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H. 5151
STATUS INFORMATION
General Bill
Sponsors: Rep. Scott
Document Path: l:\council\bills\gjk\21193sd04.doc
Companion/Similar bill(s): 5109
Introduced in the House on April 20, 2004
Currently residing in the House Committee on Ways and Means
Summary: Licensure and regulation on bingo
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 4/20/2004 House Introduced and read first time HJ-5 4/20/2004 House Referred to Committee on Ways and Means HJ-7
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND SECTION 12-21-3920, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO BINGO DEFINITIONS, SO AS TO REVISE THE DEFINITION OF A "PROMOTER"; TO AMEND SECTION 12-21-3940, RELATING TO LICENSES TO CONDUCT BINGO, SO AS TO REVISE THE TIME THE DEPARTMENT OF REVENUE HAS TO APPROVE OR REJECT LICENSE APPLICATIONS; TO AMEND SECTION 12-21-3950, AS AMENDED, RELATING TO A PROMOTER'S LICENSE, SO AS TO FURTHER PROVIDE FOR THE CONTENTS OF AN APPLICATION FOR A PROMOTER'S LICENSE; TO AMEND SECTION 12-21-3970, RELATING TO A PROMOTER'S LICENSE REQUIRED FOR EACH LICENSEE, SO AS TO PROVIDE THAT BEFORE A LICENSED NONPROFIT ORGANIZATION ALLOWS AN INDIVIDUAL OR ENTITY TO MANAGE, OPERATE, OR CONDUCT ITS BINGO GAME, THE ORGANIZATION SHALL ENSURE THAT THE INDIVIDUAL OR ENTITY FIRST OBTAINS A PROMOTER'S LICENSE FROM THE DEPARTMENT; TO AMEND SECTION 12-21-3990, RELATING TO THE MANNER OF PLAYING BINGO, SO AS TO PROVIDE THAT A NUMBER IS NOT VALID FOR A GAME UNTIL IT IS CALLED, AND TO PROVIDE THAT WHEN THE CALLER ANNOUNCES A GAME IS CLOSED, ALL PLAY FOR THAT GAME IS CONCLUDED; TO AMEND SECTION 12-21-4000, AS AMENDED, RELATING TO PROCEDURES APPLICABLE TO CONDUCT OF BINGO, SO AS TO FURTHER PROVIDE FOR THESE PROCEDURES; TO AMEND SECTION 12-21-4020, AS AMENDED, RELATING TO CLASSES OF BINGO LICENSES AND TAXES, SO AS TO PROVIDE THAT CLASS C BINGO GAMES MAY, BUT ARE NOT REQUIRED TO, HAVE A PROMOTER, AND TO REVISE THE MANNER IN WHICH CLASS C BINGO GAMES MAY BE CONDUCTED AND CERTAIN REQUIREMENTS RELATING TO CLASS C LICENSES; TO AMEND SECTION 12-21-4050, RELATING TO ALLOWING ONLY ONE ORGANIZATION TO OPERATE BINGO PER BUILDING, SO AS TO PROVIDE THAT THIS SECTION DOES NOT PROHIBIT THE LAWFUL OPERATION OF ADDITIONAL LICENSED BUSINESSES RELATED TO THE PLAY OF BINGO; TO AMEND SECTION 12-21-4080, AS AMENDED, RELATING TO THE REQUIREMENTS FOR A PROMOTER TO TURN OVER PROCEEDS AND THE MEMBER TO DEPOSIT PROCEEDS, SO AS TO PROVIDE THAT DEPOSITS MADE BY ELECTRONIC FUNDS TRANSFER MUST BE MADE WITHIN THREE BUSINESS DAYS; TO AMEND SECTION 12-21-4140, RELATING TO BINGO PENALTIES, SO AS TO REVISE PENALTIES FOR CERTAIN VIOLATIONS; TO AMEND SECTION 12-21-4190, RELATING TO BINGO CARD CHARGES AND DISTRIBUTION OF REVENUES, SO AS TO REVISE CHARGES WHICH MAY BE MADE BY THE DEPARTMENT OF REVENUE FOR CERTAIN LICENSES EXCLUDING CLASS C LICENSES; TO AMEND SECTION 12-21-4210, AS AMENDED, RELATING TO THE SALE OR TRANSFER OF BINGO CARDS, SO AS TO PROVIDE THAT CARDS HELD BY A CLASS C LICENSEE THAT CONVERTS TO A CLASS B LICENSE SHALL BE AUDITED AND A TRANSFER TAX PAID; TO AMEND SECTION 12-21-4240, RELATING TO LICENSES TO MANUFACTURE, DISTRIBUTE OR USE BINGO CARDS, SO AS TO FURTHER PROVIDE FOR THE REQUIREMENTS PERTAINING TO LICENSED MANUFACTURERS AND DISTRIBUTORS, AND FOR PROCEDURES PERTAINING TO THESE LICENSES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 12-21-3920(4) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"(4) 'Promoter' means an individual, corporation, partnership, limited liability company, subsidiary, or organization, or any related entity which manages, operates, solicits players, or conducts in any manner the nonprofit organization's game. The person hired under written contract is considered the promoter and must be licensed as a professional solicitor by the Secretary of State who is hired by a nonprofit organization to manage, operate, or conduct the licensee's bingo game. The person hired under written contract is considered the promoter."
SECTION 2. Section 12-21-3940(B) of the 1976 Code is amended to read:
"(B) Upon application for a license, the department has thirty forty-five days to approve or reject the application based on the requirements of this article."
SECTION 3. Section 12-21-3950(A) of the 1976 Code is amended by adding appropriately numbered items to read:
"(5) the names, addresses, and telephone numbers of all partners if the promoter is a partnership;
(6) the names, addresses, and telephone numbers of all stockholders of ten percent or more in the corporation if the promoter is a corporation;
(7) the names and addresses of all subsidiaries if the promoter is a corporation owning at least ten percent of a subsidiary; and
(8) the names, addresses, and telephone numbers of all individuals or entities owning ten percent or more of the company or entity if the promoter is a limited liability company or any other type of entity or organization."
SECTION 4. Section 12-21-3970 of the 1976 Code is amended to read:
"Section 12-21-3970. For each licensed nonprofit organization the promoter manages, operates, or conducts bingo, the promoter must purchase a promoter's license as provided in Section 12-21-3950 before operating or conducting bingo. Before a licensed nonprofit organization allows an individual or entity to manage, operate, or conduct its bingo game, the organization shall ensure that the individual or entity first obtains a promoter's license from the department. No promoter is permitted more than five licenses. This license must be prominently displayed at the location where bingo is conducted."
SECTION 5. Section 12-21-3990 of the 1976 Code, as last amended by Act 172 of 2004, is further amended to read:
"Section 12-21-3990. (A) The game of bingo must be played in the following manner:
(1) Bingo is played by more than one player and a caller who is associated with the house. Each player must pay face value for each card to be played during the course of a game and may purchase the card for a specified number of games. All cards sold for a game must sell for face value and cards may not be given to players as prizes or for free. After the player has purchased a card or cards for a specified number of games, the house cannot require or accept an additional payment or consideration by the player in order to complete the specified number of games.
(2) Before each game begins, the caller shall announce to the players the configuration or configurations that will win the game. A configuration consists of a number of grids covered in the manner announced by the caller. Any method of playing the games is allowed if the method is announced before each game's beginning including, but not limited to, wild card games. In addition, anytime before the conclusion of the game, the prize, specifically stating the dollar amount or value of merchandise awarded to the winner or winners for the game, must be announced.
(3) The prize must be awarded to the winner of that game without delay. For multiple winners, the prize must be divided equally among the winners. In the case of a merchandise prize, the cash value of the merchandise may be divided among the winners. Purchase receipts of merchandise awarded as prizes must be made available to players and the department for confirmation of value.
(4) The caller shall draw and announce numbers from the cage one at a time. A number is not valid for the game until it is called. If a player has a card with the called number on it, he may use a marker to cover the square which contains the number. After the number is announced, it must be indicated on the master-board by the caller.
(5) When a player covers sufficient squares on a card to achieve the winning configuration, he may indicate to the caller. The caller shall require that the player's card be checked against the master-board in the presence of the other players to determine if the squares were covered accurately. If it is determined by the caller that the player accurately has covered the squares and achieved the preannounced configuration, the player is declared the winner. If it is determined that the player has not covered the squares accurately and achieved the preannounced configuration, play continues in that game.
(6) All devices, including the master-board, used to show what numbers have been called during a game must not be changed or turned off until the winners are verified.
(7) When the caller announces a game is closed, all play for that game is concluded."
SECTION 6. A. Section 12-21-4000(2) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"(2) Only one set of seventy-five balls may be on the ball floor and only one master-board is allowed in the room or area during the play of the game."
B. Section 12-21-4000(15) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"(15) The house may hold promotions of special events during a session offering players prizes other than from the play of bingo not to exceed one hundred dollars in cash or merchandise for each session. This amount is not to may be paid out of the bingo account and is not included in total payouts for a session. There is no additional charge to players to participate in a special promotion. The promotion must not be a form of gambling or a game of chance."
SECTION 7. Section 12-21-4020(3) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"(3) CLASS C: An organization operating a bingo game and offering prizes of twenty dollars or less a game during a single session shall obtain a Class C bingo license at no cost. However, the organization may offer a prize in cash or merchandise of no more than one hundred fifty dollars for six jackpot games a session. Class C bingo games may, but are not required to, have a promoter. Sole responsibility for the operation of a Class C bingo game without a promoter lies with the nonprofit organization. A holder of a Class C bingo license may conduct bingo games seven days a week for a session of twelve hours between the hours of 9:00 a.m. and 2:00 a.m. An organization operating a Class C bingo game may not exceed gross bingo proceeds of two hundred fifty thousand dollars per calendar month for more than three consecutive months. If the gross bingo proceeds for any calendar quarter exceeds that amount, the organization must notify the department within ten days of the end of the quarter, and pay the license fee for a Class B license within one hundred eighty days. The department, in its discretion, may allow certain Class C licenses to use hard bingo cards instead of the paper cards required by this article.
To qualify to play on hard cards, a bingo game conducted by a Class C license must meet the following criteria:
(a) be operated solely by volunteers;
(b) the person managing, conducting, or operating the bingo game must not be paid or otherwise be compensated and must be a designated member of the organization;
(c) remuneration, including wages or other compensation, must not be made to any individual or corporation;
(d) all equipment used to operate a game of bingo, including chairs, tables, and other equipment, must be owned by the charity;
(e) the organization may lease the building directly from the owner of the building or own the building in which the game of bingo is played. The organization may not lease or sublease the building from a person who is not the owner;
(f) the only expenses allowed to be paid from the proceeds of the game are utility bills, prizes, purchases of cards, payments for the lease of a building, purchases of equipment required to operate a game of bingo, and the charitable purposes of the organization;
(g) one hundred percent of the net proceeds from the operation of the game must be used for charitable purposes."
SECTION 8. Section 12-21-4050 of the 1976 Code is amended to read:
"Section 12-21-4050. Only one nonprofit organization may operate or cause the operation of bingo in a building. This section does not prohibit the lawful operation of additional licensed businesses related to the play of bingo. This section applies to all buildings regardless of ownership, of primary use, or of original use."
SECTION 9. Section 12-21-4080(A) of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"(A) Upon completion of the session, the promoter or the organization member representative shall deposit the gross proceeds from the session less the amount paid out as prizes into the bingo checking account. If the promoter is authorized by the organization to make the session deposit, the promoter shall deliver to the organization representative evidence that the deposit was made in a timely manner. This evidence must be furnished no later than the next business day following the day of the bingo session on which the proceeds were obtained. Deposits made by electronic funds transfer must be made within three business days."
SECTION 10. Section 12-21-4140 of the 1976 Code is amended to read:
"Section 12-21-4140. (A) All new department revenue rulings must be presented to all bingo organizations and promoters in writing before the department's issuance of a warning or violation.
(B) A written warning must be given before the department's issuance of a first violation.
(C) Violations for any section of this article shall allow for an appeal to the department. The action in question shall cease until the appeals process is complete. The fines for violations shall be:
(1) five hundred dollars for the first violation;
(2) one thousand dollars for the second violation;
(3) five thousand dollars for the third violation; and
(4) revocation of license for fourth violation.
A penalty of up to five thousand dollars and revocation of the license at the discretion of the department may be imposed for a violation of this article. Each violation and each day in violation of a provision of this article constitutes a separate offense."
SECTION 11. Section 12-21-4190(A) of the 1976 Code is amended to read:
"(A) The department shall charge and retain sixteen and one-half cents for each dollar of face value for each bingo card sold for AA, B, D, and E licenses. The department shall charge and retain ten cents for each dollar of face value for each bingo card sold for a Class B license. The department shall charge and retain five cents for each dollar of face value for each bingo card sold to a F license. There shall be no charge for a C license."
SECTION 12. Section 12-21-4210 of the 1976 Code, as last amended by Act 334 of 2002, is further amended to read:
"Section 12-21-4210. Bingo cards may not be sold or transferred between licensed organizations, between distributors, or between manufacturers. All unused bingo cards may be returned to the department for refund and destruction. The department shall audit all cards held by a Class C licensee that converts to a Class B license, and the licensee shall pay a tax to the department of ten percent of the face value of the cards held. This tax must be distributed as directed by Section 12-21-4190(B). The department may not issue additional bingo cards to the licensee until the tax is paid. The department is required to refund only the amount retained by the department previously based on the face value of each card and does not include the manufacturer's price or transportation charges to the consignee at destination and such additional charges. If an organization operating a bingo game ceases operation within fifteen days from the purchase of the last voucher and the voucher remains outstanding, the department shall accept the returned paper and credit the value of returned paper against the outstanding voucher. The organization then shall pay the balance of the voucher less the value of returned paper."
SECTION 13. Section 12-21-4240 of the 1976 Code is amended to read:
"Section 12-21-4240. (A) Each manufacturer, distributor, organization, or promoter must be licensed to manufacture or distribute, or use bingo cards. The department shall charge an annual license fee of five thousand dollars for each manufacturer and two thousand dollars for each distributor. A license issued by the department under this section is renewable annually unless canceled or terminated. No license issued under this section is transferable or assignable.
(B) A licensed manufacturer shall obtain a certificate of authority pursuant to Section 33-15-102 and shall name a registered agent. A licensed manufacturer shall keep and maintain a complete set of records which shall include details of all activities of the licensee relating to the conduct of the licensed activity as may be required by the department, including quantities and types of all bingo cards sold to each licensed distributor. These records shall be made available for inspection and copying upon request by the department. A licensed manufacturer shall permit agents of the department to enter their premises, or the business premises of another person, including a successor corporation, whether located in this State or another state, for the purposes of inspecting all books, papers, records, memoranda, commodities, or other things bearing on activities licensed under this article. The department may require that licensees furnish copies of these records to the department regardless of whether an on-site inspection has been conducted.
(C) A licensed distributor shall have a principal place of business located within this State and shall obtain a certificate of authority pursuant to Section 33-15-102 and shall name a registered agent. A licensed distributor shall keep and maintain a complete set of records which shall include all details of all activities of the licensee relating to the conduct of the licensed activity as may be required by the department, including the quantities and types of all bingo cards sold to each licensed nonprofit organization. These records must be made available for inspection and copying upon request by the department. A licensed distributor shall permit agents of the department to enter the premises, or the business premises of another person, including a successor corporation, whether located in this State or another state, for the purposes of inspecting all books, papers, records, memoranda, commodities, or other things bearing on activities licensed under this article. The department may require that licensees furnish copies of these records to the department regardless of whether an on-site inspection has been conducted.
(D) The department shall require, by regulation, periodic reporting from licensed manufacturers and distributors relative to their bingo activities in this State.
(E) No manufacturer or distributor may permit distribution of any bingo cards, printed or nonprinted, unless authorized by the department pursuant to Section 12-21-4270. The department may revoke a license issued under this article if the holder of the license fails to comply with the provisions of this section.
(F) Failure to comply with the provisions of this section shall result in the revocation of the license.
(G) No license shall be issued to the holder of a license revoked for noncompliance with the provisions of this article. An individual or entity is deemed to be the holder of a revoked license if he or it has any interest whatsoever, directly or indirectly, in a partnership, association, limited liability corporation, limited liability partnership, or corporation holding a license revoked for noncompliance with the provisions of this article.
(H) Records obtained pursuant to this section are considered admissible in a contested case hearing before the Administrative Law Judge Division under the business records exception to the hearsay rule if the records are accompanied by an affidavit of an officer of the business reflecting that the records are kept in the ordinary course of business and that the information provided is accurate and correct and, if the records are properly exchanged pursuant to Rule 26 of the Rules of Procedure for the Administrative Law Judge Division. The manufacturer or distributor shall provide such an affidavit upon request by the department."
SECTION 14. This act takes effect upon approval by the Governor.
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