Senate Bill No. 545
(By Senators Bowman and Blatnik)
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[Introduced February 20, 995; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
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A BILL to amend and reenact section ten, article twenty-two-a,
chapter twenty-nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
racetrack video lottery; accounting and reporting;
commission to provide communications protocol date;
distribution of net terminal income; remittance through
electronic transfer of funds; establishment of accounts and
nonpayment penalties; commission control of accounting for
net terminal income; settlement of accounts; manual
reporting and payment; request for reports; examination of
accounts and records; and providing municipality which
provides essential services to racetrack a portion of proceeds from its video lottery machines.
Be it enacted by the Legislature of West Virginia:
That section ten, article twenty-two-a, chapter twenty-nine
of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted to read as
follows:
ARTICLE 22A. RACETRACK LOTTERY.
§29-22A-10. Accounting and reporting; commission to provide
communications protocol data; distribution of net
terminal income; remittance through electronic
transfer of funds; establishment of accounts and
nonpayment penalties; commission control of
accounting for net terminal income; settlement of
accounts; manual reporting and payment may be
required; request for reports; examination of
accounts and records.
(a) The commission shall provide to manufacturers, or
applicants applying for a manufacturer's permit, the protocol
documentation data necessary to enable the respective
manufacturer's video lottery terminals to communicate with the
commission's central computer for transmitting auditing program
information and for activation and disabling of video lottery
terminals.
(b) The gross terminal income of a licensed racetrack shall
be remitted to the commission through the electronic transfer of
funds. Licensed racetracks shall furnish to the commission all
information and bank authorizations required to facilitate the
timely transfer of moneys to the commission. Licensed racetracks
must provide the commission thirty days' advance notice of any
proposed account changes in order to assure the uninterrupted
electronic transfer of funds. From the gross terminal income
remitted by the licensee to the commission, the commission shall
deduct an amount sufficient to reimburse the commission for its
actual costs and expenses incurred in administering racetrack
video lottery at the licensed racetrack, and the resulting amount
after such deduction shall be the net terminal income. The
amount deducted for administrative costs and expenses of the
commission may not exceed four percent of gross terminal income.
(c) Net terminal income shall be divided as set out in this
subsection. The licensed racetrack's share shall be in lieu of
all lottery agent commissions and is considered to cover all
costs and expenses required to be expended by the licensed
racetrack in connection with video lottery operations. The
division shall be made as follows:
(1) The commission shall receive thirty twenty-nine percent
of net terminal income, which shall be paid into the general
revenue fund of the state to be appropriated by the Legislature;
(2) Fourteen percent of net terminal income at a licensed
racetrack shall be deposited in the special fund established by
the licensee, and used for payment of regular purses in addition
to other amounts provided for in article twenty-three, chapter
nineteen of this code;
(3) The county where the video lottery terminals are located
shall receive two percent of the net terminal income; one
percent of the net terminal income shall also be paid to the
municipality in which video lottery terminals are located.
(4) One half of one percent of net terminal income shall be
paid for and on behalf of all employees of the licensed racing
association by making a deposit into a special fund to be
established by the racing commission to be used for payment into
the pension plan for all employees of the licensed racing
association;
(5) The West Virginia thoroughbred development fund created
under section thirteen-b, article twenty-three, chapter nineteen
of this code and the West Virginia greyhound breeding development fund created under section ten, article twenty-three, chapter
nineteen of this code shall receive an equal share of a total of
not less than one and one-half percent of the net terminal
income: Provided, That for any racetrack which does not have a
breeder's program supported by the thoroughbred development fund
or the greyhound breeding development fund, the one and one-half
percent provided for in this subdivision shall be deposited in
the special fund established by the licensee and used for payment
of regular purses, in addition to other amounts provided for in
subdivision (2) of this subsection and article twenty-three,
chapter nineteen of this code;
(6) The West Virginia thoroughbred breeders classic shall
receive one percent of the net terminal income which shall be
used for purses. The moneys shall be deposited in the separate
account established for the classic under section thirteen,
article twenty-three, chapter nineteen of this code;
(7) A licensee shall receive forty-seven percent of net
terminal income;
(8) The tourism promotion fund established in section nine,
article one, chapter five-b of this code shall receive three
percent of the net terminal income; and
(9) The veterans memorial program shall receive one percent
of the net terminal income until sufficient moneys have been
received to complete the veterans memorial on the grounds of the
state capitol complex in Charleston, West Virginia. The money
shall be deposited in the state treasury in the special
department of culture and history fund created under section
three, article one-i, chapter twenty-nine of this code:
Provided, That after sufficient moneys have been deposited in the
fund to complete the veterans memorial, the one percent of net
terminal income provided for in this subdivision shall be
deposited in the special fund established by the licensee and
used for payment of regular purses, in addition to other amounts
provided for in subdivision (2) of this subsection and article
twenty-three, chapter nineteen of this code.
(1) (d) Each licensed racetrack shall maintain in its
account an amount equal to or greater than the gross terminal
income from its operation of video lottery machines, to be
electronically transferred by the commission on dates established
by the commission. Upon a licensed racetrack's failure to
maintain this balance, the commission may disable all of a
licensed racetrack's video lottery terminals until full payment of all amounts due is made. Interest shall accrue on any unpaid
balance at a rate consistent with the amount charged for state
income tax delinquency under chapter eleven of this code, which
interest shall begin to accrue on the date payment is due to the
commission.
(2) (e) The commission's central control computer shall keep
accurate records of all income generated by each video lottery
terminal. The commission shall prepare and mail to the licensed
racetrack a statement reflecting the gross terminal income
generated by the licensee's video lottery terminals. Each
licensed racetrack must report to the commission any
discrepancies between the commission's statement and each
terminal's mechanical and electronic meter readings. The
licensed racetrack is solely responsible for resolving income
discrepancies between actual money collected and the amount shown
on the accounting meters or on the commission's billing
statement.
(3) (f) Until an accounting discrepancy is resolved in favor
of the licensed racetrack, the commission may make no credit
adjustments. For any video lottery terminal reflecting a
discrepancy, the licensed racetrack shall submit to the commission the maintenance log which includes current mechanical
meter readings and the audit ticket which contains electronic
meter readings generated by the terminal's software. If the
meter readings and the commission's records cannot be reconciled,
final disposition of the matter shall be determined by the
commission. Any accounting discrepancies which cannot be
otherwise resolved shall be resolved in favor of the commission.
(4) (g) Licensed racetracks shall remit payment by mail if
the electronic transfer of funds is not operational or the
commission notifies licensed racetracks that remittance by this
method is required. The licensed racetracks shall report an
amount equal to the total amount of cash inserted into each video
lottery terminal operated by a licensee, minus the total value of
game credits which are cleared from the video lottery terminal in
exchange for winning redemption tickets, and remit such amount
as generated from its terminals during the reporting period. The
remittance shall be sealed in a properly addressed and stamped
envelope and deposited in the United States mail no later than
noon on the day when the payment would otherwise be completed
through electronic funds transfer.
(5) (h) Licensed racetracks may, upon request, receive additional reports of play transactions for their respective
video lottery terminals and other marketing information not
considered confidential by the commission. The commission may
charge a reasonable fee for the cost of producing and mailing any
report other than the billing statements.
(6) (i) The commission has the right to examine all
accounts, bank accounts, financial statements and records in a
licensed racetrack's possession, under its control or in which it
has an interest and the licensed racetrack must authorize all
third parties in possession or in control of the accounts or
records to allow examination of any of those accounts or records
by the commission.
NOTE: The purpose of this bill is to provide that the
municipality which supplies the racetrack with essential services
receives the portion of the income from video lottery machines
that would otherwise go to the county in which the racetrack is
located. The bill also provides, in spite of the provision of
essential services, that if the video lottery terminal is located
within the boundaries of a municipality, that the municipality
receives such portion of income.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.