Bill Text: VA HB1030 | 2010 | Regular Session | Prefiled
Bill Title: Charitable gaming; limits oversight by Department of Agriculture and Consumer Services.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-02-16 - House: Left in General Laws [HB1030 Detail]
Download: Virginia-2010-HB1030-Prefiled.html
10100844D Be it enacted by the General Assembly of Virginia: 1. That §§18.2-334.2, 18.2-340.15, 18.2-340.16, 18.2-340.18, 18.2-340.19, 18.2-340.20, 18.2-340.22, 18.2-340.23, 18.2-340.25, 18.2-340.26, 18.2-340.30, 18.2-340.33, 18.2-340.34:1, and 18.2-340.36 of the Code of Virginia are amended and reenacted as follows: §18.2-334.2. Same; bingo games, raffles and duck races conducted by certain organizations. Nothing in this article shall apply to any bingo game, instant
bingo, raffle, or duck race conducted solely by organizations as defined in §
18.2-340.16 which have received a permit as set forth in §18.2-340.25 §18.2-340.15. State control of charitable gaming.
§18.2-340.16. Definitions. As used in this article, unless the context requires a different meaning: "Bingo" means a specific game of chance played with
(i) individual cards having randomly numbered squares ranging from one to
seventy-five, (ii) "Board" means the Charitable Gaming Board created pursuant to §2.2-2455. "Bona fide member" means an individual who participates in activities of a qualified organization other than such organization's charitable gaming activities. "Charitable gaming" or "charitable games" means those raffles and games of chance explicitly authorized by this article. "Charitable gaming supplies" includes bingo cards or sheets, devices for selecting bingo numbers, instant bingo cards, pull-tab cards and seal cards, and any other equipment or product manufactured for or intended to be used in the conduct of charitable games. However for the purposes of this article, charitable gaming supplies shall not include items incidental to the conduct of charitable gaming such as markers, wands or tape. "Commissioner" means the Commissioner of the Department of Agriculture and Consumer Services. "Conduct" means the actions associated with the provision of a gaming operation during and immediately before or after the permitted activity, which may include, but not be limited to, (i) selling bingo cards or packs, electronic devices, instant bingo or pull-tab cards, or raffle tickets, (ii) calling bingo games, (iii) distributing prizes, and (iv) any other services provided by volunteer workers. "Department" means the Department of Agriculture and Consumer Services. "Fair market rental value" means the rent that a rental property will bring when offered for lease by a lessor who desires to lease the property but is not obligated to do so and leased by a lessee under no necessity of leasing. "Gaming expenses" means prizes, supplies, costs of publicizing gaming activities, audit and administration or permit fees, and a portion of the rent, utilities, accounting and legal fees and such other reasonable and proper expenses as are directly incurred for the conduct of charitable gaming. "Gross receipts" means the total amount of money generated by an organization from charitable gaming before the deduction of expenses, including prizes. "Instant bingo," "pull tabs," or
"seal cards" means specific games of chance played by the random
selection of one or more individually prepacked cards, including "Jackpot" means a bingo game that the organization has designated on its game program as a jackpot game, exclusive of a "winner-take-all" bingo game, in which the prize amount is greater than $100. "Landlord" means any person or his agent, firm, association, organization, partnership, or corporation, employee, or immediate family member thereof, which owns and leases, or leases any premise devoted in whole or in part to the conduct of bingo games, and any person residing in the same household as a landlord. "Management" means the provision of oversight of a
gaming operation, which may include, but is not limited to, the
responsibilities of applying for and maintaining a permit or authorization,
compiling, submitting and maintaining required records and financial reports,
and ensuring that all aspects of the operation are in compliance with all
applicable statutes "Operation" means the activities associated with production of a charitable gaming activity, which may include, but not be limited to (i) the direct on-site supervision of the conduct of charitable gaming; (ii) coordination of volunteers; and (iii) all responsibilities of charitable gaming designated by the organization's management. "Organization" means any one of the following: 1. A volunteer fire department or rescue squad or auxiliary unit thereof which has been recognized in accordance with §15.2-955 by an ordinance or resolution of the political subdivision where the volunteer fire department or rescue squad is located as being a part of the safety program of such political subdivision; 2. An organization operated exclusively for religious, charitable, community or educational purposes; 3. An athletic association or booster club or a band booster club established solely to raise funds for school-sponsored athletic or band activities for a public school or private school accredited pursuant to § 22.1-19 or to provide scholarships to students attending such school; 4. An association of war veterans or auxiliary units thereof organized in the United States; 5. A fraternal association or corporation operating under the lodge system; 6. A local chamber of commerce; or 7. Any other nonprofit organization that raises funds by conducting raffles that generate annual gross receipts of $40,000 or less, provided such gross receipts from the raffle, less expenses and prizes, are used exclusively for charitable, educational, religious or community purposes. "Qualified organization" means any organization to
which a valid permit has been issued by the Department to conduct charitable
gaming "Raffle" means a lottery in which the prize is won by (i) a random drawing of the name or prearranged number of one or more persons purchasing chances or (ii) a random contest in which the winning name or preassigned number of one or more persons purchasing chances is determined by a race involving inanimate objects floating on a body of water, commonly referred to as a "duck race." "Reasonable and proper business expenses" means
business expenses actually incurred by a qualified organization in the conduct
of charitable gaming and not otherwise allowed under this article "Supplier" means any person who offers to sell, sells or otherwise provides charitable gaming supplies to any qualified organization. §18.2-340.18. Powers and duties of the Department. The Department shall have 1. The Department is vested with jurisdiction and supervision
over 2. The Department 3. The Department may compel the production of any books, documents, records, or memoranda of any organizations or supplier involved in the conduct of charitable gaming for the purpose of satisfying itself that this article and its regulations are strictly complied with. In addition, the Department may require the production of an annual balance sheet and operating statement of any person granted a permit pursuant to the provisions of this article and may require the production of any contract to which such person is or may be a party.
§18.2-340.19. Regulations of the Board.
1.
§18.2-340.20. Denial, suspension or revocation of permit; hearings and appeals. A. The Department may deny, suspend or revoke the permit of
any organization found not to be in strict compliance with the provisions of
this article B. Except as provided in §§18.2-340.25, 18.2-340.30 and
18.2-340.36, no permit to conduct charitable gaming shall be denied, suspended
or revoked except upon notice stating the proposed basis for such action and
the time and place for the hearing. At the discretion of the Department,
hearings may be conducted by hearing officers who shall be selected from the
list prepared by the Executive Secretary of the Supreme Court. After a hearing
on the issues, the Department may refuse to issue or may suspend or revoke any
such permit if it determines that the organization has not complied with the
provisions of this article C. Any person aggrieved by a refusal of the Department to issue any permit, the suspension or revocation of a permit, or any other action of the Department, may seek review of such action in accordance with Article 4 (§2.2-4025 et seq.) of the Administrative Process Act. §18.2-340.22. Only raffles, bingo and instant bingo games permitted; prizes not gaming contracts. A. This article permits qualified organizations to conduct
raffles, bingo and instant bingo games. All games not explicitly authorized by
this article B. The award of any prize money for any charitable game shall not be deemed to be part of any gaming contract within the purview of §11-14. C. Nothing in this article shall prohibit an organization from using the State Lottery Department's Pick-3 number or any number or other designation selected by the State Lottery Department in connection with any lottery, as the basis for determining the winner of a raffle. §18.2-340.23. Organizations exempt from certain fees. A. B. Any volunteer fire department or rescue squad or auxiliary
unit thereof which has been recognized in accordance with §15.2-955 by an
ordinance or resolution of the political subdivision where the volunteer fire
department or rescue squad is located as being part of the safety program of
such political subdivision shall be exempt from the payment of application fees
required by §18.2-340.25
§18.2-340.25. Permit required; application fee; form of application. A. B. All complete applications for a permit shall be acted upon by the Department within 45 days from the filing thereof. Upon compliance by the applicant with the provisions of this article, and at the discretion of the Department, a permit may be issued. All permits when issued shall be valid for the period specified in the permit unless it is sooner suspended or revoked. No permit shall be valid for longer than two years. The application shall be a matter of public record. All permits shall be subject to regulation by the Department to ensure the public safety and welfare in the operation of charitable games. The permit shall only be granted after a reasonable investigation has been conducted by the Department. The Department may require any prospective employee, permit holder or applicant to submit to fingerprinting and to provide personal descriptive information to be forwarded along with employee's, licensee's or applicant's fingerprints through the Central Criminal Records Exchange to the Federal Bureau of Investigation for the purposes of obtaining criminal history record information regarding such prospective employee, permit holder or applicant. The Central Criminal Records Exchange upon receipt of a prospective employee, licensee or applicant record or notification that no record exists, shall forward the report to the Commissioner of the Department or his designee, who shall belong to a governmental entity. However, nothing in this subsection shall be construed to require the routine fingerprinting of volunteer bingo workers. C. In no case shall an organization receive more than one permit allowing it to conduct charitable gaming; however, nothing in this section shall be construed to prohibit granting special permits pursuant to § 18.2-340.27. D. Application for a charitable gaming permit shall be made on forms prescribed by the Department and shall be accompanied by payment of the fee for processing the application. E. Applications for renewal of permits shall be made in accordance with Board Regulations. If a complete renewal application is received 45 days or more prior to the expiration of the permit, the permit shall continue to be effective until such time as the Department has taken final action. Otherwise, the permit shall expire at the end of its term. F. The failure to meet any of the requirements of § 18.2-340.24 shall cause the automatic denial of the permit, and no organization shall conduct any charitable gaming until the requirements are met and a permit is obtained. §18.2-340.26. Sale of raffle tickets; drawings. A. Except as provided in subsection B, a qualified organization may sell raffle tickets both in and out of the jurisdiction designated in its permit and shall conduct the drawing within the Commonwealth. B. A qualified organization may sell raffle tickets for a
raffle drawing which will be held outside the Commonwealth, provided the raffle
is conducted in accordance with C. Before a prize drawing, each stub or other detachable section of each ticket sold or won through some other authorized charitable game conducted by the same organization holding the raffle, shall be placed into a receptacle from which the winning tickets are drawn. The receptacle shall be designed so that each ticket placed in it has an equal chance of being drawn. §18.2-340.30. Reports of gross receipts and disbursements required. A. Each qualified organization shall keep a complete record of
all inventory of charitable gaming supplies purchased, all receipts from its charitable
gaming operation, and all disbursements related to such operation. B.
§18.2-340.33. Prohibited practices. In addition to those other practices prohibited by this article, the following acts or practices are prohibited: 1. No part of the gross receipts derived by a qualified organization may be used for any purpose other than (i) reasonable and proper gaming expenses, (ii) reasonable and proper business expenses, (iii) those lawful religious, charitable, community or educational purposes for which the organization is specifically chartered or organized, and (iv) expenses relating to the acquisition, construction, maintenance, or repair of any interest in the real property involved in the operation of the organization and used for lawful religious, charitable, community or educational purposes. For the purposes of clause (iv), such expenses may include the expenses of a corporation formed for the purpose of serving as the real estate holding entity of a qualified organization, provided (a) such holding entity is qualified as a tax exempt organization under §501(c) of the Internal Revenue Code and (b) the membership of the qualified organization is identical to such holding entity. 2. Except as provided in §18.2-340.34:1, no qualified organization shall enter into a contract with or otherwise employ for compensation any person for the purpose of organizing, managing, or conducting any charitable games. However, organizations composed of or for deaf or blind persons may use a part of their gross receipts for costs associated with providing clerical assistance in the management and operation but not the conduct of charitable gaming. The provisions of this subdivision shall not prohibit the joint operation of bingo games held in accordance with §18.2-340.29. 3. No person shall pay or receive for use of any premises devoted, in whole or in part, to the conduct of any charitable games, any consideration in excess of the current fair market rental value of such property. Fair market rental value consideration shall not be based upon or determined by reference to a percentage of the proceeds derived from the operation of any charitable games or to the number of people in attendance at such charitable games. 4. No building or other premises shall be utilized in whole or in part for the purpose of conducting charitable gaming more frequently than two calendar days in any one calendar week. However, no building or other premises owned by (i) a qualified organization which is exempt from taxation pursuant to §501(c) of the Internal Revenue Code or (ii) any county, city or town shall be utilized in whole or in part for the purpose of conducting bingo games more frequently than four calendar days in any one calendar week. The provisions of this subdivision shall not apply to the playing of bingo games pursuant to a special permit issued in accordance with § 18.2-340.27. 5. No person shall participate in the management or operation of any charitable game unless such person is and, for a period of at least 30 days immediately preceding such participation, has been a bona fide member of the organization. For any organization that is not composed of members, a person who is not a bona fide member may volunteer in the conduct of a charitable game as long as that person is directly supervised by a bona fide official member of the organization. The provisions of this subdivision shall not apply to (i) persons employed as clerical assistants by qualified organizations composed of or for deaf or blind persons; (ii) employees of a corporate sponsor of a qualified organization, provided such employees' participation is limited to the management, operation or conduct of no more than one raffle per year; (iii) the spouse or family member of any such bona fide member of a qualified organization provided at least one bona fide member is present; or (iv) persons employed by a qualified organization authorized to sell pull tabs or seal cards in accordance with §18.2-340.16, provided (a) such sales are conducted by no more than two on-duty employees, (b) such employees receive no compensation for or based on the sale of the pull tabs or seal cards, and (c) such sales are conducted in the private social quarters of the organization. 6. No person shall receive any remuneration for participating in the management, operation or conduct of any charitable game, except that: a. Persons employed by organizations composed of or for deaf or blind persons may receive remuneration not to exceed $30 per event for providing clerical assistance in the management and operation but not the conduct of charitable games only for such organizations; b. Persons under the age of 19 who sell raffle tickets for a qualified organization to raise funds for youth activities in which they participate may receive nonmonetary incentive awards or prizes from the organization; c. Remuneration may be paid to off-duty law-enforcement officers from the jurisdiction in which such bingo games are played for providing uniformed security for such bingo games even if such officer is a member of the sponsoring organization, provided the remuneration paid to such member is in accordance with off-duty law-enforcement personnel work policies approved by the local law-enforcement official and further provided that such member is not otherwise engaged in the management, operation or conduct of the bingo games of that organization, or to private security services businesses licensed pursuant to §9.1-139 providing uniformed security for such bingo games, provided that employees of such businesses shall not otherwise be involved in the management, operation, or conduct of the bingo games of that organization; d. A member of a qualified organization lawfully participating
in the management, operation or conduct of a bingo game may be provided food
and nonalcoholic beverages by such organization for on-premises consumption
during the bingo game e. Remuneration may be paid to bingo managers or callers who have a current registration certificate issued by the Department in accordance with §18.2-340.34:1, or who are exempt from such registration requirement. Such remuneration shall not exceed $100 per session. 7. No landlord shall, at bingo games conducted on the landlord's premises, (i) participate in the conduct, management, or operation of any bingo games; (ii) sell, lease or otherwise provide for consideration any bingo supplies, including, but not limited to, bingo cards, instant bingo cards, or other game pieces; or (iii) require as a condition of the lease or by contract that a particular manufacturer, distributor or supplier of bingo supplies or equipment be used by the organization. The provisions of this subdivision shall not apply to any qualified organization conducting bingo games on its own behalf at premises owned by it. 8. No qualified organization shall enter into any contract with or otherwise employ or compensate any member of the organization on account of the sale of bingo supplies or equipment. 9. No organization shall award any bingo prize money or any merchandise valued in excess of the following amounts: a. No bingo door prize shall exceed $50 for a single door prize or $250 in cumulative door prizes in any one session; b. No regular bingo or special bingo game prize shall exceed $100; c. No instant bingo, pull tab, or seal card prize for a single card shall exceed $599; and d. No bingo jackpot of any nature whatsoever shall exceed $1,000, nor shall the total amount of bingo jackpot prizes awarded in any one session exceed $1,000. Proceeds from the sale of bingo cards and the sheets used for bingo jackpot games shall be accounted for separately from the bingo cards or sheets used for any other bingo games. 10. The provisions of subdivision 9 shall not apply to: a. Any bingo game, commonly referred to as "winner-take-all" games, in which all the gross receipts from players for that game, up to $1,000, are paid as prize money back to the players, provided (i) there are no more than two such games per session of play, (ii) the prize money from such games does not exceed the lesser of the gross receipts directly attributable to the sale of bingo cards or sheets for such games or $1,000, (iii) the bingo cards or sheets used for such games are sold separately from the bingo cards or sheets used for any other bingo games, and (iv) the organization separately accounts for the proceeds from such sales; or b. Any bingo game, commonly referred to as "Lucky
Seven" games, in which (a) a regular or special prize, not to exceed $100,
is awarded on the basis of seven predetermined numbers selected at random and
(b) a progressive prize, not to exceed $500 for the initial progressive prize
and $5,000 for the maximum progressive prize, is awarded if the seven predetermined
numbers are covered when a certain number of numbers is called, provided (i)
there is no more than one such game per session per organization, (ii) the
amount of increase of the progressive prize per session is no more than $100,
(iii) the bingo cards or sheets used in such games are sold separately from the
bingo cards or sheets used for any other bingo games, (iv) the organization
separately accounts for the proceeds from such sale, and (v) such games are
otherwise operated in accordance with 11. No organization shall award any raffle prize valued at more than $100,000. The provisions of this subdivision shall not apply to a raffle conducted no more than once per calendar year by a qualified organization qualified as a tax-exempt organization pursuant to §501(c) of the Internal Revenue Code for a prize consisting of a lot improved by a residential dwelling where 100 percent of the moneys received from such a raffle, less deductions for the fair market value for the cost of acquisition of the land and materials, are donated to lawful religious, charitable, community, or educational organizations specifically chartered or organized under the laws of the Commonwealth and qualified as a §501(c) tax-exempt organization. 12. No qualified organization composed of or for deaf or blind persons which employs a person not a member to provide clerical assistance in the management and operation but not the conduct of any charitable games shall conduct such games unless it has in force fidelity insurance, as defined in § 38.2-120, written by an insurer licensed to do business in the Commonwealth. 13. No person shall participate in the management or operation
of any charitable game if he has ever been convicted of any felony or if he has
been convicted of any misdemeanor involving fraud, theft, or financial crimes
within the preceding five years. No person shall participate in the conduct of
any charitable game if, within the preceding 10 years, he has been convicted of
any felony or if, within the preceding five years he has been convicted of any
misdemeanor involving fraud, theft, or financial crimes. In addition, no person
shall participate in the management, operation or conduct of any charitable
game if that person, within the preceding five years, has participated in the
management, operation, or conduct of any charitable game 14. Qualified organizations jointly conducting bingo games pursuant to §18.2-340.29 shall not circumvent any restrictions and prohibitions which would otherwise apply if a single organization were conducting such games. These restrictions and prohibitions shall include, but not be limited to, the frequency with which bingo games may be held, the value of merchandise or money awarded as prizes, or any other practice prohibited under this section. 15. A qualified organization shall not purchase any charitable gaming supplies for use in the Commonwealth from any person who is not currently registered with the Department as a supplier pursuant to § 18.2-340.34. 16. Unless otherwise permitted in this article, no part of an organization's charitable gaming gross receipts shall be used for an organization's social or recreational activities. §18.2-340.34:1. Bingo managers and callers; remuneration; registration; qualification; suspension, revocation or refusal to renew certificate; exceptions. A. No person shall receive remuneration as a bingo manager or caller from any qualified organization unless and until such person has made application for and has been issued a registration certificate by the Department. Application for registration shall be made on forms prescribed by the Department and shall be accompanied by a fee in the amount of $75. Each registration certificate shall remain valid for a period of one year from the date of issuance. Application for renewal of a registration certificate shall be accompanied by a fee in the amount of $75 and shall be made on forms prescribed by the Department. B. As a condition of registration as a bingo manager, the applicant shall (i) have been a bona fide member of the qualified organization for at least 12 consecutive months prior to making application for registration and (ii) be required to complete a reasonable training course developed and conducted by the Department. As a condition of registration as a bingo caller, the applicant shall be required to complete a reasonable training course developed and conducted by the Department. The Department may refuse to register any bingo manager or caller who has (a) been convicted of or pleaded nolo contendere to a felony in any state or federal court or has been convicted of any offense which, if committed in the Commonwealth, would be a felony; (b) been convicted of or pleaded nolo contendere to a crime involving gambling; (c) had any license, permit, certificate, or other authority related to activities defined as charitable gaming in the Commonwealth suspended or revoked in the Commonwealth or in any other jurisdiction; or (d) failed to file or has been delinquent in excess of one year in the filing of any tax returns or the payment of any taxes due the Commonwealth. C. The Department may suspend, revoke, or refuse to renew the registration certificate of any bingo manager or caller for any conduct described in subsection B or for any violation of this article or regulations of the Board. Before taking any such action, the Department shall give the bingo manager or caller a written statement of the grounds upon which it proposes to take such action and an opportunity to be heard. Every hearing in a contested case shall be conducted in accordance with the Administrative Process Act (§2.2-4000 et seq.). D. The provisions of subsection A requiring registration for bingo callers with the Department shall not apply to a bingo caller for a volunteer fire department or rescue squad or auxiliary unit thereof that has been recognized in accordance with §15.2-955 by an ordinance or resolution of the political subdivision where the volunteer fire department or rescue squad is located as being a part of the safety program of such political subdivision. §18.2-340.36. Suspension of permit; investigation by Department upon complaint. A. When any officer charged with the enforcement of the
charitable gaming laws of the Commonwealth has reasonable cause to believe that
the conduct of charitable gaming is being conducted by an organization in
violation of this article B. Written notice specifying the particular basis for the immediate suspension shall be provided by the officer to the organization within one business day of the suspension and a hearing held thereon by the Department or its designated hearing officer within 10 days of the suspension unless the organization consents to a later date. No charitable gaming shall be conducted by the organization until the suspension has been lifted by the Department or a court of competent jurisdiction. C. Any complaint against an organization for any violation of this article, in order to be investigated by the Department, shall be made in writing, or otherwise made in accordance with Department procedures, and received by the Department within three years of the act, omission or occurrence giving rise to the violation. Public information obtained from any source by the Director or agency staff may serve as the basis for a written complaint against an organization. D. However, where a regulant has materially and willfully misrepresented, concealed or omitted any information and the information so misrepresented, concealed or omitted is material to the establishment of the violation, the complaint may be made at any time within two years after discovery of the misrepresentation, concealment or omission. E. In cases where criminal charges have been filed involving matters that, if found to be true, would also constitute a violation of this article, an investigation may be initiated by the Department at any time within two years following the date such criminal charges are filed. 2. That §18.2-340.31 of the Code of Virginia is repealed. |