HOUSE BILL NO. 140
INTRODUCED BY PAVLOVICH B
BY REQUEST OF THE DEPARTMENT OF COMMERCE
A BILL FOR AN ACT ENTITLED: "AN ACT EXEMPTING LOTTERY TICKETS AND CHANCES FROM THE RESORT TAX UNLESS THEY ARE SOLD IN LODGING FACILITIES, FOOD SERVICE ESTABLISHMENTS, ESTABLISHMENTS THAT SERVE ALCOHOLIC BEVERAGES, OR DESTINATION RECREATIONAL FACILITIES; CLARIFYING THAT THE STATE LOTTERY, AS WELL AS ITS LICENSED AGENTS, MAY SELL TICKETS AND CHANCES; REVISING THE PROCEDURE AND CONTENT FOR LEGISLATIVE AUDITS OF THE STATE LOTTERY; AMENDING SECTIONS 7-6-1503, 23-7-301, AND 23-7-411, MCA; AND PROVIDING EFFECTIVE DATES."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 7-6-1503, MCA, is amended to read:
"7-6-1503. Limit on resort tax rate -- goods and services subject to tax. (1) The rate of the resort tax must be established by the election petition or resolution provided for in 7-6-1504, but the rate may not exceed 3%.
(2) (a) The resort tax is a tax on the retail value of all goods and services sold, except for goods and services sold for resale, within the resort community or area by the following establishments:
(i) hotels, motels, and other lodging or camping facilities;
(ii) restaurants, fast food stores, and other food service establishments;
(iii) taverns, bars, night clubs, lounges, and other public establishments that serve beer, wine, liquor, or other alcoholic beverages by the drink; and
(iv) destination ski resorts and other destination recreational facilities.
(b) Establishments that sell luxuries shall collect a tax on such the luxuries.
(3) (a) Except as provided in subsection (3)(b), lottery tickets or chances are subject to the resort tax if sold in an establishment referred to in subsection (2)(a) and are not subject to the resort tax if sold in any other establishment.
(b) For purposes of subsection (3)(a), an establishment is not a food service establishment unless the majority of its dollar sales are of prepared food sold for consumption on the premises."
Section 2. Section 23-7-301, MCA, is amended to read:
"23-7-301. Ticket or chance sales agents -- licenses. (1) Lottery tickets or chances may be sold only by the state lottery or by ticket or chance sales agents licensed by the director in accordance with this section.
(2) The commission shall by rule determine the places at which state lottery game tickets or chances may be sold.
(3) (a) Before issuing a license, the director shall consider:
(i) the financial responsibility and security of the applicant and the applicant's business or activity;
(ii) the accessibility of the applicant's place of business or activity to the public; and
(iii) the sufficiency of existing licenses to serve the public convenience and the volume of the expected sales.
(b) A person under 18 years of age may not sell lottery tickets or chances.
(c) A license as an agent to sell lottery tickets or chances may not be issued to any person to engage in business exclusively as a lottery ticket or chance sales agent.
(4) The director may issue temporary licenses upon conditions that the director considers necessary.
(5) License applicants shall pay a $50 fee to cover the cost of investigating and processing the application.
(6) The director may require a bond from any licensed agent in an amount provided in the commission's rules and may purchase a blanket bond covering the activities of licensed agents.
(7) A licensed agent shall display the license or a copy of the license conspicuously in accordance with the commission's rules.
(8) A license is not assignable or transferable.
(9) An employee of a ticket or chance sales agent may not be required to sell lottery game tickets or chances if the sale is against the employee's religious or moral beliefs.
(10) Sales agents are entitled to a commission of no more than 10% of the face value of tickets and chances that they purchase from the lottery and do not return. However, to further the sale of lottery products, the lottery commission may adopt rules providing additional commissions to sales agents based on incremental sales. Commissions may not come from that part of all gross revenue that is net revenue and is paid to the general fund. The commissions are statutorily appropriated, as provided in 17-7-502, to the lottery.
(11) Each sales agent shall keep a complete and up-to-date set of records and accounts fully showing the agent's sales and provide it for inspection upon request of the commission, the director, the department of commerce, the office of the legislative auditor, or the office of the attorney general.
(12) Sales agents may pay the state lottery only by check, bankdraft, electronic funds transfer, or other recorded, noncash, financial transfer method as determined by the director.
(13) A license may be suspended or revoked for failure to maintain the license qualifications provided in subsection (3) or for violation of any provision of this chapter or a commission rule. Prior to suspension or revocation, the licensee must be given notice and an opportunity for a hearing."
Section 3. Section 23-7-411, MCA, is amended to read:
"23-7-411. Audit of lottery security. (1) After the first 9 months of sales to the public and every 2 Every 4 years after
that, the office of the legislative auditor shall conduct or have conducted a comprehensive audit of all aspects of security in
the operation of the lottery. The office of the legislative auditor may conduct follow-up audits on findings in its quadrennial
audit as it thinks necessary. The costs of the audit are a state lottery operating expense and must be paid out of the state
lottery fund. The audit must may include:
(a) personnel security;
(b) lottery sales agent security;
(c) lottery contractor security;
(d) security of manufacturing operations of lottery contractors;
(e) security against ticket or chance counterfeiting and alteration and other means of fraudulently winning;
(f) security of drawings among entries or finalists;
(g) computer security;
(h) data communications security;
(i) database security;
(j) systems security;
(k) lottery premises and warehouse security;
(l) security in distribution;
(m) security involving validation and payment procedures;
(n) security involving unclaimed prizes;
(o) security aspects applicable to each particular lottery game;
(p) security of drawings in games whenever winners are determined by drawings;
(q) the completeness of security against locating winners in lottery games with preprinted winners by persons involved in their production, storage, distribution, administration, or sales; and
(r) any other aspects of security applicable to any particular lottery game and to the lottery and its operations.
(2) The security audit report must be presented to the commission, the director, the governor, the president of the senate, and the speaker of the house of representatives."
NEW SECTION. Section 4. Effective dates. (1) [Section 1] is effective July 1, 1999.
(2) [Sections 2 and 3 and this section] are effective on passage and approval.
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Latest Version of HB 140 (HB0140.01)
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