SENATE FILE _____

BY  (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON DANIELSON)

A BILL FOR

An Act authorizing and regulating savings promotion raffles, and granting licensing authority to the department of inspections and appeals.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 99B.1, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  14A.  “Financial institution” means a state or federally chartered credit union as defined in section 533.102 or a state or federally chartered bank as defined in section 524.103, which is located within the state of Iowa.
   Sec. 2.  Section 99B.1, subsection 26, Code 2011, is amended to read as follows:
   26.  “Raffle” means a lottery in which each participant buys a ticket for a chance at a prize with the winner determined by a random method and the winner is not required to be present to win.“Raffle” does not include a slot machine.  “Raffle” does not include a savings promotion raffle.
   Sec. 3.  Section 99B.1, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  26A.  “Savings promotion raffle” means a drawing conducted by a financial institution, or a group of financial institutions, in which a chance of winning a designated prize or prizes is obtained by the deposit of a specified amount of money in a savings account, time deposit, or other savings program offered through that financial institution or group of financial institutions.
   Sec. 4.  Section 99B.7, subsection 1, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Except as otherwise provided in section 99B.7C or 99B.8, games of skill, games of chance, and raffles lawfully may be conducted at a specified location meeting the requirements of subsection 2 of this section, but only if all of the following are complied with:
   Sec. 5.  NEW SECTION.  99B.7C  Savings promotion raffles.
   1.  For the purposes of this section, a“participant” is a person who is at least eighteen years of age and who has opened a savings promotion raffle account at a financial institution.
   2.  A savings promotion raffle may lawfully be conducted by a financial institution or group of financial institutions if all of the following conditions are met:
   a.  The financial institution conducting the savings promotion raffle has been issued a license from the department and prominently displays that license during raffle drawings.
   b.  The savings promotion raffle conducted includes the distribution of the financial institution’s savings promotion raffle rules to all participants in the savings promotion raffle.
   c.  The savings promotion raffle is open to all participants as provided in the rules established for the savings promotion raffle by the financial institution conducting the savings promotion raffle. Savings promotion raffles shall not be open to members of the public who are not participants pursuant to the savings promotion raffle rules of the financial institution.
   d.  The financial institution offering the savings promotion raffle maintains records regarding its savings promotion raffle and the number of participants.
   e.  The savings promotion raffle is conducted in a fair and honest manner. The financial institution shall not conduct a savings promotion raffle in a manner that jeopardizes the financial institution’s safety and financial soundness or misleads its participants.
   3.  A financial institution shall provide an annual report to the department for each year in which a savings promotion raffle was held. This report shall include the number of savings promotion raffles held during the year, when the savings promotion raffles were held, the description and value of the prize or prizes offered, the names and addresses of participants who won prizes, a copy of the savings promotion raffle rules, and the names and addresses of two witnesses to the raffle drawing. If multiple financial institutions combine efforts for one or more collective savings promotion raffles between participants, they may file a joint annual report.
   4.  A financial institution wishing to conduct one or more savings promotion raffles pursuant to this section shall submit an application and annual license fee of one hundred dollars to the department. The department shall develop an application form requiring the contact information for the financial institution or group of financial institutions conducting the savings promotion raffle and a copy of the savings promotion raffle rules from the financial institution. If multiple financial institutions combine efforts for one or more joint savings promotion raffles between their participants, each financial institution shall complete an application and shall jointly submit the applications and an annual license fee of one hundred dollars.
   5.  Prizes awarded in a savings promotion raffle may be in cash or any other form of property and, subject to the other provisions of this section, shall not be subject to limits on dollar amount, value, or quantity.
   6.  A financial institution or group of financial institutions may compensate employees of the financial institution, or may hire a third-party operator, to conduct a savings promotion raffle.
   Sec. 6.  Section 99B.9, subsection 1, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   Except as otherwise permitted by section 99B.3, 99B.5, 99B.6, 99B.7, 99B.7B, 99B.7C, 99B.8, 99B.11, or 99B.12A, it is unlawful to permit gambling on any premises owned, leased, rented, or otherwise occupied by a person other than a government, governmental agency, or governmental subdivision, unless all of the following are complied with:
EXPLANATION
   This bill allows a financial institution or multiple financial institutions to be licensed by the department of inspections and appeals to conduct savings promotions raffles. The bill sets an annual license fee for individual financial institutions and for a joint applicant license at $100.
   The bill requires that a participant deposit a stated amount of money into specified types of savings accounts in order to participate in the raffle. A savings promotion raffle may only be conducted by a financial institution, which includes state or federally chartered credit unions and banks. The bill provides that a savings promotion raffle is not a raffle which is otherwise regulated by the department.
   The bill requires that participants in a savings promotion raffle be at least 18 years of age and have opened a savings promotion raffle account with the licensed financial institution.
   The bill requires a financial institution engaging in a savings promotion raffle to have received a savings promotion raffle license from the department of inspections and appeals, and requires that the institution display the license prominently during the raffle drawing. The bill requires the licensed financial institution to distribute the rules of the raffle to all savings promotion raffle participants, and specifies that savings promotion raffles are not open to members of the public who are not participants as provided in the rules provided by the financial institution.
   The bill requires that licensed financial institutions conduct the raffles fairly and honestly, not mislead participants, and that the raffles not jeopardize the institution’s financial soundness. The bill also requires that licensed financial institutions maintain records of the raffles and the number of participants, and requires that they provide annual reports to the department. The reports must include the number of raffles held, when the raffles were held, the description and value of all raffle prizes, the names and addresses of winning participants, a copy of the financial institution’s rules, and the names and addresses of two persons who observed the raffle drawing. The bill allows for multiple institutions participating in one raffle to submit a joint annual report.
   The bill provides that prizes awarded for savings promotions raffles may be in cash or any form of property without limit on dollar amount, value, or quantity. The bill allows financial institutions to compensate employees or hire a third-party to conduct the raffles.