COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 241
(By Senators Chafin, Plymale, Ross and Anderson)
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[Originating in the Committee on Judiciary;
reported March 2, 1995.]
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A BILL to amend and reenact sections six, eleven, twelve-a,
fifteen, seventeen and twenty-two, article twenty, chapter
forty-seven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; and to amend and reenact
section three, article twenty-three of said chapter, all
relating generally to charitable bingo and raffles; revising
the license fee requirements; providing for an exemption from
fee and exemption from taxes in certain cases; changing the
types of operators eligible to run of bingo games; authorizing
concessions sales; allowing for compensation of bingo
operator; increasing the number of allowable employees;
authorizing the payment of reasonable expenses from proceeds;
providing for the disbursement of the proceeds; allowing for
expenditures for maintenance and repairs to premises;
prohibiting third-party advertising; increasing deadlines for
filing reports; and providing for an exemption from certain raffle fees.
Be it enacted by the Legislature of West Virginia:
That sections six, eleven, twelve-a, fifteen, seventeen and
twenty-two, article twenty, chapter forty-seven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended; and
that section three, article twenty-three of said chapter be amended
and reenacted, all to read as follows:
ARTICLE 2. CHARITABLE BINGO.
§47-20-6. License fee and exemption from taxes.
(a) A license fee shall be paid to the tax commissioner for
annual licenses in the amount of five hundred dollars, except that
for volunteer or nonprofit groups who gross less than twenty
thousand dollars the fee shall be two hundred dollars and for bona
fide senior citizen organizations the fee is fifty dollars. A
license fee shall be paid to the tax commissioner for a limited
occasion license in the amount of one hundred dollars. A license
fee of five hundred dollars shall be paid to the tax commissioner
for a state fair license as provided in section twenty-two of this
article: Provided, That no license fee shall be charged to
unincorporated nonprofit youth athletic organizations and
unincorporated nonprofit youth public service organizations such as
boy scout and girl scout clubs whose net profits do not exceed
three thousand five hundred dollars during the term of the license:
Provided, however, That any such organization whose net profits
exceed two thousand dollars during the term of a license shall remit, with its annual financial report, the appropriate license
fee as otherwise provided for in this section. All revenue from
said license fee shall be deposited in the special revenue account
established under the authority of section two-a, article nine,
chapter eleven of this code and used to support the investigatory
activities provided for in said section. The license fee imposed
by this section is in lieu of all other license or franchise taxes
or fees of this state and no county or municipality or other
political subdivision of this state is empowered to impose a
license or franchise tax or fee.
(b) The gross proceeds derived from the conduct of a bingo
occasion are exempt from state and local business and occupation
taxes, income taxes, excise taxes and all special taxes. The
licensee is exempt from payment of consumers sales and service
taxes and use taxes on all purchases for use or consumption in the
conduct of a bingo occasion and is exempt from collecting consumers
sales taxes on any admission fees and sales of bingo cards:
Provided, That the exemption provided in this subsection does not
apply to state fair bingo proceeds.
§47-20-10. Limits on prizes awarded -- General provisions.
Except as otherwise provided in section twenty-two of this
article, the total value of all prizes awarded by a licensee , or
in the aggregate by two or more limited occasion licensees holding
a joint bingo occasion, for any bingo occasion held pursuant to an
annual or limited occasion license, may not exceed seven thousand five hundred dollars in value.
Prizes may be money or merchandise other than beer,
nonintoxicating beer, wine, spirits or alcoholic liquor as defined
in section five, article one, chapter sixty of this code. If the
prizes are merchandise, the value assigned to them is their fair
market value at the time of purchase.
§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 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.
§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, not to exceed
the federal minimum wage, to operators of bingo games who are
active members of the licensee organization.
(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 five 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 three
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 no more than
two operators.
§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 thereto were filed within ten days of
being made;
(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;
(6) The cost of providing child care services to the bingo
patrons: Provided, That any proceeds received from the provision
of child care services shall be handled the same as bingo proceeds;
and
(7) The cost to the licensee organization for reasonable and
necessary maintenance and repair of the premises owned by the
licensee organization and utilized to conduct bingo occasions not
to exceed ten percent of the twenty-five percent of the gross
proceeds authorized for payment of expenses in accordance with
subsection (a) of this section.
(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 thereon 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, acquisition, improvement,
maintenance or repair 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.
(e) 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.
§47-20-17. Advertising.
A licensee may advertise its bingo occasions in a manner
reasonably necessary to promote the occasion: Provided, That a
licensee may not hire any person, as defined in section two of this
article, to develop or conduct an advertising campaign to promote
any bingo occasion.
§47-20-24. Filing of reports.
Each licensee holding an annual license shall file with the
tax commissioner quarterly and an annual financial report
summarizing its bingo operations for the time period covered by the
report. 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 sixty days after the expiration of the
license under which the operations covered by the report were held.
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 hundred dollars,
and other information required by the commissioner: Provided, That
any licensee failing to file such report when due shall be liable
for a penalty of twenty-five dollars for each month or fraction thereof during which the failure continues, such penalty not to
exceed one hundred dollars: Provided, however, That annual
financial reports for license years ending after the first day of
July, one thousand nine hundred ninety-three, must be audited
financial reports as defined by the American institute of certified
public accountants if a licensee's gross receipts exceed one
hundred thousand dollars: Provided further, That annual financial
reports for license years ending after the first day of July, one
thousand nine hundred ninety-three, must contain a compilation and
review of such financial report, as defined by the American
institute of certified public accountants, if a licensee's gross
receipts exceed fifty thousand dollars but are less than one
hundred thousand dollars.
ARTICLE 23. CHARITABLE RAFFLE BOARDS AND GAMES.
§47-23-3. Fees.
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. Wholesalers
and distributors shall also pay a fee of twenty cents on each
dollar 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. 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 no license or other
fee provided for in this section shall be charged to any newspaper
or other printing or duplicating operation that furnishes
charitable raffle boards and games to licensed retailers free of
charge.