H. B. 3100
(By Delegate R.M. Thompson)
[Introduced March 29, 2001; referred to the
Committee on the Judiciary then Finance.]
A BILL to repeal section fifteen, article twenty, chapter
forty-seven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to repeal section fifteen,
article twenty-one of said chapter; to amend and reenact
sections sixteen and twenty-nine, article twenty of said
chapter; to further amend said article by adding thereto two
new sections, designated sections fifteen-a and thirty-two; to
amend and reenact section sixteen, article twenty-one of said
chapter; and to further amend said article by adding thereto
three new sections, designated sections fifteen-a, thirty-one
and thirty-two, all relating to charitable bingo and
charitable raffles; setting forth required and permitted uses
of proceeds from charitable bingo and charitable raffles;
allowing licensees to offset losses from one with gains from the other; providing an alternative penalty for eligible
applicants; and establishing effective dates.
Be it enacted by the Legislature of West Virginia:
That section fifteen, article twenty, chapter forty-seven of
the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be repealed; that section fifteen, article twenty-one of
said chapter be repealed; that sections sixteen and twenty-nine,
article twenty of said chapter be amended and reenacted; that said
article twenty-one be further amended by adding thereto two new
sections, designated sections fifteen-a and thirty-two; that
section sixteen, article twenty-one of said chapter be amended and
reenacted; and that said article be further amended by adding
thereto three new sections, designated sections fifteen-a,
thirty-one and thirty-two, all to read as follows:
ARTICLE 20. CHARITABLE BINGO.
§47-20-15a. Permitted use of proceeds; disapproval of certain
contracts or leases.
(a) During the period of a charitable bingo license, the gross
proceeds from charitable bingo may only be used by a licensee for:
(i) Payment of prizes awarded to winners of charitable bingo games;
(ii) payment of reasonable, necessary and actual expenses incurred
in connection with the conduct of charitable bingo, including, but
not limited to, those for custodial services, rent, advertising,
equipment and supplies to conduct charitable bingo, security personnel, promotional supplies, workers or operators required to
conduct charitable bingo, and child care services for the children
of patrons; and expenses directly related to the existence and
operation of the licensee charitable or public service organization
where the expenses are directly related to the charitable or public
service purpose underlying the tax exempt status of the licensee
organization, including, but not limited to, rent, mortgage
payments, compensation to employees, payment of maintenance and
repairs, premiums for property, casualty or liability insurance for
the licensee organization; on-going utility expenses; printing,
postage and mail expenses; and any other expense incurred by the
licensee organization directly in furtherance of its charitable or
public service purpose; and (iii) donations for the purposes, and
to the entities, organizations or associations, described under
subsection 170(c)(1), subsection 170(c)(2) or subsection 170(c)(3)
of the Internal Revenue Code: Provided, That no more than an amount
equal to twenty percent of the gross proceeds from charitable bingo
received by a licensee in a license period, regardless of the
amount of expenses it actually incurs, as described in subdivision
(i) and (ii) of this subsection, may be used for the expenses
described in subdivision (ii) of this subsection: Provided,
however, That notwithstanding any other provision of this article,
each licensee, which is not an entity, organization or association
described in subsection 170(c)(1), 170(c)(2), or 170(c)(3) of the Internal Revenue Code, regardless of the amount of expenses it
incurs as described in subdivisions (i) and (ii) of this
subsection, shall, within one year next following such the license
period, make the donations set forth in subdivision (iii) in an
amount equal to not less than four percent of its gross proceeds
received from the conduct of charitable bingo: Provided further,
That, with respect to a license period, at least one half of the
amount of the donations shall be made by the remittance of money:
And provided further, That, with respect to a license period, not
less than twenty-five percent of the amount of such donations shall
be made to entities described in subsection 170(c)(1) of the
Internal Revenue Code which have their principal office in the
county in which the licensee conducts charitable bingo.
(b) The commissioner may 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 are 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 commissioner to
renew the charitable bingo license.
(c) 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. When used two consecutive days
during a conventional weekend the super bingo occasions may occur
at the same facility no more often than on alternating weekends
during a calendar month.
(d) 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 proceeds from charitable
bingo for one or more charitable or public service purposes other
than that stated in its license application or for permission to
expend the 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 proceeds are to be expended for a
charitable or public service purpose, the licensee shall file the
periodic reports with the commissioner as the commissioner directs
until the proceeds are expended.
(e) For purposes of this article, the term "donations" means
the acts of gratuitously remitting money, transferring other
property or providing the use of property or services to another,
the amount or amounts of which shall be based on the fair market
value thereof determined pursuant to a legislative rule proposed by
the commissioner in accordance with the provisions of chapter
twenty-nine of this code.
§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 a separate
bookkeeping procedure for its bingo operations. A licensee may not
commingle moneys from its charitable bingo operations with moneys
from its charitable raffles operations for which it may also be
licensed, but it may, by check, transfer funds between the separate
checking accounts to offset any losses from its conduct of one with
gains from its conduct of the other. Money for expenses may 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 shall
maintain all records required by this article for a 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.
§47-20-29. Effective date.
The effective date of this article is the fifteenth day of
August, one thousand nine hundred eighty-one. The effective date
of the amendments made to this article by this legislation is the
first day of July, two thousand one.
§47-20-32. Alternative penalty.
(a) Notwithstanding anything in this code to the contrary, a
licensee may elect to comply with the provisions of this section in
lieu of other enforcement action to which it may otherwise be
subject under this article. For purposes of this section, the term "other enforcement action" means an action that, on or after the
effective date of this section, is being taken, or may be taken,
pursuant to an administrative decision or order or by agreement,
including, but not limited to, any suspension, probation, criminal
or civil penalty, fine or other punitive action, or alternative
disposition, and that is based on one or more violations of this
article, which occurred before the enactment of this section, and
which are alleged or admitted to having been committed by a person
to whom a license was issued pursuant to the authority of either
article.
(b) A licensee that elects the alternative penalty provided in
this section shall retroactively satisfy, for the license periods
with respect to which the other enforcement action against it
relates, the provision of section fifteen-a of this article
mandating that no less than an amount equal to four percent of the
entire gross proceeds the licensee received from its conduct of
charitable bingo during such license periods shall be donated by
the licensee for the purposes, and to those entities, organizations
or associations, described in subsections 170(c)(1), 170(c)(2) or
170(c)(3) of the Internal Revenue Code: Provided, That the amount
of any past donations which an electing licensee shall have made to
entities, organizations or associations, with respect to the
license periods to which the other enforcement action relates,
shall be counted toward satisfaction by such electing licensee of section fifteen-a of this article for the purpose of the
alternative penalty provided in this section: Provided, however,
That donations made by a licensee pursuant to this section shall
only be made by the remittance of money and may not count toward
satisfaction of the licensee's obligations under section fifteen-a
of this article for license periods commencing on or after the
effective date of this section, if any.
(c) Any licensee that may be subject to other enforcement
action and desiring to make the election permitted in this section,
shall give written notice to the commissioner of its election of
the alternative penalty provided in this section no more than
ninety days after the effective date of this section, or ninety
days after the first notice it has of the initiation of the other
enforcement action against it, whichever is later: Provided, That,
upon receipt of the notice, the commissioner shall suspend and hold
in abeyance, as to the licensee, the other enforcement action
against it during the period described in the following sentence.
A licensee which has given timely notice of its election, as
provided in the preceding sentence, shall complete making the
donations necessary to satisfy the requirements of the alternative
penalty not later than the third anniversary of the date the notice
was received by the commissioner.
(d) Upon its full satisfaction of the requirements of this
section, a licensee shall have the other enforcement action against it vacated and withdrawn: Provided, That a licensee which fails to
timely elect and satisfy the requirements of this section shall
thereafter and immediately be subjected to other enforcement action
according to the original terms.
ARTICLE 21. CHARITABLE RAFFLES.
§47-21-15a. Permitted uses of proceeds; disapproval of certain
contracts or leases.
(a) During the period of a charitable raffles license, the
gross proceeds from charitable raffles awarded to winners of
charitable raffles games may only be used by a licensee for: (i)
Payment of prizes; (ii) payment of reasonable, necessary and actual
expenses incurred in connection with the conduct of charitable
raffles, including, but not limited to, those for custodial
services, rent, advertising, equipment and supplies to conduct
charitable raffles, security personnel, promotional supplies,
workers or operators required to conduct charitable raffles, and
child care services for the children of patrons; and expenses
directly related to the existence and operation of the licensee
charitable or public service organization where such expenses are
directly related to the charitable or public service purpose
underlying the tax exempt status of the licensee organization,
including, but not limited to, rent, mortgage payments,
compensation to employees, payment of maintenance and repairs,
premiums for property, casualty or liability insurance for the licensee organization; on-going utility expenses; printing, postage
and mail expenses; and any other expense incurred by the licensee
organization directly in furtherance of its charitable or public
service purpose; and (iii) donations for the purposes, and to the
entities, organizations or associations, described under subsection
170(c)(1), subsection 170(c)(2) or subsection 170(c)(3) of the
Internal Revenue Code: Provided, That no more than an amount equal
to twenty percent of the gross proceeds from charitable raffles
received by a licensee in a license period, regardless of the
amount of expenses it actually incurs, as described in subdivisions
(i) and (ii) of this subsection, may be used for the expenses
described in subdivision (ii) of this subsection: Provided,
however, That notwithstanding any other provision of this article,
each licensee, which is not an entity, organization, or association
described in subsection 170(c)(1), 170(c)(2), or 170(c)(3) of the
Internal Revenue Code, regardless of the amount of expenses it
incurs as described in subdivisions (i) and (ii) of this
subsection, shall, within one year next following the license
period, make the donations set forth in subdivision (iii) in an
amount equal to not less than four percent of its gross proceeds
received from the conduct of charitable raffles: Provided further,
That, with respect to a license period, at least one half of the
amount of the donations shall be made by the remittance of money:
And provided further, That, with respect to a license period, not less than twenty-five percent of the amount of the donations shall
be made to entities described in subsection 170(c)(1) of the
Internal Revenue Code which have their principal office in the
county in which the licensee conducts charitable raffles.
(b) The commissioner may disapprove any contract for sale of
goods or services to any charitable raffles licensee for use in or
with relation to any charitable raffles operation, or any lease of
real or tangible personal property to any charitable raffles
licensee for use in or with relation to any charitable raffles
operation, if the contract or lease is unreasonable or not
representative of fair market value. Contracts or leases which are
disapproved are in contravention of this article, and are void.
Any attempt by any charitable raffles 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 raffles license and for refusal by the commissioner to
renew the charitable raffles license.
(c) Any licensee which, in good faith, finds itself unable to
comply with the requirements of subsection (a) of this section
shall apply to the commissioner for permission to expend its
proceeds from charitable raffles for one or more charitable or
public service purposes other than that stated in its license
application or for permission to expend such 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 said 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.
(d) For purposes of this article, the term "donations" means
the acts of gratuitously remitting money, transferring other
property or providing the use of property or services to another,
the amount or amounts of which shall be based on the fair market
value thereof determined pursuant to a legislative rule proposed by
the commissioner in accordance with the provisions of chapter
twenty-nine of this code.
§47-21-16. Records, commissioner audit.
Any licensee which holds a raffle occasion as provided by this
article shall maintain a separate checking account and separate
bookkeeping procedure for its raffle operations. A licensee may
not commingle moneys from its charitable raffle operations with
moneys from its charitable bingo operations for which it may also
be licensed, but it may, by check, transfer funds between the
separate checking accounts to offset any losses from its conduct of one with gains from its conduct of the other. 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 or
she may perform or cause to be performed an audit of the licensee's
books and records.
§47-21-31. Alternative penalty.
(a) Notwithstanding anything in this code to the contrary, a
licensee may elect to comply with the provisions of this section in
lieu of other enforcement action to which it may otherwise be
subject under this article. For purposes of this section, the term
"other enforcement action" means an action that, on or after the
effective date of this section, is being taken, or may be taken,
pursuant to an administrative decision or order or by agreement,
including, but not limited to, any suspension, probation, criminal
or civil penalty, fine or other punitive action, or alternative
disposition, and that is based on one or more violations of this
article, which occurred before the enactment of this section, and
which are alleged or admitted to having been committed by a person
to whom a license was issued pursuant to the authority of either
such article.
(b) A licensee that elects the alternative penalty provided in
this section shall retroactively satisfy, for the license periods with respect to which the other enforcement action against it
relates, the provision of section fifteen-a of this article
mandating that no less than an amount equal to four percent of the
entire gross proceeds the licensee received from its conduct of
charitable raffles during the license periods shall be donated by
the licensee for the purposes, and to those entities, organizations
or associations, described in subsections 170(c)(1), 170(c)(2) or
170(c)(3) of the Internal Revenue Code: Provided, That the amount
of any past donations which an electing licensee has made to any
entities, organizations or associations with respect to the license
periods to which the other enforcement action relates shall be
counted toward satisfaction by such electing licensee of section
fifteen-a of this article for the purpose of the alternative
penalty provided in this section: Provided, however, That any
donations made by a licensee pursuant to this section shall only be
made by the remittance of money and may not count toward
satisfaction of the licensee's obligations under section fifteen-a
of this article for license periods commencing on or after the
effective date of this section, if any.
(c) Any licensee that may be subject to other enforcement
action and desiring to make the election permitted in this section,
shall give written notice to the commissioner of its election of
the alternative penalty provided in this section no more than
ninety days after the effective date of this section, or ninety days after the first notice it has of the initiation of other
enforcement action against it, whichever is later: Provided, That,
upon receipt of the notice, the commissioner shall suspend and hold
in abeyance, as to the licensee, the other enforcement action
against it during the period described in the following sentence.
A licensee which has given timely notice of its election, as
provided in the preceding sentence, shall complete making the
donations necessary to satisfy the requirements of the alternative
penalty not later than the third anniversary of the date the notice
was received by the commissioner.
(d) Upon its full satisfaction of the requirements of this
section, a licensee shall have the other enforcement action against
it vacated and withdrawn: Provided, That a licensee which fails to
timely elect and satisfy the requirements of this section shall
thereafter and immediately be subjected to other enforcement action
according to the original terms.
§47-21-32. Effective date.
The effective date of the amendments made to this article by
this legislation is the first day of July, two thousand one.
NOTE: The purpose of this bill is to reestablish the required
and permitted uses of the proceeds from the conduct of charitable
bingo and raffles.
The bill mandates that a portion of gross proceeds from
charitable bingo and raffles be received by local government
entities, charitable and veteran organizations and used for charitable, educational and public service purposes. In addition,
it provides for eligible applicants to elect an alternative penalty
for violation of the former law governing use of such proceeds.
§§47-20-15a and 32; and §§47-21-15a, 31 and 32 are new;
therefore, strike-throughs and underscoring have been omitted.
§§47-20-16 and 29; and §47-21-16 contain new language;
therefore, underscoring indicates new language that would be added.