BillCam

Act No. 159

Public Acts of 2019

Approved by the Governor

December 20, 2019

Filed with the Secretary of State

December 20, 2019

EFFECTIVE DATE: December 20, 2019

state of michigan

100th Legislature

Regular session of 2019

Introduced by Reps. Chirkun, Witwer, Sowerby, Sneller, Cherry, Carter, Johnson, Peterson, Stone, Shannon, Hertel, Elder, Sabo, Slagh, Garza, Tate, Bolden, Kuppa, Whitsett and Jones

ENROLLED HOUSE BILL No. 4173

AN ACT to amend 1972 PA 382, entitled An act to license and regulate the conducting of bingo, millionaire parties, and certain other forms of gambling; to provide for the conducting of charity games, raffles, and numeral games; to provide for exemptions from licensing requirements under certain circumstances; to impose certain duties and authority upon certain state departments, agencies, and officers; to provide a tax exemption; and to provide penalties, by amending sections 2, 3, 3a, 4, 4a, 8, 9, 10, 11b, 12, 13, 14, 15, 16, 18, and 19 (MCL 432.102, 432.103, 432.103a, 432.104, 432.104a, 432.108, 432.109, 432.110, 432.111b, 432.112, 432.113, 432.114, 432.115, 432.116, 432.118, and 432.119), sections 2 and 9 as amended by 2008 PA 401, sections 3, 4a, and 12 as amended by 2012 PA 189, sections 3a, 8, 10, and 11b as amended by 2006 PA 427, sections 4, 13, 14, 15, 16, and 18 as amended by 1999 PA 108, and section 19 as amended by 1995 PA 263, by designating sections 1 to 20 as article 1, and by adding article 2; and to repeal acts and parts of acts.

The People of the State of Michigan enact:

ARTICLE 1

Sec. 2. As used in this act:

(a) Active service and active state service mean those terms as defined in section 105 of the Michigan military act, 1967 PA 150, MCL 32.505.

(b) Advertising means all printed matter, handouts, flyers, radio broadcasts, television broadcasts, signs, billboards, and other media used to promote an event.

(c) Bingo means a game of chance commonly known as bingo in which prizes are awarded on the basis of designated numbers or symbols conforming to numbers or symbols selected at random.

(d) Board means the Michigan gaming control board created by section 4 of the Michigan gaming control and revenue act, 1996 IL 1, MCL 432.204.

(e) Bureau means the bureau of state lottery as created by section 5 of the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.5.

(f) Charity game means the random resale of a series of charity game tickets.

(g) Charity game ticket means a ticket commonly referred to as a break-open ticket or pull-tab that is approved and acquired by the bureau and is distributed and sold by the bureau or a supplier to a qualified organization, a portion of which is removed to discover whether the ticket is a winning ticket.

(h) Commissioner means the commissioner of state lottery appointed under section 7 of the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.7.

(i) Coverall pattern means a pattern required to win a bingo game in which all numbers on a bingo card are required to be called.

(j) Educational organization means an organization in 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 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.

(k) Equipment means the objects and mechanical, electromechanical, or electronic devices used to determine or assist in determining the winners of prizes at an event.

(l) Event means, in article 1, an occasion of bingo games, a raffle, a charity game, or a numeral game conducted under a license issued under article 1, and in article 2, an occasion of a millionaire party conducted under a license issued under article 2.

(m) Executive director means the executive director of the board, appointed under section 4 of the Michigan gaming control and revenue act, 1996 IL 1, MCL 432.204.

(n) Fraternal organization means an organization in this state, other than a college fraternity or sorority, that meets all of the following criteria:

(i) Is organized not for pecuniary profit.

(ii) Is a branch, lodge, or chapter of a national or state organization or, only for the purpose of conducting a small raffle or a large raffle under this act, if not a branch, lodge, or chapter of a national or state organization, is exempt from taxation under section 501(c) of the internal revenue code of 1986, 26 USC 501.

(iii) Exists for the common purpose, brotherhood, or other interests of its members.

Sec. 3. As used in this act:

(a) Large bingo means a series of bingo occasions that occur on a regular basis during which the total value of all prizes awarded for bingo games at a single occasion does not exceed $3,500.00 and the total value of all prizes awarded for 1 bingo game does not exceed $1,100.00, except that a prize awarded through a Michigan progressive jackpot bingo game is not subject to these limitations.

(b) Large raffle means an event where the total value of all prizes awarded through raffle drawings exceeds $500.00 per occasion.

(d) Location means a building, enclosure, part of a building or enclosure, or a distinct portion of real property that is used for the purpose of conducting an event. Location includes all components or buildings that compose 1 architectural entity or that serve a unified functional purpose.

(e) Manufacturer means a person licensed under section 11c who manufactures numeral game tickets for sale to suppliers for use in an event.

(f) Member means an individual who qualified for membership in a qualified organization under its bylaws, articles of incorporation, charter, rules, or other written statement.

(g) Michigan national guard and military mean those terms as defined in section 105 of the Michigan military act, 1967 PA 150, MCL 32.505.

(h) Michigan progressive jackpot means a bingo game conducted in conjunction with a licensed large bingo occasion in which the value of the prize is carried forward to the next bingo occasion if no player wins 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.

(i) Millionaire party means an event at which wagers are placed on 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.

(j) Numeral game means the random resale of a series of numeral game tickets.

(k) 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, so that on breaking the paper that bands the folding strip the purchaser discovers whether the ticket is a winning ticket.

(l) Occasion means a single day for which a license to conduct games is issued under this act.

Sec. 3a.

As used in this act:

(a) Person means an individual, firm, association, corporation, or other legal entity.

(b) Principal officer means the highest ranking officer of the qualified organization according to its written constitution, charter, articles of incorporation, or bylaws.

(c) 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 given away by a qualified organization in accordance with rules promulgated under this act.

(d) Qualified organization means, subject to subdivision (e), either of the following:

(i) 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 under section 501(c) of the internal revenue code of 1986, 26 USC 501(c).

(ii) Only for the purpose of conducting a small raffle or a large raffle under this act, a component of the military or the Michigan national guard whose members are in active service or active state service.

(e) 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 under, the Michigan campaign finance act, 1976 PA 388, MCL 169.201 to 169.282.

(f) Raffle means an event for which raffle tickets are sold and at which a winner or winners are determined, either by randomly selecting stubs from all of the raffle tickets sold for an event or by an alternative method that is approved in writing by the bureau, and a preannounced prize is awarded.

(g) Religious organization means any of the following:

(i) An organization, church, body of communicants, or group in this state that is organized not for pecuniary profit and that gathers in common membership for mutual support and edification in piety, worship, and religious observances.

(ii) A society of individuals in this state that is organized not for pecuniary profit and that unites for religious purposes at a definite place.

(iii) A church-related private school in this state that is organized not for pecuniary profit.

(h) Senior citizens organization means an organization in 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.

(i) Service organization means either of the following:

(i) A branch, lodge, or chapter in this state 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 in this state.

(ii) A local civic organization in this state 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 used for charitable purposes; and whose constitution, charter, articles of incorporation, or bylaws contain a provision that all assets, real property, and personal property must revert to the benefit of the local governmental subdivision that granted the resolution or another nonprofit organization on dissolution of the organization.

(j) Small bingo means a series of bingo occasions that occur on a regular basis during which the total value of all prizes awarded for bingo games 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.

(k) 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.

(l) Special bingo means a single or consecutive series of bingo occasions during which the total value of all prizes awarded for bingo games at a single occasion does not exceed $3,500.00 and the total value of all prizes awarded for a single bingo game does not exceed $1,100.00.

(m) 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.

(n) Veterans organization means an organization in this state, or a branch, lodge, or chapter in 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 armed forces of the United States. Veterans organization includes an auxiliary of a veterans organization that is a national organization chartered by the Congress of the United States.

Sec. 4. (1) An applicant for a license to conduct a bingo, raffle, charity game, or numeral game event shall submit to the bureau a written application on a form prescribed by the commissioner.

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

(a) The name and address of the applicant organization.

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

(d) The day or dates of the event.

(e) The member or members of the applicant organization who will be responsible for the conduct of the event.

(f) Sufficient facts relating to the applicants incorporation or organization to enable the commissioner to determine whether the applicant is a qualified organization.

(g) A sworn statement attesting to the nonprofit status of the applicant organization, signed by the principal officer of the organization.

(h) Other information the commissioner considers necessary.

Sec. 4a. (1) Except as provided in subsections (2) and (3), if the commissioner determines that an applicant under section 4 is a qualified organization, is not ineligible under section 18, and has paid to the bureau the appropriate fee, the commissioner may issue 1 or more of the following licenses:

License

Fee

(a)

Large bingo...............................

150.00

(b)

Small bingo...............................

55.00

(c)

Special bingo.............................

25.00

(d)

Large raffle..............................

50.00 per drawing date

(e)

Small raffle..............................

15.00

(i)

One to 3 drawing dates....................

15.00

(ii)

Four or more drawing dates.................

5.00 per drawing date

(f)

Annual charity game.......................

200.00

(g)

Special charity game.......................

15.00 per day

(h)

Numeral game..............................

15.00 per day

(2) Under extreme hardship conditions as determined by the commissioner, the commissioner may waive 1 or more requirements for a person to be a qualified organization under section 3a(d) to permit the licensing of a special bingo or raffle event, if all of the following conditions are met:

(a) The organization applying for the license 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 charitable purpose, organization, or cause.

(c) None of the individuals connected with the conduct of the event is compensated in any manner for his or her participation.

(d) The organization complies with all other applicable provisions of this article and rules promulgated under this article.

(3) Under extreme hardship conditions as determined by the commissioner, the commissioner may allow an individual or a group of individuals to obtain a license to conduct a special bingo event or raffle 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 charitable purpose, organization, or cause.

(b) None of the individuals connected with the conduct of the event is compensated in any manner for his or her participation.

(c) The individual or group of individuals complies with all other applicable provisions of this article and the rules promulgated under this article.

(4) Each event license issued to a qualified organization under this section is valid for only the location included on the license.

(5) A license issued under this section is not assignable or transferable.

(6) A licensee shall ensure that the events conducted under a license issued under this section are conducted in compliance with the applicable provisions of this article and rules promulgated under this article.

(7) Except as otherwise provided in this section, a licensee shall only conduct events licensed under this section during the hours and on the date or dates stated on the license.

(8) In connection with an application for a small raffle license or a large raffle license, in determining whether a fraternal organization that is not a branch, lodge, or chapter of a national or state organization is a qualified organization, the commissioner shall only consider whether the organization meets requirements that are applicable under this article that are unrelated to whether the organization is a branch, lodge, or chapter of a national or state organization.

Sec. 8. (1) All fees and revenue collected by the commissioner or bureau under this act must be paid into the state lottery fund created under section 41 of the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.41. 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 any activity authorized by this act must be financed from the state lottery fund.

(2) All fees and revenue collected by the executive director or board under this act must be paid into the state lottery fund created under section 41 of the McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, MCL 432.41. All necessary expenses incurred by the executive director or board in the administration and enforcement of any activity authorized by this act and in the initiation, implementation, and ongoing operation of any activity authorized by this act must be financed from the state lottery fund.

(3) The amount of necessary expenses incurred under subsections (1) and (2) must not exceed the amount of revenues received from the sale of charity game tickets and all fees collected under this act. At the end of each fiscal year all money, including interest, in the state lottery fund that is attributable to fees and revenue collected under this act but that has not been expended under this section must be deposited in the state general fund.

Sec. 9. (1) Except as provided in subsection (2), the entire net proceeds of an event conducted under a license issued under this article must be devoted exclusively to the lawful purposes of the licensee. A licensee shall not incur or pay an item of expense in connection with holding, operating, or conducting an event except the following expenses in amounts that the commissioner determines to be reasonable:

(a) The purchase or rental of equipment necessary for conducting an event and payment of services reasonably necessary for the repair of equipment.

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

(d) Janitorial services.

(e) The fee required for issuance or reissuance of a license to conduct the event.

(f) Other reasonable expenses incurred by the licensee, not inconsistent with this article, as permitted by rule of the commissioner.

(2) A qualified organization described in section 3a(d)(ii) shall use the entire net proceeds of an event, after paying items of expense incurred in reasonable amounts in connection with the holding, operating, or conducting of the event and listed in subsection (1), only for the expense of training or purchasing goods or services for the support of the activities of the component.

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 a bingo event, a raffle, or a charity game except as provided by rule promulgated under this article.

(3) Except by special permission of the commissioner, a licensee shall conduct bingo games 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 a bingo event except to the extent and in the manner permitted by rule promulgated under this article. If the commissioner permits a licensee to advertise a bingo event, the licensee shall indicate in the advertisement the purposes for which the net proceeds will be used by the licensee.

Sec. 11b. (1) An 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) An applicant under this section shall pay an annual license fee of $300.00 at the time of the application.

(3) A suppliers license issued under this section 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 $1,000,000.00.

(5) A supplier shall remit to the bureau an amount equal to the qualified organizations 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) A supplier shall collect a fee from a qualified organization for each game of numeral tickets sold that equals $5.00 per 1,000 tickets or any portion of 1,000 tickets.

(8) A supplier shall remit the fees collected under subsection (7) to the bureau by the fifteenth day of the month following the month in which the numeral game is sold. The commissioner may assess a late fee of 25% of the amount due against a 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 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 licensed under this section 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.

Sec. 12. (1) The bureau shall enforce and supervise the administration of this article. The commissioner shall employ personnel as necessary to implement this article.

(2) The bureau may select fraternal organizations 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 article.

Sec. 13. The commissioner 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. 14. (1) A licensee under this article shall keep a record of each event as required by the commissioner. A licensee shall allow a representative authorized by the bureau to inspect a record kept under this subsection and all financial accounts into which proceeds from events are deposited or transferred during reasonable business hours.

(2) A licensee under this article shall file with the commissioner a financial statement signed by the principal officer of the qualified organization of receipts and expenses related to the conduct of each event as required by rule promulgated under this article. If the revenue from a bingo, raffle, numeral game, or charity game event is represented to be used or applied by a licensee under this article 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.

(3) A licensee under this article shall allow an authorized representative of the bureau or the department of state police or a law enforcement officer of a political subdivision of this state to inspect the location or an intended location during business hours.

Sec. 15. The commissioner shall report annually to the governor and the legislature about the operation of events licensed under this article, abuses that the bureau may have encountered, and recommendations for changes in this act.

Sec. 16. (1) The commissioner 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 commissioner 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 under this article is a contested case governed by the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(3) On petition of the commissioner, 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 it has jurisdiction, control, or supervision. 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, that person may be punished as being in contempt of the court.

(4) With approval of the commissioner, a bingo hall licensee, in lieu of a suspension of its license, may elect to pay a fine equal to the amount of rent that would have been paid by bingo licensees during the period of the suspension. The bingo hall licensee shall pay this fine to the bureau on or before the date agreed to in the suspension agreement entered into by the bureau and the bingo hall licensee.

Sec. 18. (1) A licensee whose license is revoked for violating this act or a rule promulgated under this act is ineligible to apply for a license for 2 years.

(2) A person convicted of an offense under section 51 or any other gambling offense is ineligible to serve as an officer of a licensee or to participate in conducting bingo, a millionaire party, raffle, numeral game, or charity game for 1 year after the conviction becomes final. If the person is licensed under this act, the person shall forfeit the license and is ineligible to apply for the issuance or reissuance of the license for 1 year after the conviction becomes final.

Sec. 19. (1) Except as provided in subsection (2), any other law providing a penalty or disability upon a person who conducts or participates in a raffle, bingo, millionaire party, or charity game; who sells or possesses equipment used in conducting a raffle, bingo, or a millionaire party; who permits a raffle, bingo, a millionaire party, or a charity game to be conducted on his or her premises; or who does other acts in connection with a raffle, bingo, a millionaire party, or a charity game does not apply to that conduct if done under this act or rules promulgated under this act.

(2) Subsection (1) does not limit the application of the Michigan campaign finance act, 1976 PA 388, MCL 169.201 to 169.282, including, but not limited to, section 41 of the Michigan campaign finance act, 1976 PA 388, MCL 169.241, to fund-raising events conducted by or for the benefit of a committee that has filed or is required to file a statement of organization under the Michigan campaign finance act, 1976 PA 388, MCL 169.201 to 169.282.

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.

(c) Demarcated area means the physical area in which licensed millionaire party gaming will be conducted, the boundaries of which are marked with rope or tape or separated in an access-controlled area of the location.

(d) Lawful purpose means a purpose that would qualify an organization to be exempt from taxation under subsection 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 and the rules promulgated under this act 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.

(c) The name of each individual who will serve as a dealer at 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 applicants 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 otherwise eligible and suitable and the applicant paid to this state a fee of $50.00 per day that the applicant proposes to conduct the millionaire party, the executive director may issue a millionaire party license to the applicant.

(2) 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.

(3) A millionaire party license may be issued for up to 4 consecutive days.

(4) The executive director shall not issue more than 1 millionaire party license to a qualified organization for any 1 day.

(5) The executive director shall not issue millionaire party licenses that would allow more than 2 millionaire party events to be conducted at a single location on the same date or at the same time.

(6) The executive director shall not issue millionaire party licenses that would allow millionaire party events to be conducted more than 4 days per week at a single location.

(7) A millionaire party license must state the hours for each event day on which the millionaire party may be conducted. The executive director shall not permit a millionaire party to begin before 8 a.m. or continue past 2 a.m. on the following day.

Sec. 35. (1) A millionaire party licensee shall comply with this act and the rules promulgated under this act.

(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.

(c) Participate in any aspect of an event being conducted at 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 act, rules promulgated under this act, and any directives of the executive director.

Sec. 40. (1) The executive director shall not require more than 2 bona fide members of the millionaire party licensee, not including any bona fide member acting as a dealer, to 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 act, 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 act and the rules promulgated under this act.

(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 individuals age and identification.

(7) 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.

(8) 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 executive director has sole enforcement and supervision authority over the conduct of the game.

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 $250.00 for each event day.

(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 act.

(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 act.

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 act. 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 suppliers activities under this article.

(6) A suppliers license expires at 12 midnight on September 30 of each year.

(7) A person shall not obtain a supplier license on behalf of another person. A person shall not have another person obtain a supplier license on the persons behalf. A person, other than a person approved by the executive director, shall not directly or indirectly receive a payment from, pay an expense for, or have an ownership or equity stake in, a supplier.

(8) Two or more persons shall not conspire for 1 or more persons to obtain a suppliers license for the purpose of allowing any person who is not a supplier to enjoy the benefits of the license.

Sec. 48. The executive director shall enforce and supervise the administration of this article. The executive director shall employ personnel as necessary to implement this article.

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 remain in effect unless directly inconsistent with the amendatory act that added this article.

(2) The executive director may 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) For each violation of this act, any rules promulgated under this act, or any order issued under this act, the executive director may impose a civil penalty of up to $2,500.00 and may issue a cease and desist order, or obtain injunctive relief. 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. (1) Except as otherwise provided in subsection (2), a person who willfully violates this act is guilty of a misdemeanor punishable by imprisonment for not more than 6 months or a fine of not more than $1,000.00, or both, for doing any of the following:

(a) Cheating at an event.

(b) Using millionaire party proceeds for something other than a lawful purpose of the qualified organization.

(c) Knowingly making a wager if the person is less than 18 years of age or permitting a person who is less than 18 years of age to make a wager.

(d) Using chips not authorized for use at a millionaire party.

(e) Willfully failing to appear before and provide an item to the executive director at the time and place specified in a subpoena issued by the executive director.

(f) Willfully refusing, without just cause, to testify or provide items in an answer to a subpoena or subpoena duces tecum issued by the executive director.

(g) For a location owner or lessor, a shareholder of a privately held corporation that owns or leases a location, a partner or officer, an agent or employee of a lessor, or an individual residing in the same household as a location owner or lessor, a shareholder of a privately held corporation that owns or leases a location, or a partner, officer, or agent of a location owner, making or receiving a payment from any person, other than for the preapproved payment of rent, for any aspect of a millionaire party. This subdivision does not apply to the sale of food or drink.

(h) Conducting or permitting a person who is not licensed under this act to conduct activities required to be licensed under this act.

(i) Violating section 46(7) or (8).

(2) A person is guilty of a misdemeanor punishable by imprisonment for not more than 1 year or a fine of not more than $2,500.00, or both for doing any of the following:

(a) Knowingly making a false statement on an application for a license under this act.

(b) Knowingly making a false statement, orally or in writing, to the executive director or his or her authorized representative.

(3) A person convicted under this section is ineligible to receive or maintain a license under this act.

(4) In addition to the fines provided in this section, a person may be liable for a fine up to the amount of any payments made or received in violation of this act.

(5) This section does not prohibit a person who violates this act from being charged with, convicted of, or punished for any other violation of law, including the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, and the Michigan gaming control and revenue act, 1996 IL 1, MCL 432.201 to 432.226.

Sec. 52. 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. Sections 10a, 10b, 17, and 20 of the Traxler-McCauley-Law-Bowman bingo act, 1972 PA 382, MCL 432.110a, 432.110b, 432.117, and 432.120, are repealed.

This act is ordered to take immediate effect.

Clerk of the House of Representatives

Secretary of the Senate

Approved___________________________________________

____________________________________________________

Governor