Washington State House of Representatives Office of Program Research	BILL ANALYSIS
Commerce & Labor Committee

SSB 5573

Brief Description:  Authorizing raffles by student groups and public hospital districts.

Sponsors:  By Senate Committee on Labor, Commerce & Financial Institutions (originally sponsored by Senators Snyder and Kohl‑Welles).

Brief Summary of Substitute Bill

$Permits associated student bodies in the K-12 public school system to conduct raffles, and exempts the raffle revenue from local government gambling taxes.

Hearing Date:  3/20/01

Staff:  Chris Cordes (786‑7103).

Background: 

The Gambling Commission licenses bona fide charitable and nonprofit organizations (including organizations existing under specific state statutes and non-profit corporations organized for various reasons such as charitable, benevolent, educational, civic, social, athletic, or agricultural purposes) to conduct certain gambling activities.  Qualified organizations may, however, conduct unlicensed raffles for members only or for the public under the following conditions:

(1)  Member-only raffles:  The gross revenue from the organization's member-only raffles during a calendar year must not exceed $5,000 and the tickets may be sold only to members of the organization from whom the winners are selected.

(2)  Public raffles:  Public raffles may be conducted no more than twice a calendar year, only bona fide members may participate in selling raffle tickets, gross revenue from all unlicensed gambling activities may not exceed $5,000 in a calendar year, the net revenue must be devoted solely to the organization's purposes, the organization must give at least five days notice to the local police agency, and the organization must keep records for one year from the raffle's date showing at least the gross revenue, details of expenses, and details of uses of the gross revenue.

A "raffle" is a game in which tickets bearing an individual number are sold for not more than $25 each and in which prizes are awarded on the basis of a drawing from the tickets, the game is conducted by a bona fide charitable or nonprofit organization, no person other than a member of the organization takes part in conducting the game, and the proceeds do not benefit any person other than the organization.

Local governments are permitted to tax gambling activity subject to specific limits.  These taxes do not apply to the first $10,000 of gross receipts, less prizes, from raffles conducted by a bona fide charitable or nonprofit organization.

In the K-12 public school system, associated student bodies are formal organizations of the students of a school formed with the approval of and regulated by the school district's school board under rules adopted by the Superintendent of Public Instruction.  The county treasurer holds a fund on deposit for each  school district in the county having an associated student body.  Separate accounting is required for each associated student body's transactions.

Summary of Bill: 

Associated student bodies in the K-12 public school system and student groups organized under local school board policies regulating these associated student bodies are considered bona fide nonprofit organizations for purposes of conducting raffles.  These groups may conduct unlicensed raffles if:

$the raffle complies with applicable laws and rules of the Gambling Commission and local school district's policies;

$gross revenues from all raffles conducted by an associated student body or student group do not exceed $15,000 per calendar year or $5,000 per raffle;

$gross revenues are devoted solely to the use of the associated student body or student group, with the funds deposited in the associated student body program fund and not used for a private purpose; and

$the associated student body or student group keeps records for one year from the raffle's date showing at least the gross revenues, details of expenses, and details of uses of the gross revenues.

Local government gambling taxes do not apply to revenue from raffles conducted by associated student bodies or authorized student groups.

Rules Authority:  The bill does not contain provisions addressing the rule-making powers of an agency.

Appropriation:  None.

Fiscal Note:  Preliminary fiscal note available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.