§348.__Applicability

Except as expressly provided in chapter 16, this chapter does not apply to video gaming machines.

Sec. 8. 17 MRSA c. 16 is enacted to read:

CHAPTER 16

VIDEO GAMING MACHINES

SUBCHAPTER I

GENERAL PROVISIONS

§361.__Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.

1.__Associated equipment.__"Associated equipment" means any proprietary device, machine or part used in the manufacture or maintenance of a video gaming machine, including, but not limited to, integrated circuit chips, printed wired assemblies, printed wired boards, printing mechanisms, video display monitors and metering devices.

2.__Director.__"Director" means the Director of the Bureau of Alcoholic Beverages and Lottery Operations in the Department of Administrative and Financial Services.

3.__Drug abuser.__"Drug abuser" has the same meaning as set forth in Title 5, section 20003, subsection 10.

4.__Drug addict.__"Drug addict" has the same meaning as set forth in Title 5, section 20003, subsection 11.

5.__Drug-dependent person.__"Drug-dependent person" has the same meaning as set forth in Title 5, section 20003, subsection 12.

6.__Engaged in reckless or negligent conduct.__"Engaged in reckless or negligent conduct" means that a person, either consciously disregarding or failing to be aware of a risk that the person's conduct would cause such a result, engaged in conduct that in fact created a substantial risk of death, serious bodily injury or bodily injury to another human being and the

person's disregard or failure to be aware of that risk, when viewed in light of the nature and purpose of the person's conduct and the circumstances known to the person, involved a gross deviation from the standard of conduct that a reasonable and prudent person would observe in the same situation.

7.__Formal charging instrument.__"Formal charging instrument" means a complaint, indictment, information, juvenile petition or other formal written accusation against a person for some criminal or juvenile offense.

8.__Fugitive from justice.__"Fugitive from justice" means a person described in Title 15, section 201, subsection 4 or 18 United States Code, Section 921(a)(15) or a person subject to an outstanding warrant of arrest in this State or any other jurisdiction for a crime punishable by imprisonment for one year or longer.

9.__Illegal gaming machine.__"Illegal gaming machine" or "illegal machine" means a machine as defined in section 330 that:

A.__Is required to be licensed under this chapter, but is not so licensed;

B.__Is required to be licensed under chapter 14, but is not so licensed; or

C.__Is licensed under either chapter 14 or this chapter, but is being operated in a manner that violates the license.

10.__Licensee.__"Licensee" means a person licensed by the director to operate a video gaming machine.

11.__Net machine income.__"Net machine income" means money inserted into a video gaming machine minus credits paid out in cash.

12.__Operate.__"Operate" means to offer for use.

13.__Payback value.__"Payback value" means the value of credits granted to players by a video gaming machine compared to the value of money inserted into the machine by players, calculated on an annual basis.

14. Person. "Person" means an individual, corporation, association or partnership.

15.__Uniform location agreement.__"Uniform location agreement" means a written agreement between a licensee and a video gaming machine distributor that governs the terms and conditions of the placement of video gaming machines on the premises of the licensee and that is on a form developed by the director.

16.__Video gaming machine.__"Video gaming machine" means a machine, as defined in section 330, that, upon insertion of coin or currency, is available to play or simulate the play of a video game authorized by the director, including, but not limited to, poker, keno, blackjack and line games utilizing a video display and microprocessor, in which by chance the player may receive free games or credits that may be redeemed for cash.

17.__Video gaming machine distributor or distributor.__"Video gaming machine distributor" or "distributor" means a person who owns video gaming machines and who distributes or places video gaming machines or associated equipment for use in this State.

18.__Video gaming machine distributor employee or distributor employee.__"Video gaming machine distributor employee" or "distributor employee" means a person who is employed by a specific video gaming machine distributor and who is involved in sales, maintenance, repairs, technical service, collection of funds, delivery, distribution or transportation of video gaming machines or who services in any other way video gaming machines or associated equipment on behalf of a distributor for use in this State.

19.__Video gaming machine manufacturer or manufacturer.__ "Video gaming machine manufacturer" or "manufacturer" means a person who assembles or produces video gaming machines or associated equipment for sale or use in this State, but who does not distribute video gaming machines.

20.__Video gaming machine wholesaler or wholesaler.__"Video gaming machine wholesaler" or "wholesaler" means a person who sells video gaming machines or associated equipment to video gaming machine distributors, but does not distribute video gaming machines.

§362.__License required

A person may not manufacture, distribute, sell, operate or place a video gaming machine for use in this State unless the person is licensed to do so by the director.__A person may not place for use or operate a video gaming machine in this State unless the machine is licensed by the director.__Except as authorized by section 376, subsection 4, a person may not be a video gaming machine distributor employee unless licensed by the director.

§363.__Administration and enforcement

The director shall administer and enforce the provisions of this chapter as specified in this chapter.

§364.__Powers and duties of the director

1.__Powers.__In addition to powers conferred by any other provision of law, the director may:

A.__Regulate, supervise and exercise general control over the operation of video gaming machines;

B.__Investigate the direct or indirect ownership or control of any licensee;

C.__Propose rules necessary to administer and enforce this chapter.__These rules are major substantive rules as defined in Title 5, chapter 375, subchapter II-A;

D.__In any investigation conducted under this chapter, issue subpoenas to compel the attendance of witnesses and the production of evidence relevant to any fact at issue;

E.__Subject to approval of the State Liquor and Lottery Commission and to any applicable laws relating to public contracts, enter into a contract for performance of the director's duties under this chapter.__All contracts must be awarded in accordance with rules adopted by the Department of Administrative and Financial Services pursuant to Title 5, chapters 141, 143, 144 and 145 and Title 5, sections 1812 and 1813.__A contract awarded or entered into by the director may not be assigned by the holder of the contract, except by specific approval of the commission; and

F.__Approve or disapprove terms and conditions of uniform location agreements.

2.__Duties.__The director shall:

A.__Investigate or cause to be investigated all complaints made to the director and all violations of this chapter or the rules adopted under this chapter;

B.__Propose rules, which are major substantive rules as defined in Title 5, chapter 375, subchapter II-A, to prevent undesirable conduct relating to the operation of video gaming machines, including the following:

(1)__The practice of any fraud or deception upon a player of a video gaming machine;

(2)__The presence of a video gaming machine in or at premises that may be unsafe due to fire hazard or other such conditions;

(3)__The use of obscene advertising;

(4)__The solicitation on a public way of persons to play video gaming machines;

(5)__The infiltration of organized crime into the operation of video gaming machines or into the distribution of the machines;

(6)__The presence of disorderly persons in a location where video gaming machines are in use; and

(7)__The use of the word "casino" to describe any video gaming machine licensed under this chapter or as the name or any part of the name of the licensed premises or of a portion of the premises where the video gaming machine is located;

C.__Disable any video gaming machine if the director has reason to believe that:

(1)__A person has illegally tampered with the machine;

(2)__The funds from the machine have not been distributed, deposited or allocated in accordance with section 383;

(3)__The machine does not meet the licensure requirements of this chapter; or

(4)__The licensee is guilty of criminal conduct;

D.__In accordance with the Maine Administrative Procedure Act, develop industry standards for uniform location agreements to be used as the basis of agreements between distributors and licensees;

E.__Certify monthly to the Treasurer of State, the State Lottery Commission and the Commissioner of Administrative and Financial Services a full and complete statement of all video gaming machine revenue, credits disbursed by licensees, administrative expenses and the allocation of net machine income for the preceding month;

F.__Submit by January 15th an annual report to the Governor and the joint standing committee of the Legislature having jurisdiction over gaming matters.__The report must include information on video gaming machine revenue, credits disbursed by licensees, administrative expenses and the allocation of net machine income for the preceding year; and

G.__Prepare and submit to the Commissioner of Administrative and Financial Services a budget for the program's administration.

§365.__Applicability of chapter 14

Except as expressly provided in this chapter, chapter 14 does not apply to video gaming machines.

SUBCHAPTER II

LICENSING

§371.__License to operate

1.__Eligible entities.__The director may issue a license to operate video gaming machines to a person who:

A.__Has held a license to conduct games of chance pursuant to section 332 for the last 2 consecutive years previous to applying for the video gaming machine license;

B.__Is exempt from federal taxation under the Internal Revenue Code, Section 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10) or 501(c)(19); and

C.__Owns or leases the premises upon which the video gaming machines will be located and uses those premises to fulfill the primary charitable or nonprofit purpose of the organization.__If the premises are leased, the lease must run for a term longer than the license term.

2.__Qualifications for license.__A person may be issued a license to operate a video gaming machine if the person is eligible for a license under subsection 1, has sufficient financial assets to meet the financial obligations imposed by this chapter and a method acceptable to the director for meeting those obligations and the individual and each officer, director or partner of the corporation, association or partnership:

A.__Has not been convicted in this State or any other jurisdiction of a misdemeanor crime of domestic violence, within the meaning of 18 United States Code, Section 921(a)(33);

B.__Does not have a formal charging instrument pending in the State or any other jurisdiction for a misdemeanor crime of domestic violence, within the meaning of 18 United States Code, Section 921(a)(33);

C.__Has not been convicted in the State or any other jurisdiction within the past 3 years of 3 or more crimes punishable by imprisonment for less than one year, if those convictions arose from different criminal episodes;

D.__Has not engaged within the past 3 years in reckless or negligent conduct that is substantiated by information of record by a governmental entity;

E.__Is current in payment of all taxes, interest and penalties owed to the State or to a municipality, excluding items under formal dispute or appeal pursuant to applicable statutes or ordinances;

F.__Has not been involved in any criminal activity and has not been convicted of a crime punishable by one year or more of imprisonment in any jurisdiction unless at least 10 years have passed since satisfactory completion of the sentence or probation imposed by the court for the crime;

G.__Has not been convicted of a violation of this chapter or chapter 14 or of equivalent laws in any other state;

H.__Has not been adjudicated within the past 3 years of having committed a juvenile offense involving conduct that, if committed by an adult, would cause the director to refuse to approve a license application under this section;

I.__Is not a fugitive from justice, a drug abuser, a drug addict, a drug-dependent person, an illegal alien or a person who was discharged from the United States Armed Forces under dishonorable conditions within 3 years prior to the date of application;

J.__Has completed the application form and complied with the requirements of section 375; and

K.__Has not knowingly made a false statement of material fact to the director in applying for a license under this chapter or chapter 14.

§372.__Placement and ownership of machines

1. Number of machines; location.__No more than 5 video gaming machines may be placed on the premises of a licensee. A machine may not be placed in any location other than the premises of the licensee.__A licensee must own or control the premises on which a video gaming machine is located.__The machine area must be designed to permit the licensee or an agent of the licensee to see and control the area at all times to ensure compliance with the provisions of this chapter.

2.__Uniform location agreement.__Each location must be subject to a uniform location agreement between the distributor and the licensee.__A copy of the agreement must be submitted to the director.__The director may approve or disapprove any uniform location agreement.__If the uniform location agreement is disapproved, the director shall provide written reasons for the denial.__The uniform location agreement is the complete and sole agreement between the licensee and the distributor regarding video gaming machines.__No other agreement between the licensee and the distributor is legally binding.

3.__Appeal to Maine Administrative Procedure Act.__Any distributor or licensee denied approval of a uniform location agreement may appeal the decision pursuant to the Maine Administrative Procedure Act.

4.__Disclosure of other contracts and agreements.__A distributor shall disclose to the director any other contracts or agreements that the distributor or a subsidiary of the distributor has made with a licensee.

5.__Incentives prohibited.__A distributor may not offer an incentive to a licensee to accept placement of a video gaming machine on the premises of the licensee and a licensee may not solicit such an incentive.__For purposes of this subsection, "incentive" means any consideration, including merchandise, a premium or bonus in cash or an advance payment of the licensee's share of net machine income.__"Incentive" does not include the licensee's share of net machine income provided for in section 383.__A person who violates this subsection is guilty of a Class C crime and that person's license, if any, is revoked and the right to apply for a license under this chapter is precluded.

6.__Ownership of machines.__A person may not place or operate a video gaming machine for use in this State if the machine is owned by a person other than a video gaming machine distributor licensed under this chapter.__A video gaming machine distributor may not own more than 100 video gaming machines licensed in this State or more than 15% of the total number of video gaming machines licensed in this State, whichever is lesser.

§373.__Licensing of machines

1.__License required.__A video gaming machine may not be placed for public use or operated in this State unless the machine is licensed by the director.__The video gaming machine license must be prominently displayed no more than 5 feet from the machine.__Language describing the odds of winning the game and warning of the danger of compulsive gambling must also be prominently displayed on the machine.

2.__Requirements for license.__To be licensed, a video gaming machine:

A.__May offer only games permitted by the director;

B.__May not have any means of manipulation that affect the random probabilities of winning a game;

C.__May not directly dispense coins, cash or tokens;

D.__Must have one or more mechanisms that accept coin or cash in the form of bills and that are designed to prevent a person from obtaining credits without paying;

E.__Must be designed to suspend operation until reset if a person attempts, by physical or other tampering, to obtain credits without paying; and

F.__Must have accounting software that keeps an electronic record of information that includes, but is not limited to, the following:__total cash inserted into the machine, total credits awarded by the machine and total credits played for video games.

3.__Amount of play; payback value.__A video gaming machine may be played for a maximum of $5 in a single game.__A video gaming machine may not accept more than $20 at a time.__The maximum prize awarded may not exceed the value of $1,000.__The payback value of each type of game offered by each machine must be at least 85%.

4.__Examination of prototypes.__The director and the Attorney General shall examine prototypes of video gaming machines and associated equipment of manufacturers seeking a license as required in this chapter.__The director shall require the manufacturer seeking the examination and approval of the video gaming machine or associated equipment to pay the anticipated actual cost of the examination, not to exceed $300, before the examination occurs.__After the examination occurs, the director shall refund overpayments or charge and collect amounts sufficient to reimburse the director for underpayments of actual cost, except that collection may not exceed a cumulative total of $300 per examination.__The director and the Attorney General shall complete the examination within 10 business days.__The director may contract for the examinations of video gaming machines and associated equipment as required by this section.

5.__Illegal gaming machine.__An illegal gaming machine is subject to seizure and forfeiture to the State pursuant to sections 395 and 396.

§374.__Licensing of manufacturer, distributor, wholesaler,

distributor employee

1.__Qualifications.__To be licensed as a video gaming machine distributor, a person must meet the qualifications set forth in section 371, subsection 2.__A video gaming machine distributor employee must meet the qualifications set forth in section 371, subsection 2, paragraphs A to D and F to I.

2.__Additional qualifications.__A person may be issued a video gaming machine distributor license only if that person has been a resident of this State for 5 years prior to application for a video gaming machine distributor license.__All stockholders, partners, trustees, administrators, officers, principals or shareholders of a corporation, business, association, partnership, company or any other entity entitled to be distributors according to this chapter must be residents of this State for a period of 5 years prior to application for a video gaming machine distributor license by that corporation, business, association, partnership, company or any other entity and must be able to verify residency.

3.__Manufacturers and wholesalers.__A video gaming machine manufacturer or wholesaler must be licensed by the director.

4.__Limitation on ownership.__A partnership, corporation, person, individual partner or shareholder of more than 5% of a corporation or an immediate family member of a person, individual partner or shareholder of more than 5% of a corporation may not have ownership interests in more than one distributor.__For the purposes of this subsection, "immediate family" means a spouse, child, parent, stepchild or stepparent.

§375.__Applications; investigation

1.__Form.__An application for a license required under this chapter must be on the form provided by the director.__The application must be signed by the individual applicant or by a duly authorized officer of the partnership, corporation or association applying for the license.__The application must contain, but is not limited to, the following information regarding the individual applicant and each officer, director, partner or owner of any interest in a corporation, partnership or association applying for a license:

A.__Full name;

B.__Full current address and addresses for the prior 5 years and verification of those prior addresses.__Verification is sufficient if the applicant utilizes at least one of the following verification methods and the verification method used provides evidence of residency in this State of 5 years:__copies of tax returns, voter registration cards or voter registration records or driver's licenses;

C.__A record of previous issuances of, refusals to issue and revocations of a license under this chapter; and

D.__Answers to the following questions posed in substantially the following form.

(1)__"Is there a formal charging instrument now pending against you in this or any other jurisdiction for a crime that is punishable by imprisonment for one year or more or for a misdemeanor crime of domestic violence?"

(2)__"Is there a formal charging instrument now pending against you in this or any other jurisdiction for a juvenile offense that involves conduct that, if committed by an adult, would be punishable by imprisonment for one year or more or would constitute a misdemeanor crime of domestic violence?"

(3) "Have you ever been convicted of a crime described in subparagraph (1)__or adjudicated as having committed a juvenile offense as described in subparagraph (2)?"

(4)__"Are you a fugitive from justice?"

(5)__"Are you a drug abuser, drug addict or drug- dependent person?"

(6)__"Have you been discharged from the United States Armed Forces under dishonorable circumstances within the past 5 years?"

(7)__"Are you an illegal alien?"

(8)__"Have you been convicted within the past 3 years of 3 or more crimes punishable by imprisonment of less than one year?"

(9)__"Have you been adjudged within the past 3 years to have committed 3 or more juvenile offenses involving conduct that, if committed by an adult, would be punishable by imprisonment of less than one year?"

(10)__"To your knowledge, have you engaged within the past 3 years in reckless or negligent conduct that is substantiated by the records of a governmental entity?"

2.__Signature as certification.__The applicant, by affixing the applicant's signature to the application, certifies the following:

A.__That the statements made in the application and any documents made a part of the application are true and correct;

B.__That the applicant understands that an affirmative answer to one or more of the questions in subsection 1, paragraph D is cause for refusal; and

C.__That the applicant understands that knowingly making any false statement in the application or any document made a part of the application is grounds for a refusal to issue a license or for revocation or suspension of a license.

3.__Consent to review records. At the request of the director, the applicant shall take whatever action is necessary to permit the director to examine all accounts and records in the applicant's possession, under the applicant's control or under the control of 3rd parties but accessible by consent of the applicant and shall authorize all 3rd parties in possession or in control of those accounts or records to allow the director or a designee to examine the accounts and records as the director determines necessary to ascertain:

A.__Whether the information supplied on the application or any documents made a part of the application is true and correct;

B.__Whether each of the requirements of this section has been met; or

C.__Whether the applicant meets the requirements for licensure under this chapter.

This requirement includes taking whatever action is necessary to permit the director or a designee to have access to confidential records held by banks, the courts, law enforcement agencies and the military for the purposes stated in this subsection.

4.__Investigations; national criminal history record check. An individual applying for a license, a partner of a partnership or an officer, director or holder of an ownership interest of a corporation or association applying for a video gaming machine license as a licensee, manufacturer, distributor or wholesaler must submit to a background investigation by the Chief of the State Police to verify the applicant's compliance with the requirements of section 371, subsection 2.

5.__Notification of municipal officers.__An applicant for a license to operate a video gaming machine must send a copy of the application to the officers of the municipality in which the machine will be operated.__The applicant must certify in the application that the copy has been sent and must list the names and addresses of the persons to whom the copy was sent.

§376.__Fees; term of license; transferability levels

1.__License levels; fees.__The annual fee for a license issued under this chapter is as follows:

A.__A license for a video gaming machine manufacturer is a Level 1 license and the fee for a video gaming machine manufacturer license is $5,000;

B.__A license for a video gaming machine wholesaler is a Level 1 license and the fee for a video gaming machine wholesaler license is $5,000;

C.__A license for a video gaming machine distributor is a Level 2 license and the fee for a video gaming machine distributor license is $1,000;

D.__A license to operate a video gaming machine is a Level 3 license and the fee for a video gaming machine operator license is $100; and

E.__A license for a video gaming machine distributor employee is a Level 4 license and the fee for a video gaming machine distributor employee license is $100 per employee.

In addition to the annual license fee, the director may charge an initial one-time application fee of $50 for a license issued under this chapter.__All fees collected pursuant to this subsection must be deposited directly to the Video Gaming Fund established in section 384.

2.__Term of license.__All licenses issued by the director under this chapter are effective for one year and are renewable annually, unless sooner revoked pursuant to section 377.

3.__Nontransferable.__A license issued under this chapter is not transferable or assignable.__A license for a video gaming machine distributor employee is not transferable and must be associated with a specific distributor and that distributor association may not be transferred.

4.__Levels of license; prohibition against multiple licenses.__ A person licensed as a video gaming machine manufacturer or wholesaler under section 374 has a Level 1 license.__A person licensed as a video gaming machine distributor under section 374 has a Level 2 license.__A licensee under section 371 has a Level 3 license.__A person licensed as a video gaming machine distributor employee has a Level 4 license.__A person may not hold more than one level of license.__A person holding a Level 2 license is automatically authorized to perform the duties of a Level 4 licensee without being required to hold a Level 4 license.

§377.__Actions relating to licenses

1.__Refusal to renew license.__The director may refuse to renew a license for just cause after a hearing in accordance with the Maine Administrative Procedure Act.

2.__Suspension or revocation of license by the District Court.__ The District Court may suspend or revoke a license issued under this chapter for just cause.

3.__Just cause.__As used in this section, "just cause" includes:

A.__Making or causing to be made a false statement of material fact in obtaining a license under this chapter or in connection with service rendered within the scope of the license issued;

B.__Violating or knowingly instructing a video gaming machine distributor employee to violate any provision of this chapter or any rule adopted under this chapter; or

C.__Becoming ineligible to hold a license under this chapter.

4.__Actions taken by video gaming machine distributor employee.____A distributor may not be held liable for the actions of a video gaming machine distributor employee unless these actions were instructed by the distributor.__A distributor license renewal may not be denied or suspended due to the actions of a video gaming machine distributor employee unless these actions were instructed by the distributor.

5.__Ineligibility period following refusal to issue or renew license or revocation of license.__A person may not apply to the director for any license under this chapter less than 2 years after the director refused to issue or renew a license under this chapter or less than 2 years after the District Court revoked a license issued to the person under this chapter.

SUBCHAPTER III

MACHINE OPERATION; ALLOCATION OF FUNDS

§381.__Limits on machine use

1.__Hours of play.__A licensee may not permit a person to play a video gaming machine at any time other than a time when the sale of liquor is permissible under Title 28-A, section 4, subsection 1.

2.__Age of player.__A licensee may not permit a person under 21 years of age to play a video gaming machine.

3.__Time and money limits imposed by licensee.__A licensee may impose a daily limit on the amount of time or money spent by an individual playing the video gaming machines on the licensee's premises.

4.__Play by members and guests; public events.__Except as provided in this subsection, only persons who are members of the licensee organization or guests of those members may play a video gaming machine on the premises of the licensee.__The licensee may obtain a license to offer the video gaming machines for public use once every 6 months for a period not to exceed 3 consecutive days.

§382.__Payment of credits by licensee

A licensee shall redeem credits for players who earn credits on machines located on the premises of that licensee in accordance with rules proposed by the director.__Rules adopted pursuant to this section are major substantive rules as defined in Title 5, chapter 375, subchapter II-A.__If a person receives a credit redeemable for more than the amount required by federal law to be reported to the United States Internal Revenue Service, the licensee shall require the person to complete a form listing the person's name, address and social security number.__The licensee shall promptly send the form to the Bureau of Revenue Services.

§383.__Allocation of funds

1.__Distributor responsible.__A video gaming machine distributor shall collect and allocate funds from video gaming machines owned by the distributor in accordance with this section.

2.__Allocation of net machine income.__Funds must be allocated as follows:

A.__Twenty percent must be sent to the Treasurer of State for deposit in the Local Government Fund created in Title 30-A, section 5681;

B.__Forty percent must be paid to the distributor that owns the machine; and

C.__Forty percent must be paid to the licensee.

3.__Deposit of state funds.__Each distributor shall maintain a bank account accessible by the State for the deposit of funds owed to the State under this chapter.__The distributor shall deposit in that account the State's share of the net machine income attributable to machines owned by the distributor during the first 15 days of each month not later than the 22nd day of the month.__The distributor shall deposit in that account the State's share of net machine income attributable to machines owned by the distributor between the 16th and the last day of each month not later than the 7th day of the next month.__If the day on which funds must be deposited is not a business day, the funds must be deposited on the next business day after that date.

4.__Use of state share.__At the end of each fiscal year beginning after June 30, 2001, the Treasurer of State shall transfer to the Local Government Fund created in Title 30-A, section 5681 an amount equal to all revenue collected pursuant to subsection 2, paragraph A.

5.__Failure to deposit funds.__A distributor who willfully fails to comply with this section commits a Class C crime.__The license of that person may be revoked by the District Court and the video gaming machines to which the undeposited funds are attributable may be disabled by the director.

6.__Late payments.__All payments not remitted when due must be paid together with a penalty assessment on the unpaid balance at a rate of 1.5% per month.

§384.__Video Gaming Fund

1.__Fund created.__There is created and established a separate fund to be known as the Video Gaming Fund, referred to in this section as the "fund," and to be deposited in depositories the Treasurer of State selects.__The fund consists of all revenue payable to the State pursuant to section 376 and all other money credited or transferred to the fund from any other fund or source pursuant to law.

2.__Use of money.__The money in the fund may be appropriated or allocated only:

A.__For expenses incurred in implementing or enforcing this chapter;

B.__For payment to the Local Government Fund created in Title 30-A, section 5681; and

C.__For payment to the General Fund.

3.__Committee review of allocation.__The Commissioner of Administrative and Financial Services shall submit to the joint standing committee of the Legislature having jurisdiction over gaming matters for review all proposals for allocations from the fund.__The proposed allocations for each fiscal year must be submitted by January 1st preceding the start of the fiscal year.

SUBCHAPTER IV

ENFORCEMENT AND PENALTIES

§391.__Reports; records; location

1.__Reports; records.__The director shall require from any licensed video gaming machine distributor, manufacturer, wholesaler or licensee whatever records and reports the director considers necessary for the administration and enforcement of this chapter.

2.__Location.__A license holder shall maintain all records required by this chapter or by rules adopted under this chapter at the primary business office within this State of the license holder or on the premises where the video gaming machine is operated.__In the case of a video gaming machine manufacturer or wholesaler, the records must be maintained at the primary business office of the manufacturer or wholesaler.__The primary business office must be designated by the license holder in the license application.__All records must be open to inspection by the director or the director's designee and a license holder may not refuse the director or the director's designee the right to inspect or audit the records.__Refusal to permit inspection or audit of the records is not a crime under this chapter but does constitute grounds for revocation of the license.

§392.__Access to premises, equipment, records

A person holding a license under this chapter shall permit the director or the director's designee to inspect any equipment, prizes, records or items and materials used or to be used in the operation of any video gaming machine manufactured, owned, distributed or operated by that person.__A person holding a license under this chapter shall consent in writing to the examination of all accounts, bank accounts and records in the license holder's possession or under the license holder's control and shall authorize all 3rd parties in possession or in control of those accounts or records to allow the director or the director's designee to examine the accounts and records as the director determines necessary.

§393.__Contempt

If a witness refuses to obey a subpoena issued by the director or to give any evidence relevant to proper inquiry by the director, the Attorney General may petition the Superior Court in the county where the refusal occurred to find the witness in contempt.__The Attorney General shall cause to be served on the witness an order requiring that witness to appear before the Superior Court to show cause why that witness should not be adjudged in contempt.__The Superior Court shall, in a summary manner, hear the evidence and, if it is such as to warrant the court to do so, punish the witness in the same manner and to the same extent as for contempt committed before the Superior Court or with reference to the process of the Superior Court.

§394.__Violations

1.__Crimes by licensee.__A licensee who performs any of the following acts commits a Class D crime:

A.__Permitting a person under 21 years of age to play a video gaming machine licensed pursuant to this chapter;

B.__Permitting a person to play a video gaming machine licensed pursuant to this chapter at a time other than a time when the sale of liquor is permissible under Title 28- A, section 4, subsection 1;

C.__Extending credit to a person in order for the person to play a video gaming machine;

D.__Permitting a person to use a credit card as a method of payment for playing a video gaming machine; or

E.__Permitting a visibly intoxicated person to play a video gaming machine.

2.__Class C crimes by any person.__A person who performs any of the following acts commits a Class C crime:

A.__Tampering with a video gaming machine with intent to interfere with the proper operation of that machine;

B.__Manipulating or intending to manipulate the outcome, payoff or operation of a video gaming machine by physical tampering or any other means;

C.__Manufacturing, distributing, selling, operating or placing a video gaming machine for use in this State without a license or manufacturing, distributing, selling, operating or placing an illegal machine for use in this State; or

D.__Placing for public use or operating an unlicensed video gaming machine in this State.

3.__Class D crimes by any person.__A person who violates any provision of this chapter or any rule adopted under this chapter for which a specific penalty is not provided commits a Class D crime.

§395.__Seizure and forfeiture of illegal gaming machines

1.__Forfeiture.__An illegal gaming machine, including any monetary contents, is subject to forfeiture to the State.

2.__Court jurisdiction.__An illegal gaming machine and any monetary contents may be declared forfeited by any court that has jurisdiction over the illegal machine or final jurisdiction over any related criminal proceeding brought under this chapter or by the Superior Court for Kennebec County.__Property subject to forfeiture may be kept or stored at any location within the territorial boundaries of the State and is subject to the authority of any court in which a petition seeking the forfeiture of that property is filed.

3.__Procedure.__Forfeitures under this section must be accomplished by the following procedure.

A.__A district attorney or the Attorney General may petition the Superior Court in the name of the State in the nature of a proceeding in rem to order forfeiture of an illegal gaming machine and any monetary contents.__The petition must be filed in the court having jurisdiction over the property.

B.__The proceeding is an in rem civil action in which the State has the burden of proving all material facts by a preponderance of the evidence.

C.__The court shall order the State to give notice of the pendency of the action and the right to be heard by certified or registered mail or hand delivered by a deputy sheriff to any person who appears to have an interest in the illegal machine and any monetary contents.__Receipt by a person then licensed to operate a motor vehicle in the State is presumed when notice is mailed to the last known address of that person on file with the Department of the Secretary of State, Bureau of Motor Vehicles.

D.__The court shall promptly, but not less than 2 weeks after notice, hold a hearing on the petition after an answer is filed by a person served with notice under paragraph C.__ At the hearing, the court shall hear evidence and make findings of fact and enter conclusions of law.

E.__Based on the findings and conclusions, the court shall issue a final order from which the parties have a right of appeal.__The final order must provide for disposition of the illegal gaming machine and any monetary contents by the State.__Revenue generated by the disposition of the illegal machine__and any monetary contents of the machine must be used to pay the reasonable expenses of the forfeiture proceedings, seizure, storage, maintenance of custody, advertising and notice.__The balance, if any, must be deposited in the General Fund.

4.__Records.__A law enforcement officer, a department or an agency having custody of an illegal gaming machine or any monetary contents of an illegal gaming machine, or having disposed of the illegal gaming machine or any monetary contents, shall keep and maintain during the pendency of the action full and complete records in accordance with this subsection.__Upon issuance by the court of a final order ordering the disposition, destruction or return of the illegal gaming machine or the monetary contents, the officer, department or agency shall transmit a copy of those records to the Department of Public Safety for inclusion into a centralized record.

A.__The records must show:

(1)__From whom the illegal machine__and any monetary contents were received;

(2)__Under what authority the illegal machine and any monetary contents are held, received or disposed of;

(3)__To whom the illegal machine and any monetary contents are delivered;

(4)__The date and manner of destruction or disposition of the illegal machine; and

(5)__The exact kinds, quantities and forms of illegal gaming machines and the exact amount of any monetary contents of any machine held in custody or disposed of.

B.__The records must be open to inspections by all federal and state officers authorized by the laws of the United States, a state or territory of the United States or a foreign nation to investigate or prosecute violations of gambling laws.

C.__The director shall maintain a centralized record of illegal machines seized.__At least quarterly, the director shall provide a report of the disposition of property previously held by the director to the Commissioner of Administrative and Financial Services and the legislative Office of Fiscal and Program Review.__These records must include an estimate of the fair market value of items seized.

5.__Report to the court.__Persons making final disposition or destruction of an illegal gaming machine or its monetary contents under court order shall report, under oath, to the court the exact circumstances of the destruction or disposition.

6.__Seizure.__An illegal gaming machine__together with any monetary contents is contraband and may be seized by any law enforcement officer pursuant to subsection 7 or 8.

7.__Process for seizure.__At the request of the State ex parte, the court may issue any preliminary order or process necessary to seize or secure the property for which forfeiture is sought and provide for its custody.

A.__Process for seizure of the property may issue only upon a showing of probable cause.__The application for process for seizure of the property and the issuance, execution and return of the process are subject to the provisions of applicable state law.

B.__Any property subject to forfeiture under this section may be seized upon process.

8.__Seizure without process.__Seizure without process may be made when seizure is incident to a legal search or inspection if the law enforcement officer has probable cause to believe the property seized is an illegal gaming machine.

§396.__Criminal forfeiture

1.__Forfeiture upon conviction of violation.__A person convicted of a violation of this chapter forfeits to the State all rights, privileges, interests and claims to property that is subject to forfeiture pursuant to section 395.__All rights, privileges, interest and title in property subject to forfeiture under this section vest in the State upon the commission of the act giving rise to forfeiture pursuant to section 395.

2.__Proceeding by indictment.__Property subject to forfeiture that is not yet the subject of a final order pursuant to section 395 may be proceeded against by indictment or superseding indictment of the grand jury in any related criminal proceeding in which one or more persons with an interest in the property have been simultaneously indicted for one or more violations of this chapter.__At any time prior to trial, the State, with the consent of the court and any defendant with an interest in the property, may file an ancillary charging instrument or information alleging that that property is subject to criminal forfeiture.__Upon commencement of a criminal forfeiture by indictment or information of any property that may be the subject of any pending civil action commenced pursuant to section 395, the civil action must be immediately stayed and subrogated to the criminal forfeiture action.__Discovery in the criminal action must be as provided by the Maine Rules of Criminal Procedure.

3.__Seizure upon finding of probable cause. Property subject to forfeiture that has not already been seized but has been indicted by the grand jury pursuant to this section may also be ordered seized based upon the grand jury's finding of probable cause pursuant to section 395.

4.__Trial against property. Trial against property charged by indictment or information may be by jury and must be held in a single proceeding together with the trial of the related criminal violation.__Forfeiture of the property must be proved by the State by a preponderance of the evidence.__The court, in its discretion, may allow any defendant with an interest in property indicted pursuant to this section to waive the right to trial by jury as against the property while preserving the right to trial by jury of any crime alleged.__At trial by jury, the court, upon motion of a defendant or the State, may separate the trial of the matter against the defendant from the trial of the matter against the property subject to criminal forfeiture.__If the court bifurcates the jury trial, the court shall first instruct and submit to the jury the issue of the guilt or innocence of defendants to be determined by proof beyond a reasonable doubt and shall restrict argument of counsel to those issues.__After a verdict upon the guilt or innocence of all defendants, the court shall instruct and submit to the jury the issue of the forfeiture of the property to be determined by proof by a preponderance of the evidence and the court shall restrict argument to those issues.__ A special verdict must be returned as to the extent of the interest in property subject to forfeiture, if any.

5.__Person interested in forfeited property.__A person not charged in the indictment may not intervene in the criminal action.__Following the entry of a verdict of forfeiture of property pursuant to this section or the entry of a guilty plea in open court on the record, the State shall provide written notice of its intent to dispose of the property to any person known to have alleged an interest in the property.__The notice may be by certified, return receipt mail or as otherwise ordered by the court.__Receipt by a person then licensed to operate a motor vehicle in the State is presumed when notice is mailed to the last known address of that person on file with the Department of the Secretary of State, Bureau of Motor Vehicles.__A person other than the defendant asserting a legal interest in the property within 30 days of the date of receipt of the notice may petition the court for a hearing to adjudicate the validity of any alleged interest in the property.__The hearing must be held before the court without jury.__The request for the hearing must be signed by the petitioner under penalty of perjury and must state the nature and extent of the petitioner's right, title or interest in the property, the time and circumstances of the petitioner's acquisition of the right, title or interest in the property, any additional facts supporting the petitioner's claim and the relief sought.__Upon the filing of any petition for hearing, the court shall schedule the hearing as soon as practicable, but in no event later than 6 months after the petition is filed or after the sentencing of any defendant convicted upon the same indictment.__The court shall issue or amend a final order of forfeiture in accordance with its determination if, after the hearing, the court determines that the petitioner has established by a preponderance of the evidence that:

A.__The petitioner has a legal right, title or interest in the property and the right, title or interest renders the order of forfeiture invalid in whole or in part because the right, title or interest was vested in the petitioner rather than any defendant or was superior to any right, title or interest to the exclusion of any defendant at the time of the commission of the act that gave rise to the forfeiture of the property under this section; and

B.__The petitioner is a bona fide purchaser for value of the right, title or interest in the property and was at the time of purchase reasonably without cause to believe that the property was subject to__forfeiture under this section.

6. Title to property following forfeiture.__Following the entry of a verdict of forfeiture of property pursuant to this section or the entry of a guilty plea in open court on the record, the State has clear title to property that is the subject of the indictment or information and order of forfeiture and may order all or a portion of the property forfeited to the State to be disposed of pursuant to section 395.

§397.__Rules

Rules adopted pursuant to this chapter must be proposed by the director and are major substantive rules as defined in Title 5, chapter 375, subchapter II-A.

§398.__Short title

This chapter may be known and cited as the "Video Gaming Property Tax Relief Act of 2001."

Sec. 9. 25 MRSA §3902, sub-§4 is enacted to read:

4.__Notice of violation of video gaming machine laws.__A liquor enforcement officer who notices a potential violation of any provision of Title 17, chapter 16 shall promptly notify the Director of the Bureau of Alcoholic Beverages and Lottery Operations in the Department of Administrative and Financial Services of the potential violation.

SUMMARY

This bill allows operation of video gaming machines by nonprofit organizations that are eligible for games of chance licenses and that are exempt from federal tax under the Internal Revenue Code, Section 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10) or 501(c)(19). These sections of the Internal Revenue Code refer to charitable organizations, civic leagues, fraternal benefit societies, domestic fraternal societies and associations and veterans organizations. The organization applying for the license must own or lease the premises on which the machines will be placed and must use the premises for its primary charitable or nonprofit purpose.

Video gaming machine manufacturers, distributors, wholesalers, operators and distributor employees must be licensed by the Director of the Bureau of Alcoholic Beverages and Lottery Operations in the Department of Administrative and Financial Services, following background investigations of the applicants and their major business partners.

The license specifies the number of machines allowed on the premises, and the maximum number of machines allowed is 5 per licensee. Machines must be licensed by the Director of the Bureau of Alcoholic Beverages and Lottery Operations. Persons under 21 years of age are not allowed to use the machines. Only members of the organization and their guests are allowed to use the machines, except that the organization may obtain a license to offer the machines for public use once every 6 months for a period of 3 consecutive days. The maximum dollar amount for each play is $20 and the maximum payout is $1,000. Each game on each machine must return at least 85% of wagers to players, calculated on an annual basis.

A single video gaming machine distributor may not own more than 100 machines or 15% of the total number of machines in the State, whichever is less. A person may not hold more than one type of license; for example, a distributor may not also be a licensee or a manufacturer.

Net machine income, which is income after payback to players, is divided as follows: 20% to the State for payment into the Local Government Fund; 40% to the distributor; and 40% to the licensee.

Licenses are issued for one year. Applicants for an initial license must pay an additional fee of $50 to help offset costs of processing the application and performing the background investigation.