BillCam

HOUSE BILL No. 4173

February 13, 2019, Introduced by Reps. Chirkun, Witwer, Sowerby, Sneller, Cherry, Brenda Carter, Cynthia Johnson, Peterson, Stone, Shannon, Hertel, Elder, Sabo, Slagh, Garza, Tate, Bolden, Kuppa, Whitsett and Jones and referred to the Committee on Regulatory Reform.

A bill to amend 1972 PA 382, entitled

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

(MCL 432.101 to 432.120) by adding article 2.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

ARTICLE 2

Sec. 32. (1) As used in this article:

(a) "Bona fide member" means a member who participates in the

qualified organization to further its lawful purposes and the

spouse of such a member.

(b) "Dealer" means an individual who does any of the following

in a millionaire party game:

(i) Performs the act of dealing.

(ii) Assists in supervising the dealers.

(iii) Provides technical advice to the millionaire party

chairperson.

is conducted at an event.

(d) "Lawful purpose" means a purpose that would qualify an

organization to be exempt from taxation under section 501(c) of the

internal revenue code of 1986, 26 USC 501.

(e) "Lessor" means a person who rents a location to a

millionaire party licensee for the purpose of conducting an event.

(f) "Location owner" means the person that owns a location or

an employee or agent of the person.

(2) The definitions in sections 2, 3, and 3a apply to this

article, unless a term defined in 1 of those sections is defined

differently in this article.

Sec. 33. (1) An applicant for a license to conduct a

millionaire party shall submit to the executive director a written

application on a form prescribed by the executive director.

(2) The application under subsection (1) must include all of

the following:

(a) The name and address of the applicant.

(b) The name and address of each officer of the applicant.

the event and, as to each individual, whether the individual has

been convicted of, forfeited bond on a charge of, or pled guilty to

any of the following:

(i) A felony.

(ii) A gambling offense.

(iii) Criminal fraud.

(iv) Forgery.

(v) Larceny.

(vi) Filing a false report with a governmental agency.

(d) The location at which the applicant will conduct the

event.

(e) A description of the demarcated area for the event and an

explanation of how the demarcated area will be marked.

(f) The dates of the event.

(g) Sufficient facts relating to the applicant's incorporation

or organization to enable the executive director to determine

whether the applicant is a qualified organization.

(h) A sworn statement attesting to the nonprofit status of the

applicant, signed by the principal officer of the applicant.

(i) Other information the executive director considers

necessary.

Sec. 34. (1) If the executive director determines that an

applicant for a millionaire party license is a qualified

organization and that both of the following apply, the executive

director shall issue a millionaire party license to the applicant:

(a) The applicant has paid to the executive director a fee of

$50.00 per day that the applicant proposes to conduct the

millionaire party.

(b) There is no reason to deny the issuance of the license

under section 18.

(2) Under extreme hardship conditions as determined by the

executive director, the executive director may waive 1 or more of

the requirements under section 3a(d) for a person to be a qualified

organization and issue a millionaire party license to the person if

all of the following conditions are met:

(a) The person is a nonprofit organization.

(b) The entire proceeds of the event, less the actual

reasonable expense of conducting the event, are donated or used for

a lawful purpose or a charitable organization or cause.

the event is compensated in any manner for his or her

participation.

(d) The person has complied and will comply with all other

provisions of this article and rules promulgated under this

article.

(3) Under extreme hardship conditions as determined by the

executive director, the executive director may allow an individual

or a group of individuals to obtain a license to conduct a

millionaire party if all of the following conditions are met:

(a) The entire proceeds of the event, less the actual

reasonable expense of conducting the event, are donated or used for

a lawful purpose or a charitable organization or cause.

(b) None of the individuals connected with the management of

the event is compensated in any manner for his or her

participation.

will comply with all other provisions of this article and the rules

promulgated under this article.

(4) A qualified organization may be issued up to 4 millionaire

party licenses in 1 calendar year. Each license is valid for only 1

location as stated on the license.

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

consecutive days.

(6) The executive director shall not issue more than 1

millionaire party license to a qualified organization for any 1

day.

(7) The executive director shall not issue millionaire party

licenses that would allow more than 2 events to be conducted at a

location on the same date.

(8) The executive director shall not issue millionaire party

licenses that would allow more than 4 events to be conducted at a

location in 1 week.

(9) A millionaire party license must state that for each day

on which the millionaire party is to be conducted, the licensee may

conduct gaming under the license between the hours of 8 a.m. on

that day and 2 a.m. on the following day.

Sec. 35. (1) A millionaire party licensee shall comply with

this article and the rules promulgated under this article.

(2) A millionaire party licensee shall comply with the terms

and requirements of the license.

(3) A millionaire party license is not assignable or

transferrable, and a licensee shall not assign or transfer a

millionaire party license.

Sec. 36. (1) A millionaire party licensee may advertise the

event if the advertising complies with rules promulgated under this

article.

(2) An advertisement under this section must state the

purposes for which the proceeds from the event will be used.

Sec. 37. (1) A millionaire party licensee shall not enter into

an agreement with a location owner or lessor unless the agreement

is expressed in a written rental agreement that is approved by the

executive director.

(2) A location owner or lessor, a partner, member, director,

officer, agent, or employee of a location owner or lessor, a

shareholder of a privately held corporation that is a location

owner or lessor, or a person residing in the same household as any

of these shall not do any of the following:

(a) Be an officer of a qualified organization conducting a

millionaire party at the location.

(b) Participate as a player in any event being conducted at

the location.

the location, including providing dealers, equipment, or workers,

unless all of the following conditions exist:

(i) The location is owned or rented by a qualified

organization and used by the qualified organization on a continual

basis for the regular use of its members.

(ii) The qualified organization is the millionaire party

licensee and is conducting the event.

(iii) The executive director has granted a waiver for the

participation.

Sec. 38. A millionaire party licensee shall only conduct an

event with equipment that it owns, rents from another qualified

organization under a rental agreement approved by the executive

director, or purchases or rents from a supplier.

Sec. 39. (1) A millionaire party licensee shall use only the

following as dealers at an event:

(a) A bona fide member.

(b) An employee of a supplier.

(2) An individual shall not act as a dealer if the individual

has been convicted of, forfeited bond on a charge of, or pled

guilty to any of the following offenses:

(a) A felony.

(b) A gambling offense.

(d) Forgery.

(e) Larceny.

(f) Filing a false report with a governmental agency.

(3) An individual who is not listed as a dealer on the

application for a millionaire party license shall not act as a

dealer at an event conducted under the license.

(4) A millionaire party licensee shall ensure that the dealers

at an event conducted under the license comply with this article,

rules promulgated under this article, and any directives of the

executive director.

Sec. 40. (1) At least 2 bona fide members of the millionaire

party licensee, not including any bona fide member acting as a

dealer, must be present at all times during an event.

(2) If fewer than 2 bona fide members are present at any time

during an event, the millionaire party licensee shall immediately

report this to the executive director. The executive director may

require the licensee to stop conducting the event.

(3) One of the bona fide members listed on the application for

the millionaire party license shall act as the millionaire party

chairperson. An individual shall not serve as chairperson of

millionaire parties conducted by more than 1 qualified organization

during a calendar year.

(4) A bona fide member of a millionaire party licensee who is

present at the event shall wear a vest, button, or other

distinctive apparel to identify the bona fide member as a member of

the millionaire party licensee and as not being an employee or

agent of the location owner, lessor, or supplier.

(5) Unless permitted by this act, a rule promulgated under

this article, or written authorization of the executive director,

only a bona fide member of the millionaire party licensee may

perform any of the following duties at an event conducted under the

license:

(a) Monitoring a game or verifying that the game is conducted

in conformance with the rules of the game.

(b) Verifying the age of a player.

(6) A bona fide member of a millionaire party licensee shall

not play a game at an event at which the bona fide member is

working or assisting.

(7) A bona fide member of a millionaire party licensee shall

not share in a prize awarded at an event at which the bona fide

member is working or assisting.

(8) A bona fide member of a millionaire party licensee shall

not purchase, play, or accept a charity game ticket or numeral game

ticket offered for sale by the licensee at an event at which the

bona fide member is working or assisting.

(9) A bona fide member of a millionaire party licensee shall

not split a prize with a player or accept a tip of any kind at an

event conducted under the license, unless the tip is a cash tip

given to the bona fide member for serving as a dealer at the event.

Sec. 41. (1) A millionaire party licensee shall ensure that an

event conducted under the license is conducted in compliance with

this article and the rules promulgated under this article.

(2) A millionaire party licensee shall post the license so

that it is conspicuously visible at the location where the event is

being conducted at all times during the event.

(3) A millionaire party licensee shall not conduct gaming

under the license anywhere outside of the demarcated area approved

by the executive director.

(4) A millionaire party licensee shall ensure that access to

the demarcated area is controlled.

(5) A millionaire party licensee shall not allow an individual

who is less than 18 years old to enter the demarcated area when

gaming is being conducted there.

(6) If alcoholic beverages are served at an event, an

individual in the demarcated area who is 18 years old or older but

less than 21 years old must be identified by wearing a mark

indicating that a member or agent of the millionaire party licensee

has verified the individual's age and identification.

(7) A millionaire party licensee shall not allow wagering at

an event held under the license other than wagering on a game of

chance that takes place in the demarcated area at the location

during the event. The licensee shall not allow a wager to be placed

at the event on an athletic event or a game involving personal

skill.

(8) A millionaire party licensee shall not receive more than

$20,000.00 in exchange for imitation money or chips on any day

under the license. However, if the licensee conducts the

millionaire party without using dealers from a supplier and owns

the location at which the millionaire party is held and if the

license is for fewer than 4 days of gaming, the daily limit under

this subsection is determined by dividing $80,000.00 by the number

of days of gaming allowed under the license.

(9) A millionaire party licensee may conduct a charity game as

provided in section 7b and may conduct a numeral game as provided

in section 7c. If a millionaire party licensee conducts a charity

game or a numeral game, the bureau has sole enforcement and

supervision authority over the conduct of the game, as provided in

article 1.

Sec. 42. (1) A millionaire party licensee shall not pay an

expense related to an event unless all of the following apply:

(a) The expense is incurred in connection with the conduct of

the event.

(b) The expense is necessary and reasonable and falls into 1

of the following categories of expense:

(i) The purchase or rental of equipment necessary for

conducting the event and payment of services reasonably necessary

for the repair of equipment.

(ii) Cash prizes or the purchase of prizes of merchandise.

(iii) Rental of the location at which the event is conducted.

The rental expense must not exceed $1,000.00 for each event.

(iv) Janitorial services.

(v) The fee required for issuance or reissuance of a license

to conduct the event.

(vi) Other reasonable expenses incurred by the licensee, not

inconsistent with this act, as permitted by rule promulgated under

this article.

(d) The expense is approved by the executive director in

writing before the event.

(2) A millionaire party licensee shall not accept any

compensation in connection with an event unless the compensation is

expressly authorized by this article or a rule promulgated under

this article.

(3) A millionaire party licensee shall not expend more than

45% of the gross profit from an event to pay expenses incurred in

connection with the event.

(4) A person shall not accept any commission, salary, pay,

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

a millionaire party except as allowed under a rule promulgated

under this article.

Sec. 42a. A person who is directly or indirectly connected to

the sale, rental, or distribution of millionaire party equipment 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.

Sec. 43. (1) A millionaire party licensee shall keep a record

of each event as required by the executive director.

(2) The millionaire party licensee shall allow an authorized

representative of the executive director to inspect during

reasonable business hours a record kept under subsection (1) and

all financial accounts into which proceeds from the event are

deposited or transferred.

(3) A millionaire party licensee shall file with the executive

director a financial statement signed by the principal officer of

the qualified organization. The financial statement must contain a

list of the qualified members of the millionaire party licensee who

were present as to each event and a disclosure of receipts and

expenses related to the conduct of each event as required by rule

promulgated under this article. If the revenue from a millionaire

party is represented to be used or applied by a millionaire party

licensee for a charitable purpose, the licensee shall file a copy

of the financial statement with the attorney general under the

supervision of trustees for charitable purposes act, 1961 PA 101,

MCL 14.251 to 14.266.

(4) A millionaire party licensee and a location owner or

lessee shall allow an authorized representative of the executive

director or the state police or a peace officer of a political

subdivision in which the event is being conducted to inspect the

location, or an intended location, during business hours.

Sec. 46. (1) A person that applies for a license or renewal of

a license to operate as a supplier to millionaire party licensees

shall submit a written application to the executive director on a

form prescribed by the executive director.

(2) An applicant under this section shall pay an annual

license fee of $300.00 at the time of the application.

(3) If an applicant under this section wishes to provide

dealers to millionaire party licensees, the applicant shall include

with its application a list containing the name of each individual

who will work for the applicant as a dealer at millionaire parties

and, as to each individual, whether the individual has been

convicted of, forfeited bond on a charge of, or pled guilty to any

of the following:

(a) A felony.

(b) A gambling offense.

(d) Forgery.

(e) Larceny.

(f) Filing a false report with a governmental agency.

(4) If, after the application is submitted as described in

subsection (1) or after the suppliers license is issued, there are

any changes in the individuals who will work for the supplier as

dealers at millionaire parties, the applicant or supplier shall

immediately provide an updated list containing all of the

information required under subsection (3).

(5) A supplier licensed under this section shall submit to the

executive director reports as required by the executive director

regarding the supplier's activities under this article.

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

30 of each year.

Sec. 48. (1) The executive director shall enforce and

supervise the administration of this article. The executive

director shall employ personnel as necessary to implement this

article.

(2) The executive director may select fraternal organizations

that conduct millionaire parties and that are not a branch, lodge,

or chapter of a national or state organization to audit to ensure

that the organizations are in compliance with this act.

Sec. 49. (1) Any rules promulgated by the executive director

under this act before the effective date of the amendatory act that

added this article are rescinded.

(2) The executive director shall promulgate rules pursuant to

the administrative procedures act of 1969, 1969 PA 306, MCL 24.201

to 24.328, to implement this article.

Sec. 50. (1) The executive director may deny, suspend,

summarily suspend, or revoke a license issued under this article if

the licensee or an officer, director, agent, member, or employee of

the licensee violates this article or a rule promulgated under this

article. The executive director may summarily suspend a license for

a period of not more than 60 days pending prosecution,

investigation, or public hearing.

(2) A proceeding to suspend or revoke a license is a contested

case and must be conducted in accordance with the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(3) On petition of the executive director, the circuit court

after a hearing may issue subpoenas to compel the attendance of

witnesses and the production of documents, papers, books, records,

and other evidence before it in a matter over which the executive

director has jurisdiction, control, or supervision under this

article. If a person subpoenaed to attend in any such proceeding or

hearing fails to obey the command of the subpoena without

reasonable cause, or if a person in attendance in any such

proceeding or hearing refuses, without lawful cause, to be examined

or to answer a legal or pertinent question or to exhibit a book,

account, record, or other document when ordered to do so by the

court, the person may be punished as being in contempt of the

court.

(4) The executive director may impose a civil penalty of up to

$2,500.00 for each violation of this act, any rules promulgated

under this act, or any order issued under this act. In addition to

any civil penalty imposed under this subsection, a person may be

liable for a fine of up to the amount of any illegal payments made

or received.

(5) A qualified organization, a millionaire party chairperson,

and a principal officer are jointly and severally liable for any

penalties and fines levied under subsection (4).

(6) A supplier and the owners and co-owners of a supplier are

jointly and severally liable for any penalties and fines levied

under subsection (4).

(7) A person whose license is revoked under this section is

ineligible to apply for a license for 5 years.

Sec. 51. The executive director shall report annually to the

governor and the legislature about the operation of events licensed

under this article, abuses that the executive director may have

encountered, and recommendations for changes in this act.

Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. ____ or House Bill No. 4172 (request no.

01600'19) of the 100th Legislature is enacted into law.