2015 Kentucky Revised Statutes CHAPTER 238 - CHARITABLE GAMING 238.536 Amount and use of net receipts retained by charitable organization -- Penalties imposed upon charitable organization failing to retain certain percentage of adjusted gross receipts -- Submission of financial plan -- Petition for reconsideration.
Download as PDF
238.536 Amount and use of net receipts retained by charitable organization -Penalties imposed upon charitable organization failing to retain certain
percentage of adjusted gross receipts -- Submission of financial plan -- Petition
for reconsideration.
(1)
(2)
The net receipts from charitable gaming retained by a charitable organization for the
previous calendar year, provided the charitable organization was licensed at the start
of the calendar year, shall be equal to or greater than forty percent (40%) of the
adjusted gross receipts of the charitable organization for the same period. A licensed
charitable organization shall expend net receipts exclusively for purposes consistent
with the charitable, religious, educational, literary, civic, fraternal, or patriotic
functions or objectives for which the licensed charitable organization received and
maintains federal tax-exempt status, or consistent with its status as a common
school, an institution of higher education, or a state college or university. No net
receipts shall inure to the benefits or financial gain of an individual. Any charitable
organization which permits its license to expire or otherwise lapse shall still be
subject to the retention requirement. The following fees and taxes shall be excluded
from the calculation of the percentage retained, retroactive to calculations made for
calendar year 1999:
(a) All fees paid to the department during the calendar year;
(b) Any sales or use taxes levied under KRS Chapter 139 on charitable gaming
supplies and equipment that are paid by a licensed charitable organization
during the calendar year; and
(c) Any federal excise taxes levied under 26 U.S.C. secs. 4401 and 4411 and paid
by a licensed charitable organization during the calendar year.
The following actions shall be imposed on a licensed charitable organization that
fails to retain the requisite percentage of adjusted gross receipts required in
subsection (1) of this section. The calculation of percentages shall be rounded to the
nearest tenth of a percent:
(a) If the percentage retained is between thirty-five percent (35%) and thirty-nine
and nine-tenths percent (39.9%), the licensee shall be placed on probation for
a period of six (6) months and shall be required to submit to the department an
acceptable financial plan detailing corrective actions to be taken by the
licensee to achieve the forty percent (40%) threshold by the end of the
calendar year in which the probation is imposed;
(b) If the percentage retained is between thirty percent (30%) and thirty-four and
nine-tenths percent (34.9%), the licensee shall be placed on probation for a
period of one (1) year and shall be required to submit to the department a
financial plan as described in paragraph (a) of this subsection. The department
shall conduct a six (6) month review of the charitable gaming activities of a
licensee placed on probation pursuant to this subsection to evaluate the
licensee's compliance with its financial plan;
(c) If the percentage retained falls between twenty-nine and nine-tenths percent
(29.9%) and twenty-five percent (25%), the licensee shall be placed on
(3)
(4)
probation for a period of one (1) year, shall submit to the department an
acceptable financial plan as described in paragraph (a) of this subsection, and
shall participate in a mandatory training program designed by the department.
The department shall conduct a quarterly review of the licensee's activities to
evaluate the licensee's compliance with its financial plan and its progress
toward achievement of the forty percent (40%) threshold during the
probationary period;
(d) If the percentage falls below twenty-five percent (25%) or if the licensee fails
to attain the forty percent (40%) threshold for a second consecutive calendar
year, the licensee shall have its license suspended for a period of one (1) year;
and
(e) For purposes of paragraphs (a), (b), (c), and (d) of this subsection, periods of
probation and suspension shall commence, unless appealed, from the date the
department notifies the licensee of its failure to satisfy the retention
requirement for the previous calendar year. If a probation or suspension is
appealed, the action shall commence on the date final adjudication of the
matter is complete.
Any licensee that has had its license suspended under the provisions of subsection
(2)(d) of this section shall be required to submit to the department an acceptable
financial plan as described in subsection (2)(a) of this section, upon applying for
reinstatement of its license. As a condition of reinstatement, the licensee shall be on
probation for a period of one (1) year and shall be subject to quarterly review by the
department in accordance with subsection (2)(c) of this section.
Any licensee that has had its license revoked, has had its renewal application
denied, or has had action initiated to revoke, suspend, or deny its license for failure
to meet the forty percent (40%) retention threshold prior to July 14, 2000, may
petition the department for reconsideration of its action or proposed action. Upon
petition for reconsideration, the department shall apply the standards contained in
subsection (2) of this section and shall adjust the license status of the petitioner
accordingly. The department shall give credit for the amount of time a license has
been revoked in assessing penalties under subsection (2) of this section not to
exceed the amount of time imposed under the new penalty.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 541, effective July 15, 2010. -- Amended
2000 Ky. Acts ch. 374, sec. 9, effective July 14, 2000. -- Created 1998 Ky. Acts ch.
232, sec. 7, effective April 1, 1998.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.