Date of Adoption: February 9, 2001.

Purpose: This rules package simplifies the requirements bingo operators must follow for returning bingo money to their organization's stated purpose.

Citation of Existing Rules Affected by this Order: Repealing WAC 230-02-362, 230-02-364, 230-02-366, 230-02-530, 230-02-535, 230-02-540, 230-20-058, 230-20-060 and 230-20-062; and amending WAC 230-04-260, 230-20-059, 230-30-052, and 230-50-010.

Statutory Authority for Adoption: RCW 9.46.070.

Adopted under notice filed as WSR 00-20-086 on October 3, 2000, with a publication date of October 18, 2000.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 4, Repealed 9.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 4, Repealed 9.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 4, Repealed 9; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0. Effective Date of Rule: April 1, 2001.

February 9, 2001

Susan Arland

Rules Coordinator

OTS-4649.2

AMENDATORY SECTION(Amending WSR 97-14-013, filed 6/20/97, effective 7/21/97)

WAC 230-04-260   Effect of exceeding license class income limit -- Procedures -- Penalties.   During any annual license period, a licensee shall not exceed the gross gambling receipts limits set forth on the license, except as authorized by this section. The following procedures, limitations, and penalties apply to licensees that exceed limits for any license.

((What must I do when it appears I will exceed the gross gambling receipts limits of my license?)) Anticipating gambling receipts limit will be exceeded.

(1) Each licensee shall monitor the level of gross gambling receipts received from each gambling activity. When a projection of year-to-date receipts, as applied to the remaining period of the license, indicates that it is reasonably likely that a license will be exceeded, the licensee shall immediately comply with the following:

(a) Apply for a license that authorizes the anticipated level of gross gambling receipts; and

(b) Submit the basic fee required for the new license, less the amount originally submitted for the previous license, plus a change of classification fee required by WAC 230-04-202 or ((WAC)) 230-04-203((; and, if applicable,

(c) Organizations whose bingo licenses were previously limited pursuant to WAC 230-20-062 shall include with their application, evidence of the ability to maintain net return requirements set forth in WAC 230-20-059, table 1, at or above the minimum level for the class of license sought. Achieving net return at or above the minimum level for the license class sought, for at least the six consecutive months immediately preceding the month in which the application for a license upgrade is submitted, shall be prima facie evidence of the ability to operate at the new license class level. A bingo licensee that is unable to demonstrate the ability to achieve net return requirements for at least six consecutive months preceding the application for upgrade may petition the director for a variance in accordance with the criteria set forth in WAC 230-20-060.

If the licensee's petition for a variance is denied, the licensee may petition the commission for review of the director's decision, in accordance with the criteria set forth in WAC 230-20-062)).

((If I upgrade my license during my normal annual license period, when will my license expire?))

(2) Any license upgrade issued by the commission shall be valid only for the remainder of the original term of the license.

((What are the penalties for failing to voluntarily apply for a license upgrade when my license has not previously been limited?)) Penalty for failing to apply for license upgrade.

(3) Any licensee that fails to comply with the requirements set forth in ((paragraph)) subsection (1) ((above)) of this section and exceeds the license class limit within a present or previous license year, may be assessed an exceeding class fee not to exceed ((50%)) fifty percent of the difference between the fees for the present license class and the new license class or (($1,000)) one thousand dollars, whichever is less. Upon written notice by the commission assessing an exceeding class fee, a licensee shall remit the proper fee plus all upgrade fees within ((20)) twenty days. Failure to remit such fees may result in a summary suspension of all licenses held by the licensee pending a hearing for the suspension or revocation of such licenses.

((What are the penalties for failing to voluntarily apply for a license upgrade when my license has been previously limited?

(4) In addition to the penalties set forth in paragraph (3) of this section, any organization that has had its bingo license limited under the restrictions set forth in WAC 230-20-062 and which exceeds its annual gross receipts limits for its assigned class of license, shall have its gambling license summarily suspended.

Can I request a refund of license fees when I do not achieve the level of gross gambling receipts for which I was authorized?)) Partial refund of license fees when gambling receipts limit is not achieved.

(((5))) (4) A licensee shall be allowed to apply for a partial refund of its license fee when its annual gross gambling receipts are less than the minimum for the class of license issued. The amount of refund shall be the difference between fees actually paid to operate during the period and those fees that would normally apply to the level of gross gambling receipts actually received during the period. Such request shall be made after the end of any annual license period and prior to the end of the next annual license period.

[Statutory Authority: RCW 9.46.070 (1), (2). 97-14-013, 230-04-260, filed 6/20/97, effective 7/21/97. Statutory Authority: Chapter 9.46 RCW. 94-24-056 (Order 262), 230-04-260, filed 12/5/94, effective 1/5/95. Statutory Authority: RCW 9.46.070(14). 88-15-019 (Order 181), 230-04-260, filed 7/11/88. Statutory Authority: RCW 9.46.070 (5), (6), (8), (10), and (11). 84-01-026 (Order 139), 230-04-260, filed 12/12/83. Statutory Authority: RCW 9.46.070 (5) and (9). 80-03-060 (Order 99), 230-04-260, filed 2/25/80; Order 42, 230-04-260, filed 9/18/75; Order 5, 230-04-260, filed 12/19/73.]

OTS-4641.3

ALTERNATIVE #5
AMENDATORY SECTION(Amending Order 303, filed 11/21/96, effective 12/22/96)

WAC 230-20-059   Minimum ((net return required)) cash flow requirements for bingo games--((Prize and expense limitations--Maximum gross gambling receipts)) Contributions to stated purpose -- Sanctions.   Bingo shall be conducted only as a social pastime or for fund-raising to support the stated purpose(s) of a charitable or nonprofit organization. Organizations licensed to conduct bingo games shall comply with the following procedures and limitations:

Contributions.

(1) ((Gross gambling receipts from the sale of bingo cards shall not exceed the limits by class of license for the organization's license year as set out in WAC 230-04-202 or as restricted by the commission under WAC 230-20-062;

(2))) To ensure that organizations licensed to conduct bingo games meet the intent of RCW 9.46.010 and ((retain)) provide funds adequate to promote charitable and nonprofit programs, such organizations shall not allow their bingo operation to award prizes or pay expenses to conduct bingo games that are excessive and all capital expenditures for the bingo operation that exceed six thousand dollars shall be specifically approved by the governing board. ((Organizations that fail to retain at least the minimum net return for their class of license, as set forth in Table 1 of this section and as adjusted by the director, may be deemed to have paid excessive prizes or unnecessary expenses from the operation of bingo games. As a result, the commission may restrict the organization's gross gambling receipts, prizes, and/or expenses from bingo games or the organization may be subject to other enforcement actions recommended by the director.

(3) This rule will apply to organizations with measurement periods beginning on or after January 1, 1996.

Table 1

(b) A licensee with long-term, legally binding financial obligations for its bingo facility as of the effective date of this rule, may petition the commission for a variance for a period of no more than two years based on their plans to gain compliance within the two years. This variance shall be in the form of a reduction to the dollar amount of adjusted cash flow required by subsection (1) of this section.

[Statutory Authority: RCW 9.46.070, 9.46.0209, 9.46.0237, 9.46.0205 and 9.46.075. 96-24-008 (Order 303), 230-20-059, filed 11/21/96, effective 12/22/96.]

OTS-4541.1

AMENDATORY SECTION(Amending Order 358, filed 7/15/98, effective 1/1/99)

WAC 230-30-052   Punch boards and pull-tabs operated by charitable or nonprofit organizations -- Net income required.   Charitable or nonprofit organizations operating punch boards and pull-tabs and which do not operate bingo games at any level shall not pay excessive expenses. To ensure that licensees meet the intent of RCW 9.46.010 and to prevent the payment of excessive expenses, net income, as a percentage of gross gambling receipts from punch boards and pull-tabs, shall not be less than zero when measured over the annual license period: Provided, That the limits set out in ((Table 1. of)) WAC 230-20-059 shall apply to organizations operating punch boards and pull-tabs in conjunction with a bingo game.

[Statutory Authority: RCW 9.46.070. 98-15-073 (Order 358), 230-30-052, filed 7/15/98, effective 1/1/99. Statutory Authority: RCW 9.46.070 (1)(16). 90-10-007, 230-30-052, filed 4/19/90, effective 7/1/90.]

(2) The commission shall afford an applicant for a license an opportunity for an adjudicative proceeding prior to denying such application, and shall afford a licensee the opportunity for an adjudicative proceeding prior to suspending or revoking a license.

(3) The commission will afford a person applying to the commission for approval of a pull-tab dispensing device under WAC 230-30-095 an opportunity for an adjudicative proceeding prior to denying approval of such device.

(4) No hearing will be conducted with respect to any adjudicative proceeding unless an application for an adjudicative proceeding and request for hearing is timely filed by the applicant or licensee with the commission in compliance with WAC 230-50-210. The application must be made upon a form to be obtained from the commission, or facsimile thereof, and must be received within 20 days following service upon the party affected by the commission or the director of a notice of administrative charges and opportunity for an adjudicative proceeding. Said document shall contain the maximum penalty that may be assessed should an application not be filed by the party affected. An application for an adjudicative proceeding and request for hearing shall accompany all notices of administrative charges.

(5) If an application for an adjudicative proceeding is not timely filed, then the party affected shall have waived the right to a hearing on the allegations set forth in the notice of administrative charges. The party shall be deemed to be in default pursuant to RCW 34.05.440 and the commission and director may take action against the party not to exceed the maximum penalty as stated in the notice of administrative charges and opportunity for an adjudicative proceeding, which action shall be final.

(6) The procedures of RCW 34.05.485, brief adjudicative proceedings, shall be used for the following purposes:

(a) All hearings in which the penalty sought by the commission is for a suspension of seven days or less;

(b) Hearings held pursuant to WAC 230-50-015 (stay of summary suspension);

(c) Hearings held pursuant to WAC 230-04-400(3) (failure to pay required gambling taxes);

(d) Hearings held pursuant to WAC 230-04-190 (10)(c) (two part payment plan: Failure to make second payment);

(e) Hearings in which the parties have stipulated to facts or the parties have stipulated to charges, and the hearing is limited to a determination of whether facts constitute violations as charged and/or determination of appropriate penalty to be imposed;

(f) Denial of an application to operate at a higher bingo license class when the licensee has been restricted by WAC 230-20-062;

(g) ((Petitions for a variance to bingo net return requirements authorized by WAC 230-20-060;

(h))) Hearings held pursuant to WAC 230-20-059 (failure for charitable or nonprofit organizations to contribute required funds to their stated purpose or maintain a positive adjusted cash flow;

(h) Hearings held pursuant to WAC 230-08-255 (failure for charitable or nonprofit organizations to make significant progress);

(i) Denial or revocation of extended card room hours pursuant to WAC 230-40-400;

(((i))) (j) Denial of request for Phase II pursuant to WAC 230-40-810;

(((j))) (k) Repeal of an approved card game pursuant to WAC 230-40-010; or

(((k))) (l) Where the parties have stipulated to the use of brief adjudicative proceedings.

[Statutory Authority: RCW 9.46.070. 00-09-052 (Order 383), 230-50-010, filed 4/14/00, effective 5/15/00. Statutory Authority: RCW 9.46.070 (1), (2). 97-14-013, 230-50-010, filed 6/20/97, effective 7/21/97. Statutory Authority: RCW 9.46.070. 95-13-030, 230-50-010, filed 6/13/95, effective 7/14/95; 92-19-107 (Order 231), 230-50-010, filed 9/18/92, effective 10/19/92. Statutory Authority: Chapter 34.05 RCW. 89-24-003 (Order 200), 230-50-010, filed 11/27/89, effective 12/28/89. Statutory Authority: RCW 9.46.070(13). 80-03-059 (Order 98), 230-50-010, filed 2/25/80; Order 45, 230-50-010, filed 12/30/75; Order 9, 230-50-010, filed 12/19/73.]

OTS-4372.1

REPEALER

     The following sections of the Washington Administrative Code are repealed:

WAC 230-02-362	Primary market area defined.
WAC 230-02-364	Secondary market area defined.
WAC 230-02-366	Impact market area defined.
WAC 230-02-530	Circumstances outside the control of the licensee -- Defined.
WAC 230-02-535	Permanent interruption of customer flow -- Defined.
WAC 230-02-540	Temporary interruption of customer flow -- Defined.

OTS-4373.1

REPEALER

     The following sections of the Washington Administrative Code are repealed:

WAC 230-20-058	Temporary moratorium for complying with net return requirements.
WAC 230-20-060	Petitioning the director for a variance from net return requirements.

OTS-4540.1

REPEALER

     The following section of the Washington Administrative Code is repealed:

WAC 230-20-062

Minimum net return from bingo games -- Sanctions.

Washington State Code Reviser's Office