wholesaler or distributor to the commissioner on or before the twentieth day of April, July, October and January for the preceding three calendar months. The measure of the fee on the retail value of charitable raffle boards or games shall be determined by multiplying the total amount of the retail value of all charitable raffle boards and games sold by a wholesaler or distributor to retailers during the said three-month period by twenty percent until the thirtieth day of June, two thousand and by one hundred percent effective the first day of July, two thousand. Said fee shall be in addition to any tax imposed pursuant to the provisions of article fifteen, chapter eleven of this code.
(b) All fees due and owing to the commissioner by reason of this article, if paid after the due dates required by this section, shall be subject to the provisions of article ten, chapter eleven of this code.
(c) Each wholesaler or distributor shall provide with each quarterly payment of fees a return covering the business transacted in the previous three calendar months and providing such other information as the commissioner may deem necessary for the ascertainment or assessment of the fee imposed by this article. Such return shall be signed under penalty of perjury on such forms as the tax commissioner may prescribe and the wholesaler or distributor shall at the time of filing remit all fees owed or due.
(d) The returns prescribed herein are required, although a fee might not be due or no business transacted for the period covered by the return.
(e) Each person required to file a return under this article shall make and keep such records as shall be prescribed by the commissioner that are necessary to substantiate the returns required by this article, including, but not limited to, invoices, serial numbers or other verification, inventories, receipts, disbursements and sales, for a period of time not less than three years.
(f) Unless otherwise permitted, in writing, by authority of the commissioner, each delivery ticket or invoice for each purchase or sale of charitable raffle boards or games must be recorded upon a serially numbered invoice showing the name and address of the seller and the purchaser, the point of delivery, the date, quantity, serial number and price of the product sold and the fee must be set out separately, and such other reasonable information as the commissioner may require. These invoicing requirements also apply to cash sales and a person making such sales must maintain such records as may be reasonably necessary to substantiate his or her return.
(g) In addition to the commissioner's powers set forth in section five, article ten, chapter eleven of this code, the commissioner shall have authority to inspect or examine the stock of charitable raffle boards and games kept in and upon the premises of any person where charitable raffle boards and games are placed, stored or sold, and he or she shall have authority to inspect or examine the records, books, papers and any equipment or records of manufacturers, wholesalers and distributors or any other person for the purpose of determining the quantity of charitable raffle boards and games acquired or disbursed to verify the truth and accuracy of any statement or return and to ascertain whether the fee imposed by this article has been properly paid.
(h) In addition to the commissioner's powers set forth in section five, article ten, chapter eleven of this code, and as a further means of obtaining the records, books and papers of a manufacturer, wholesaler, distributor or any other person and ascertaining the amount of fees and returns due under this article, the commissioner shall have the power to examine witnesses under oath; and if the witness shall fail or refuse at the request of the commissioner to grant access to the books, records or papers, the commissioner shall certify the facts and names to the circuit court of the county having jurisdiction of the party and such court shall thereupon issue summons to such party to appear before the commissioner, at a place designated within the jurisdiction of such court, on a day fixed, to be continued as the occasion may require for good cause shown and give such evidence and lay open for inspection such books and papers as may be required for the purpose of ascertaining the amount of fee and returns due, if any.
§47-23-10a. Civil remedies when retailer possesses charitable raffle boards and games not purchased from a wholesaler or distributor licensed under this article.

(a) A retailer who possesses charitable raffle boards and games that were not purchased from a wholesaler or distributor licensed under this article shall be subject to the following civil remedies:
(1) For a first offense, the retailer shall pay to the commissioner, a civil money penalty of not less than one hundred nor more than five hundred dollars for each charitable raffle board or game in the possession of the retailer that was not purchased from a wholesaler or distributor licensed under this article.
(2) For a second and each subsequent offense, the retailer shall pay to the commissioner, a civil money penalty of not less than five hundred nor more than one thousand five hundred dollars for each charitable raffle board or game in the possession of the retailer that was not purchased from a wholesaler or distributor licensed under this article.
(3) For a second offense, the retailer, in addition to paying the money penalty imposed in subdivision (2) of this subsection, shall have all licenses issued under article sixteen, chapter eleven of this code and article seven, chapter sixty of this code, for the place of business in which charitable raffle boards and games not purchased from a wholesaler or distributor licensed under this article were found, suspended for a period of thirty consecutive days. The alcohol beverage control commissioner shall suspend the licenses of a retailer upon receipt of the tax commissioner's certified order issued under this subdivision.
(4) For a third and each subsequent offense, the retailer, in addition to applying the money penalty imposed in subdivision (2) of this subsection shall have the business registration certificate issued under article twelve, chapter eleven of this code and the licenses issued under articles twelve and sixteen, chapter eleven of this code and article seven, chapter sixty of this code, for the place of business in which charitable raffle boards and games not purchased from a wholesaler or distributor licensed under this article were found, suspended for a period of thirty consecutive days. The alcohol beverage control commissioner shall suspend the licenses of a retailer upon receipt of the tax commissioner's certified order issued under this subsection. Additionally, any license issued to the retailer to conduct charitable bingo games or raffles shall be suspended for a period of thirty consecutive days.
(b) Administrative procedures. -
(1) An order issued under this section by the tax commissioner shall be served by certified mail or in the manner provided in rule 4(d) of the West Virginia rules of civil procedure.
(2) A retailer may appeal an order of the tax commissioner issued under this section by filing a written protest with the tax commissioner, either in person or by certified mail, within twenty days after the licensee is served with a copy of the order.
(3) When a written protest is filed timely, the provisions of article five, chapter twenty-nine-a of this code shall apply. The tax commissioner may, by procedural rule, specify the form and content of a written protest.
(4) The burden of proof in any administrative or court proceeding is on the licensee to show cause why the order of the tax commissioner under this section should be modified, in whole or in part, or set aside.
(c) Deposit of money penalties. -- All money penalties imposed under this section and collected by the tax commissioner,
shall be deposited into the general revenue fund of this state.



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(NOTE: The purpose of this bill is to set the fee wholesalers and distributors pay on charitable raffle boards and games sold to retailers at one hundred percent of retail value. The bill also creates civil penalties where retailers possess charitable raffle boards and games which were purchased from a wholesaler or distributor not licensed to sell them.

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

Section ten-a is new; therefore, strike-throughs and underscoring have been omitted.)