House Study Bill 162



                                    SENATE/HOUSE FILE       
                                    BY  (PROPOSED DEPARTMENT OF
                                         INSPECTIONS AND APPEALS BILL)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act concerning social and charitable gambling, including the
  2    regulation of cash raffles at fairs, prohibiting raffles at
  3    annual game nights, establishing a permanent electrical and
  4    mechanical amusement devices special fund and providing an
  5    appropriation, and providing for the denial, suspension, and
  6    revocation of certain gambling licenses by the department of
  7    inspections and appeals.
  8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  9 TLSB 1261DP 81
 10 ec/sh/8

PAG LIN



  1  1    Section 1.  Section 99B.5, subsection 1, paragraphs e and
  1  2 g, Code 2005, are amended to read as follows:
  1  3    e.  Except with respect to an annual raffle as provided in
  1  4 paragraph "g", and subsection 3, cash prizes are not awarded
  1  5 and merchandise prizes are not repurchased.
  1  6    g.  The actual retail value of any prize does not exceed
  1  7 one thousand dollars.  If a prize consists of more than one
  1  8 item, unit, or part, the aggregate retail value of all items,
  1  9 units, or parts shall not exceed one thousand dollars.
  1 10 However, either a fair sponsor or a qualified organization,
  1 11 but not both, may hold one raffle per calendar year at which
  1 12 prizes having a combined value of more than one thousand
  1 13 dollars may be offered.  If the prize for the annual raffle is
  1 14 cash, the total cash amount awarded shall not exceed two
  1 15 hundred thousand dollars.  If the prize is merchandise, its
  1 16 value shall be determined by the purchase price paid by the
  1 17 fair sponsor or qualified organization.
  1 18    Sec. 2.  Section 99B.5, subsection 3, unnumbered paragraph
  1 19 1, Code 2005, is amended to read as follows:
  1 20    A licensee under this section may hold one real property
  1 21 raffle per calendar year in lieu of the annual raffle
  1 22 authorized in subsection 1, paragraph "g", at which the value
  1 23 of the real property may exceed one thousand dollars in lieu
  1 24 of the or an annual raffle of cash as authorized in subsection
  1 25 1, paragraph "g", if the total cash amount awarded is one
  1 26 hundred thousand dollars or more, if all of the following
  1 27 applicable requirements are met:
  1 28    Sec. 3.  Section 99B.5, subsection 3, paragraph a, Code
  1 29 2005, is amended to read as follows:
  1 30    a.  The licensee has submitted the special real property or
  1 31 cash raffle license application and a fee of one hundred
  1 32 dollars to the department, has been issued a license, and
  1 33 prominently displays the license at the drawing area of the
  1 34 raffle.
  1 35    Sec. 4.  Section 99B.5, subsection 4, Code 2005, is amended
  2  1 to read as follows:
  2  2    4.  For each real property or cash raffle license issued
  2  3 pursuant to subsection 3, the department shall conduct a
  2  4 special audit of the raffle to verify compliance with the
  2  5 appropriate requirements of this chapter.
  2  6    Sec. 5.  Section 99B.8, subsection 1, unnumbered paragraph
  2  7 1, Code 2005, is amended to read as follows:
  2  8    Games of skill, games of chance, and card games and raffles
  2  9 lawfully may be conducted during a period of twelve
  2 10 consecutive hours once each year by any person.  The games or
  2 11 raffles may be conducted at any location except one for which
  2 12 a license is required pursuant to section 99B.3 or section
  2 13 99B.5, but only if all of the following are complied with:
  2 14    Sec. 6.  NEW SECTION.  99B.10D  ELECTRICAL AND MECHANICAL
  2 15 AMUSEMENT DEVICES == SPECIAL FUND.
  2 16    Fees collected by the department pursuant to sections
  2 17 99B.10 and 99B.10A shall be deposited in a special fund
  2 18 created in the state treasury.  Moneys in the fund are
  2 19 appropriated to the department of inspections and appeals and
  2 20 the department of public safety for administration and
  2 21 enforcement of sections 99B.10, 99B.10A, 99B.10B, and 99B.10C,
  2 22 including employment of necessary personnel.  The distribution
  2 23 of moneys in the fund to the department of inspections and
  2 24 appeals and the department of public safety shall be pursuant
  2 25 to a written policy agreed upon by the departments.
  2 26 Notwithstanding section 12C.7, subsection 2, interest or
  2 27 earnings on moneys deposited in the fund shall be credited to
  2 28 the fund.  Notwithstanding section 8.33, moneys remaining in
  2 29 the fund at the end of a fiscal year shall not revert to the
  2 30 general fund of the state.
  2 31    Sec. 7.  Section 99B.14, Code 2005, is amended to read as
  2 32 follows:
  2 33    99B.14  REVOCATION OF LICENSE DENIAL, SUSPENSION, AND
  2 34 REVOCATION.
  2 35    1.  The department shall may deny, suspend, or revoke a
  3  1 license issued pursuant to this chapter if the department
  3  2 finds that an applicant, licensee, or an agent of the licensee
  3  3 violates or permits violated or permitted a violation of a
  3  4 provision of this chapter, or a departmental rule adopted
  3  5 pursuant to chapter 17A, or if a for any other cause exists
  3  6 for which the director of the department would be or would
  3  7 have been justified in refusing to issue a license, or upon
  3  8 the conviction of a person of a violation of this chapter or a
  3  9 rule adopted under this chapter which occurred on the licensed
  3 10 premises.  However, the denial, suspension, or revocation of
  3 11 one type of gambling license does not require, but may result
  3 12 in, the denial, suspension, or revocation of a different type
  3 13 of gambling license held by the same licensee.
  3 14    Revocation proceedings shall be held only after giving
  3 15 notice and an opportunity for hearing to the licensee.  Notice
  3 16 shall be given at least ten days in advance of the date set
  3 17 for hearing.  If the department finds cause for revocation,
  3 18 the license shall be revoked for a period not to exceed two
  3 19 years.
  3 20    2.  The process for denial, suspension, or revocation of a
  3 21 license shall commence by delivering to the applicant or
  3 22 licensee by certified mail, return receipt requested, or by
  3 23 personal service a notice setting forth the particular reasons
  3 24 for such action.
  3 25    a.  If a written request for a hearing is not received
  3 26 within thirty days after the mailing or service of the notice,
  3 27 the denial, suspension, or revocation of a license shall
  3 28 become effective pending a final determination by the
  3 29 department.  The determination involved in the notice may be
  3 30 affirmed, modified, or set aside by the department in a
  3 31 written decision.
  3 32    b.  If a request for a hearing is timely received by the
  3 33 department, the applicant or licensee shall be given an
  3 34 opportunity for a prompt and fair hearing before the
  3 35 department and the denial, suspension, or revocation shall be
  4  1 deemed suspended until the department makes a final
  4  2 determination.  However, the director may suspend a license
  4  3 prior to a hearing if the director finds that the public
  4  4 integrity of the licensed activity is compromised or there is
  4  5 a risk to public health, safety, or welfare.  In addition, at
  4  6 any time during or prior to the hearing the department may
  4  7 rescind the notice of the denial, suspension, or revocation
  4  8 upon being satisfied that the reasons for the denial,
  4  9 suspension, or revocation have been or will be removed.  On
  4 10 the basis of any such hearing, the determination involved in
  4 11 the notice may be affirmed, modified, or set aside by the
  4 12 department in a written decision.
  4 13    3.  A copy of the final decision of the department shall be
  4 14 sent by certified mail, return receipt requested, or served
  4 15 personally upon the applicant or licensee.  The applicant or
  4 16 licensee may seek judicial review in accordance with the terms
  4 17 of the Iowa administrative procedure Act, chapter 17A.
  4 18    4.  The procedure governing hearings authorized by this
  4 19 section shall be in accordance with the rules promulgated by
  4 20 the department and chapter 17A.
  4 21    5.  If the department finds cause for denial of a license,
  4 22 the applicant may not reapply for the same license for a
  4 23 period of two years.  If the department finds cause for
  4 24 suspension, the license shall be suspended for a period
  4 25 determined by the department.  If the department finds cause
  4 26 for revocation, the license shall be revoked for a period not
  4 27 to exceed two years.
  4 28                           EXPLANATION
  4 29    This bill concerns social and charitable gambling as
  4 30 provided for in Code chapter 99B.
  4 31    Code section 99B.5, concerning raffles at fairs, is amended
  4 32 to provide that the total amount awarded for an annual cash
  4 33 raffle is limited to a maximum of $200,000.  The bill also
  4 34 provides that if the cash to be awarded at a raffle is
  4 35 $100,000 or more, the requirements applicable to real property
  5  1 raffles where the value of the real property exceeds $1,000
  5  2 shall also apply.  As a result, a licensee seeking to conduct
  5  3 a cash raffle of $100,000 or more is required to get a special
  5  4 cash raffle license and the department of inspections and
  5  5 appeals is required to conduct a special audit of the raffle.
  5  6    Code section 99B.8 is amended to provide that raffles are
  5  7 not permitted at an annual game night.
  5  8    New Code section 99B.10D provides for the establishment of
  5  9 a permanent electrical and mechanical amusement devices
  5 10 special fund.  The bill provides that fees collected by the
  5 11 department of inspections and appeals for amusement devices
  5 12 shall be deposited in the fund and shall be appropriated to
  5 13 the department of inspections and appeals and the department
  5 14 of public safety for administration and enforcement of
  5 15 provisions governing these amusement devices.  A special fund
  5 16 currently exists for the same purpose, but that fund only
  5 17 provides for the deposit of fees collected in fiscal years
  5 18 beginning July 1, 2003, and July 1, 2004.  The bill codifies
  5 19 and makes the fund permanent.
  5 20    Code section 99B.14 is amended to provide that the
  5 21 department of inspections and appeals has the authority to
  5 22 deny or suspend a license if the department finds that an
  5 23 applicant or licensee has violated a provision of Code chapter
  5 24 99B.  Under current law, the department may only revoke a
  5 25 license for a violation of the chapter.  The bill also
  5 26 provides for the administrative procedure the department shall
  5 27 follow if it intends to deny, revoke, or suspend a license.
  5 28 The bill includes provisions governing notice, requests for
  5 29 hearing, appeals, and penalties.  The bill provides that the
  5 30 department may suspend a license pending a hearing if the
  5 31 director finds that the public integrity of the licensed
  5 32 activity is compromised or there is a risk to public health,
  5 33 safety, or welfare.  The bill provides that hearings conducted
  5 34 by the department shall comply with the Iowa administrative
  5 35 procedure Act.  The bill also provides that if an applicant
  6  1 for a license is denied, the applicant may not reapply for two
  6  2 years.  In addition, if a license is suspended, the bill
  6  3 provides that the department shall determine the length of the
  6  4 suspension.  Current law providing that a revocation remains
  6  5 in effect for no more than two years is unchanged by the bill.
  6  6 LSB 1261DP 81
  6  7 ec:nh/sh/8.1