MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Finance

By: Senator(s) Canon

Senate Bill 2906

AN ACT TO AMEND SECTION 75-76-17, MISSISSIPPI CODE OF 1972, TO DELETE THE PROHIBITION AGAINST THE MISSISSIPPI GAMING COMMISSION ESTABLISHING AN AUDIT DIVISION; TO AMEND SECTION 75-76-45, MISSISSIPPI CODE OF 1972, TO REQUIRE THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION TO JOINTLY PRESCRIBE A SINGLE SET OF MINIMUM INTERNAL CONTROL PROCEDURES REGARDING HOW GAMING LICENSEES ARE TO EXERCISE CONTROL OVER THEIR INTERNAL FISCAL AFFAIRS; TO PROVIDE THAT IF THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION DIFFER IN THE INTERPRETATION OR APPLICATION OF SUCH MINIMUM INTERNAL CONTROL PROCEDURES, STAFF OF THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION SHALL MEET TO DEVELOP A JOINT RESOLUTION OF THE DIFFERENCES IN A TIMELY MANNER; TO PROVIDE THAT IF THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION CANNOT AGREE ON THE CONTENT OR NECESSITY OF A MINIMUM INTERNAL CONTROL PROCEDURE OR SUBSEQUENT INTERPRETATION OF ADOPTED MINIMUM INTERNAL CONTROL PROCEDURES, THE MISSISSIPPI GAMING COMMISSION AND STATE TAX COMMISSION SHALL SUBMIT SUCH DIFFERENCES IN WRITING TO THE STATE AUDITOR FOR ARBITRATION; TO PROVIDE THAT THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION SHALL ADOPT IN RULE FORM ANY ARBITRATION DECISIONS DEVELOPED BY THE STATE AUDITOR; TO AMEND SECTION 75-76-47, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE MISSISSIPPI GAMING COMMISSION SHALL REQUIRE EACH GAMING LICENSEE TO PROVIDE IT WITH DUPLICATE COPIES OF ALL CURRENCY TRANSACTION REPORTS WHICH THE LICENSEE PROVIDES TO THE INTERNAL REVENUE SERVICE, AND THAT THE MISSISSIPPI GAMING COMMISSION SHALL MAKE THESE REPORTS AVAILABLE FOR INSPECTION BY LAW ENFORCEMENT OFFICERS OF THE STATE AND FEDERAL GOVERNMENTS; TO AMEND SECTION 75-76-51, MISSISSIPPI CODE OF 1972, TO REQUIRE THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION TO JOINTLY PRESCRIBE A SINGLE SET OF REGULATIONS REGARDING THE MANNER IN WHICH GAMING LICENSEES MUST COMPUTE AND REPORT WINNINGS, COMPENSATION AND GROSS REVENUES; TO PROVIDE THAT IF THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION DIFFER IN THE INTERPRETATION OR APPLICATION OF SUCH REGULATIONS, OR SUBSEQUENT INTERPRETATION OF ADOPTED REGULATIONS, THEY SHALL USE THE SAME PROCEDURES TO RESOLVE SUCH DIFFERENCES AS REQUIRED FOR RESOLVING THEIR DIFFERENCES REGARDING MINIMUM INTERNAL CONTROL PROCEDURES; TO AMEND SECTION 75-76-87, MISSISSIPPI CODE OF 1972, TO REQUIRE THE SHARING OF CERTAIN INFORMATION BETWEEN THE MISSISSIPPI GAMING COMMISSION AND THE STATE TAX COMMISSION; TO AMEND SECTION 75-76-131, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE MISSISSIPPI GAMING COMMISSION TO ISSUE A TEMPORARY WORK PERMIT TO AN APPLICANT FOR A PERMANENT WORK PERMIT, TO PROVIDE THAT A TEMPORARY WORK PERMIT MAY BE REVOKED FOR CAUSE WITHOUT A PRE-REVOCATION HEARING; TO AUTHORIZE THE MISSISSIPPI GAMING COMMISSION TO CONDUCT POST REVOCATION REVIEW OF A DECISION TO REVOKE A TEMPORARY WORK PERMIT; TO AMEND SECTION 27-7-83, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PROVISIONS OF THIS ACT; TO CREATE A NEW CODE SECTION TO BE CODIFIED AS SECTION 97-33-111, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE MISSISSIPPI GAMING COMMISSION TO SET MINIMUM ANNUAL CHARITABLE CONTRIBUTION PERCENTAGES FOR CHARITABLE BINGO LICENSEES; TO AUTHORIZE THE MISSISSIPPI GAMING COMMISSION TO AUDIT THE RECORDS OF ENTITIES TO WHICH CHARITABLE BINGO LICENSEES GIVE, SELL OR TRANSFER MONEY OR OTHER THINGS OF VALUE; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 75-76-17, Mississippi Code of 1972, is amended as follows:

75-76-17. (1) From and after October 1, 1993, there are hereby created, for supervision by the executive director, two (2) divisions which are entitled the Enforcement Division and the Investigation Division. The executive director shall be authorized to create such other divisions as he deems necessary to implement the provisions of this chapter. * * *

(2) The executive director shall employ division directors that possess training and experience in the fields of investigation, law enforcement, law, auditing or gaming.

SECTION 2. Section 75-76-45, Mississippi Code of 1972, is amended as follows:

75-76-45. (1) The commission and the State Tax Commission shall prescribe a single set of minimum procedures for adoption by each licensee to exercise effective control over the internal fiscal affairs of the licensee, which shall include but are not limited to provisions for:

(a) The safeguarding of assets and revenues, especially the recording of cash and evidences of indebtedness; and

(b) The provision of reliable records, accounts and reports of transactions, operations and events, including reports to the commission and the executive director.

(2) The procedures provided for in this section shall be the only minimum internal control procedures enforceable by the commission and the State Tax Commission. Such procedures shall become effective from and after January 1, 1998. If any material differences arise between the commission and the State Tax Commission in the interpretation or application of such procedures, staff of the commission and the State Tax Commission shall meet jointly to develop a joint resolution of the differences in a timely manner.

(3) If the commission and the State Tax Commission cannot agree on the content or necessity of a minimum internal control procedure or subsequent interpretation of adopted minimum internal control procedures, the commission and State Tax Commission shall submit such differences in writing to the State Auditor for arbitration. The State Auditor may resolve the differences by selecting a proposal of the commission or the State Tax Commission or by developing a proposal based on the positions of the commission and State Tax Commission. The commission and State Tax Commission shall adopt in rule form any arbitration decisions developed by the State Auditor.

(4) The commission and the State Tax Commission shall meet annually no later than April 1 to discuss the need for new minimum internal control procedures or revision of existing minimum internal control procedures. The commission and State Tax Commission shall complete their revisions of such minimum internal control procedures no later than May 15 of each year in order to provide for initial comment by licensees. Any conflict between the commission and the State Tax Commission that cannot be jointly resolved shall be referred to the State Auditor for resolution as provided in subsection (3) of this section.

SECTION 3. Section 75-76-47, Mississippi Code of 1972, is amended as follows:

75-76-47. (1) The commission shall by regulation require periodic financial reports from each licensee, and:

(a) Specify standard forms for reporting financial condition, results of operations and other relevant financial information.

(b) Formulate a uniform code of accounts and accounting classifications to assure consistency, comparability and effective disclosure of financial information.

(c) Prescribe the intervals at which such information shall be furnished. For this purpose the commission may classify licensees by size of operation.

(2) The commission shall require each licensee to provide it with duplicate copies of all Currency Transaction Reports which the licensee provides to the Internal Revenue Service, and the commission shall make these reports available for inspection by law enforcement officers of the state and federal governments.

SECTION 4. Section 75-76-51, Mississippi Code of 1972, is amended as follows:

75-76-51. (1) The commission and the State Tax Commission shall adopt a single set of regulations which prescribe the manner in which winnings, compensation from games and gaming devices, and gross revenue must be computed and reported by the licensee.

(2) The regulations provided for in this section shall be the only regulations the commission and State Tax Commission use in determining a licensee's winnings, compensation and gross revenue. Such regulations shall become effective from and after January 1, 1998. If any material differences arise between the commission and State Tax Commission in the interpretation or application of such regulations, staff of the commission and the State Tax Commission shall meet jointly to develop a joint resolution of the differences in a timely manner.

(3) If the commission and the State Tax Commission cannot agree on the content or necessity of a proposed regulation, or subsequent interpretation of adopted regulations, the commission and State Tax Commission shall submit such differences in writing to the State Auditor for arbitration. The State Auditor may resolve the differences by selecting a proposal of the commission or the State Tax Commission or by developing a proposal based on the positions of the commission and State Tax Commission. The commission and State Tax Commission shall adopt in rule form any arbitration decisions developed by the State Auditor.

(4) The commission and the State Tax Commission shall meet annually no later than April 1 to discuss the need for new regulations or revision of existing regulations. The commission and State Tax Commission shall complete their revisions of such regulations no later than May 15 of each year in order to provide for initial comment by licensees. Any conflict between the commission and the State Tax Commission that cannot be jointly resolved shall be referred to the State Auditor for resolution as provided in subsection (3) of this section.

SECTION 5. Section 75-76-87, Mississippi Code of 1972, is amended as follows:

75-76-87. (1) Applications, returns and information contained therein filed or furnished under this chapter shall be confidential, and except in accordance with proper judicial order or as otherwise authorized by this chapter, it shall be unlawful for members of the State Tax Commission, the Mississippi Gaming Commission or members of the Central Data Processing Authority, or any former employee thereof to divulge or make known in any manner the amount of income or any particulars set forth or disclosed on any application, report or return required.

The term "proper judicial order" as used in this chapter shall not include subpoenas or subpoenas duces tecum but shall include only those orders entered by a court of record in this state after furnishing notice and a hearing to the taxpayer and the State Tax Commission. The court shall not authorize the furnishing of such information unless it is satisfied that the information is needed to pursue pending litigation wherein the return itself is in issue, or the judge is satisfied that the need for furnishing the information outweighs the rights of the taxpayer to have such information secreted.

(2) Such information contained on the application, returns or reports from the licensee or the Mississippi Gaming Commission may be furnished to: (a) members and employees of the State Tax Commission and the income tax department thereof, for the purpose of auditing, comparing and correcting returns; (b) the Attorney General, or any other attorney representing the state in any action in respect to the amount of tax under the provisions of this chapter; (c) the Mississippi Gaming Commission; or (d) the revenue department of the other states or the federal government when said states of federal government grants a like comity to Mississippi. If requested by the State Tax Commission, the commission shall provide the information described in item (a) of this subsection (2).

(3) The State Auditor and the employees of his office shall have the right to examine only such tax returns as are necessary for auditing the State Tax Commission, or the Mississippi Gaming Commission and the same prohibitions against disclosure which apply to the State Tax Commission shall apply to the State Auditor and his office.

(4) Nothing in this section shall prohibit the Chairman of the State Tax Commission from making available information necessary to recover taxes, fees, fines or damages owing the state pursuant to the authority granted in Section 27-75-16.

(5) The State Tax Commission shall make available to the commission records of all reports or returns from licensees in order to assist the commission in conducting investigations of licensees.

SECTION 6. Section 75-76-131, Mississippi Code of 1972, is amended as follows:

75-76-131. (1) The executive director shall:

(a) Ascertain and keep himself informed of the identity, prior activities and present location of all gaming employees in the State of Mississippi; and

(b) Maintain confidential records of such information.

(2) No person may be employed as a gaming employee unless he is the holder of a work permit issued by the commission.

(3) A work permit issued to a gaming employee must have clearly imprinted thereon a statement that it is valid for gaming purposes only.

(4) Application for a work permit is to be made to the executive director and may be granted or denied for any cause deemed reasonable by the commission. Whenever the executive director denies such an application, he shall include in the notice of the denial a statement of the facts upon which he relied in denying the application.

(5) Any person whose application for a work permit has been denied by the executive director may, not later than sixty (60) days after receiving notice of the denial or objection, apply to the commission for a hearing before a hearing examiner. A failure of a person whose application has been denied to apply for a hearing within sixty (60) days or his failure to appear at a hearing conducted pursuant to this section shall be deemed to be an admission that the denial or objection is well founded and precludes administrative or judicial review. At the hearing, the hearing examiner appointed by the commission shall take any testimony deemed necessary. After the hearing the hearing examiner shall within thirty (30) days after the date of the hearing announce his decision sustaining or reversing the denial of the work permit or the objection to the issuance of a work permit. The executive director may refuse to issue a work permit if the applicant has:

(a) Failed to disclose, misstated or otherwise attempted to mislead the commission with respect to any material fact contained in the application for the issuance or renewal of a work permit;

(b) Knowingly failed to comply with the provisions of this chapter or the regulations of the commission at a place of previous employment;

(c) Committed, attempted or conspired to commit any crime of moral turpitude, embezzlement or larceny or any violation of any law pertaining to gaming, or any crime which is inimical to the declared policy of this state concerning gaming;

(d) Been identified in the published reports of any federal or state legislative or executive body as being a member or associate of organized crime, or as being of notorious and unsavory reputation;

(e) Been placed and remains in the constructive custody of any federal, state or municipal law enforcement authority;

(f) Had a work permit revoked or committed any act which is a ground for the revocation of a work permit or would have been a ground for revoking his work permit if he had then held a work permit; or

(g) For any other reasonable cause.

The executive director shall refuse to issue a work permit if the applicant has committed, attempted or conspired to commit a crime which is a felony in this state or an offense in another state or jurisdiction which would be a felony if committed in this state.

(6) Any applicant aggrieved by the decision of the hearing examiner may, within fifteen (15) days after the announcement of the decision, apply in writing to the commission for review of the decision. Review is limited to the record of the proceedings before the hearing examiner. The commission may sustain or reverse the hearing examiner's decision. The commission may decline to review the hearing examiner's decision, in which case the hearing examiner's decision becomes the final decision of the commission. The decision of the commission is subject to judicial review.

(7) All records acquired or compiled by the commission relating to any application made pursuant to this section and all lists of persons to whom work permits have been issued or denied and all records of the names or identity of persons engaged in the gaming industry in this state are confidential and must not be disclosed except in the proper administration of this chapter or to an authorized law enforcement agency. Any record of the commission which shows that the applicant has been convicted of a crime in another state must show whether the crime was a misdemeanor, gross misdemeanor, felony or other class of crime as classified by the state in which the crime was committed. In a disclosure of the conviction, reference to the classification of the crime must be based on the classification in the state where it was committed.

(8) A work permit expires unless renewed within ten (10) days after a change of place of employment or if the holder thereof is not employed as a gaming employee within the jurisdiction of the issuing authority for more than ninety (90) days.

(9) Notice of any objection to or denial of a work permit by the executive director as provided pursuant to this section is sufficient if it is mailed to the applicant's last known address as indicated on the application for a work permit. The date of mailing may be proven by a certificate signed by the executive director or his designee that specifies the time the notice was mailed. The notice is presumed to have been received by the applicant five (5) days after it is deposited with the United States Postal Service with the postage thereon prepaid.

(10) The executive director, upon good cause shown by an applicant for a permanent work permit, may issue a temporary work permit which will be valid for a period not to exceed eight (8) months. The issuance of a temporary work permit shall not

create a vested right in such permit in favor of the holder of the permit. The executive director may revoke a temporary work permit for any cause described in Section 75-76-137(2), and there shall be no requirement that the commission provide a pre-revocation hearing in such a case. Notice of revocation of a temporary work permit shall be accompanied by notice of denial of a permanent work permit. The holder of a temporary work permit which has been revoked shall surrender such permit immediately upon notice or revocation.

(11) Any holder of a temporary work permit who is aggrieved by any action of the executive director taken pursuant to subsection (10) of this section, shall be entitled to a post-revocation hearing. This hearing shall be scheduled no later than fifteen (15) days after the notice of revocation has been made, and the hearing shall be conducted in the same manner as a hearing to revoke a permanent work permit.

SECTION 7. Section 27-7-83, Mississippi Code of 1972, is amended as follows:

27-7-83. (1) Returns and return information filed or furnished under the provisions of this chapter shall be confidential, and except in accordance with proper judicial order, or as otherwise authorized by this section, it shall be unlawful for members of the State Tax Commission or members of the Central Data Processing Authority, any deputy, agent, clerk or other officer or employee thereof, or any former employee thereof, to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any report or return required. The provisions of this section shall apply fully to any federal return, a copy of any portion of a federal return, or any information reflected on a federal return which is attached to or made a part of the state tax return. Likewise, the provisions of this section shall apply to any federal return or portion thereof, or to any federal return information data which is acquired from the Internal Revenue Service for state tax administration purposes pursuant to the Federal-State Exchange Program cited at Section 6103, Federal Internal Revenue Code. The term "proper judicial order" as used in this section shall not include subpoenas or subpoenas duces tecum, but shall include only those orders entered by a court of record in this state after furnishing notice and a hearing to the taxpayer and the State Tax Commission. The court shall not authorize the furnishing of such information unless it is satisfied that the information is needed to pursue pending litigation wherein the return itself is in issue, or the judge is satisfied that the need for furnishing the information outweighs the rights of the taxpayer to have such information secreted.

(2) Returns and return information with respect to taxes imposed by this chapter shall be open to inspection by or disclosure to the Commissioner of the Internal Revenue Service of the United States, or the proper officer of any state imposing an income tax similar to that imposed by this chapter, or the authorized representatives of such agencies. Such inspection shall be permitted, or such disclosure made, only upon written request by the head of such agencies, or the district director in the case of the Internal Revenue Service, and only to the representatives of such agencies designated in a written statement to the commissioner as the individuals who are to inspect or to receive the return or return information on behalf of such agency. The commissioner is authorized to enter into agreements with the Internal Revenue Service and with other states for the exchange of returns and return information data, or the disclosure of returns or return information data to such agencies, only to the extent that the statutes of the United States or of such other state, as the case may be, grant substantially similar privileges to the proper officer of this state charged with the administration of the tax laws of this state.

(3) (a) The return of a person shall, upon written request, be open to inspection by or disclosure to:

(i) In the case of the return of an individual, that individual;

(ii) In the case of an income tax return filed jointly, either of the individuals with respect to whom the return is filed;

(iii) In the case of the return of a partnership, any person who was a member of such partnership during any part of the period covered by the return;

(iv) In the case of the return of a corporation or a subsidiary thereof, any person designated by resolution of its board of directors or other similar governing body, or any officer or employee of such corporation upon written request signed by any principal officer and attested to by the secretary or other officer;

(v) In the case of the return of an estate, the administrator, executor or trustee of such estate, and any heir at law, next of kin or beneficiary under the will, of the decedent, but only to the extent that such latter persons have a material interest which will be affected by information contained therein;

(vi) In the case of the return of a trust, the trustee or trustees, jointly or separately, and any beneficiary of such trust, but only to the extent that such beneficiary has a material interest which will be affected by information contained therein;

(vii) In the case of the return of an individual or a return filed jointly, any claimant agency seeking to collect a debt through the setoff procedure established in Sections 27-7-701 through 27-7-713 and Sections 27-7-501 through 27-7-519, from an individual with respect to whom the return is filed.

(b) If an individual described in paragraph (a) is legally incompetent, the applicable return shall, upon written request, be open to inspection by or disclosure to the committee, trustee or guardian of his estate.

(c) If substantially all of the property of the person with respect to whom the return is filed is in the hands of a trustee in bankruptcy or receiver, such return or returns for prior years of such person shall, upon written request, be open to inspection by or disclosure to such trustee or receiver, but only if the commissioner finds that such receiver or trustee, in his fiduciary capacity, has a material interest which will be affected by information contained therein.

(d) Any return to which this section applies shall, upon written request, also be open to inspection by or disclosure to the attorney in fact duly authorized in writing by any of the persons described in paragraph (a) of this subsection to inspect the return or receive the information on his behalf, subject to the conditions provided in paragraph (a).

(e) Return information with respect to any taxpayer may be open to inspection by or disclosure to any person authorized by this subsection to inspect any return of such taxpayer if the commissioner determines that such disclosure would not seriously impair state tax administration.

(4) The State Auditor and the employees of his office shall have the right to examine only such tax returns as are necessary for auditing the State Tax Commission, and the same prohibitions against disclosure which apply to the State Tax Commission shall apply to the State Auditor and his employees or former employees.

(5) Nothing herein shall be construed to prohibit the publication of statistics, so classified as to prevent the identification of particular reports or returns and the items thereof, or the inspection by the Attorney General, or any other attorney representing the state, of the report or return of any taxpayer who shall bring action to set aside the tax thereon, or against whom any action or proceeding has been instituted to recover any tax or penalty imposed.

(6) Nothing in this section shall prohibit the chairman of the commission from making available information necessary to recover taxes owing the state pursuant to the authority granted in Section 27-75-16, Mississippi Code of 1972.

(7) Reports and returns required under the provisions of this chapter shall be preserved in accordance with approved records control schedules. No records, however, may be destroyed without the approval of the Director of the Department of Archives and History.

(8) The Mississippi Gaming Commission shall have the right, pursuant to Section 75-76-87, to examine and inspect and to have made available to it any return, return information or report.

SECTION 8. The following shall be codified as Section 97-33-111, Mississippi Code of 1972:

97-33-111. (1) The commission shall be responsible for determining an appropriate annual minimum percentage of net proceeds that licensees must contribute to charities, and the commission shall promulgate the necessary rules prescribing the necessary amounts that each licensee shall be required to contribute annually to charities.

(2) The commission shall have the authority to audit and inspect the records of all entities to which a licensee gives, sells or otherwise transfers money or other things of value in order to determine whether a licensee is complying with this section.

SECTION 9. This act shall take effect and be in force from and after July 1, 1997.