2008 Legislation
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SENATE BILL NO. 1322<br /> – Bingo/raffles, accounting, records


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S1322......................................................by STATE AFFAIRS
BINGO - RAFFLES - Amends existing law to require charitable bingo and
raffle operations to provide documentation of their charitable activities;
to require minimum recordkeeping and other financial guidelines; to delete
the authority for unincorporated associations to conduct charitable bingo
and raffle operations; and to clarify the procedure for denying certain

01/21    Senate intro - 1st rdg - to printing
01/22    Rpt prt - to St Aff
02/05    Rpt out - rec d/p - to 2nd rdg
02/06    2nd rdg - to 3rd rdg
02/07    3rd rdg - PASSED - 32-0-3
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Cameron,
      Coiner, Corder, Darrington, Fulcher, Gannon, Geddes, Goedde, Hammond,
      Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, Pearce, Richardson, Schroeder,
      Siddoway, Stegner, Stennett(Thorson), Werk
      NAYS -- None
      Absent and excused -- Burkett, Davis, McKenzie
    Floor Sponsor - Jorgenson
    Title apvd - to House
02/08    House intro - 1st rdg - to St Aff
02/15    Rpt out - rec d/p - to 2nd rdg
02/18    2nd rdg - to 3rd rdg
02/20    3rd rdg - PASSED - 65-0-5
      AYES -- Anderson, Andrus, Barrett, Bayer, Bell, Bilbao, Black, Block,
      Bock, Boe, Bolz, Bowers, Bradford, Chadderdon, Chavez, Chew, Clark,
      Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood,
      Henbest(Burgoyne), Henderson, Jaquet, Killen, King, Kren, Labrador,
      Lake, LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin,
      Mortimer, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould,
      Ringo, Ruchti, Rusche, Sayler, Shepherd(02), Shepherd(08), Shirley,
      Shively, Smith(24), Smith(30)(Stanek), Snodgrass, Stevenson, Thayn,
      Thomas, Trail, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- None
      Absent and excused -- Bedke, Brackett, Patrick, Roberts, Schaefer
    Floor Sponsor - Snodgrass
    Title apvd - to Senate
02/21    To enrol
02/22    Rpt enrol - Pres signed
02/25    Sp signed
02/26    To Governor
02/27    Governor signed
         Session Law Chapter 43
         Effective: 07/01/08

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008


                                       IN THE SENATE

                                    SENATE BILL NO. 1322

                                 BY STATE AFFAIRS COMMITTEE

  1                                        AN ACT

  7    Be It Enacted by the Legislature of the State of Idaho:

  8        SECTION 1.  That Section 67-7702, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:

 10        67-7702.  DEFINITIONS. As used in this chapter:
 11        (1)  "Bingo"  means  the  traditional  game  of  chance played for a prize
 12    determined prior to the start of the game.
 13        (a)  Upon approval by the bingo-raffle advisory board a licensee may offer
 14        bingo games in which players are allowed to select their  own  numbers  if
 15        the  cards  used  to conduct the games have controls that provide an audit
 16        trail adequate to determine all winning number combinations.
 17        (b)  Card-minding devices are prohibited. Autodaubing features are prohib-
 18        ited.
 19        (c)  Bingo shall not include "instant bingo" which is  a  game  of  chance
 20        played  by  the selection of one (1) or more prepackaged bingo cards, with
 21        the winner determined by the appearance of a preprinted  winning  designa-
 22        tion on the bingo card.
 23        (2)  "Bingo-raffle advisory board" means a board of six (6) persons chosen
 24    by  the  governor  to make advisory recommendations regarding bingo and raffle
 25    operations and regulation in Idaho.
 26        (3)  "Charitable organization" means an organization that has been in con-
 27    tinuous existence in the county of operation of the charitable bingo  game  or
 28    raffle  for  at  least  one (1) year, that conducts charitable activities, and
 29    that is exempt from taxation under section  501(c)(3),  501(c)(4),  501(c)(6),
 30    501(c)(8),  501(c)(10),  501(c)(19) or 501(d) of the Internal Revenue Code and
 31    is exempt from income taxation under title 63, Idaho Code, as a bona fide non-
 32    profit charitable, civic, religious, fraternal, patriotic or veterans  organi-
 33    zation  or  as a nonprofit volunteer fire department, or as a nonprofit volun-
 34    teer rescue squad, or as a nonprofit volunteer educational booster group, par-
 35    ent-teacher  organization  or  association.  If  the  organization  has  local
 36    branches or chapters, the  term  "charitable  organization"  means  the  local
 37    branch or chapter operating the bingo or raffle game.
 38        (4)  "Commission"  means  the Idaho state lottery commission as defined in
 39    section 67-7404, Idaho Code.
 40        (5)  "Duck race" means a charitable raffle played by  releasing  numbered,
 41    inanimate  toys  (ducks)  into  a  body of moving water. A person who has been
 42    assigned the same number as the first duck to cross a predetermined  point  in
 43    the  water (the finish line) is the winner. Other prizes may be awarded on the


  1    basis of the order in which the ducks cross the finish line. With  the  excep-
  2    tion of determining "net proceeds," all restrictions and requirements applica-
  3    ble  to  the conduct of charitable raffles in this chapter shall also apply to
  4    the conduct of duck races.
  5        (6)  "Electronic bingo card" or "face" means an electronic facsimile of  a
  6    bingo card or face, from a permutation of bingo cards formulated by a manufac-
  7    turer  licensed  in  Idaho,  which is stored and/or displayed in a bingo card-
  8    monitoring device. An electronic bingo  card or face is deemed to be a form of
  9    disposable paper bingo card.
 10        (7)  (a) "Electronic bingo device" means an electronic device  used  by  a
 11        bingo  player  to monitor bingo cards purchased at the time and place of a
 12        licensed organization's bingo session, and which:
 13             (i)   Provides a means for bingo players to input  numbers  announced
 14             by a bingo caller;
 15             (ii)  Requires  the  player to manually enter the numbers as they are
 16             announced by a bingo caller;
 17             (iii) Compares the numbers entered by the bingo player to the numbers
 18             contained on bingo cards previously stored in the electronic database
 19             of the device;
 20             (iv)  Identifies winning bingo patterns; and
 21             (v)   Signals only the bingo player when a winning bingo  pattern  is
 22             achieved.
 23        (b)  "Electronic  bingo  device"  does not mean or include any device into
 24        which coins, currency, or tokens are inserted to  activate  play,  or  any
 25        device  which is interfaced with or connected to any host system which can
 26        transmit or receive any ball call information, site system  or  any  other
 27        type  of bingo equipment once the device has been activated for use by the
 28        bingo player.
 29        (8)  "Gross revenues" shall means all moneys  paid  by  players  during  a
 30    bingo game or session for the playing of bingo or raffle events and shall does
 31    not  include money paid for concessions; provided that the expenses of renting
 32    electronic bingo devices from a licensed vendor and the  fees  collected  from
 33    players for the use of electronic bingo devices must be reported separately on
 34    the  organization's  annual  bingo  report  and must be netted for purposes of
 35    determining gross revenues as follows: only fees  collected  from  players  in
 36    excess of the rental charges paid to licensed vendors will be considered to be
 37    a part of gross revenues, and if the costs of renting electronic bingo devices
 38    from a licensed vendor exceed the fees collected from players for use of elec-
 39    tronic  bingo  devices,  the  difference  will be considered an administrative
 40    expense for purposes of section 67-7709(1)(d), Idaho Code.
 41        (9)  "Holiday Christmas tree fundraiser" means a charitable raffle  played
 42    by persons bidding on decorated holiday trees with the proceeds being utilized
 43    for  senior  citizen  centers  or  hospitals or hospital auxiliaries. With the
 44    exception of determining "net proceeds,"  all  restrictions  and  requirements
 45    applicable  to  the  conduct  of charitable raffles in this chapter shall also
 46    apply to the conduct of holiday Christmas tree fundraisers.
 47        (10) "Host system" means the computer hardware,  software  and  peripheral
 48    equipment  of  a  licensed manufacturer which is used to generate and download
 49    electronic bingo cards to a licensed organization's  site  system,  and  which
 50    monitors sales and other activities of a site system.
 51        (11) "Nonprofit  organization"  means  an  organization incorporated under
 52    chapter 3, title 30, Idaho Code, or an unincorporated  association  recognized
 53    under chapter 7, title 53, Idaho Code.
 54        (12) "Organization" means a charitable organization or a nonprofit organi-
 55    zation.


  1        (13) "Person"  shall be construed to mean and include an individual, asso-
  2    ciation, corporation, club, trust, estate, society, company, joint stock  com-
  3    pany,  receiver,  trustee,  assignee,  referee or any other person acting in a
  4    fiduciary or representative capacity, whether appointed by a court  or  other-
  5    wise,  and any combination of individuals. "Person" shall also be construed to
  6    mean and include departments, commissions, agencies and  instrumentalities  of
  7    the  state  of  Idaho,  including  counties and municipalities and agencies or
  8    instrumentalities thereof.
  9        (14) "Raffle" means a game in which the prize is won by random drawing of
 10    the name or number of one (1) or more persons purchasing chances.
 11        (15) "Session" means a period of time not to exceed eight (8) hours in any
 12    one (1) day in which players are allowed to participate in bingo  games  oper-
 13    ated by a charitable or nonprofit organization.
 14        (16) "Site  system"  means  the computer hardware, software and peripheral
 15    equipment used by a licensed organization at the site  of  its  bingo  session
 16    which  provides  electronic  bingo  cards  or bingo card monitoring devices to
 17    players, and which receipts the sale or rental of such cards and  devices  and
 18    generates reports relative to such sales or rentals.
 19        (17) "Special  permit" means a permit that can be obtained by a charitable
 20    organization that is not licensed but qualifies to  operate  an  exempt  bingo
 21    operation. This permit allows a qualifying organization to operate bingo games
 22    at a county fair for the duration of the fair.
 23        (18) "Vendor" means an applicant, licensee or manufacturer, distributor or
 24    supplier  licensed  or  unlicensed  that furnishes or supplies bingo or raffle
 25    equipment, disposable or nondisposable cards and any and  all  related  gaming
 26    equipment.

 27        SECTION  2.  That  Section 67-7709, Idaho Code, be, and the same is hereby
 28    amended to read as follows:

 30        (1)  (a) All funds received in connection with a bingo game required to be
 31        licensed pursuant to this chapter and the rules of the state lottery  com-
 32        mission  shall  be placed in a separate bank account. No funds may be dis-
 33        bursed from this account except the charitable or  nonprofit  organization
 34        may  expend  proceeds  for prizes, advertising, utilities, rental of elec-
 35        tronic bingo devices,  and the purchase of supplies and equipment in play-
 36        ing bingo, taxes and license fees related to bingo, the payment of compen-
 37        sation, and for the purposes set forth below for the remaining proceeds.
 38        (b)  Funds from bingo accounts must be withdrawn by  preprinted,  consecu-
 39        tively numbered checks or withdrawal slips, signed by an authorized repre-
 40        sentative  of  the  licensed authorized organization and made payable to a
 41        person. A check or withdrawal slip shall not be made  payable  to  "cash,"
 42        "bearer"  or  a  fictitious payee. The nature of the payment made shall be
 43        noted on the face of the check or withdrawal slip. Checks  for  the  bingo
 44        account  shall  be imprinted with the words "bingo account" and shall con-
 45        tain the organization's bingo license name on the face of  each  check.  A
 46        licensed authorized organization shall keep and account for all checks and
 47        withdrawal slips, including voided checks and withdrawal slips.
 48        (c)  Any  proceeds  available  in  a  bingo  account  after payment of the
 49        expenses set forth in paragraph (1)(a) of this subsection shall  inure  to
 50        the  charitable or nonprofit organization to be used for religious, chari-
 51        table, civic, scientific testing, public safety, literary  or  educational
 52        purposes  or for purchasing, constructing, maintaining, operating or using
 53        equipment or land, or a building or improvements thereto, owned, leased or


  1        rented by and for the charitable or nonprofit organization  and  used  for
  2        civic  purposes or made available by the charitable or nonprofit organiza-
  3        tion for use by the general public from time to time, or to foster amateur
  4        sports competition, or for the prevention of cruelty to children  or  ani-
  5        mals,  provided  that  no  proceeds  shall be used or expended directly or
  6        indirectly to compensate officers or directors. The licensed bingo  opera-
  7        tion  must maintain records for three (3) years on forms prescribed by the
  8        commission or pursuant to rules prescribed by the commission  showing  the
  9        charitable  activities  to  which the proceeds described in this paragraph
 10        are applied. No employees of the charitable organization  may  be  compen-
 11        sated from bingo proceeds except as provided in this subsection.
 12        (d)  (i)   All gross revenues received from bingo games by a charitable or
 13             nonprofit  organization  must  be  disbursed in the following manner,
 14             unless otherwise provided in section 67-7708, Idaho  Code:  not  more
 15             than sixty-five percent (65%) of the gross revenues shall be utilized
 16             used  for  prizes  in the charitable bingo game, not less than twenty
 17             percent (20%) of gross revenues shall be used for charitable purposes
 18             enumerated in this subsection, and  not  more  than  fifteen  percent
 19             (15%) of the gross revenues shall be used for administrative expenses
 20             associated  with  the  charitable  bingo  game. If agreed upon by its
 21             board of directors, a charitable organization may decrease gross rev-
 22             enues spent on administrative expenses associated  with  bingo  games
 23             and allocate those revenues to prizes so long as no more than seventy
 24             percent  (70%)  of  the gross revenues is utilized used for prizes on
 25             the bingo game. An organization requesting an exemption from the dis-
 26             bursement percentages provided in this paragraph  for  administrative
 27             costs may request an exemption from the state lottery commission.
 28             (ii)  Two  hundred  fifty  dollars ($250) or one-tenth of one percent
 29             (.1%) of annual gross revenues, as per  the  previous  year's  annual
 30             bingo  report  whichever is greater may be paid as wages for the con-
 31             duct of any one (1) bingo session. Such pay wages shall be paid on an
 32             hourly basis, and shall be directly related to the preparation,  con-
 33             duct of and cleaning following a bingo session, and shall be paid out
 34             of  the  organization's  separate bank account unless the director of
 35             lottery security has given prior written permission to pay wages  out
 36             of  another account.  Such wages shall be part of the fifteen percent
 37             (15%) gross revenues used for administrative expenses.  An  organiza-
 38             tion  requesting  an exemption from the disbursement percentages pro-
 39             vided in this subsection for  administrative  costs  may  request  an
 40             exemption from the state lottery commission.
 41        (2)  Any  charitable or nonprofit organization conducting bingo games pur-
 42    suant to this chapter shall prepare a statement at the close  of  its  license
 43    year and shall file such statement with the state lottery. The statement shall
 44    be  prepared on a form prescribed by the lottery commission and shall include,
 45    at a minimum, the following information:
 46        (a)  The number of bingo sessions conducted or sponsored by  the  licensed
 47        organization;
 48        (b)  The location and date at which each bingo session was conducted;
 49        (c)  The gross revenues of each bingo session;
 50        (d)  The fair market value of any prize given at each bingo session;
 51        (e)  The number of individual players participating in each session;
 52        (f)  The number of cards played in each session;
 53        (g)  The amount paid in prizes at each session;
 54        (h)  The amount paid to the charitable organization;
 55        (i)  All  disbursements  from  bingo revenue and the purpose of those dis-


  1        bursements must be documented on a general ledger and submitted  with  the
  2        annual bingo report to the Idaho lottery commission; and
  3        (j)  An accounting of all gross revenues and the disbursements required by
  4        statute  and rule of the state lottery commission must be retained in per-
  5        manent records with the organization, including the date of each  transac-
  6        tion  and  the  name  and  address of each payee for all prize payments in
  7        excess of one hundred dollars ($100) and the  disbursements  of  funds  to
  8        charitable  activities, including the identity of  the charity and/or pur-
  9        pose and use of the disbursements by the charity.
 10        (3)  Any organization required to be licensed to conduct bingo  operations
 11    under  the provisions of this chapter shall use only nonreusable colored bingo
 12    paper or electronic bingo  paper  so  that  all  sales  may  be  tracked.  The
 13    nonreusable  colored  paper must have a series and serial number on each card.
 14    At the conclusion of each session, all organizations using  nonreusable  bingo
 15    paper  must  track  their  bingo sales per session by recording the series and
 16    serial numbers of all paper sold, damaged, donated or used  for  promotion  in
 17    that session. Each such organization shall keep a ledger of the numbers of all
 18    such  papers  used  during  each  session. All paper must be tracked as either
 19    sold, damaged, donated, used for promotion, or omitted from the original  dis-
 20    tributor  or  manufacturer.  Paper tracking ledgers and invoices from the dis-
 21    tributor or manufacturer for nonrefundable colored bingo paper  must  be  kept
 22    with the permanent records for that bingo operation.
 23        (4)  Any person who shall willfully or knowingly furnish, supply or other-
 24    wise  give  false  information in any statement filed pursuant to this section
 25    shall be guilty of a misdemeanor.
 26        (5)  All financial books, papers, records and documents of an organization
 27    shall be kept as determined by rule of the state lottery and shall be open  to
 28    inspection  by the county sheriff of the county, or the chief of police of the
 29    city, or the prosecuting attorney of the county where the bingo game was held,
 30    or the attorney general or the state lottery at reasonable  times  and  during
 31    reasonable hours.
 32        (6)  Every  charitable  or nonprofit organization whose annual gross reve-
 33    nues exceed two hundred thousand dollars  ($200,000)  from  the  operation  of
 34    bingo  games shall provide the state lottery with a copy of an annual audit of
 35    the bingo operation. The audit shall be performed  by  an  independent  public
 36    accountant  and submitted within ninety (90) days after the end of the license
 37    year.

 38        SECTION 3.  That Section 67-7711, Idaho Code, be, and the same  is  hereby
 39    amended to read as follows:

 40        67-7711.  LICENSING  PROCEDURE.  (1) Any charitable or nonprofit organiza-
 41    tion not exempt pursuant to section 67-7713, Idaho Code, desiring  to  operate
 42    bingo  sessions  or  games  or charitable raffles shall make application for a
 43    license to the state lottery. The  state  lottery  shall  review  the  license
 44    application  and shall approve or deny the issuing of a license within fifteen
 45    (15) calendar days of receipt of the license application.  The  state  lottery
 46    may  deny  the  application  if  it  determines that the applicant has not met
 47    requirements for an application imposed in this act chapter and rules  promul-
 48    gated pursuant to this act chapter or upon any ground for which an application
 49    for  renewal  of a license could be denied or for which an existing licensee's
 50    license could be revoked or suspended. Whenever an application is  denied,  it
 51    shall  be returned to the applicant by the state lottery with specific reasons
 52    for the denial. When a license application is approved by the  state  lottery,
 53    the  state lottery shall issue a license to the applicant. No person or chari-


  1    table or nonprofit organization,  except  those  exempt  pursuant  to  section
  2    67-7713, Idaho Code, shall operate or conduct a bingo session or game or char-
  3    itable  raffle  until  it  has  received a license from the state lottery. The
  4    license shall expire one (1) year after the date it was issued. A copy of  the
  5    license shall be furnished to the county sheriff of the county or the chief of
  6    police of the city in which the licensee intends to operate a bingo session or
  7    game  or  sell  charitable  raffle tickets before a bingo session or game or a
  8    charitable raffle is conducted by the licensee.
  9        (2)  Each application and renewal application shall contain the  following
 10    information:
 11        (a)  The  name, address, date of birth, driver's license number and social
 12        security number of the applicant and if the applicant  is  a  corporation,
 13        association or other similar legal entity, the name, home address, date of
 14        birth,  driver's  license number and social security number of each of the
 15        officers of the organization as well as the name and address of the direc-
 16        tors, or other persons similarly situated, of the organization;
 17        (b)  The name, home address, date of birth, driver's  license  number  and
 18        social  security  number  of each of the person or persons responsible for
 19        managing the bingo session or game or raffle;
 20        (c)  (i) In the case of charitable organizations, a copy of  the  applica-
 21             tion  for  recognition  of exemptions and a determination letter from
 22             the internal revenue service and the state tax commission that  indi-
 23             cates  that the organization is a charitable organization and stating
 24             the section under which that exemption is granted, except that if the
 25             organization is a state or local branch, lodge, post or chapter of  a
 26             national  organization,  a  copy  of  the determination letter of the
 27             national organization shall satisfy this requirement; and
 28             (ii)  In the case of incorporated nonprofit organizations, a copy  of
 29             a  certificate of existence issued by the secretary of state pursuant
 30             to chapter 3, title 30, Idaho Code, establishing  the  organization's
 31             good standing in the state; and
 32             (iii) In  the case of unincorporated nonprofit associations operating
 33             pursuant to chapter 7, title 53, Idaho Code, a statement meeting  the
 34             requirements  of  section 53-710, Idaho Code, for appointing an agent
 35             for service of process.
 36        (d)  The location at which the applicant will conduct the bingo session or
 37        games or drawings for the raffles.
 38        (3)  The operation of bingo sessions or games or charitable raffles  shall
 39    be  the  direct  responsibility  of,  and  controlled  by, a special committee
 40    selected by the governing body of the organization. If the governing body  has
 41    not  appointed a special committee, the members of the governing body shall be
 42    held responsible for the conduct of the bingo sessions or games or raffles. No
 43    directors or officers of an organization or persons related to them either  by
 44    marriage  or  blood  within  the  second degree shall receive any compensation
 45    derived from the proceeds of a bingo session or  raffle  regulated  under  the
 46    provisions of this chapter. An organization shall not contract with any person
 47    not  employed by, or a volunteer for, the organization for the purpose of con-
 48    ducting a bingo session or providing bingo services or conducting a raffle  on
 49    the  organization's  behalf, provided that this prohibition does not prevent a
 50    bingo organization from hiring employees and paying wages as provided in  sec-
 51    tion  67-7709(1)(d)(ii),  Idaho Code. However, if the state lottery commission
 52    has entered into an agreement or contract with another state for the operation
 53    or promotion of joint bingo sessions, the charitable or nonprofit organization
 54    may participate in that contract or agreement.
 55        (4)  Different chapters of an organization may apply for and share one (1)


  1    license to conduct raffles so long as the information required  in  subsection
  2    (2)  of  this  section is provided to the lottery prior to the issuance of the
  3    license.
  4        (5)  The organization may apply for  the  license  to  coincide  with  the
  5    organization's fiscal year.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                            RS 17427C1

This legislation amends current law governing charitable gaming to
require charitable bingo and raffle operations to provide
documentation of their charitable activities, meet certain minimum
record keeping and other financial guidelines.  The legislation
repeals the authority for unincorporated associations to conduct
charitable bingo and raffle operations and clarifies the procedure
for denying certain applications.

                           FISCAL NOTE

No General Fund or other fiscal impact.


Name:   Jeff Anderson
Agency: Lottery Commission 
Phone:  334-2600

STATEMENT OF PURPOSE/FISCAL NOTE                        S 1322