H. B. 2547
(By Delegate Browning)
[Introduced January 25, 2007; referred to the
Committee on the Judiciary.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §29-22C-1, §29-22C-2,
§29-22C-3, §29-22C-4, §29-22C-5, §29-22C-6 and §29-22C-7, all
relating to allowing approved and licensed auctioneers to
conduct pulltab games at public auctions; setting forth
certain responsibilities of the Lottery Commission with
respect to auctions in which pulltab games are allowed;
establishing for certain fees and charges; and providing that
certain revenues be remitted to the State Treasury.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §29-22C-1, §29-22C-2,
§29-22C-3, §29-22C-4, §29-22C-5, §29-22C-6 and §29-22C-7, all to
read as follows:
ARTICLE 22C. AUCTION PULLTAB GAMES.
§29-22C-1. Short title.
This article may be known and cited as the "Auction Pulltab
Games Act."
§29-22C-2. Authorization of Pulltab games at auctions conducted by
licensed and approved auctioneers; legislative
findings and declarations.
(a) Operation of authorized auction pulltab games. --
Notwithstanding any provision of law to the contrary, the operation
of authorized pulltab games and ancillary activities at a public
auction conducted by a licensed and approved auctioneer is not
unlawful when conducted in accordance with the provisions of this
article and rules of the commission.
(b) Legislative findings and declarations. --
(1) The Legislature finds and declares that allowing licensed
and approved auctioneers to include and conduct pulltab games at
public auctions enhances the economy of the state. A substantial
state interest exists in promoting public auctions. It further
finds and declares that the authorization of the operation of
pulltab games, pursuant to this article, at public auctions, will
protect and enhance the economy of small communities in this state
and will indirectly benefit other segments of the economy of this
state.
(2) The Legislature further finds and declares that the state
can control and regulate the operation of authorized pulltab games under this article if the state limits the operation of authorized
pulltab games at public auctions conducted by licensed and approved
auctioneers who obtain a license issued by the State Lottery
Commission pursuant to article twenty-two-a of this chapter.
(3) The Legislature further finds and declares that permitting
the operation of pulltab games in accordance with the provisions
of this article at public auctions constitutes the operation of
lottery games owned, controlled, operated and regulated by the
State of West Virginia within the purview of section thirty-six,
article VI of the Constitution of this state.
(c) Legislative intent. --
(1) The Legislature declares that permitting the operation of
pulltab games at public auctions in accordance with the provisions
of this article is intended to enhance the state's economy.
(2) The Legislature further declares that permitting the
operation of authorized pulltab games at public auctions in
accordance with the provisions of this article is intended to
preserve and protect existing racetrack video lottery revenues to
the state.
(3) The Legislature further declares that permitting the
operation of authorized pulltab games at public auctions in
accordance with the provisions of this article is intended to
provide broad economic opportunities to the citizens of the state,
including the creation of a significant number of year-round employment opportunities.
§29-22C-3. Definitions.
(a) Applicability of definitions. -- For the purposes of this
article, the words or terms defined in this section, and any
variation of those words or terms required by the context, have the
meanings ascribed to them in this section. These definitions are
applicable unless a different meaning clearly appears from the
context in which the word or term is used.
(b) Terms defined. --
(1) "Adjusted gross receipts" means gross receipts from
authorized pulltab games less winnings paid to patrons wagering on
the public auction pulltab games.
(2) "Applicant" means any person who on his or her own behalf,
or on behalf of another, has applied for permission to engage in
any act or activity that is regulated under the provision of this
article for which a license is required by this article or rule of
the commission.
(3) "Application" means any written request for permission to
engage in any act or activity that is regulated under the
provisions of this article submitted in the form prescribed by the
commission.
(4) "Authorized pulltab game" means any game designated as
punchboards, numbers tickets, push cards, jar tickets, pulltabs or
similar games.
(5) "Background investigation" means a security, criminal and
credit investigation of an applicant who has applied for the
issuance or renewal of a license pursuant to this article, or a
licensee who holds a current license.
(6) "Commission" or "State Lottery Commission" means the West
Virginia Lottery Commission created by article twenty-two of this
chapter.
(7) "Complimentary" means a service or item provided at no
cost or at a reduced price.
(8) "Compensation" means any money, thing of value, or
financial benefit conferred or received by a person in return for
services rendered, or to be rendered, whether by that person or
another.
(9) "Contested case" means a proceeding before the commission,
or a hearing examiner designated by the commission to hear the
contested case, in which the legal rights, duties, interests or
privileges of specific persons are required by law or
constitutional right to be determined after a commission hearing,
but does not include cases in which the commission issues a
license, permit or certificate after an examination to test the
knowledge or ability of the applicant where the controversy
concerns whether the examination was fair or whether the applicant
passed the examination and does not include rulemaking.
(10) "Control" means the authority directly or indirectly to direct the management and policies of an applicant for a license
issued under this article or the holder of a license issued under
this article.
(11) "Public auction" means an auction of goods, realty or
personal property advertised and held open to the public without
charge or qualification.
(12) "Director" means the Director of the West Virginia State
Lottery Commission appointed pursuant to section six, article
twenty-two of this chapter.
(13) "Disciplinary action" is an action by the commission
suspending or revoking a license, fining, excluding, reprimanding,
or otherwise penalizing a person for violating this article or
rules promulgated by the commission.
(14) "Financial interest" or "financially interested" means
any interest in investments, awarding of contracts, grants, loans,
purchases, leases, sales or similar matters under consideration for
consummation by the commission. A member, employee or agent of the
commission will be considered to have a financial interest in a
matter under consideration if any of the following circumstances
exist:
(A) He or she owns one percent or more of any class of
outstanding securities that are issued by a party to the matter
under consideration by the commission; or
(B) He or she is employed by an independent contractor for a party to the matter under consideration or consummated by the
commission.
(15) "Gross receipts" means the total of all sums including
valid or invalid checks, currency, tokens, coupons, vouchers, or
instruments of monetary value whether collected or uncollected,
received by pulltab games at public auctions.
(16) "Indirect ownership" means an interest a person owns in
an entity or in property solely as a result of application of
constructive ownership rules without regard to any direct ownership
interest, or other beneficial interest, in the entity or property.
"Indirect ownership" is determined under the same rules applicable
to determining whether a gain or loss between related parties is
recognized for federal income tax purposes.
(17) "Licensed and approved auctioneer" means a person
licensed as an auctioneer under the provisions of facility licensed
under both article twenty-two-a of this chapter and article
twenty-three, chapter nineteen of this code.
(18) "License" means any license applied for or issued by the
commission under this article in combination with a license issued
pursuant to the provisions of article two-c, chapter nineteen of
this code.
(19) "Licensee" means any person who is licensed under any
provision of this article.
(20) "Lottery" means the public gaming systems or games regulated, controlled, owned and operated by the State Lottery
Commission as provided in this article and in articles twenty-two,
twenty-two-a, twenty-two-b and twenty-five of this chapter.
(21) "Member" means a commission member appointed to the West
Virginia Lottery Commission under article twenty-two of this
chapter.
(22) "National criminal history background check system" means
the criminal history record system maintained by the Federal Bureau
of Investigation based on fingerprint identification or any other
method of positive identification.
(23) "Own" means any beneficial or proprietary interest in any
property and includes, but is not limited to, any direct or
indirect beneficial or proprietary interest in any business of an
applicant or licensee.
(24) "Person" means any natural person, and any corporation,
association, partnership, limited liability company, limited
liability partnership, trust or other entity, regardless of its
form, structure or nature other than a government agency or
instrumentality.
(25) "Player", "Patron" or "Wagerer" means a person who plays
a pulltab game at a public auction conducted by a licensed and
approved auctioneer.
(26) "Pulltab games license" means authorization granted under
this article by the commission to an approved and licensed auctioneer who is already licensed under article two-c, chapter
nineteen of this code.
(27) "Pulltab Games Fund" means the special fund in the State
Treasury created in section twenty-seven of this article.
(28) "Significant influence" means the capacity of a person to
affect substantially, but not control, either or both of the
financial and operating policies of another person.
(29) "Supplier" means a person who the commission has
identified under rules promulgated by the commission as requiring
a license to provide a pulltab games licensee with goods or
services to be used in connection with operation of pulltab games.
(30) "Wager" means a sum of money or thing of value risked on
an uncertain occurrence.
(31) "Winnings" means the total cash value of all property or
sums including currency, tokens or instruments of monetary value
paid to players as a direct result of wagers placed at or through
authorized pulltab games.
§29-22C-4. Commission duties and powers.
(a) Duties. -- In addition to the duties set forth elsewhere
in this article or in articles twenty-two, twenty-two-a,
twenty-two-b and twenty-five of this chapter, the commission shall:
(1) Establish minimum standards for pulltab gaming equipment;
(2) Approve, modify or reject rules proposed by the licensee
for all authorized pulltab games proposed to be operated by a pulltab games licensee;
(3) Approve, modify or reject minimum internal control
standards proposed by the licensee governing pulltab game
operations, including the maintenance of financial records;
(4) Approve staff considered necessary by the director to
oversee, inspect and monitor the operation of pulltab games by any
licensed and approved auctioneer under this article and article
twenty-two-a of this chapter, including, but not limited to,
inspection of designated gaming areas, gaming equipment and
security equipment used in the operation of pulltab games to assure
continuous compliance with the provisions of this article and
applicable rules of the commission;
(5) Determine eligibility of a person to hold or continue to
hold a license issued under this article;
(6) Issue all licenses;
(7) Maintain a record of all licenses issued;
(8) Levy and collect the taxes imposed by this article and the
fees authorized, required or specified in this article or the
legislative rules of the commission, and receive, accept and pay
all taxes and fees collected under this article into the Pulltab
Games Fund; and
(9) Keep a public record of all commission actions and
proceedings with respect to pulltab games.
(b) Powers. -- In addition to the powers set forth elsewhere in this article or in articles twenty-two, twenty-two-a,
twenty-two-b and twenty-five of this chapter, the commission may:
(1) Sue to enforce any provision of this article or any rule
of the commission, whether by civil action or petition for
injunctive relief;
(2) Hold hearings, administer oaths and issue subpoenas for
attendance of witnesses to testify or subpoena duces tecum for the
production of documents or other evidence;
(3) Enter a public auction and the buildings and appurtenances
used by a licensee under this article at any time and without
notice to ensure strict compliance with this article and with the
rules of the commission;
(4) Bar, for cause, any person from participating in any
capacity in the play of any pulltab game;
(5) Propose for promulgation or promulgate, in accordance with
the provision of article three, chapter twenty-nine-a of this code,
any legislative, interpretive and procedural rules the commission
considers necessary for the successful implementation,
administration and enforcement of this article, and to amend or
revoke any promulgated rule, in accordance with provisions of
article three, chapter twenty-nine-a of this code, at the
discretion of the commission; and
(6) Exercise any other powers that may be necessary to
effectuate the provisions of this article and the rules of the commission.
§29-22C-5. Appointment of commission staff; conditions of
employment.
(a) The director, with the approval of the commission, may
appoint any professional, clerical, technical and administrative
personnel, who are required to be state employees hired in
accordance with article six, chapter twenty-nine of this code,
which the director considers necessary to carry out the provisions
of this article. Prior to his or her appointment, each applicant
for a position shall provide his or her fingerprints and shall
undergo a thorough background investigation.
(b) No commission employee may directly or indirectly hold an
ownership or a financial interest in:
(1) A pulltab table game licensee;
(2) A supplier licensee;
(3) A holding company that owns a licensee;
(4) A business related to the licensee for federal income tax
purposes; or
(5) An applicant for either license.
(c) A commission employee may not knowingly wager or be paid
any prize from any wager at any pulltab game within this state or
at any facility outside this state or this country that is directly
or indirectly owned or operated:
(1) By a pulltab games licensee that is licensed pursuant to this article; or
(2) By any person who directly or indirectly owns the pulltab
games license.
§29-22C-6. Licenses required.
(a) A person may not engage in any activity in connection with
public auction pulltab games in this state for which a license is
required by this article or rules of the commission unless all
necessary licenses have been obtained in accordance with this
article and rules of the commission.
(b) Licenses are required for the following purposes:
(1) For an auctioneer to own or conduct an authorized pulltab
game in the state;
(2) For a person to supply a pulltab games licensee with
gaming equipment or gaming equipment services;
(3) For an individual to be employed by a pulltab games
licensee in connection with the operation of authorized pulltab
games in the state; and
(4) For a person to provide management services under a
contract to a pulltab games licensee.
(c) The commission may not grant a license to an applicant
until the commission determines that each person who has control of
the applicant also meets all of the qualifications the applicant
must meet to hold the license for which application is made. The
following persons are considered to have control of an applicant:
(1) Each person associated with a corporate applicant,
including any corporate holding company, parent company or
subsidiary company of the applicant, but not including a bank or
other licensed lending institution which holds a mortgage or other
lien acquired in the ordinary course of business, who has the
ability to control the activities of the corporate applicant or
elect a majority of the board of directors of that corporation;
(2) Each person associated with a noncorporate applicant who
directly or indirectly holds any beneficial or proprietary interest
in the applicant or who the commission determines to have the
ability to control the applicant; and
(3) Key personnel of an applicant, including any executive,
employee or agent, having the power to exercise significant
influence over decisions concerning any part of the applicant's
business operation.
(d) A license required by this article or rules of the
commission is in addition to all other licenses or permits required
by applicable federal, state or local law.
§29-22C-7. Fees and charges, one third of revenues from pulltab
games deposited in the general fund.
Notwithstanding any other provision of this chapter to the
contrary, the commission shall:
(1) Assess and collect a fee not to exceed one hundred dollars
per applicant for the issuance of any license under the provisions of this article.
(2) Assess and collect a charge not to exceed ten percent of
the gross proceeds of any pulltab game held under the provisions of
this article to be deposited in a special account of the State
Treasury to be appropriated by the Legislature to the commission to
carry out the provisions of this article.
(3) Each approved and licensed auctioneer shall, in addition
to the fees and charges set out herein, shall remit to the State
Treasurer one third of the gross receipts of each authorized
pulltab game.
In accordance with the provision of article three, chapter
twenty-nine-a of this code, the commission shall adopt any
legislative, interpretive and procedural rules the commission
considers necessary for the successful implementation,
administration and enforcement of this article, and to amend or
revoke any promulgated rule, in accordance with provisions of
article three, chapter twenty-nine-a of this code, at the
discretion of the commission.
NOTE: The purpose of this bill is to provide for the licensing
of auctioneers to conduct pulltab games at public auctions.
This article is new; therefore, strike-throughs and
underscoring have been omitted.