Format Document

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

Section 1. Heading change

The article heading of title 5, chapter 4, article 1, Arizona Revised Statutes, is changed from "GAMES OF BINGO" to "BINGO AND CHARITY GAME TICKET GAMES".

Sec. 2. Section 5-401, Arizona Revised Statutes, is amended to read:

START_STATUTE5-401. Definitions

In this chapter article, unless the context otherwise requires:

1. "Adjusted gross receipts" means the receipts remaining after deducting the monies paid for prizes from gross receipts.

2. "Applicant" means a person, a group of persons or an organization that submits an application to the licensing authority for a license required under this chapter article.

3. "Assistant" means a person who is not a manager, supervisor or proceeds coordinator, who assists in conducting bingo or charity game ticket games, or both, and who is designated as an assistant in the application for a license.

4. "Auxiliary" means a formally organized body formed for the purpose of assisting a qualified organization in accomplishing its primary purposes and recognized by a licensee in writing to the licensing authority as the licensee for the purposes of this chapter article.

5. "Charitable organization" means any organization, including not more than one auxiliary of the organization, not for pecuniary profit, which that is operated for charitable purposes within this state and which that has been so engaged for two years prior to before making application for a license under this article.

6. "Charity game ticket" means a paper card with perforated break-open tabs, the face of which is covered or otherwise hidden from view to conceal one or more numbers, letters or symbols, some of which out of every set or deal have been designated in advance and at random as prize winners. Charity game ticket includes those games referred to as bingo event tickets in which some winners may be determined by the use of a bingo flashboard or seal card or by marking preprinted numbers on the ticket.

6. 7. "Chartered branch or lodge or chapter of a national or state organization" means any branch or lodge or chapter of a national or state qualified organization.

8. "Deal" means a single game or set of charity game tickets with the same serial number.

9. "Distributor" means a business entity that purchases or obtains charity game tickets and that sells, offers to sell or otherwise provides charity game tickets to a licensed charitable organization for use in this state.

7. 10. "Equipment" means the receptacle and numbered objects drawn from it, the master board upon on which such objects are placed as drawn, the cards or sheets bearing numbers or other designations to be covered and the objects used to cover them, the board or signs, however operated, used to announce or display the numbers or designations as they are drawn, the public address system, and all other articles essential to the operation, conduct and playing of bingo.

8. 11. "Fraternal organization" means any organization within this state, except college and high school fraternities, not for pecuniary profit, which that is a branch or lodge or chapter of a national or state organization and that exists for the common business, brotherhood or other interests of its members and which if the national or state organization has so existed for at least two years in Arizona prior to before making application for a license under this article. Fraternal organization shall also include not more than one auxiliary of such organization.

9. 12. "Gross receipts" means the total of the following:

(a) The receipts from the sale of shares, tickets or rights in any manner connected with participation in a game of bingo or charity game tickets, or both, or the right to participate therein, including any admission fee, charge for cards, daubers or other devices, the sale of equipment or supplies and all other miscellaneous receipts, excluding sales of food or beverages or other products which that are not required to play bingo or charity game ticket games, or both.

(b) Interest collected on the special account or interest bearing accounts established pursuant to section 5‑407.

10. 13. "Homeowners association" means a nonprofit corporation or association that is established to own, lease or manage common, limited access lots, parcels, areas, grounds or streets of a real estate development and that has continuously engaged in those activities in this state for at least two years immediately before applying for a license.

11. 14. "Lawful purposes" means the expenditure of net proceeds of a game of bingo or charity game tickets, or both, exclusively by a licensee for the purposes of carrying out its mission and its aims or for the purpose of charity.

12. 15. "Lawful use" means the devotion of the entire net proceeds of a game of bingo or charity game tickets, or both, exclusively to a lawful purpose or to lawful purposes.

13. 16. "License" means a license issued by the licensing authority pursuant to this article.

14. 17. "Licensee" means any person or qualified organization to which a license has been issued by the licensing authority.

15. 18. "Licensing authority" means the department of revenue.

16. 19. "Local governing body" means the governing body of a city or town or the board of supervisors of the county for locations outside a city or town.

17. 20. "Manager" means a person who has overall responsibility for conducting bingo or charity game ticket games, or both, by a licensee and who is designated as a manager in the application for a license.

21. "Manufacturer" means a person that prints and assembles charity game tickets from raw materials, supplies or subparts.

18. 22. "Member" means an individual who has qualified for membership in a qualified organization or its auxiliary pursuant to its bylaws, articles of incorporation, charter, or rules or a similar written instrument and who has been a member in good standing for at least two years.

19. 23. "Net proceeds" means the receipts less such expenses, charges, fees and deductions as are specifically authorized under this article.

20. 24. "New member" means an individual who has qualified and been approved by the appropriate parent organization or state or national organization for membership in a qualified organization including auxiliaries pursuant to its bylaws, articles of incorporation, charter, or rules or a similar written instrument and who has been a member in good standing for at least thirty days but less than two years.

21. 25. "Occasion" means a gathering at which bingo games are played.

22. 26. "Person" means a natural person, firm, association, corporation or other legal entity.

23. 27. "Premises" means any room, hall, building, enclosure or outdoor area used for the purpose of playing a game of bingo or charity game tickets, or both. Premises shall not be subdivided to provide multiple premises.

24. 28. "Proceeds coordinator" means a person who has primary responsibility for the use of bingo game or charity game ticket proceeds, or both, in accordance with law and for all checks issued from bingo game or charity game ticket proceeds, or both, and who is designated as the proceeds coordinator in the application for a license.

25. 29. "Qualified organization" means a homeowners association or any bona fide charitable, fraternal, religious, social, as described in section 43‑1201, paragraph 7, veterans' or volunteer fire fighters firefighters' organization, or nonprofit ambulance service as defined in section 41‑1831 or any chartered branch or lodge or chapter of such national or state organization which that operates without profit to its members and which that has been in existence continuously for a period of at least two years in Arizona immediately before applying for a license under this article, and may include not more than one identified auxiliary of any such organization.

26. 30. "Religious organization" means any organization, church, body of communicants or group, not for pecuniary profit, gathered that gathers in common membership for regular worship and religious observances and which organization that has been so gathered or united for at least two years prior to before making application for a license under this article. Religious organization shall also include not more than one auxiliary of the organization.

27. 31. "Reporting period" means the applicable reporting period prescribed in section 5‑413.

28. 32. "Revocation" means the disciplinary termination of bingo or charity game ticket license activity, or both.

29. 33. "Supervisor" means a person who is primarily responsible for the conduct of bingo games on each occasion or for conducting charity game ticket games, or both, including the supervision of all activities and the making of any report required by the licensing authority for the occasion.

30. 34. "Suspension" means the disciplinary termination of bingo or charity game ticket license activity for a period of less than five years.

31. 35. "Veterans' organization" means any congressionally chartered organization within this state, or any branch, lodge or chapter of a national or state organization within this state, not for pecuniary profit, the membership of which that consists of individuals who were members of the armed services or forces of the United States, which and that has been in existence for at least two years prior to before making application for a license under this article. Veterans' organization shall also include not more than one auxiliary of such organization.

32. 36. "Voluntary fire fighters Volunteer firefighters' organization" means any organization within this state, not for pecuniary profit, that is established pursuant to title 48, chapter 5 which and that has been in existence continuously for at least two years immediately before applying for a license under this article. END_STATUTE

Sec. 3. Section 5-402, Arizona Revised Statutes, is amended to read:

START_STATUTE5-402. Licensing authority; powers; duties

The department of revenue is designated as the "licensing authority" of for this article. The department of revenue shall be in charge of enforcement of the terms and provisions of this article and, as state licensing authority, it shall:

1. Grant or refuse licenses under this article. In addition, the licensing authority shall have the power on its own motion based on reasonable grounds or on a complaint made and after an investigation and public hearing, at which the licensee shall be afforded an opportunity to be heard, to suspend or revoke any license issued by the licensing authority for any violation by the licensee or any officer, director, agent, member or employee of such licensee of the provisions of this article or any rule authorized under adopted pursuant to this article. Notice of suspension or revocation, as well as notice of such hearing, shall be given by certified mail to the licensee at the address contained in such license. The licensing authority may suspend the operation of a game pending a hearing, in which case, the hearing shall be held within ten days after such notice. Proceedings to suspend or revoke a license shall be held pursuant to title 41, chapter 6, article 10.

2. Supervise the administration of this article and adopt, amend and repeal rules governing the holding, operating and conducting of games of bingo, the rental or purchase of premises and the purchase of equipment and providing that games of bingo or charity game tickets, or both, shall be held, operated and conducted only by licensees for the purposes and in conformity with the provisions of this article.

3. Keep records of all actions and transactions of the licensing authority.

4. Report on request to the governor or the legislature respecting the administration of this article and make such recommendations in regard to legislation as the licensing authority shall deem necessary and proper. END_STATUTE

Sec. 4. Section 5-403, Arizona Revised Statutes, is amended to read:

START_STATUTE5-403. Qualification for license; renewal; transfer

A. A person shall not conduct or assist in conducting activity for which a license is required under this article unless the person conducting the activity first obtains the specific class of license for the activity.

B. A license prescribed by this article shall not be issued to an applicant qualified under this article until the licensing authority receives an original or certified copy of the application from the local governing body and the nonrefundable license fee prescribed in section 5‑414 is paid to the licensing authority. The license expires one year from the date it is issued and may be renewed upon on the filing with the licensing authority of an application for renewal of the license provided by the licensing authority and the payment of the license fee prescribed in section 5‑414. A thirty‑day grace period shall be allowed during which the license may be renewed if a late filing penalty equal to the license fee is submitted with the regular license fee. A licensee filing late shall not conduct occasions of bingo or charity game tickets, or both, until the licensing authority has renewed the license for the next one year period. If the licensee fails to apply to the licensing authority within the thirty‑day grace period, the licensee must reapply for a new license under section 5‑404.

C. If a license is revoked, the licensing authority shall not issue a new license to the licensee for a period of five years from the effective date of the revocation.

D. A license issued pursuant to this article is not transferable to another person.

E. The licensing authority shall not issue more than one license to conduct bingo to an applicant or licensee. END_STATUTE

Sec. 5. Section 5-404, Arizona Revised Statutes, is amended to read:

START_STATUTE5-404. Application for license

A. Each applicant for an initial license to be issued pursuant to the provisions of this section shall submit to the local governing body the local governing body fee and the license fee prescribed in section 5‑414 together with a written application in the form prescribed by the licensing authority, duly executed and verified, and in which shall be stated:

1. The name, telephone number and address of the applicant.

2. Sufficient facts to enable the licensing authority to determine whether or not the applicant is qualified for the specific class of license for which the applicant is applying.

3. If the applicant is a qualified organization, the names and addresses of its officers.

4. The place where and day and time when such games of bingo or charity game tickets, or both, are to be held, operated and conducted by the applicant, under the license applied for.

5. The items of expense intended to be incurred or paid in connection with the holding, operating and conducting of such games of bingo or charity game tickets, or both, and the names and addresses of the persons to whom, and the purposes for which, they are to be paid.

6. The specific projected use of the net proceeds.

7. Such other information as shall be deemed advisable by the licensing authority requires.

B. The applicant shall designate in the application:

1. One or two persons who will serve as manager.

2. One person who will serve as proceeds coordinator.

3. At least one person who will serve as supervisor.

4. At least one person who will serve as assistant.

C. A person who is designated as a manager, proceeds coordinator or supervisor on a license shall not serve in any of these positions under any other license.

D. The applicant shall attach affidavits to the application which that are executed by each manager and that state that the manager:

1. Will conduct all bingo or charity game ticket games, or both, in compliance with the license, this article and the rules of the licensing authority.

2. Is of good moral character.

3. Has never been convicted of a misdemeanor involving moral turpitude or a felony.

E. The applicant shall attach an affidavit to the application which that is executed by the proceeds coordinator and that states that the proceeds coordinator:

1. Will use the net proceeds in compliance with the terms of the license, this article and the rules of the licensing authority.

2. Is of good moral character.

3. Has never been convicted of a misdemeanor involving moral turpitude or a felony.

F. A person may serve as supervisor for more than one occasion for the same licensee. The supervisor shall be continuously present on the premises during the bingo games and until all associated activities have been completed. The applicant shall attach affidavits to the application which that are executed by each supervisor and that state that the supervisor:

1. Will comply with the terms of the license, this article and the rules of the licensing authority in supervising each occasion.

2. Is of good moral character.

3. Has never been convicted of a misdemeanor involving moral turpitude or a felony.

G. Except in an application for a class A license, the applicant shall attach affidavits to the application which that are executed by each assistant and that state that the assistant:

1. Will comply with the terms of the license, this article and the rules of the licensing authority in assisting in the conduct of all bingo or charity game ticket games, or both.

2. Is of good moral character.

3. Has never been convicted of a misdemeanor involving moral turpitude or a felony.

H. If any premises are to be leased or rented in connection with holding, operating or conducting any game of bingo or charity game tickets, or both, pursuant to this article, an affidavit by the lessor shall accompany the application stating the lessor's name and address, the amount of rent, stated in a specific dollar amount and not relating to any percentage or portion of gross or net revenue, which that will be paid for such premises and that the lessor is, or its officers and directors are, of good moral character and have not been convicted of any misdemeanor involving moral turpitude or a felony.

I. The local governing body shall upon on receipt of the application shall immediately set a hearing on the application to be held within forty‑five days.

J. Following the receipt of the application and the hearing, the local governing body shall recommend approval or disapproval of the application and forward the original or a certified copy of the application endorsed with its approval or disapproval to the licensing authority. If the application is disapproved by the local governing body, the endorsement shall contain the specific reasons for disapproval. END_STATUTE

Sec. 6. Section 5-405, Arizona Revised Statutes, is amended to read:

START_STATUTE5-405. Form of license; display

A. Each license shall contain a statement of the name and address of the licensee, the name of the manager and the place where bingo or charity game ticket games, or both, are to be held.

B. Each license issued for the conduct of any game or games of bingo or charity game tickets, or both, shall be conspicuously displayed at the place where any game is to be conducted at all times during any game.END_STATUTE

Sec. 7. Section 5-406, Arizona Revised Statutes, is amended to read:

START_STATUTE5-406. Persons permitted to conduct games; premises; equipment; expenses; compensation

A. A person shall not hold, operate or conduct any game of bingo or charity game tickets, or both, under any license issued pursuant to this article unless the person has submitted affidavits as required in section 5‑404 and has received prior written approval from the licensing authority. Persons seeking to replace a manager, proceeds coordinator, supervisor or assistant or to serve as an additional manager, supervisor or assistant shall submit the appropriate affidavit to the licensing authority as required in section 5‑404.

B. Except as provided in section 5‑413, only members and new members of a licensee or an applicant may participate or apply to participate in conducting any bingo or charity game ticket game, or both, held by the licensee.

C. Except for a class A licensee, a person shall not hold, operate, conduct or assist in conducting any game or games of bingo or charity game tickets, or both, under any license if the person or the person's spouse has a proprietary, equitable or credit interest, or is an officer, director, agent or employee of an individual or company that has a proprietary, equitable or credit interest, in the licensee.

D. Bookkeepers or accountants need not be members of the organization.

E. An item of expense shall not be incurred or paid in connection with holding, operating or conducting any game of bingo or charity game tickets, or both, that is held, operated or conducted pursuant to any license issued under this article, except bona fide expenses in a reasonable amount for purposes described in section 5‑407, subsection G. A game of bingo or charity game tickets, or both, shall not be conducted with any equipment except equipment owned solely by the licensee, or jointly by not more than six licensees. No portion of the ownership of such equipment may be held by any person or organization not licensed pursuant to this chapter article. A game of bingo or charity game tickets, or both, shall not be conducted with rented equipment.

F. An applicant or a licensee shall not enter into any purchase agreement other than a bona fide purchase agreement. The seller may repurchase equipment only upon on default of the buyer and then only at a price equal to or greater than ninety per cent of any money paid for equipment from buyer to seller. The seller may repurchase a building only upon on default of the buyer at a fair market value per licensee.

G. A licensee shall not conduct or operate more than five occasions of bingo during any calendar week. No more than twelve hours of bingo shall be conducted in any building or on any premises during any calendar day.

H. The entire net proceeds of any bingo game or charity game tickets shall be devoted to a lawful use or uses. In addition to other unlawful uses, the following are not considered lawful uses under this subsection:

1. Compensation and expenses of directors, officers and management personnel.

2. Fees or commissions of consultants.

3. Compensation paid for legal services incurred by a licensee unsuccessfully defending against charges of violations of this article.

4. Donations to other than national, state or local nonprofit parent organizations in excess of five per cent of the net proceeds except with the permission of the licensing authority.

5. Donations or any payment from the lessor to the lessee.

I. The premises where any game of bingo or charity game tickets, or both, is being held, operated or conducted, where it is intended that any game of bingo or charity game tickets, or both, shall be held, operated or conducted or where it is intended that any equipment shall be used shall at all times be open to inspection by the licensing authority, its agents and employees and peace officers of any political subdivision of the state.

J. When any merchandise prize is awarded in a game of bingo, its value shall be its current retail price. A merchandise prize shall not be redeemable or convertible into cash directly or indirectly.

K. Equipment, prizes and supplies for games of bingo or charity game tickets, or both, shall not be purchased or sold at prices in excess of one hundred fifteen per cent of the average price paid by other licensees as reported in the reports submitted to the licensing authority during the prior six month period by licensees having the same class of license. A licensee shall not enter into any contract or purchase agreement whereby it agrees to limit its source of supplies.

L. An alcoholic beverage shall not be offered or given as a prize in any such game.

M. The net profits derived from the holding of games of bingo or charity game tickets, or both, must be devoted within one year from the date such profits were earned to the lawful purposes of the organization permitted to conduct such games. Any organization desiring to hold the net profits of games of bingo or charity game tickets, or both, for a period longer than one year from the date such profits were earned must apply to the licensing authority for special permission, and upon on good cause shown the authority may grant the request.

N. Any licensee which that does not report during any one‑year period the amount of its net profits, if any, shall be required to show cause before the licensing authority why its license to conduct games of bingo or charity game tickets, or both, should not be revoked.

O. The licensing authority shall require a licensee which that does not conduct bingo games during any one year period to show cause why its license to conduct games of bingo or charity game tickets, or both, should not be cancelled.

P. Except as otherwise provided by this section, a prize greater in amount or value than one thousand dollars shall not be offered or given in any single game of bingo conducted under any such license, and total prizes shall not exceed an amount or value greater than three thousand dollars for any occasion. Door prizes, discounts or other inducements with a value exceeding two hundred fifty dollars per occasion shall not be offered or given away.

Q. Except for a class A licensee, on application to the licensing authority by the licensee the licensing authority may authorize one special bonus game to be played at weekly consecutive occasions with a quarterly prize limit of twelve thousand dollars. A weekly consecutive occasion is an occasion played on the same day of each week during the quarter. The special bonus game may be played at each weekly consecutive occasion subject to the rules adopted by the licensing authority. The special bonus game is not subject to the prize limits prescribed by subsection P of this section.

R. The equipment used in playing bingo and the method of play shall be such that each card shall have an equal opportunity to be a winner. The objects or balls to be drawn shall be essentially the same as to size, shape, weight, balance and all other characteristics that may influence their selection. All objects or balls shall be present in the receptacle before each game is begun. All numbers announced shall be plainly and clearly audible or visible to all the players present. Where more than one room is used for any one game, the receptacle, the person calling the numbers as they are drawn and the person removing the objects or balls from the receptacle must be present in the room where the greatest number of players is present and all numbers announced shall be plainly audible or visible to the players in that room and also audible or visible to the players in the other room or rooms. The cards or sheets of the players shall be part of a deck, group or series of cards, no two of which shall be alike, and which deck, group or series shall not be so prepared or arranged as to prefer any card. A licensee may provide braille cards for legally blind persons as defined in section 41‑1973 or allow legally blind persons to supply their own braille cards. A legally blind person supplying the person's own cards shall pay a fee to the licensee equal to that which would be charged if the legally blind person obtained the cards from the licensee. The bingo game activity shall be conducted and recorded in a manner as prescribed by the licensing authority to verify the gross receipts from each occasion.

S. The receptacle, the person calling the numbers as they are drawn and the person removing the objects or balls from the receptacle must be visible to all the players at all times except where more than one room is used for any one game and subsection R of this section applies.

T. The particular arrangement of numbers required to be covered in order to win the game and the amount of the prize shall be clearly and audibly or visibly described and announced to the players immediately before each game is begun.

U. Any players shall be entitled to call for a verification of all numbers drawn at the time a winner is determined, and for a verification of the objects or balls remaining in the receptacle and not yet drawn. The verification shall be made in the immediate presence of the supervisor and in full view of any player requesting the verification.

V. A person who is not physically present on the premises where the game is actually conducted shall not be allowed to participate as a player in the game.

W. A person who holds, operates or conducts, or assists in holding, operating or conducting, a game of bingo shall not play at any occasion at which such person works unless the game of bingo is conducted pursuant to a class A license.

X. A person shall not conduct a lottery or raffle within a twelve hour period before or after a bingo occasion or game on any premises used for bingo games or within one thousand feet of the bingo game. This subsection does not affect any legally conducted activity related to the state lottery or charity game ticket games.END_STATUTE

Sec. 8. Section 5-407, Arizona Revised Statutes, is amended to read:

START_STATUTE5-407. Statement of receipts; expenses; penalty

A. On or before the twentieth day after the end of every reporting period designated for the class of the license, each licensee shall file with the licensing authority upon on forms prescribed by the licensing authority a financial report which that is signed and sworn to by the proceeds coordinator showing the amount of the gross receipts derived during the reporting period from games of bingo or charity game tickets, or both, the expenses paid, a brief description of the classification of such expenses, the ratio of net proceeds to the adjusted gross receipts received by the licensee during the reporting period, the name and address of each person to whom has been paid three hundred dollars or more and the purpose of such expenditure, the net proceeds derived from each such game of bingo or charity game tickets, or both, and the uses to which such net proceeds have been or are to be applied. Each licensee shall maintain and keep such books and records as may be necessary to substantiate the particulars of each such report.

B. Except for class A licensees, if the net proceeds derived from the games of bingo or charity game tickets, or both, for any six consecutive months do not amount to at least fifty per cent of adjusted gross receipts for those months in total, it shall be presumed that the expenses incurred for goods, wares, merchandise and services rendered are not bona fide and reasonable, and the operation of the game is deemed to be against public policy. If the net proceeds of the games operated by a licensee are less than fifty per cent of the adjusted gross receipts in any six consecutive months, the license may be revoked.

C. The failure to file reports within forty‑five days after their due date, or if filing reports that are not fully, accurately and truthfully completed, may be the basis of the revocation of the license. If the licensee fails to make and file a return on or before the due date, unless the failure is due to reasonable cause, a penalty equal to five per cent of the amount found to be due or remaining due under subsection H I of this section shall be added to that amount for each month or fraction of a month between the due date of the return and the date on which it was filed, plus interest at a rate determined pursuant to section 42‑1123. The total penalty shall not exceed twenty‑five per cent of the amount found to be remaining due. The penalty is due and payable on notice and demand from the licensing authority. If an action has been filed by the licensing authority for revocation of a license, the court shall award reasonable attorney fees to the licensing authority as a part of the proceedings if the licensing authority prevails in the proceedings.

D. Except for a class A licensee, all monies collected or received from the sale of admission, extra regular cards, special game cards, sale of supplies and all other receipts from the games of bingo or charity game tickets, or both, shall be deposited in a special account of the licensee, which shall contain only such money. Except for a class A licensee, all expenses for bingo games, except cash prizes in the amount of less than one hundred fifty dollars, and all expenses for CHARITY game tickets, except cash prizes in the amount of two hundred fifty dollars or less, shall be withdrawn from the licensee's special account by consecutively numbered checks duly signed by a specified officer or officers of the licensee or the supervisor and payable to a specific person or organization. Class A licensees shall pay all bingo game prizes, except cash prizes in an amount less than one hundred fifty dollars, by check duly signed by a specified person or persons or the supervisor. A check shall not be drawn to "cash" or a fictitious payee. A check drawn on a licensee's special account shall not be payable to the licensee. Checks drawn against the net proceeds in the special account shall be drawn only for lawful uses and purposes. The licensee may establish interest bearing accounts, which shall contain only monies transferred from the licensee's special account, but all monies, interest and other proceeds shall be redeposited to the special account before being used for lawful uses and purposes.

E. A licensee shall maintain a permanent record containing the signature of each player who receives a bingo cash prize from such licensee and the amount of the bingo cash prize awarded to such player.

F. The net profits after they have been given over to another organization shall not be used by the donee organization to pay any person for services rendered or materials purchased in connection with the conducting of bingo or charity game tickets, or both, by the donor organization.

G. Expenses shall not be incurred or paid in connection with holding, operating or conducting any game of bingo or charity game tickets, or both, pursuant to any license, except bona fide expenses of a reasonable amount. Expenses may be incurred only for the following purposes:

1. The purchase of goods, wares and merchandise furnished.

2. Payment for services rendered.

3. Rent.

4. Accountants' fees.

5. License fees.

6. Utility expenses.

7. Security guards.

8. Compensation not to exceed the current federal minimum wage plus twenty per cent.

9. Mortgage payments when a nonprofit charitable organization licensee is using the building or premises for both bingo or charity game tickets, or both, and for the licensee’s bona fide charity.

10. Advertising.

H. For the purposes of In this subsection G of this section:

(a) 1. "Goods, wares and merchandise" means prizes, equipment and articles of a minor nature such as pencils, crayons, tickets, envelopes, paper clips and coupons necessary for the conduct of games of bingo or charity game tickets, or both.

(b) 2. "Services rendered" means repair to equipment, reasonable compensation to bookkeepers or accountants, not more than two in the aggregate, for services in preparing financial reports and a reasonable amount for janitorial service and security guards. Services rendered do not include and no item of expense may be incurred or paid for service of any nature whatever rendered by a member or new member, including, without limitation except as provided by subsection G, paragraph 8 of this subsection section, equipment repair, bookkeeping, accounting, janitorial service, security guard service or operating, conducting or managing a bingo or charity game ticket game, or both, or providing any professional or consultation service related to bingo or charity game tickets, or both.

H. I. In lieu of the taxes collected under title 42, chapter 5, article 1 there shall be paid to the state licensing authority a tax in the amount prescribed in section 5‑414. The taxes collected pursuant to this section shall be deposited in the state general fund. All administrative receipts, including license fees, penalties and interest, collected by the state pursuant to this article shall be deposited in the state general fund.

I. J. Each licensee, at the time each financial report is submitted to the licensing authority, shall pay to the order of the licensing authority the amount of tax provided in subsection H I of this section. END_STATUTE

Sec. 9. Section 5-408, Arizona Revised Statutes, is amended to read:

START_STATUTE5-408. Examination of books and records

The licensing authority and its agents shall have power to examine or cause to be examined the books, records and bingo paper or charity game ticket inventory of any licensee to which any such license is issued so far as they may relate to any transactions connected with the holding, operating and conducting of any game of bingo or charity game tickets, or both. Such records shall be maintained and available to the licensing authority for a period of three years. END_STATUTE

Sec. 10. Section 5-409, Arizona Revised Statutes, is amended to read:

START_STATUTE5-409. Forfeiture of license; ineligibility to apply for license; classification

Any person who knowingly makes any false statement in any application for any license pursuant to this article or in any statement annexed to the application or fails to keep sufficient books and records to substantiate the financial reports required under section 5‑407 or knowingly falsifies any books or records so far as they relate to any transaction connected with the holding, operating and conducting of any game of bingo or charity game tickets, or both, under any license or violates any of the provisions of this article or of any term of a license is guilty of a class 2 misdemeanor and shall, if convicted, in addition to suffering any other penalties which that may be imposed, shall forfeit any license issued to it pursuant to this article and shall be ineligible to apply for a license pursuant to this article for at least five years thereafter after the conviction. END_STATUTE

Sec. 11. Section 5-412, Arizona Revised Statutes, is amended to read:

START_STATUTE5-412. Preemption by state of taxation

Excise taxation of bingo or charity game tickets, or both, is preempted by the state, and a any county, city, town or other political subdivision of this state shall not levy an excise tax on bingo or charity game tickets, or both. END_STATUTE

Sec. 12. Section 5-413, Arizona Revised Statutes, is amended to read:

START_STATUTE5-413. License classifications; requirements

A. A class A bingo license may be issued to a person for the conduct of bingo games for which the gross receipts do not exceed fifteen thousand six hundred forty‑six thousand eight hundred dollars per year. A class A license shall not be issued to a person who holds a license issued pursuant to title 4 except a club license issued pursuant to section 4‑205. For a class A license:

1. Any person may apply as prescribed in this article.

2. The manager, proceeds coordinator, supervisor and assistant are not required to be members or new members.

3. The reporting period is one year coinciding with the term of the license.

B. A class B bingo license may be issued to a qualified organization for the conduct of bingo games for which the gross receipts do not exceed three hundred thousand dollars per year. For a class B license:

1. Only a qualified organization may apply.

2. The manager and supervisor shall be members of the licensee.

3. The proceeds coordinator shall be an officer or director and a member of the licensee and is responsible for completion of the required financial report.

4. An assistant shall be a member or new member of the licensee.

5. There are four reporting periods coinciding with the quarters of the term of the license.

C. A class C bingo license may be issued to a qualified organization for the conduct of bingo games for which the gross receipts exceed three hundred thousand dollars per year. For a class C license:

1. Only a qualified organization may apply.

2. The manager and supervisor shall be members of the licensee.

3. The proceeds coordinator shall be an officer or director and a member of the licensee and is responsible for completion of the required financial report.

4. An assistant shall be a member or new member of the licensee.

5. There are twelve reporting periods coinciding with each month of the term of the license.

D. A class D charity game ticket license may be issued for the conduct of charity game tickets to a qualified organization that operates with a class B or class C bingo license or any charitable organization that operates a private, members‑only club that meets the requirements prescribed in section 4-101, paragraph 7, subdivision (a), (b) or (c). For a class D license:

1. Only a qualified organization may apply for the license.

2. The manager and supervisor shall be members of the licensee organization.

3. The proceeds coordinator shall be an officer or director and a member of the licensee organization and shall be responsible for completion of the required financial report.

4. The licensee organization shall file twelve reports that coincide with each month of the term of the license. END_STATUTE

Sec. 13. Section 5-414, Arizona Revised Statutes, is amended to read:

START_STATUTE5-414. Fees; tax

A. The following fees and tax shall be assessed as prescribed in this article for the different license classes:

Local Governing

License Class Body Fee License Fee Bingo Tax

A $ 5.00 $ 10.00 2.5% of adjusted gross receipts

B 25.00 50.00 1.5% of gross receipts

C 50.00 200.00 2.0% of gross receipts

B. The licensing authority may assess and collect fees for class D charity game ticket licenses. END_STATUTE

Sec. 14. Title 5, chapter 4, article 1, Arizona Revised Statutes, is amended by adding sections 5-416, 5-417 and 5-418, to read:

START_STATUTE5-416. Charity game tickets; conduct times; location

A. Charity game tickets may be sold at licensed bingo games only during the authorized session times and no earlier than one hour before the start of the authorized session times and one hour after the end of the authorized session times.

B. Charity game tickets may be sold within a charitable organization's private club as prescribed in section 5-413, subsection d during the posted hours of operation of that club. END_STATUTE

START_STATUTE5-417. Charity game ticket limitations

A. The maximum price for an individual charity game ticket is one dollar.

B. The maximum prize for an individual charity game ticket is five hundred dollars.

C. The maximum number of charity game tickets in a set or deal is four thousand tickets.

D. The prizes awarded for charity game ticket games are not subject to the bingo prize limits prescribed in section 5-406, subsection P. END_STATUTE

START_STATUTE5-418. Licensing of charity game ticket manufacturers and distributors; fees; restriction on sales; quality standards

A. Any person that sells charity game tickets to organizations licensed to conduct games of bingo or charity game tickets, or both, shall obtain a distributor's license from the licensing authority for a fee to be determined by the director of the licensing authority.

B. Any manufacturer of charity game tickets that sells to distributors in this state shall obtain a manufacturer's license from the licensing authority for a fee to be determined by the director of the licensing authority.

C. The licensing authority shall adopt rules prescribing the qualifications for manufacturers' and distributors' licenses.

D. Licensed manufacturers shall sell charity game tickets only to licensed distributors in this state.

E. Licensed distributors shall purchase charity game tickets only from licensed manufacturers for all sales to licensed organizations in this state.

F. Licensed organizations shall purchase all charity game tickets only from licensed distributors.

G. No charity game tickets may be sold in this state that do not conform to the standards for opacity, randomization, minimum information, winner protection, color and cutting for charity game tickets established by a recognized gaming regulators association selected by the licensing authority. END_STATUTE