5034 AMC CONF S3286.1

SB 5034 - CONF REPT

By Conference Committee

    Strike everything after the enacting clause and insert the following:

    "Sec. 1.  RCW 9.46.0209 and 1987 c 4 s 4 are each amended to read as follows:

    "Bona fide charitable or nonprofit organization," as used in this chapter, means:  (1) Any organization duly existing under the provisions of chapters 24.12, 24.20, or 24.28 RCW, any agricultural fair authorized under the provisions of chapters 15.76 or 36.37 RCW, or any nonprofit corporation duly existing under the provisions of chapter 24.03 RCW for charitable, benevolent, eleemosynary, educational, civic, patriotic, political, social, fraternal, athletic or agricultural purposes only, or any nonprofit organization, whether incorporated or otherwise, when found by the commission to be organized and operating for one or more of the aforesaid purposes only, all of which in the opinion of the commission have been organized and are operated primarily for purposes other than the operation of gambling activities authorized under this chapter; or (2) any corporation which has been incorporated under Title 36 U.S.C. and whose principal purposes are to furnish volunteer aid to members of the armed forces of the United States and also to carry on a system of national and international relief and to apply the same in mitigating the sufferings caused by pestilence, famine, fire, floods, and other national calamities and to devise and carry on measures for preventing the same.  Such an organization must have been organized and continuously operating for at least twelve calendar months immediately preceding making application for any license to operate a gambling activity, or the operation of any gambling activity authorized by this chapter for which no license is required.  It must have not less than ((fifteen)) seven bona fide active members each with the right to an equal vote in the election of the officers, or board members, if any, who determine the policies of the organization in order to receive a gambling license.  An organization must demonstrate to the commission that it has made significant progress toward the accomplishment of the purposes of the organization during the twelve consecutive month period preceding the date of application for a license or license renewal.  The fact that contributions to an organization do not qualify for charitable contribution deduction purposes or that the organization is not otherwise exempt from payment of federal income taxes pursuant to the internal revenue code of 1954, as amended, shall constitute prima facie evidence that the organization is not a bona fide charitable or nonprofit organization for the purposes of this section.

    Any person, association or organization which pays its employees, including members, compensation other than is reasonable therefor under the local prevailing wage scale shall be deemed paying compensation based in part or whole upon receipts relating to gambling activities authorized under this chapter and shall not be a bona fide charitable or nonprofit organization for the purposes of this chapter.

    Sec. 2.  RCW 9.46.0205 and 1987 c 4 s 3 are each amended to read as follows:

(1) "Bingo," as used in this chapter, means a game ((conducted only in the county within which the organization is principally located)) in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random and in which no cards are sold except at the time and place of ((said)) the game, ((when said)) except as authorized by the commission for joint bingo games.

(2) The game ((is)) shall be conducted only by:

(a) A bona fide charitable or nonprofit organization which does not conduct or allow its premises to be used for conducting bingo on more than three occasions per week and which does not conduct bingo in any location which is used for conducting bingo on more than three occasions per week((,)); or ((if))

(b) An agricultural fair authorized under chapters 15.76 and 36.37 RCW, which does not conduct bingo on more than twelve consecutive days in any calendar year((, and)).

(3) Except in the case of any agricultural fair as authorized under chapters 15.76 and 36.37 RCW, no person other than a bona fide member or an employee of ((said)) the organization ((takes)) may take any part in the management or operation of ((said)) the game unless approved by the commission, and no person who takes any part in the management or operation of ((said)) the game ((takes)) may take any part in the management or operation of any game conducted by any other organization or any other branch of the same organization((,)) unless approved by the commission((, and)).

(4) No part of the proceeds ((thereof)) from a bingo game may inure to the benefit of any person other than the organization conducting ((said)) the game.

(5) A bingo game must be conducted only in the county where the sponsoring organization is principally located, except as authorized by the commission for joint bingo games.  For the purposes of this section, the organization shall be deemed to be principally located in the county within which it has its primary business office.  If the organization has no business office, the organization shall be deemed to be located in the county of principal residence of its chief executive officer((:  PROVIDED, That)).  Any organization which is conducting any licensed and established bingo game in any locale as of January 1, 1981, shall be exempt from the requirement that such game be conducted in the county in which the organization is principally located.

(6) The commission may authorize joint bingo games conducted by two or more bona fide charitable or nonprofit organizations if the prizes are pooled and the games are conducted during each organization's normal period of operation.  The commission may adopt rules for the operation, management, and location of the games.

    Sec. 3.  RCW 9.46.120 and 1987 c 4 s 40 are each amended to read as follows:

    (1) Except in the case of an agricultural fair as authorized under chapters 15.76 and 36.37 RCW, no person other than a member of a bona fide charitable or nonprofit organization (and their employees) or any other person, association or organization (and their employees) approved by the commission, shall take any part in the management or operation of any gambling activity authorized under this chapter((, and)) unless approved by the commission.  No person who takes any part in the management or operation of any such gambling activity shall take any part in the management or operation of any gambling activity conducted by any other organization or any other branch of the same organization((,)) unless approved by the commission((, and)).  No part of the proceeds ((thereof)) of the activity shall inure to the benefit of any person other than the organization conducting such gambling activities or if such gambling activities be for the charitable benefit of any specific persons designated in the application for a license, then only for such specific persons as so designated.

    (2) No bona fide charitable or nonprofit organization or any other person, association or organization shall conduct any gambling activity authorized under this chapter in any leased premises if rental for such premises is unreasonable or to be paid, wholly or partly, on the basis of a percentage of the receipts or profits derived from such gambling activity.

    Sec. 4.  RCW 9.46.110 and 1994 c 301 s 2 are each amended to read as follows:

(1) The legislative authority of any county, city-county, city, or town, by local law and ordinance, and in accordance with the provisions of this chapter and rules ((and regulations promulgated hereunder)) adopted under this chapter, may provide for the taxing of any gambling activity authorized by this chapter within its jurisdiction, the tax receipts to go to the county, city-county, city, or town so taxing the ((same:  PROVIDED, That)) activity.  Any such tax imposed by a county alone shall not apply to any gambling activity within a city or town located ((therein)) in the county but the tax rate established by a county, if any, shall constitute the tax rate throughout the unincorporated areas of such county((:  PROVIDED FURTHER, That (1) punch boards and pull-tabs, chances on which shall)).

(2) The operation of punch boards and pull-tabs are subject to the following conditions:

(a) Chances may only be sold to adults((, which shall have a fifty cent limit on a single chance thereon, shall be taxed on a basis which shall reflect only the gross receipts from such punch boards and pull-tabs; and (2)));

(b) The price of a single chance may not exceed one dollar;

(c) No punch board or pull-tab license may award as a prize upon a winning number or symbol being drawn the opportunity of taking a chance upon any other punch board or pull-tab; ((and (3)))

(d) All prizes ((for punch boards and pull-tabs)) available to be won must be described on an information flare.  All merchandise prizes must be on display within the immediate area of the premises ((wherein)) in which any such punch board or pull-tab is located ((and)).  Upon a winning number or symbol being drawn, ((such)) a merchandise prize must be immediately removed ((therefrom)) from the display and awarded to the winner.  All references to cash or merchandise prizes, with a value over twenty dollars, must be removed immediately from the information flare when won, or such omission shall be deemed a fraud for the purposes of this chapter; and (((4)))

(e) When any person ((shall win over twenty dollars in)) wins money or merchandise from any punch board or pull-tab over an amount determined by the commission, every licensee ((hereunder)) shall keep a public record ((thereof)) of the award for at least ninety days ((thereafter)) containing such information as the commission shall deem necessary((:  AND PROVIDED FURTHER, That)).

(3)(a) Taxation of bingo and raffles shall never be in an amount greater than ten percent of the gross ((revenue received therefrom)) receipts from a bingo game or raffle less the amount ((paid for or)) awarded as cash or merchandise prizes.

(b) Taxation of amusement games shall only be in an amount sufficient to pay the actual costs of enforcement of the provisions of this chapter by the county, city or town law enforcement agency and in no event shall such taxation exceed two percent of the gross ((revenue therefrom)) receipts from the amusement game less the amount ((paid for)) awarded as prizes((:  PROVIDED FURTHER, That)).

(c) No tax shall be imposed under the authority of this chapter on bingo or amusement games when such activities or any combination thereof are conducted by any bona fide charitable or nonprofit organization as defined in this chapter, which organization has no paid operating or management personnel and has gross ((income)) receipts from bingo or amusement games, or a combination thereof, not exceeding five thousand dollars per year, less the amount ((paid for)) awarded as cash or merchandise prizes.

(d) No tax shall be imposed on the first ten thousand dollars of ((net proceeds)) gross receipts less the amount awarded as cash or merchandise prizes from raffles conducted by any bona fide charitable or nonprofit organization as defined in this chapter.

(e) Taxation of punch boards and pull-tabs for bona fide charitable or nonprofit organizations is based on gross receipts from the operation of the games less the amount awarded as cash or merchandise prizes, and shall not exceed ((five)) a rate of ten percent ((of gross receipts, nor shall)).  At the option of the county, city-county, city, or town, the taxation of punch boards and pull-tabs for commercial stimulant operators may be based on gross receipts from the operation of the games, and may not exceed a rate of five percent, or may be based on gross receipts from the operation of the games less the amount awarded as cash or merchandise prizes, and may not exceed a rate of ten percent.

(f) Taxation of social card games may not exceed twenty percent of the gross revenue from such games.

(4) Taxes imposed under this chapter become a lien upon personal and real property used in the gambling activity in the same manner as provided for under RCW 84.60.010.  The lien shall attach on the date the tax becomes due and shall relate back and have priority against real and personal property to the same extent as ad valorem taxes.

    Sec. 5.  RCW 9.46.0233 and 1987 c 4 s 24 are each amended to read as follows:

    (1) "Fund raising event," as used in this chapter, means a fund raising event conducted during any seventy-two consecutive hours ((but exceeding twenty-four consecutive hours and)) not more than ((once)) twice in any calendar year when no gambling activities are conducted between the hours of 2:00 a.m. and 6:00 a.m.; or a fund raising event conducted not more than ((twice)) four times each calendar year for not more than ((twenty-four)) twenty consecutive hours ((each time)) when no gambling activities are conducted between the hours of 2:00 a.m. and 6:00 a.m.; or a combination of one seventy-two consecutive hour event and not more than two twenty consecutive hour events by a bona fide charitable or nonprofit organization as defined in RCW 9.46.0209 other than any agricultural fair referred to thereunder, upon authorization therefor by the commission, which the legislature hereby authorizes to issue a license therefor, with or without fee, permitting the following activities, or any of them, during such event:  Bingo, amusement games, contests of chance, lotteries and raffles:  PROVIDED, That (a) gross wagers and bets received by the organization less the amount of money paid by the organization as winnings and for the purchase cost of prizes given as winnings do not exceed ((ten)) fifteen thousand dollars during a single event or thirty thousand dollars during the total calendar days of such fund raising event in the calendar year; (b) such activities shall not include any mechanical gambling or lottery device activated by the insertion of a coin or by the insertion of any object purchased by any person taking a chance by gambling in respect to the device; (c) only bona fide members of the organization or their spouses who are not paid for such service shall participate in the management or operation of the activities((, and)).  However, an organization may use up to five individuals who are not members or spouses of members to operate gambling activities when the individuals are approved by the commission.  The individuals may be paid an amount determined by the commission but shall not be involved in the management of the event, perform duties of a cashier, banker, or otherwise have access to or share in the net proceeds of the event, or perform any of the accounting functions or otherwise have access to the accounting records.  Further, anyone licensed by the commission to rent equipment to conduct the activities may be paid an amount determined by the commission to provide training and advisory services in conjunction with the events; (d) all income therefrom, after deducting the cost of prizes and other expenses, shall be devoted solely to the lawful purposes of the organization; and (((d))) (e) such organization shall notify the appropriate local law enforcement agency of the time and place where such activities shall be conducted.  The commission shall require an annual information report setting forth in detail the expenses incurred and the revenue received relative to the activities permitted.

    (2) Bona fide charitable or nonprofit organizations holding a license to conduct a fund raising event may join together to jointly conduct a fund raising event if:

    (a) Approval to do so is received from the commission; ((and))

    (b) The method of dividing the income and expenditures and the method of recording and handling of funds are disclosed to the commission in the application for approval of the joint fund raising event and are approved by the commission((.));

(c) The gross wagers and bets received by the organizations less the amount of money paid by the organizations as winnings and for the purchase costs of prizes given as winnings ((may)) does not exceed ((ten)) fifteen thousand dollars during the total calendar days of such event.  The net receipts each organization receives shall count against the organization's annual limit stated in this subsection((.));

(d) A joint fund raising event shall count against only the lead organization or organizations receiving fifty percent or more of the net receipts for the purposes of the number of such events an organization may conduct each year((.)); and

(e) The commission may issue a joint license for a joint fund raising event and charge a license fee for such license according to a schedule of fees adopted by the commission which reflects the added cost to the commission of licensing more than one licensee for the event."

SB 5034 - CONF REPT

By Conference Committee

    On page 1, line 1 of the title, after "gambling;" strike the remainder of the title and insert "and amending RCW 9.46.0209, 9.46.0205, 9.46.120, 9.46.110, and 9.46.0233."

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