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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
applications.
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
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE BILL NO. 1322 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO CHARITABLE BINGO AND RAFFLE OPERATIONS; AMENDING SECTION 67-7702, 3 IDAHO CODE, TO REVISE DEFINITIONS; AMENDING SECTION 67-7709, IDAHO CODE, 4 TO REVISE PROCEDURES FOR ACCOUNTING AND USE OF BINGO PROCEEDS; AND AMEND- 5 ING SECTION 67-7711, IDAHO CODE, TO REVISE LICENSING PROCEDURES AND TO 6 MAKE TECHNICAL CORRECTIONS. 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 2 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"shallmeans all moneys paid by players during a 30 bingo game or session for the playing of bingo or raffle events andshalldoes 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 recognized53under chapter 7, title 53, Idaho Code. 54 (12) "Organization" means a charitable organization or a nonprofit organi- 55 zation. 3 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: 29 67-7709. ACCOUNTING AND USE OF BINGO PROCEEDS. 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 4 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 beutilized16 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 isutilizedused 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. Suchpaywages shall be paid on an 32 hourly basis,andshall 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-38tion requesting an exemption from the disbursement percentages pro-39vided in this subsection for administrative costs may request an40exemption 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- 5 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 thisactchapter and rules promul- 48 gated pursuant to thisactchapter 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- 6 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 serviceand the state tax commissionthat 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; and32(iii) In the case of unincorporated nonprofit associations operating33pursuant to chapter 7, title 53, Idaho Code, a statement meeting the34requirements of section 53-710, Idaho Code, for appointing an agent35for 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 47not employed by, or a volunteer for, the organizationfor 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) 7 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
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.
Contact
Name: Jeff Anderson
Agency: Lottery Commission
Phone: 334-2600
STATEMENT OF PURPOSE/FISCAL NOTE S 1322