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 merchandise Merchandise exceeding five fifty
  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 commits an a 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 commits an a 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 32 awards commits 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 establishment and the establishment's
  3  1 sales tax permit shall 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