SB-0435, As Passed House, June 29, 2006

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 435

     A bill to amend 1972 PA 382, entitled

"Traxler-McCauley-Law-Bowman bingo act,"

by amending sections 3, 3a, 5, 5c, 8, 10, 10a, 10b, and 11b (MCL

432.103, 432.103a, 432.105, 432.105c, 432.108, 432.110, 432.110a,

432.110b, and 432.111b), section 3 as amended by 1995 PA 275,

sections 3a, 5c, 10b, and 11b as added and sections 5, 10, and 10a

as amended by 1999 PA 108, and section 8 as amended by 1981 PA 229,

and by adding section 10c.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3. (1) "Educational organization" means an organization

within this state that is organized not for pecuniary profit, whose

primary purpose is educational in nature and designed to develop

the capabilities of individuals by instruction in any public or

private elementary or secondary school that complies with the

school code of 1976, Act No. 451 of the Public Acts of 1976, being

sections 380.1 to 380.1852 of the Michigan Compiled Laws  revised

school code, 1976 PA 451, MCL 380.1 to 380.1852, or any private or

public college or university that is organized not for pecuniary

profit and that is approved by the state board of education.

     (2) "Fraternal organization" means an organization within this

state, except a college fraternity or sorority, that is organized

not for pecuniary profit; that is a branch, lodge, or chapter of a

national or state organization; and that exists for the common

purpose, brotherhood, or other interests of its members.

     (3) "Licensee" means a person or qualified organization

licensed  pursuant to  under this act.

     (4) "Member" means an individual who qualified for membership

in a qualified organization  pursuant to  under its bylaws,

articles of incorporation, charter, rules, or other written

statement.

     (5) "Person" means a natural person, firm, association,

corporation, or other legal entity.

     (6) "Qualified organization" means a bona fide religious,

educational, service, senior citizens, fraternal, or veterans'

organization that operates without profit to its members and that

either has been in existence continuously as an organization for a

period of 5 years or is exempt from taxation  imposed by the single

business tax act, Act No. 228 of the Public Acts of 1975, being

sections 208.1 to 208.145 of the Michigan Compiled Laws  under 26

USC 501(c). Qualified organization does not include a candidate

committee, political committee, political party committee, ballot

question committee, independent committee, or any other committee

as defined by, and organized  pursuant to  under, the Michigan

campaign finance act,  Act No. 388 of the Public Acts of 1976,

being sections 169.201 to 169.282 of the Michigan Compiled Laws

1976 PA 388, MCL 169.201 to 169.282.

     (7) "Religious organization" means any of the following:

     (a) An organization, church, body of communicants, or group

that is organized not for pecuniary profit and that gathers in

common membership for mutual support and edification in piety,

worship, and religious observances.

     (b) A society of individuals that is organized not for

pecuniary profit and that unites for religious purposes at a

definite place.

     (c) A church related private school that is organized not for

pecuniary profit.

     (8) "Senior citizens organization" means an organization

within this state that is organized not for pecuniary profit, that

consists of at least 15 members who are 60 years of age or older,

and that exists for their mutual support and for the advancement of

the causes of elderly or retired persons.

     (9) "Service organization" means either of the following:

     (a) A branch, lodge, or chapter of a national or state

organization that is organized not for pecuniary profit and that is

authorized by its written constitution, charter, articles of

incorporation, or bylaws to engage in a fraternal, civic, or

service purpose within the state.

     (b) A local civic organization that is organized not for

pecuniary profit; that is not affiliated with a state or national

organization; that is recognized by resolution adopted by the local

governmental subdivision in which the organization conducts its

principal activities; whose constitution, charter, articles of

incorporation, or bylaws contain a provision for the perpetuation

of the organization as a nonprofit organization; whose entire

assets are  pledged to  used for charitable purposes; and whose

constitution, charter, articles of incorporation, or bylaws contain

a provision that all assets, real property, and personal property

shall revert to the benefit of the local governmental subdivision

that granted the resolution upon dissolution of the organization.

     (10) "Veterans' organization" means an organization within

this state, or a branch, lodge, or chapter within this state of a

state organization or of a national organization chartered by the

congress of the United States, that is organized not for pecuniary

profit, the membership of which consists of individuals who were

members of the armed services or forces of the United States.

     Sec. 3a. (1) "Equipment" means the objects and mechanical or

electromechanical devices used to determine or assist in

determining the winners of prizes at events licensed under this

act.

     (2) "Event" means each occasion of a bingo, millionaire party,

raffle, charity game, or numeral game licensed under this act.

     (3) "Large bingo" means a series of bingo occasions that occur

on a regular basis during which the total value of all prizes

awarded through bingo at a single occasion does not exceed

$2,000.00  $3,500.00 and the total value of all prizes awarded for

1 game does not exceed  $500.00  $1,100.00, except that a prize

awarded through a Michigan progressive jackpot bingo game  shall

is not  be subject to these limitations.

     (4) "Large raffle" means an event where the total value of all

prizes awarded through raffle drawings exceed $500.00 per occasion.

     (5) "Location" means a building, enclosure, part of a building

or enclosure, or a distinct portion of real estate that is used for

the purpose of conducting events licensed under this act. Location

also means all components or buildings that comprise 1

architectural entity or that serve a unified functional purpose.

     (6) "Manufacturer" means a person licensed under section 11c

who manufactures numeral game tickets for sale to suppliers for use

in an event.

     (7) "Michigan progressive jackpot" means a bingo game

conducted in conjunction with a licensed large bingo occasion,

where the value of the prize is carried forward to the next bingo

occasion if no player bingos in a predetermined number of allowable

calls. Michigan progressive jackpot may include bingo games

conducted by more than 1 licensee that are linked together for the

purpose of a common jackpot prize and consolation prize as

prescribed by the commissioner.

     (8) "Millionaire party" means an event at which wagers are

placed upon games of chance customarily associated with a gambling

casino through the use of imitation money or chips that have a

nominal value equal to or greater than the value of the currency

for which they can be exchanged.

     (9) "Numeral game" means the random resale of a series of

numeral game tickets by a qualified organization under a numeral

game license or in conjunction with a licensed millionaire party or

large raffle.

     (10) "Numeral game ticket" means a paper strip on which

preprinted numerals are covered by folding the strip and banding

the folded strip with a separate piece of paper, if upon breaking

the paper strip that bands the ticket, the purchaser discovers

whether the ticket is a winning ticket and the purchaser may be

awarded a merchandise prize.

     (11) "Occasion" means the hours of the day for which a license

is issued.

     (12) "Principal officer" means the highest ranking officer of

the qualified organization according to its written constitution,

charter, articles of incorporation, or bylaws.

     (13) "Prize" means anything of value, including, but not

limited to, money or merchandise that is given to a player for

attending or winning a game at an event. A nonmonetary item is

valued at its retail value. Prize does not include advertising

material given away by a qualified organization in accordance with

rules promulgated under this act.

     (14) "Single gathering" means 1 scheduled assembly or meeting

with a specified beginning and ending time that is conducted or

sponsored by the qualified organization. Single gathering does not

include the regular operating hours of a club or similar facility

and does not include a meeting conducted solely for the purpose of

conducting a raffle.

     (15) "Small bingo" means a series of bingo occasions that

occur on a regular basis during which the total value of all prizes

awarded through bingo at a single occasion does not exceed $300.00

and the total value of all prizes awarded for a single bingo game

does not exceed $25.00.

     (16) "Small raffle" means an event during which the total

value of all prizes awarded through raffle drawings does not exceed

$500.00 during 1 occasion.

     (17) "Special bingo" means a single or consecutive series of

bingo occasions during which the total value of all prizes awarded

through bingo at a single occasion does not exceed  $2,000.00

$3,500.00 and the total value of all prizes awarded for a single

bingo game does not exceed  $500.00  $1,100.00.

     (18) "Supplier" means a person licensed under this act to

rent, sell, or lease equipment or to sell charity game or numeral

game tickets to qualified organizations licensed under this act.

     Sec. 5. (1) A large or small bingo license may be reissued

annually upon the submitting of an application for renewal provided

by the commissioner and upon the licensee's payment of the

appropriate fee. A small or large bingo license expires at 12

midnight on the last day of February.

     (2) A qualified organization may hold more than 1 bingo

license.

     (3) A small or large bingo license shall be valid for not more

than 1 day per week.

     (4) Not more than  10  14 bingo licenses shall be issued for a

7-day period at any 1 location.

     (5) Not more than 1 bingo license shall be issued to a

qualified organization for any 1 day.

     (6) Not more than 2 bingo licenses shall be issued for the

same day at any 1 location.

(5)  (7) A special bingo license may be issued for up to 7

consecutive days.

(6)  (8) A qualified organization may be issued up to 4

special bingo licenses per calendar year.

     Sec. 5c. (1) The value of a prize or consolation prize awarded

during a Michigan progressive jackpot bingo game is not subject to

the prize limitations of section 3a(3).

     (2) The prize awarded to the winner of a Michigan progressive

jackpot bingo game may be a predetermined amount that shall not

exceed $500.00 or 50% of the card sales on the first bingo

occasion.

     (3) If a Michigan progressive jackpot prize is not won in the

predetermined number of allowable calls, the game shall be played

to its conclusion for a predetermined consolation prize that shall

not exceed $100.00.

     (4) If a Michigan progressive jackpot prize is not won in the

predetermined number of allowable calls, the entire prize amount

shall be carried forward to the next scheduled bingo occasion.

     (5) When a Michigan progressive jackpot prize has been carried

forward from a previous bingo occasion, the new prize amount shall

include the entire amount carried forward, plus 50% of the card

sales for the Michigan progressive jackpot bingo game for the

current bingo occasion.

     (6) No arrangement of numbers other than a coverall pattern

shall be required or allowed to win a Michigan progressive jackpot

bingo game.

     (7) A Michigan progressive jackpot bingo game shall be played

only on bingo cards that are approved by the commissioner.

     (8) All cards for the Michigan progressive jackpot bingo game

shall be sold by the licensee at a uniform price with no discount

for the purchase of more than 1 card.

     (9) All bingo cards used in the Michigan progressive jackpot

bingo game shall be sold prior to the drawing of the first ball for

that game.

(9)  (10) Whenever a Michigan progressive jackpot bingo game

is conducted, the licensee shall post a notice and announce the

following information:

     (a) The maximum number of allowable calls in which the player

must complete a coverall pattern in order to win a Michigan

progressive jackpot prize on that occasion.

     (b) The prize amount offered to the winner of the Michigan

progressive jackpot game and the consolation prize for that bingo

occasion.

     (c) The date the next bingo occasion will occur in that

particular progression if the jackpot is not awarded.

(10)  (11) A Michigan progressive jackpot bingo game shall be

conducted in the following manner:

     (a) On the first bingo occasion a player shall not be required

to obtain bingo in less than  50 numbers called  the number of

allowable calls as prescribed by the commissioner to win the

jackpot prize.

     (b) The number of allowable calls required to win the jackpot

shall be increased by 1 number on each successive bingo occasion

for that licensee in a particular progression.

     (c) Once a Michigan progressive jackpot bingo game has been

started, the progressive jackpot prize shall be offered at each

successive bingo occasion for that licensee until the jackpot prize

has been won.

     (d) A Michigan progressive jackpot progression shall only be

terminated or interrupted by 1 of the following:

     (i) Determining a winner of the Michigan progressive jackpot

prize.

     (ii) Expiration, suspension, revocation, or surrender of the

license to conduct bingo.

     (iii) A previously announced scheduled interruption, such as a

legal holiday or other temporary closing.

     (iv) A valid emergency condition under which the licensee is

unable to conduct the game.

(11)  (12) Only 1 Michigan progressive jackpot bingo game

shall be in progress at 1 time per bingo occasion.

(12)  (13) Prizes for a Michigan progressive jackpot bingo

game shall be awarded as follows:

     (a) The Michigan progressive jackpot prize shall be awarded to

the player or players who complete the coverall pattern within the

predesignated number of allowable calls.

     (b) A consolation prize shall be awarded on each bingo

occasion at which a Michigan progressive jackpot game is played,

except on the bingo occasion that the jackpot prize is won.

     (c) The consolation prize shall be awarded to the player or

players who complete a coverall pattern on each bingo occasion,

regardless of the number of calls in excess of the predesignated

number of allowable calls required to win the Michigan progressive

jackpot bingo game.

(13)  (14) The jackpot prize shall be awarded by a check

written from the licensee's financial account or in the manner

prescribed by the commissioner.

(14)  (15) Except as otherwise provided in this section, all

other provisions of this act or rules promulgated under this act

apply to the conduct of a Michigan progressive jackpot game.

(15)  (16) If an organization's bingo license will expire or

is suspended, revoked, or surrendered before the last bingo

occasion of a particular progression, the jackpot prize shall be

awarded and the winner determined on the last authorized bingo

occasion regardless of the number of calls required to determine

the winner.

     Sec. 8. All fees and revenue collected by the commissioner or

bureau under this act shall be paid into the state lottery fund.

All necessary expenses incurred by the bureau in the administration

and enforcement of any activity authorized by this act and in the

initiation, implementation, and ongoing operation of  charity games

any activity authorized by this act shall be financed from the

state lottery fund. The amount of these necessary expenses shall

not exceed the amount of revenues received from the sale of charity

game tickets and all fees collected under this act.  , except that

this limitation shall not apply before October 1, 1983. At the end

of each fiscal year all money, including interest, in the state

lottery fund which is attributable to fees and revenue collected

pursuant to  under this act but which has not been expended

pursuant to  under this section shall be deposited in the state

general fund.

     Sec. 10. (1) Only a member of the qualified organization shall

participate in the management of an event.

     (2) A person shall not receive any commission, salary, pay,

profit, or wage for participating in the management or operation of

bingo, a millionaire party, a raffle, or a charity game except as

provided by rule promulgated under this act.

     (3) Except by special permission of the commissioner, a

licensee shall conduct bingo or a millionaire party only with

equipment that it owns, uses under a bureau-approved rental

contract, or is purchasing or renting at a reasonable rate from a

supplier.

     (4) A licensee shall not advertise bingo except to the extent

and in the manner permitted by rule promulgated under this act. If

the commissioner permits a licensee to advertise bingo, the

licensee shall indicate in the advertisement the purposes for which

the net proceeds will be used by the licensee.

     (5) The holder of a millionaire party license shall not

advertise the event, except to the extent and in the manner

permitted by rule promulgated under this act. If the commissioner

permits a licensee to advertise the event, the licensee shall

indicate in the advertising the purposes for which the net proceeds

will be used by the licensee.  , and shall give notice of the

$500.00 personal limitation on winnings required by section 10a(e).

     Sec. 10a. All of the following apply in the conduct of a

millionaire party:

     (a) A person less than 18 years of age shall not be permitted

to wager.

     (b) A wager may not be placed on a contest other than a game

of chance taking place at the location and during the time period

approved for the event, and in no event shall a wager be placed

upon an athletic event or upon a game involving personal skill.

     (c) The licensee under the millionaire party license shall be

responsible for insuring that the requirements of this section are

met.

     (d) A qualified organization shall not receive more than

$15,000.00 in exchange for imitation money or chips in 1 day of a

millionaire party.

     (e) A person participating in a millionaire party shall not be

awarded prizes having an aggregate value greater than $500.00 per

day. The value of raffle, charity game, and numeral game prizes

awarded at the millionaire party is not subject to the limitations

of this section. A notice of personal limitation on winnings shall

be given to the participant or posted at the location of the event.

     Sec. 10b. (1)  A Except as otherwise provided in section 10c,

a qualified organization may be issued up to 4 millionaire party

licenses in 1 calendar year. Each license shall only be valid for 1

location.

     (2) A millionaire party license may be issued for up to 4

consecutive days.

     (3) The bureau shall not issue more than 1 millionaire party

license to a qualified organization for any 1 day.

     Sec. 10c. (1) Notwithstanding section 10b, a qualified

organization may be issued not more than 20 millionaire party

licenses in 1 calendar year, which shall be conducted only at a

location that is a pari-mutuel facility licensed under the horse

racing law of 1995, 1995 PA 279, MCL 431.301 to 431.336.

     (2) A qualified organization conducting a millionaire party

under this section shall participate in the management of the

millionaire party, but may use equipment owned by the licensed

pari-mutuel facility.

     (3) All net proceeds of a millionaire party conducted under

this section shall be devoted exclusively to the lawful purposes of

the qualified organization. Fees, expenses, equipment rental,

location rental, janitorial services, cash prizes, and the purchase

of prizes of merchandise shall not exceed 50% of the gross proceeds

of a millionaire party conducted under this section.

     Sec. 11b. (1) Each applicant for a license or renewal of a

license to operate as a supplier of equipment, charity game

tickets, or numeral game tickets to qualified organizations

licensed under this act shall submit a written application to the

bureau on a form prescribed by the commissioner.

     (2) The applicant shall pay an annual license fee of $300.00

at the time of the application.

     (3) A supplier's license expires at 12 midnight on September

30 of each year.

     (4) The commissioner shall require suppliers authorized to

sell charity game tickets, numeral game tickets, or both, to post a

performance bond of not less than $50,000.00 and not greater than

$500,000.00  $1,000,000.00.

     (5) A supplier shall remit to the bureau an amount equal to

the qualified organization's purchase price of the charity game

tickets less an amount that shall not be less than the sum of $.008

for each ticket sold plus 1.0% of the total resale value for all

charity game tickets sold.

     (6) For each numeral game sold, the supplier shall issue to

the licensed organization an invoice listing the manufacturer and

serial number of each game.

     (7) The fee collected by a supplier from the qualified

organization for each game of numeral tickets sold shall be $5.00

per 1,000 tickets or any portion of 1,000 tickets.

     (8) The fees collected by the supplier for each numeral game

sold shall be remitted to the bureau by the fifteenth day of the

month following the month in which the numeral game is sold. A late

fee of 25% of the amount due may be assessed by the commissioner

against any supplier who fails to remit the fees by the required

filing date.

     (9) A supplier shall only display, offer for sale, sell, or

otherwise make available to a qualified organization numeral game

tickets that have been obtained from a manufacturer.

     (10) A person who is directly or indirectly connected to the

sale, rental, or distribution of bingo or millionaire party

equipment, or the sale of charity game tickets or numeral game

tickets, or a person residing in the same household as the supplier

shall not be involved directly or indirectly with the rental or

leasing of a facility used for an event.

     (11) A supplier shall submit to the bureau a report as

required by the commissioner regarding the sale or rental of

equipment and the sale of charity game tickets and numeral game

tickets.