HB 2547 Text

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.

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