1998 Regular Session
To: Ways and Means
By: Representative Clark
House Bill 454
AN ACT TO CODIFY SECTIONS 75-76-501, 75-76-503, 75-76-505 AND 75-76-507, MISSISSIPPI CODE OF 1972, PROVIDE LICENSE FEES FOR THE MANUFACTURE, SALE, DISTRIBUTION, OWNERSHIP AND OPERATION OF ELECTRONIC VIDEO COIN MACHINES; TO TAX THE MANUFACTURE, SALE, DISTRIBUTION, OWNERSHIP AND OPERATION OF ELECTRONIC VIDEO COIN MACHINES; TO LEVY A STATE TAX IN THE AMOUNT OF 12% OF THE NET PROCEEDS DERIVED FROM THE OPERATION OF ELECTRONIC VIDEO COIN MACHINES; TO PROVIDE THAT THE MUNICIPALITY AND COUNTY IN WHICH AN ELECTRONIC VIDEO COIN MACHINE IS LOCATED SHALL SHARE IN THE DISTRIBUTION OF THE NET PROCEEDS; TO AMEND SECTIONS 27-27-3 AND 75-76-5, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following shall be codified as Section 75-76-501, Mississippi Code of 1972:
75-76-501. As used in Sections 1 through 4 of this act, the following definitions shall have the meanings ascribed herein unless the context clearly requires otherwise:
(a) "Commission" means the Mississippi Gaming Commission.
(b) "Distributor" means an individual, partnership or corporation licensed under this act to buy, sell, lease, repair or distribute electronic video coin machines. The term excludes machine owners and manufacturers.
(c) "Gross proceeds" means the total amount of money placed into electronic video coin machines.
(d) "Incentive" means a consideration, including a premium or bonus in cash or advance commission on merchandise, offered from a machine owner to a licensee in order to solicit its business.
(e) "Licensee" means an individual, partnership or corporation that has been issued a license by the Mississippi Gaming Commission for the placement and operation of electronic video coin machines on the premises of the individual, partnership or corporation.
(f) "Licensed premises" means any restaurant, bar, lounge, tavern, motel, hotel, club, fraternal order or any other premises that has a license for the sale of alcoholic beverages, light wine or beer for on-premises consumption.
(g) "Machine owner" means an individual, partnership or corporation which is licensed under this act and which owns, and operates, leases, services and maintains electronic video coin machines for placement in licensed premises.
(h) "Manufacturer" means an individual, partnership or corporation which is licensed under this act and which manufactures or assembles and programs electronic video coin machines.
(i) "Net proceeds" means gross proceeds after awards have been paid.
(j) "Person" means a corporation, partnership and association, as well as a natural person.
(k) "Electronic video coin machine" means any electronic video game machine authorized pursuant to the provisions of this act that, upon insertion of cash, is available to play or simulate the play of a card game utilizing a video display and microprocessors in which, by the skill of the player or by chance, or both, the player may receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses coins, cash, tokens or anything of value or any slot amusement machine as defined in Section 27-27-3. All machines must contain electronic information verifying transmitting components as required by the Mississippi Gaming Commission.
SECTION 2. The following shall be codified as Section 75-76-503, Mississippi Code of 1972:
75-76-503. The commission shall collect the prescribed fees for the following licenses:
(a) A manufacturer's license.......Annual fee of Fifteen Thousand Dollars ($15,000.00).
(b) A distributor's license........Annual fee of Five Thousand Dollars ($5,000.00).
(c) A machine owner's license......Annual fee of One Hundred Fifty Dollars ($150.00) per machine for the first fifty (50) individual coin machine licenses. For each additional electronic video coin machine, the annual fee shall be Fifty Dollars ($50.00) per machine. Every electronic video coin machine in use in this state must have a current license displayed on the machine. Every electronic video coin machine licensed under this act must be manufactured by an individual, partnership or corporation licensed under item (a) of this section. This type of license will allow a machine owner to sell used electronic video coin machines that the owner purchased new and operated for at least two (2) years.
(d) A licensee's license...........Annual fee of One Hundred Fifty Dollars ($150.00) for each machine.
(e) The commission shall refund all licensee fees if an application is rejected; however, the commission may establish an application fee not to exceed Two Hundred Fifty Dollars ($250.00) per application.
SECTION 3. The following shall be codified as Section 75-76-505, Mississippi Code of 1972:
75-76-505. (1) Net proceeds shall be collected by the machine owner for each licensed electronic video coin machine.
(2) (a) A tax at the rate of twelve percent (12%) of the net proceeds derived from the operation of such machines shall be collected by the State Tax Commission to be deposited in the State General Fund.
(b) A tax at the rate of eight percent (8%) of the net proceeds derived from the operation of such machines shall be collected by the State Tax Commission and distributed as follows: (i) Four percent (4%) to the incorporated municipality where the machine is located; and four percent (4%) to the county where the machine is located; or
(ii) In the event that the machine is not located within an incorporated municipality, eight percent (8%) to the county where the machine is located.
(3) The commission is authorized to establish a procedure for auditing the electronic video coin machines. The procedure will include reports prepared by the machine owners and electronic auditing at a central location designated by the commission. The timing and contents of the reports shall be established by the commission. The commission shall have the authority to contract with an independent auditing firm to establish and operate all or some of the auditing requirements as established by the commission.
SECTION 4. The following shall be codified as Section 75-76-507, Mississippi Code of 1972:
75-76-507. Electronic video coin machines licensed and permitted pursuant to this act are exempt from taxes, fees, and licensing restrictions imposed by any governmental entity, except as provided for in this act.
SECTION 5. Section 27-27-3, Mississippi Code of 1972, is amended as follows:
27-27-3. The words, terms, and phrases, when used in this article, shall have the meaning ascribed to them herein.
(a) "Slot amusement machine" or "machine" means any mechanical device or contrivance which is operated, played, worked, manipulated, or used by inserting or depositing any coin, slug, token, or thing of value, in which may be seen any picture or heard any music, or wherein any game may be played, or any form of diversion had. "Slot amusement machine" or "machine" does not mean any electronic video coin machine described in Sections 1 through 4 of House Bill No. , 1998 Regular Session.
(b) "Officer collecting the tax" means the tax collector of the county, or, in the case of a municipality, the person who collects the taxes for the municipality by whatever title he may be known.
(c) "Person" means and includes any individual, firm, partnership, joint venture, association, corporation, estate, trust, or other group or combination acting as a unit and includes the plural as well as the singular in number.
SECTION 6. Section 75-76-5, Mississippi Code of 1972, is amended as follows:
75-76-5. As used in Sections 75-76-1 through 75-76-313, unless the context requires otherwise:
(a) "Applicant" means any person who has applied for or is about to apply for a state gaming license, registration or finding of suitability under the provisions of this chapter or approval of any act or transaction for which approval is required or permitted under the provisions of this chapter.
(b) "Application" means a request for the issuance of a state gaming license, registration or finding of suitability under the provisions of this chapter or for approval of any act or transaction for which approval is required or permitted under the provisions of this chapter but does not include any supplemental forms or information that may be required with the application.
(c) "Associated equipment" means any equipment or mechanical, electromechanical or electronic contrivance, component or machine used remotely or directly in connection with gaming or with any game, race book or sports pool that would not otherwise be classified as a gaming device, including dice, playing cards, links which connect to progressive slot machines, equipment which affects the proper reporting of gross revenue, computerized systems of betting at a race book or sports pool, computerized systems for monitoring slot machines, and devices for weighing or counting money.
(d) "Chairman," through September 30, 1993, means the Chairman of the State Tax Commission, and thereafter means the Chairman of the Mississippi Gaming Commission.
(e) "Commission" or "Mississippi Gaming Commission," through September 30, 1993, means the State Tax Commission, and thereafter means the Mississippi Gaming Commission.
(f) "Commission member," through September 30, 1993, means a member of the State Tax Commission, and thereafter means a member of the Mississippi Gaming Commission.
(g) "Credit instrument" means a writing which evidences a gaming debt owed to a person who holds a license at the time the debt is created, and includes any writing taken in consolidation, redemption or payment of a prior credit instrument.
(h) "Enforcement division" means a particular division supervised by the executive director that provides enforcement functions.
(i) "Establishment" means any premises wherein or whereon any gaming is done.
(j) "Executive director," through September 30, 1993, means the director appointed by the State Tax Commission pursuant to Section 75-76-15(1), and thereafter means the Executive Director of the Mississippi Gaming Commission.
(k) Except as otherwise provided by law, "game," or "gambling game" means any banking or percentage game played with cards, with dice or with any mechanical, electromechanical or electronic device or machine for money, property, checks, credit or any representative of value, including, without limiting the generality of the foregoing, faro, monte, roulette, keno, fan-tan, twenty-one, blackjack, seven-and-a-half, big injun, klondike, craps, poker, chuck-a-luck (dai shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat the banker, panguingui, slot machine, or any other game or device approved by the commission. However, "game" or "gambling game" shall not include bingo games or raffles which are held pursuant to the provisions of Section 97-33-51.
The commission shall not be required to recognize any game hereunder with respect to which the commission determines it does not have sufficient experience or expertise.
(l) "Gaming" or "gambling" means to deal, operate, carry on, conduct, maintain or expose for play any game as defined in this chapter.
(m) "Gaming device" means any mechanical, electromechanical or electronic contrivance, component or machine used in connection with gaming or any game which affects the result of a wager by determining win or loss. The term includes a system for processing information which can alter the normal criteria of random selection, which affects the operation of any game, or which determines the outcome of a game. The term does not include a system or device which affects a game solely by stopping its operation so that the outcome remains undetermined, and does not include any antique coin machine as defined in Section 27-27-12.
(n) "Gaming employee" means any person connected directly with the operation of a gaming establishment licensed to conduct any game, including:
(iii) Change personnel;
(iv) Counting room personnel;
(vii) Hosts or other persons empowered to extend credit or complimentary services;
(viii) Keno runners;
(ix) Keno writers;
(x) Machine mechanics;
(xi) Security personnel;
(xii) Shift or pit bosses;
(xiv) Supervisors or managers; and
(xv) Ticket writers.
The term "gaming employee" also includes employees of manufacturers or distributors of gaming equipment within this state whose duties are directly involved with the manufacture, repair or distribution of gaming equipment.
"Gaming employee" does not include bartenders, cocktail waitresses or other persons engaged in preparing or serving food or beverages unless acting in some other capacity.
(o) "Gaming license" means any license issued by the state which authorizes the person named therein to engage in gaming.
(p) "Gross revenue" means the total of all of the following, less the total of all cash paid out as losses to patrons and those amounts paid to purchase annuities to fund losses paid to patrons over several years by independent financial institutions:
(i) Cash received as winnings;
(ii) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and
(iii) Compensation received for conducting any game in which the licensee is not party to a wager.
For the purposes of this definition, cash or the value of noncash prizes awarded to patrons in a contest or tournament are not losses.
The term does not include:
(i) Counterfeit money or tokens;
(ii) Coins of other countries which are received in gaming devices;
(iii) Cash taken in fraudulent acts perpetrated against a licensee for which the licensee is not reimbursed; or
(iv) Cash received as entry fees for contests or tournaments in which the patrons compete for prizes.
(q) "Hearing examiner" means a member of the Mississippi Gaming Commission or other person authorized by the commission to conduct hearings.
(r) "Investigation division" means a particular division supervised by the executive director that provides investigative functions.
(s) "License" means a gaming license or a manufacturer's, seller's or distributor's license.
(t) "Licensee" means any person to whom a valid license has been issued.
(u) "License fees" means monies required by law to be paid to obtain or continue a gaming license or a manufacturer's, seller's or distributor's license.
(v) "Licensed gaming establishment" means any premises licensed pursuant to the provisions of this chapter wherein or whereon gaming is done.
(w) "Manufacturer's," "seller's" or "distributor's" license means a license issued pursuant to Section 75-76-79.
(x) "Navigable waters" shall have the meaning ascribed to such term under Section 27-109-1.
(y) "Operation" means the conduct of gaming.
(z) "Party" means the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding before the commission; or the Mississippi Gaming Commission and any licensee or other person appearing of record in any proceeding for judicial review of any action, decision or order of the commission.
(aa) "Person" includes any association, corporation, firm, partnership, trust or other form of business association as well as a natural person.
(bb) "Premises" means land, together with all buildings, improvements and personal property located thereon, and includes all parts of any vessel or cruise vessel.
(cc) "Race book" means the business of accepting wagers upon the outcome of any event held at a track which uses the pari-mutuel system of wagering.
(dd) "Regulation" means a rule, standard, directive or statement of general applicability which effectuates law or policy or which describes the procedure or requirements for practicing before the commission. The term includes a proposed regulation and the amendment or repeal of a prior regulation but does not include:
(i) A statement concerning only the internal management of the commission and not affecting the rights or procedures available to any licensee or other person;
(ii) A declaratory ruling;
(iii) An interagency memorandum;
(iv) The commission's decision in a contested case or relating to an application for a license; or
(v) Any notice concerning the fees to be charged which are necessary for the administration of this chapter.
(ee) "Respondent" means any licensee or other person against whom a complaint has been filed with the commission.
(ff) "Slot machine" means any mechanical, electrical or other device, contrivance or machine which, upon insertion of a coin, token or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of the skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the machine to receive cash, premiums, merchandise, tokens or anything of value, whether the payoff is made automatically from the machine or in any other manner. The term does not include any antique coin machine as defined in Section 27-27-12.
(gg) "Sports pool" means the business of accepting wagers on sporting events, except for athletic events, by any system or method of wagering other than the system known as the "pari-mutuel method of wagering."
(hh) "Temporary work permit" means a work permit which is valid only for a period not to exceed ninety (90) days from its date of issue and which is not renewable.
(ii) "Vessel" or "cruise vessel" shall have the meanings ascribed to such terms under Section 27-109-1.
(jj) "Work permit" means any card, certificate or permit issued by the commission, whether denominated as a work permit, registration card or otherwise, authorizing the employment of the holder as a gaming employee. A document issued by any governmental authority for any employment other than gaming is not a valid work permit for the purposes of this chapter.
(kk) "School or training institution" means any school or training institution which is licensed by the commission to teach or train gaming employees pursuant to Section 75-76-34.
(ll) "Cheat" means to alter the selection of criteria that determine:
(i) The rules of a game; or
(ii) The amount or frequency of payment in a game.
SECTION 7. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the slot amusement machine tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the slot amusement machine tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.
SECTION 8. This act shall take effect and be in force from and after July 1, 1998.