HB-4612, As Passed Senate, July 6, 2004                                     

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4612

                                                                             A bill to amend the Initiated Law of 1996, entitled                               

"Michigan gaming control and revenue act,"                                  

by amending section 12 (MCL 432.212), as amended by 1997 PA 69.             

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 12.  (1) A wagering tax is imposed on the adjusted                     

2   gross receipts received by the licensee from gaming authorized              

3   under this act at the rate of 18%.  If a city  does exercises

4   either of the options in subsection (4), the tax rate under this            

5   subsection shall be 8.1% and deposited in the state school aid              

6   fund to provide additional funds for K-12 classroom education.              

7   If the city rescinds or is otherwise unable to exercise 1 of the            

8   options in subsection (4), the tax rate under this subsection               

9   shall be 18%.  A tax rate of 18% imposed under this subsection              

10  shall cover any period for which the city does not or is unable             

11  to exercise 1 of the options in subsection (4).                             

1       (2) The state casino gaming fund is created in the department               

2   of treasury.  The fund  is to shall be administered by the                 

3   department in accordance with this act.  Except as provided in              

4   sections 12a and 13, the wagering  tax taxes imposed under                 

5   subsections (1), (5), and (6) plus all other fees, fines, and               

6   charges imposed by the state shall be deposited into the state              

7   casino gaming fund.  The wagering tax is to be remitted daily by            

8   the holder of a casino license to the department of treasury by             

9   electronic wire transfer of funds.  The state shall remit the               

10  city's portion of the wagering tax to the city daily by                     

11  electronic wire transfer of funds as provided by this act.                  

12      (3) If the state imposes a wagering tax under subsection (1)

13  equal to 18% of adjusted gross receipts, the state casino gaming            

14  fund shall be allocated as follows:                                         

15      (a) 55% to the city in which a casino is located for use in                 

16  connection with the following:                                              

17                                                                               (i) The hiring, training, and deployment of street patrol                           

18  officers.                                                                   

19      (ii) Neighborhood and downtown economic development programs                 

20  designed to create local jobs.                                              

21      (iii) Public safety programs such as emergency medical                       

22  services, fire department programs, and street lighting.                    

23      (iv) Anti-gang and youth development programs.                               

24      (v) Other programs that are designed to contribute to the                   

25  improvement of the quality of life in the city.                             

26      (vi) Relief to the taxpayers of the city from 1 or more taxes                

27  or fees imposed by the city.                                                

1       (vii) The costs of capital improvements.                                     

2       (viii) Road repairs and improvements.                                         

3       (b) 45% to the state to be deposited in the state school aid                

4   fund to provide additional funds for K-12 classroom education.              

5       (4) A city in which a licensee is located may do 1 of the                   

6   following:                                                                  

7       (a) In the development agreement into which the city is                     

8   entitled to enter, include a provision that requires the licensee           

9   located in the city to pay the city a payment equal to 9.9% of              

10  the adjusted gross receipts received by the licensee from gaming            

11  authorized under this act.                                                  

12      (b) By ordinance, levy, assess, and collect an excise tax                   

13  upon licensees located in the city at a rate of 9.9% of the                 

14  adjusted gross receipts received by the licensee from gaming                

15  authorized under this act.                                                  

16  (5) Subject to subsections (6) and (7), a wagering tax in                   

17  addition to the tax imposed in subsection (1) is imposed on the             

18  adjusted gross receipts received by a licensee from gaming                  

19  authorized under this act at the rate of 6%.  Money from the tax            

20  imposed under this subsection that has been deposited in the                

21  state casino gaming fund shall be allocated 1/3 to the city in              

22  which the licensee's casino is located for use in connection with           

23  the purposes listed in subsection (3)(a) and 2/3 to the general             

24  fund.  The city may exercise either of the options in subsection            

25  (4) with regard to the city's share of the tax under this                   

26  subsection.  For a period during which the licensee is paying the           

27  city's share of the tax under this subsection directly to the               

House Bill No. 4612 as amended July 6, 2004                                 

1   city under either of the options in subsection (4), the payment             

2   to the state casino gaming fund under this subsection shall be 4%           

3   and shall be allocated entirely to the general fund.                        

4       (6) Subject to subsection (7), after December 31, 2005, the                 

5   wagering tax imposed under subsection (5) shall be 4% and shall             

6   be deposited entirely in the general fund.                                  

7       (7) After a casino licensee is fully operational at its                     

8   permanent casino location under and in compliance with its                  

9   development agreement that is in existence on July 1, 2004 or a             

10  subsequent original development agreement, the licensee may apply           

11  to the board for certification under this subsection.  If the               

12  board determines that a licensee that makes an application under            

13  this subsection has been fully operational at its permanent                 

14  casino location, under and in compliance with its development               

15  agreement that is in existence on July 1, 2004 or a subsequent              

16  original development agreement, for at least 30 consecutive days,           

17  the board shall certify the licensee under this subsection, and             

18  the tax imposed on the licensee under subsection (5) or (6) shall           

19  be, retroactive to the first day of the 30-day period on which              

20  the board based its certification, reduced <<to 1% to be deposited entirely into the general fund>>.                                                        

21      (8) On or before each September 30 after the board certifies                

22  a licensee under subsection (7), the board shall determine the              

23  number of days since the previous certification that the licensee           

24  has been fully operational only at its permanent casino location            

25  under and in compliance with its development agreement that was             

26  in existence on July 1, 2004 or a subsequent original development           

27  agreement, and the number of days that the licensee operated                

1   entirely or partially at a location other than that permanent               

2   casino location.  The board shall issue a new certification after           

3   making the determination under this subsection, certifying both             

4   numbers of days and identifying the days on which the licensee              

5   operated entirely or partially at a location other than its                 

6   permanent location.  The board shall retroactively apply the                

7   higher applicable tax rate under subsection (5) or (6) to the               

8   adjusted gross receipts received by the licensee on the days on             

9   which the licensee operated entirely or partially at a location             

10  other than its permanent location.                                          

11      (9) If a casino licensee imposes a surcharge on its patrons,                

12  a surcharge tax is imposed on money received by the licensee                

13  because of those charges of 25%.  The tax imposed by this                   

14  subsection shall be remitted, deposited, paid, and administered             

15  in the same manner as the wagering tax under subsection (2) and             

16  allocated entirely to the general fund.  As used in this                    

17  subsection, "surcharge" means a charge to enter a casino or,                

18  except for the money wagered, as a condition to participate in              

19  gaming.

20  (10)  (5)  Payments  of any amount required  to a city under                

21  1 of the options in subsection (4) shall be made in a manner, at            

22  those times, and subject to reporting requirements and penalties            

23  and interest for delinquent payment as may be provided for in the           

24  development agreement  ,  if the payment is required under a                

25  development agreement, or by ordinance if the payment is required           

26  for a tax levied by the city.  Payments required under subsection           

27  (4)(a) may be in addition to any other payments which may be                

House Bill No. 4612 as amended July 6, 2004                                 

1   required in the development agreement for the conveyance of any             

2   interest in property, the purchase of services, or the                      

3   reimbursement of expenses.  Payments to a city under subsection             

4   (4) shall be used by the city for the purposes listed in                    

5   subsection (3)(a).                                                          

6   (11)  (6)  Approval by the city of a development agreement or               

7   adoption of an ordinance approving either casino gaming or the              

8   levy of a local excise tax  shall not be considered does not               

9   constitute the granting of a franchise or license by the city for           

10  purposes of any statutory, charter, or constitutional provision.            

11  (12)  (7)  The wagering  tax taxes imposed under  subsection               

12  (1) this section and any tax imposed under section 13(2) shall             

13  be administered by the department of treasury in accordance with            

14  1941 PA 122, MCL 205.1 to 205.31, and this act.  In case of                 

15  conflict between the provisions of 1941 PA 122, MCL 205.1 to                

16  205.31, and this act, the provisions of this act shall prevail.             

17  (13)  (8)  Funds from this act shall not be used to supplant                

18   existing state appropriations or local expenditures.

    <<(14) As used in this section, "fully operational" means fully operating the licensee's entire casino and casino enterprise, including, but not limited to, its hotel required under its development agreement.>>

19      Enacting section 1.  This amendatory act takes effect                       

20  August 1, 2004.