Senate File 2240 - Introduced SENATE FILE BY DOTZLER, DANIELSON, ZIEMAN, COURTNEY, BEALL, SENG, and HORN Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to permissible prizes for use of an electrical 2 and mechanical amusement device and the penalties for awarding 3 an improper cash prize. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6034SS 82 6 ec/nh/5 PAG LIN 1 1 Section 1. Section 99B.10, subsection 1, paragraphs a and 1 2 b, Code Supplement 2007, are amended to read as follows: 1 3 a.A prize of merchandiseMerchandise exceedingfivefifty 1 4 dollars in value shall not be awarded for use of the device. 1 5 However, a mechanical or amusement device may be designed or 1 6 adapted to award a prize or one or more free games or portions 1 7 of games without payment of additional consideration by the 1 8 participant. 1 9 b. A prize of cash shall not be awarded for use of the 1 10 device. However, if a prize of merchandise is awarded and is 1 11 redeemed for less than the total value of the prize awarded, 1 12 cash in an amount of less than five dollars that represents 1 13 the difference between the total value and the value of the 1 14 redeemed prize may be awarded. 1 15 Sec. 2. Section 99B.10, subsection 1, paragraph f, Code 1 16 Supplement 2007, is amended by adding the following new 1 17 subparagraph: 1 18 NEW SUBPARAGRAPH. (6) A distributor shall not be limited 1 19 in the number of electrical and mechanical amusement devices 1 20 registered by the department under this lettered paragraph 1 21 that the distributor may store for the sole purpose of future 1 22 placement or replacement of existing registered devices. 1 23 Sec. 3. Section 99B.10, subsection 3, unnumbered paragraph 1 24 1, Code Supplement 2007, is amended to read as follows: 1 25 A person who violates any provision of subsection 1, 1 26 paragraph "a", "b", "e", "g", "h", "i", "j", "k", or "m", 1 27 shall be subject to the following: 1 28 Sec. 4. Section 99B.10, Code Supplement 2007, is amended 1 29 by adding the following new subsection: 1 30 NEW SUBSECTION. 5. Notwithstanding any provision of this 1 31 section to the contrary, a distributor shall not be liable for 1 32 a violation of this section unless the distributor, or an 1 33 employee of the distributor, violates a provision of this 1 34 section. 1 35 Sec. 5. Section 99B.10B, subsection 2, Code Supplement 2 1 2007, is amended to read as follows: 2 2 2. a. The department shall revoke a registration issued 2 3 pursuant to section 99B.10 or 99B.10A, for a period of ten 2 4 years if a person commitsana second or subsequent offense of 2 5 awarding a cash prize in violation of section 99B.10, 2 6 subsection 1, paragraph "b", pursuant to rules adopted by the 2 7 department. A person whose registration is revoked under this 2 8 subsection who is a person for which a class "A", class "B", 2 9 class "C", special class "C", or class "D" liquor control 2 10 license has been issued pursuant to chapter 123 shall have the 2 11 person's liquor control license suspended for a period of 2 12 fourteen days in the same manner as provided in section 2 13 123.50, subsection 3, paragraph "a". A person whose 2 14 registration is revoked under this subsection who is a person 2 15 for which only a class "B" or class "C" beer permit has been 2 16 issued pursuant to chapter 123 shall have the person's class 2 17 "B" or class "C" beer permit suspended and that person's sales 2 18 tax permit suspended for a period of fourteen days in the same 2 19 manner as provided in section 123.50, subsection 3, paragraph 2 20 "a". 2 21 b. If a person owning or employed by an establishment 2 22 having a class "A", class "B", class "C", special class "C", 2 23 or class "D" liquor control license issued pursuant to chapter 2 24 123 commitsana second or subsequent offense of awarding a 2 25 cash prize in violation of section 99B.10, subsection 1, 2 26 paragraph "b", pursuant to rules adopted by the department, 2 27 the liquor control license of the establishment shall be 2 28 suspended for a period of fourteen days in the same manner as 2 29 provided in section 123.50, subsection 3, paragraph "a". If a 2 30 person owning or employed by an establishment having a class 2 31 "B" or class "C" beer permit issued pursuant to chapter 123 2 32awardscommits a second or subsequent offense of awarding a 2 33 cash prize in violation of section 99B.10, subsection 1, 2 34 paragraph "b", pursuant to rules adopted by the department, 2 35 the beer permit of the establishmentand the establishment's 3 1 sales tax permitshall be suspended for a period of fourteen 3 2 days in the same manner as provided in section 123.50, 3 3 subsection 3, paragraph "a". 3 4 EXPLANATION 3 5 This bill concerns permissible prizes from an electrical 3 6 and mechanical amusement device and the penalties applicable 3 7 for violating provisions restricting the awarding of a cash 3 8 prize from such a device. 3 9 The bill increases the value of merchandise that can be 3 10 awarded from an electrical and mechanical amusement device 3 11 from a maximum of $5 to a maximum of $50. The bill also 3 12 provides that if the prize is redeemed for less than the total 3 13 value of the prize, cash in an amount of less than $5 that 3 14 represents the difference between the total value and redeemed 3 15 prize can be awarded. Under current law, no award of cash is 3 16 allowed. 3 17 The bill also changes the penalties applicable to a person 3 18 who awards an improper cash prize from an electrical and 3 19 mechanical amusement device. The bill provides that a first 3 20 offense of awarding an improper cash prize shall be a simple 3 21 misdemeanor, punishable as a scheduled violation with a fine 3 22 of $250, and a second or subsequent offense is a serious 3 23 misdemeanor. Current law provides that a first offense 3 24 violation is a serious misdemeanor. 3 25 The bill provides that a distributor shall not be limited 3 26 in the number of registered amusement devices it stores for 3 27 future placement or replacement of existing registered 3 28 devices. In addition, the bill provides that a distributor 3 29 shall not be liable for a violation of Code section 99B.10 3 30 relative to amusement devices unless the distributor or an 3 31 employee of the distributor violates the Code section. 3 32 Code section 99B.10B(2), concerning the revocation of 3 33 registration and suspension of a liquor license or beer permit 3 34 for a violation of awarding an improper cash prize from an 3 35 electrical and mechanical amusement device is amended to 4 1 provide that the penalties therein apply to a second or 4 2 subsequent offense of awarding an improper cash prize and not 4 3 to a first offense. In addition, the bill eliminates the 4 4 ability of the department to suspend the sales tax permit of 4 5 an establishment with a class "B" or class "C" beer permit if 4 6 a person owning or employed by the establishment commits a 4 7 second offense of awarding an improper cash prize. Current 4 8 penalties that apply are for the suspension of the violator's 4 9 liquor control license, or beer permit and sales tax permit 4 10 for 14 days. 4 11 LSB 6034SS 82 4 12 ec/nh/5.2