House Bill No. 275

Introduced By _______________________________________________________________________________

A Bill for an Act entitled: "An Act reducing the period of time in which a premises licensed to have video gambling machines must comply with distance restrictions; amending section

23-5-629, MCA; and providing an immediate effective date."

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 23-5-629, MCA, is amended to read:

"23-5-629.   Permit for premises within 150 feet of another premises. (1)  (a) A licensee may not be granted a permit for video gambling machines allowed on a premises under 23-5-611 if, at the time of application for the permit, the licensee's premises are within 150 feet of, or have an external structural connection not amounting to a common internal wall, as that term is used in 23-5-117, to, a premises that already has a permit for video gambling machines allowed on a premises under 23-5-611 and if the two premises have one or more common owners. A measurement of the distance between two premises must be taken between the nearest exterior wall of each premises.

(b)  A premises for which an on-premises alcoholic beverages license was granted, was applied for, or the transfer of which was validly contracted for prior to February 1, 1995, is not subject to subsection (1)(a) during the 10-year 5-year period following October 1, 1995. A premises licensed before January 1, 1985, is not subject to subsection (1)(a) for as long as ownership remains within the immediate family that owned the premises on January 1, 1985, if ownership of the premises on October 1, 1995, was within the immediate family that owned the premises on January 1, 1985.

(2)  For purposes of this section, the following definitions apply:

(a)  "Affiliate" means a person or entity that controls, is controlled by, or is under common control with another person or entity. The term includes but is not limited to a premises that has:

(i)  shareholders, partners, or other individual owners, by trust or otherwise, who are also shareholders, partners, or individual owners, by trust or otherwise, of the other premises;

(ii) shareholders, partners, or other individual owners, by trust or otherwise, who are income taxpayers related to the shareholders, partners, or other individual owners, by trust or otherwise, of the other premises;

(iii) an agreement with the other premises or the other premises' shareholders, partners, or other individual owners, by trust or otherwise, for the ownership and operation of gaming equipment if the agreement has other financial components, such as a landlord and tenant relationship or noninstitutional financing; or

(iv) a premises rental agreement with the other premises or its shareholders, partners, or other individual owners, by trust or otherwise, at a rental rate other than the market rental rate, as determined by a Montana independent appraisers association appraisal done at the time that the rental rate is set or changed.

(b)  "Common owner" means an affiliate, immediate family member, manager, parent or subsidiary business entity, investor, person or entity with a commonality of business interests, or other person or entity able to influence the operator or manager of the premises or to prevent the operator or manager from fully pursuing the premises' separate interests.

(c)  "Commonality of business interests" means:

(i)  a contract, deed, contract for deed, concession agreement, or lease, rental, or other agreement involving real property, with the same person or entity, except:

(A)  a commercial mall with at least 50,000 square feet and at least eight separate businesses; or

(B)  an agreement by a licensee to lease premises from a person or entity that also leases other premises in the same building or structure to one or more licensees if there is no other common ownership between any of the licensees; or

(ii) that the same person or entity, except a financial institution, provides the financing for:

(A)  the purchase of the liquor license;

(B)  the purchase of the premises; or

(C)  operating expenses of more than $25,000, except for expenses allowed under 23-5-130.

(d)  "Control" means the power to cause or direct management and policies through ownership, contract, or otherwise.

(e)  "Immediate family" means a parent, children, siblings, grandchildren, grandparents, nieces, and nephews.

(f)  "Investor" means a person who:

(i)  advances or pledges to advance funds with the expectation of a specified or unspecified return;

(ii) guarantees a loan, except a loan guaranteed by a route operator who would not otherwise be considered a common owner; or

(iii) has an option to participate in the premises."

NEW SECTION. Section 2.  Effective date. [This act] is effective on passage and approval.

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