Bill Text: AZ HB2522 | 2020 | Fifty-fourth Legislature 2nd Regular | Engrossed
Bill Title: Bingo; conduct; licenses; taxes
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2020-03-16 - Senate consent calendar [HB2522 Detail]
Download: Arizona-2020-HB2522-Engrossed.html
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House Engrossed |
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bingo; licenses; taxes. (now: bingo; conduct; licenses; taxes)
State of Arizona House of Representatives Fifty-fourth Legislature Second Regular Session 2020
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HOUSE BILL 2522 |
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AN ACT
amending sections 5-406, 5-407 and 5-413, arizona revised statutes; relating to bingo.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 5-406, Arizona Revised Statutes, is amended to read:
5-406. Persons permitted to conduct games; premises; equipment; expenses; compensation
A. A person shall not hold, operate or conduct any game of bingo under any license issued pursuant to this article unless the person has submitted affidavits as required in section 5‑404 and has received prior written approval from the licensing authority. Persons seeking to replace a manager, proceeds coordinator, supervisor or assistant or to serve as an additional manager, supervisor or assistant shall submit the appropriate affidavit to the licensing authority as required in section 5‑404.
B. Except as provided in section 5‑413, only contractors, members and new members of a licensee or an applicant may participate or apply to participate in conducting any bingo game held by the licensee.
C. Except for a class A licensee, a person shall not hold, operate, conduct or assist in conducting any game or games of bingo under any license if the person or the person's spouse has a proprietary, equitable or credit interest, or is an officer, director, agent or employee of an individual or company that has a proprietary, equitable or credit interest, in the licensee.
D. Bookkeepers or accountants need not be members of the organization.
E. An item of expense shall not be incurred or paid in connection with holding, operating or conducting any game of bingo held, operated or conducted pursuant to any license issued under this article, except bona fide expenses in a reasonable amount for purposes described in section 5‑407, subsection G. A game of bingo shall not be conducted with any equipment except equipment owned solely by the licensee, or jointly by not more than six licensees. No portion of the ownership of such equipment may be held by any person or organization not licensed pursuant to this chapter. A game of bingo shall not be conducted with rented equipment. This subsection does not apply to technological aids for bingo games that function only as electronic substitutes for bingo cards or a contractor's personnel who are needed to operate technological aids prescribed in subsection Y of this section.
F. An applicant or a licensee shall not enter into any purchase agreement other than a bona fide purchase agreement. The seller may repurchase equipment only on default of the buyer and then only at a price equal to or greater than ninety percent of any money paid for equipment from buyer to seller. The seller may repurchase a building only on default of the buyer at a fair market value per licensee.
G. A licensee shall not conduct or operate more than five occasions of bingo during any calendar week. Not more than twelve hours of bingo shall be conducted in any building or on any premises during any calendar day.
H. The entire net proceeds of any game shall be devoted to a lawful use or uses. In addition to other unlawful uses, the following are not considered lawful uses under this subsection:
1. Compensation and expenses of directors, officers and management personnel.
2. Fees or commissions of consultants.
3. Compensation paid for legal services incurred by a licensee unsuccessfully defending against charges of violations of this article.
4. Donations to other than national, state or local nonprofit parent organizations in excess of five percent of the net proceeds except with the permission of the licensing authority.
5. Donations or any payment from the lessor to the lessee.
I. The premises where any game of bingo is being held, operated or conducted, where it is intended that any game of bingo shall be held, operated or conducted or where it is intended that any equipment shall be used shall at all times be open to inspection by the licensing authority, its agents and employees and peace officers of any political subdivision of the state.
J. When any merchandise prize is awarded in a game of bingo, its value shall be its current retail price. A merchandise prize shall not be redeemable or convertible into cash directly or indirectly.
K. Equipment, prizes and supplies for games of bingo shall not be purchased or sold at prices in excess of one hundred fifteen percent of the average price paid by other licensees as reported in the reports submitted to the licensing authority during the prior six‑month period by licensees having the same class of license. A licensee shall not enter into any contract or purchase agreement whereby it agrees to limit its source of supplies.
L. An alcoholic beverage shall not be offered or given as a prize in any such game.
M. The net profits derived from the holding of games of bingo must be devoted within one year after the date such profits were earned to the lawful purposes of the organization permitted to conduct such games. Any organization desiring to hold the net profits of games of bingo for a period longer than one year after the date such profits were earned must apply to the licensing authority for special permission and on good cause shown the authority may grant the request.
N. Any licensee that does not report during any one‑year period the amount of its net profits, if any, shall be required to show cause before the licensing authority why its license to conduct games of bingo should not be revoked.
O. The licensing authority shall require a licensee that does not conduct bingo games during any one‑year period to show cause why its license to conduct games of bingo should not be cancelled.
P. Except as otherwise provided by this section, a prize greater in amount or value than one thousand dollars shall not be offered or given in any single game of bingo conducted under any such license, and total prizes shall not exceed an amount or value greater than three thousand dollars for any occasion. Door prizes, discounts or other inducements with a value exceeding two hundred fifty dollars per occasion shall not be offered or given away.
Q. Except for a class A licensee, on application to the licensing authority by the licensee the licensing authority may authorize one special bonus game to be played at weekly consecutive occasions with a quarterly prize limit of twelve thousand dollars. A weekly consecutive occasion is an occasion played on the same day of each week during the quarter. The special bonus game may be played at each weekly consecutive occasion subject to the rules adopted by the licensing authority. The special bonus game is not subject to the prize limits prescribed by subsection P of this section.
R. The equipment used in playing bingo and the method of play shall be such that each card shall have an equal opportunity to be a winner. The objects or balls to be drawn shall be essentially the same as to size, shape, weight, balance and all other characteristics that may influence their selection. All objects or balls shall be present in the receptacle before each game is begun. All numbers announced shall be plainly and clearly audible or visible to all the players present. Where more than one room is used for any one game, the receptacle, the person calling the numbers as they are drawn and the person removing the objects or balls from the receptacle must be present in the room where the greatest number of players is present and all numbers announced shall be plainly audible or visible to the players in that room and also audible or visible to the players in the other room or rooms. The cards or sheets of the players shall be part of a deck, group or series of cards, no two of which shall be alike, and which deck, group or series shall not be so prepared or arranged as to prefer any card. A licensee may provide braille cards for legally blind persons or allow legally blind persons to supply their own braille cards. A legally blind person supplying the person's own cards shall pay a fee to the licensee equal to that which would be charged if the legally blind person obtained the cards from the licensee. The bingo game activity shall be conducted and recorded in a manner as prescribed by the licensing authority to verify the gross receipts from each occasion.
S. The receptacle, the person calling the numbers as they are drawn and the person removing the objects or balls from the receptacle must be visible to all the players at all times except where more than one room is used for any one game and subsection R of this section applies.
T. The particular arrangement of numbers required to be covered in order to win the game and the amount of the prize shall be clearly and audibly or visibly described and announced to the players immediately before each game is begun.
U. Any players shall be entitled to call for a verification of all numbers drawn at the time a winner is determined, and for a verification of the objects or balls remaining in the receptacle and not yet drawn. The verification shall be made in the immediate presence of the supervisor and in full view of any player requesting the verification.
V. A person who is not physically present on the premises where the game is actually conducted shall not be allowed to participate as a player in the game.
W. A person who holds, operates or conducts, or assists in holding, operating or conducting, a game of bingo shall not play at any occasion at which such person works unless the game of bingo is conducted pursuant to a class A license.
X. A person shall not conduct a lottery or raffle within a twelve‑hour period before or after a bingo occasion or game on any premises used for bingo games or within one thousand feet of the bingo game. This subsection does not affect any legally conducted activity related to the state lottery.
Y. x. The operator of a bingo game shall offer assistance to players with disabilities, subject to the following:
1. The operator of a bingo game may offer players technological aids for bingo games that function only as electronic substitutes for bingo cards and shall reserve at least two of these technological aids for use by players with disabilities. If no requests are made for the use of these technological aids within fifteen minutes after the scheduled start of a game of bingo, these reserved technological aids may be made available to any other player.
2. If the operator of a bingo game, or any other person that is involved in the conduct of a bingo game, charges players a fee for the use of technological aids for bingo games that function only as electronic substitutes for bingo cards or requires players to comply with a minimum purchase requirement for the use of these technological aids, players with disabilities may not be required to pay that fee or to comply with that minimum purchase requirement. This paragraph does not prohibit the operator of a bingo game or any other person that is involved in the conduct of a bingo game from requiring a player with a disability to comply with a minimum purchase requirement that is imposed on all players.
3. The operator of a bingo game that offers technological aids for bingo games that function only as electronic substitutes for bingo cards shall allow players with disabilities to claim prizes by presenting a printout or other evidence of a winning card.
4. The operator of a bingo game shall allow players to use a form of visual or audio signal to notify the operator of a winning pattern or bingo, which may include a flag, paddle, light, horn, bell or whistle or any other mechanical or electronic means.
5. If a player's disability restricts the player's ability to mark cards, use technological aids for bingo games that function only as electronic substitutes for bingo cards or announce bingo, the operator of a bingo game shall allow another person to assist the player with a disability in the bingo game.
6. A person with a disability who is employed by a bingo operator may use technological aids for bingo games that function only as electronic substitutes for bingo cards to properly carry out the person's job functions as those functions apply to the conduct of bingo games.
Sec. 2. Section 5-407, Arizona Revised Statutes, is amended to read:
5-407. Statement of receipts; expenses; penalty
A. On or before the twentieth day after the end of every reporting period designated for the class of the license each licensee shall file with the licensing authority upon forms prescribed by the licensing authority a financial report which is signed and sworn to by the proceeds coordinator showing the amount of the gross receipts derived during the reporting period from games of bingo, the expenses paid, a brief description of the classification of such expenses, the ratio of net proceeds to the adjusted gross receipts received by the licensee during the reporting period, the name and address of each person to whom has been paid three hundred dollars or more and the purpose of such expenditure, the net proceeds derived from each such game of bingo and the uses to which such net proceeds have been or are to be applied. Each licensee shall maintain and keep such books and records as may be necessary to substantiate the particulars of each such report.
B. Except for class A licensees, if the net proceeds derived from the games of bingo for any six consecutive months do not amount to at least fifty percent of adjusted gross receipts for those months in total, it shall be presumed that the expenses incurred for goods, wares, merchandise and services rendered are not bona fide and reasonable, and the operation of the game is deemed to be against public policy. If the net proceeds of the games operated by a licensee are less than fifty percent of the adjusted gross receipts in any six consecutive months, the license may be revoked.
C. The failure to file reports within forty‑five days after their due date, or filing reports that are not fully, accurately and truthfully completed, may be the basis of the revocation of the license. If the licensee fails to make and file a return on or before the due date, unless the failure is due to reasonable cause, a penalty equal to five percent of the amount found to be due or remaining due under subsection H of this section shall be added to that amount for each month or fraction of a month between the due date of the return and the date on which filed, plus interest at a rate determined pursuant to section 42‑1123. The total penalty shall not exceed twenty‑five percent of the amount found to be remaining due. The penalty is due and payable on notice and demand from the licensing authority. If an action has been filed by the licensing authority for revocation of a license, the court shall award reasonable attorney fees to the licensing authority as a part of the proceedings if the licensing authority prevails in the proceedings.
D. Except for a class A licensee, all monies collected or received from the sale of admission, extra regular cards, special game cards, sale of supplies and all other receipts from the games of bingo shall be deposited in a special account of the licensee which shall contain only such money. Except for a class A licensee, all expenses for bingo games, except cash prizes in the amount of less than one hundred fifty dollars $1,100, shall be withdrawn from the licensee's special account by consecutively numbered checks duly signed by a specified officer or officers of the licensee or the supervisor and payable to a specific person or organization. Class A licensees shall pay all bingo game prizes, except cash prizes in an amount less than one hundred fifty dollars $1,100, by check duly signed by a specified person or persons or the supervisor. A check shall not be drawn to "cash" or a fictitious payee. A check drawn on a licensee's special account shall not be payable to the licensee. Checks drawn against the net proceeds in the special account shall be drawn only for lawful uses and purposes. The licensee may establish interest bearing accounts which shall contain only monies transferred from the licensee's special account, but all monies, interest and other proceeds shall be redeposited to the special account before being used for lawful uses and purposes.
E. A licensee shall maintain a permanent record containing the signature of each player who receives a cash prize from such licensee and the amount of the cash prize awarded to such player.
F. The net profits after they have been given over to another organization shall not be used by the donee organization to pay any person for services rendered or materials purchased in connection with the conducting of bingo by the donor organization.
G. Expenses shall not be incurred or paid in connection with holding, operating or conducting any game of bingo pursuant to any license, except bona fide expenses of a reasonable amount. Expenses may be incurred only for the following purposes:
1. The purchase of goods, wares and merchandise furnished.
2. Payment for services rendered.
3. Rent.
4. Accountants' fees.
5. License fees.
6. Utility expenses.
7. Security guards.
8. Compensation not to exceed the current federal minimum wage plus twenty percent.
9. Mortgage payments when a nonprofit charitable organization licensee is using the building or premises for both bingo and for the licensee's bona fide charity.
10. Advertising. In this subsection:
(a) "Goods, wares and merchandise" means prizes, equipment and articles of a minor nature such as pencils, crayons, tickets, envelopes, paper clips and coupons necessary for the conduct of games of bingo.
(b) "Services rendered" means repair to equipment, reasonable compensation to bookkeepers or accountants, not more than two in the aggregate, for services in preparing financial reports and a reasonable amount for janitorial service and security guards. Services rendered do not include and no item of expense may be incurred or paid for service of any nature whatever rendered by a member or new member, including, without limitation except as provided by paragraph 8 of this subsection, equipment repair, bookkeeping, accounting, janitorial service, security guard service or operating, conducting or managing a bingo game or providing any professional or consultation service related to bingo.
H. In lieu of the taxes collected under title 42, chapter 5, article 1 there shall be paid to the state licensing authority a tax in the amount prescribed in section 5‑414. The taxes collected pursuant to this section shall be deposited in the state general fund. All administrative receipts, including license fees, penalties and interest, collected by the state pursuant to this article shall be deposited in the state general fund.
I. Each licensee, at the time each financial report is submitted to the licensing authority, shall pay to the order of the licensing authority the amount of tax provided in subsection H of this section.
J. For reporting periods beginning from and after December 31, 2019, or when the licensing authority has established an electronic filing program, whichever is later, each licensee shall file electronically any report or return required under this chapter. The report or return is considered to be filed and received by the licensing authority on the date of the electronic postmark pursuant to section 42‑1105.02.
Sec. 3. Section 5-413, Arizona Revised Statutes, is amended to read:
5-413. License classification; requirements
A. A class A license may be issued to a person for the conduct of bingo games for which the gross receipts do not exceed fifteen thousand six hundred dollars $75,000 per year. A class A license shall not be issued to a person who holds a license issued pursuant to title 4 except a club license issued pursuant to section 4‑205. For a class A license:
1. Any person may apply as prescribed in this article.
2. The manager, proceeds coordinator, supervisor and assistant are not required to be members or new members.
3. The reporting period is one year coinciding with the term of the license.
B. A class B license may be issued to a qualified organization for the conduct of bingo games for which the gross receipts do not exceed three hundred thousand dollars $500,000 per year. For a class B license:
1. Only a qualified organization may apply.
2. The manager and supervisor shall be members of the licensee.
3. The proceeds coordinator shall be an officer or director and a member of the licensee and is responsible for completion of the required financial report.
4. An assistant shall be a member or new member of the licensee.
5. There are four reporting periods coinciding with the quarters of the term of the license.
C. A class C license may be issued to a qualified organization for the conduct of bingo games for which the gross receipts exceed three hundred thousand dollars $500,000 per year. For a class C license:
1. Only a qualified organization may apply.
2. The manager and supervisor shall be members of the licensee.
3. The proceeds coordinator shall be an officer or director and a member of the licensee and is responsible for completion of the required financial report.
4. An assistant shall be a member or new member of the licensee.
5. There are twelve reporting periods coinciding with each month of the term of the license.
