Senate File 218 - Introduced
SENATE FILE
BY DANIELSON, ZIEMAN, HAHN, BOLKCOM,
RAGAN, HANCOCK, ZAUN, KETTERING,
HOUSER, GASKILL, SCHOENJAHN,
BLACK, COURTNEY, DEARDEN, LUNDBY,
FRAISE, MULDER, KREIMAN, HORN,
CONNOLLY, STEWART, DOTZLER,
DVORSKY, WARNSTADT, McCOY,
RIELLY, OLIVE, APPEL, KIBBIE,
WOOD, SCHMITZ, and BEALL
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act concerning the licensure, operation, and taxation of card
2 game tournaments by organizations representing veterans and
3 allowable prizes at annual game nights.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 1815XS 82
6 ec/es/88
PAG LIN
1 1 Section 1. NEW SECTION. 99B.7B CARD GAME TOURNAMENTS
1 2 CONDUCTED BY QUALIFIED ORGANIZATIONS REPRESENTING VETERANS.
1 3 1. As used in this section, unless the context otherwise
1 4 requires:
1 5 a. "Card game" means only poker, pinochle, pitch, gin
1 6 rummy, bridge, euchre, hearts, or cribbage.
1 7 b. "Qualified organization representing veterans" means
1 8 any licensed organization representing veterans, which is a
1 9 post, branch, or chapter of a national association of veterans
1 10 of the armed forces of the United States which is a federally
1 11 chartered corporation, dedicates the net receipts of a game of
1 12 skill, game of chance, or raffle as provided in section 99B.7,
1 13 is exempt from federal income taxes under section 501(c)(19)
1 14 of the Internal Revenue Code as defined in section 422.3, has
1 15 an active membership of not less than twelve persons, and does
1 16 not have a self=perpetuating governing body and officers.
1 17 2. Notwithstanding any provision of this chapter to the
1 18 contrary, card game tournaments lawfully may be conducted by a
1 19 qualified organization representing veterans if all of the
1 20 following are complied with:
1 21 a. The organization conducting the card game tournament
1 22 has been issued a license pursuant to subsection 4 and
1 23 prominently displays that license in the playing area of the
1 24 card game tournament.
1 25 b. The card games to be conducted during a card game
1 26 tournament, including the rules of each card game and how
1 27 winners are determined, shall be displayed prominently in the
1 28 playing area of the card game tournament. Each card game
1 29 shall be conducted in a fair and honest manner and shall not
1 30 be operated on a build=up or pyramid basis. Every participant
1 31 in a card game tournament must be given the same chances of
1 32 winning the tournament and shall not be allowed any second
1 33 chance entries or multiple entries in the card game
1 34 tournament.
1 35 c. Participation in a card game tournament conducted by a
2 1 qualified organization representing veterans shall only be
2 2 open to members of the qualified organization representing
2 3 veterans and guests of members of the qualified organization
2 4 participating in the tournament. The cost to participate in a
2 5 card game tournament shall be limited to one hundred dollars
2 6 and shall be the same for every participant in the card game
2 7 tournament. Participants in a card game tournament shall be
2 8 at least twenty=one years of age.
2 9 d. Cash or merchandise prizes may be awarded during a card
2 10 game tournament and shall not exceed one thousand dollars and
2 11 no participant shall win more than a total of five hundred
2 12 dollars. A qualified organization representing veterans shall
2 13 distribute amounts awarded as prizes on the day they are won
2 14 and merchandise prizes shall not be repurchased. An
2 15 organization conducting a card game tournament shall only
2 16 display prizes in the playing area of the card game tournament
2 17 that can be won.
2 18 e. The qualified organization representing veterans shall
2 19 conduct each card game tournament and any card game conducted
2 20 during the tournament and shall not contract with or permit
2 21 another person to conduct the card game tournament or any card
2 22 game during the tournament.
2 23 f. No person receives or has any fixed or contingent right
2 24 to receive, directly or indirectly, any profit, remuneration,
2 25 or compensation from or related to a game in a card game
2 26 tournament, except any amount which the person may win as a
2 27 participant on the same basis as the other participants.
2 28 g. A qualified organization representing veterans licensed
2 29 under this section shall not hold more than one card game
2 30 tournament per week. Card game tournaments held under an
2 31 annual game night license shall not count toward the limit of
2 32 one card game tournament per week for a license holder. A
2 33 qualified organization representing veterans shall be allowed
2 34 to hold only one card game tournament during any
2 35 twenty=four=hour period.
3 1 h. At the conclusion of each card game tournament, the
3 2 person conducting the card game tournament shall announce the
3 3 gross receipts received, the total amount of money withheld
3 4 for expenses, and the amount withheld for state taxes.
3 5 i. The person conducting the card game tournament does
3 6 none of the following:
3 7 (1) Hold, currently, another license issued under this
3 8 section.
3 9 (2) Own or control, directly or indirectly, any class of
3 10 stock of another person who has been issued a license to
3 11 conduct games under this section.
3 12 (3) Have, directly or indirectly, an interest in the
3 13 ownership or profits of another person who has been issued a
3 14 license to conduct games under this section.
3 15 3. The qualified organization representing veterans
3 16 licensed to hold card game tournaments under this section
3 17 shall keep a journal of all dates of events, amount of gross
3 18 receipts, amount given out as prizes, expenses, amount
3 19 collected for taxes, and the amount collected as revenue.
3 20 a. The amount collected by the qualified organization
3 21 representing veterans as revenue shall be no less than ten
3 22 percent of the gross receipts collected from each event.
3 23 b. Each qualified organization representing veterans shall
3 24 withhold that portion of the gross receipts subject to
3 25 taxation pursuant to section 423.2, subsection 4, which shall
3 26 be kept in a separate account and sent to the state along with
3 27 the organization's quarterly report.
3 28 c. A qualified organization representing veterans licensed
3 29 to conduct card game tournaments is allowed to withhold no
3 30 more than five percent of the gross receipts from each card
3 31 game tournament for qualified expenses. Qualified expenses
3 32 include but are not limited to the purchase of supplies and
3 33 materials used in conducting card games. Any money collected
3 34 for expenses and not used by the end of the calendar year
3 35 shall be donated for educational, civic, public, charitable,
4 1 patriotic, or religious uses as described in section 99B.7,
4 2 subsection 3, paragraph "b". The qualified organization
4 3 representing veterans shall attach a receipt for any donation
4 4 made to the fourth quarter quarterly report required to be
4 5 submitted pursuant to section 99B.2.
4 6 d. Each qualified organization representing veterans
4 7 licensed under this section shall make recordkeeping and all
4 8 deposit receipts available as provided in section 99B.2,
4 9 subsection 2.
4 10 4. An organization wishing to conduct card game
4 11 tournaments pursuant to this section as a qualified
4 12 organization representing veterans shall submit an application
4 13 and annual license fee of one hundred dollars to the
4 14 department.
4 15 Sec. 2. Section 99B.8, Code 2007, is amended by adding the
4 16 following new subsection:
4 17 NEW SUBSECTION. 6. a. Notwithstanding any provision of
4 18 section 99B.7 to the contrary, if the games are conducted by
4 19 an eligible qualified organization issued a license pursuant
4 20 to subsection 3, the sponsor may award cash or merchandise
4 21 prizes in any game of skill, game of chance, or card game
4 22 lawfully conducted during the annual game night in an amount
4 23 not to exceed ten thousand dollars and no participant shall
4 24 win more than a total of five thousand dollars.
4 25 b. For purposes of this subsection, an "eligible qualified
4 26 organization" means any of the following:
4 27 (1) A qualified organization representing veterans as
4 28 defined in section 99B.7B.
4 29 (2) A qualified organization that primarily represents
4 30 volunteer emergency services providers as defined in section
4 31 100B.31.
4 32 (3) A qualified organization that is exempt from federal
4 33 income tax under section 501(c)(3) of the Internal Revenue
4 34 Code and that has conducted an annual game night during the
4 35 period beginning January 1, 2001, and ending December 31,
5 1 2006.
5 2 Sec. 3. Section 99B.9, subsection 1, unnumbered paragraph
5 3 1, Code 2007, is amended to read as follows:
5 4 Except as otherwise permitted by section 99B.3, 99B.5,
5 5 99B.6, 99B.7, 99B.7B, 99B.8, 99B.11, or 99B.12A, it is
5 6 unlawful to permit gambling on any premises owned, leased,
5 7 rented, or otherwise occupied by a person other than a
5 8 government, governmental agency, or governmental subdivision,
5 9 unless all of the following are complied with:
5 10 Sec. 4. Section 99B.12, subsection 1, unnumbered paragraph
5 11 1, Code 2007, is amended to read as follows:
5 12 Except in instances where because of the location of the
5 13 game or the circumstances of the game section 99B.3, section
5 14 99B.5, section 99B.6, section 99B.7, section 99B.7B, section
5 15 99B.8, or section 99B.9 is applicable, individuals may
5 16 participate in gambling specified in subsection 2, but only if
5 17 all of the following are complied with:
5 18 Sec. 5. Section 423.2, subsection 4, Code 2007, is amended
5 19 to read as follows:
5 20 4. A tax of five percent is imposed upon the sales price
5 21 derived from the operation of all forms of amusement devices
5 22 and games of skill, games of chance, raffles, and bingo games
5 23 as defined in chapter 99B, and card game tournaments conducted
5 24 under section 99B.7B, that are operated or conducted within
5 25 the state, the tax to be collected from the operator in the
5 26 same manner as for the collection of taxes upon the sales
5 27 price of tickets or admission as provided in this section.
5 28 Nothing in this subsection shall legalize any games of skill
5 29 or chance or slot=operated devices which are now prohibited by
5 30 law.
5 31 The tax imposed under this subsection covers the total
5 32 amount from the operation of games of skill, games of chance,
5 33 raffles, and bingo games as defined in chapter 99B, card game
5 34 tournaments conducted under section 99B.7B, and musical
5 35 devices, weighing machines, shooting galleries, billiard and
6 1 pool tables, bowling alleys, pinball machines, slot=operated
6 2 devices selling merchandise not subject to the general sales
6 3 taxes and on the total amount from devices or systems where
6 4 prizes are in any manner awarded to patrons and upon the
6 5 receipts from fees charged for participation in any game or
6 6 other form of amusement, and generally upon the sales price
6 7 from any source of amusement operated for profit, not
6 8 specified in this section, and upon the sales price from which
6 9 tax is not collected for tickets or admission, but tax shall
6 10 not be imposed upon any activity exempt from sales tax under
6 11 section 423.3, subsection 78. Every person receiving any
6 12 sales price from the sources described in this section is
6 13 subject to all provisions of this subchapter relating to
6 14 retail sales tax and other provisions of this chapter as
6 15 applicable.
6 16 EXPLANATION
6 17 This bill provides for the operation of card game
6 18 tournaments by qualified organizations representing veterans
6 19 and allowable prizes at annual game nights conducted by
6 20 certain authorized organizations.
6 21 The bill establishes new Code section 99B.7B, providing for
6 22 card game tournaments conducted by a qualified organization
6 23 representing veterans. The bill defines "card game" to mean
6 24 only poker, pinochle, pitch, gin rummy, bridge, euchre,
6 25 hearts, or cribbage. The bill provides that only qualified
6 26 organizations representing veterans can conduct a card game
6 27 tournament and provides for a $100 annual license fee. The
6 28 bill requires the organization to display the card games to be
6 29 conducted during a tournament, including the rules and manner
6 30 of determining winners for each game. The bill provides that
6 31 participation in a tournament shall be open to members and
6 32 guests of the qualified organization and the cost to
6 33 participate shall not be more than $100. A person under age
6 34 21 cannot participate.
6 35 The bill provides that cash or merchandise of up to $1,000
7 1 can be awarded at a tournament and no participant shall win
7 2 more than a total of $500. The bill also provides that an
7 3 organization holding a license can hold no more than one
7 4 tournament a week and only one tournament can be conducted by
7 5 a qualified organization in any 24=hour period. Card game
7 6 tournaments held under an annual game night license shall not
7 7 count toward the number of tournaments allowed. The bill also
7 8 provides that the qualified organization licensed to conduct
7 9 card game tournaments shall keep records of the dates of
7 10 events, the amount of gross receipts, the amount of prizes
7 11 awarded, expenses, amount collected for taxes, and revenue
7 12 collected for conducting card game tournaments. The bill
7 13 requires qualified organizations to collect at least 10
7 14 percent of gross receipts collected from each event as revenue
7 15 and to withhold no more than 5 percent of gross receipts for
7 16 expenses incurred in holding card game tournaments. Of the
7 17 amount withheld for expenses, any amounts collected but unused
7 18 for expenses by the end of a calendar year shall be donated
7 19 for charitable purposes. Any amounts donated shall be
7 20 indicated on the quarterly reports required to be submitted to
7 21 the department of inspection and appeals pursuant to Code
7 22 section 99B.2.
7 23 Code section 99B.8, concerning annual game nights, is also
7 24 amended to allow certain eligible qualified organizations to
7 25 award cash or merchandise prizes of up to a total of $10,000
7 26 with no more than $5,000 awarded to any participant. The bill
7 27 defines eligible qualified organizations as a qualified
7 28 organization representing veterans, a qualified organization
7 29 representing volunteer emergency services providers, and a
7 30 qualified organization exempt from federal taxes under section
7 31 501(c)(3) of the Internal Revenue Code that has held a game
7 32 night between January 1, 2001, and December 31, 2006.
7 33 The bill further amends Code section 423.2, concerning
7 34 sales taxes, to specifically provide that sales taxes shall be
7 35 imposed on card game tournaments in the same manner as for
8 1 other games as defined in Code chapter 99B.
8 2 LSB 1815XS 82
8 3 ec:nh/es/88.1