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LEGISLATIVE BILL 685
Approved by the Governor April 15, 2024
Introduced by Lowe, 37; Briese, 41.
A BILL FOR AN ACT relating to law; to amend sections 77-3002, 77-3003, 77-3004,
77-3005, and 77-3009, Reissue Revised Statutes of Nebraska, sections
77-3001, 77-3003.01, 77-3003.02, 77-3006, 77-3007, 77-3008, 77-3011, and
81-3729, Revised Statutes Cumulative Supplement, 2022, and sections
9-1,101 and 53-101, Revised Statutes Supplement, 2023; to provide for the use of certain funds; to provide requirements for licensees under the Nebraska Liquor Control Act selling co-branded alcoholic beverages; to provide, change, and eliminate definitions; to change and eliminate provisions of the Mechanical Amusement Device Tax Act relating to
licensure, powers and duties of the Department of Revenue and Tax Commissioner, operation of cash devices, taxes, and penalties; to change the age at which a person may play a mechanical amusement device; to prohibit taxes by political subdivisions; to provide for a central server;
to provide a tax on cash devices; to harmonize provisions; and to repeal the original sections.
Be it enacted by the people of the State of Nebraska,
Section 1. Section 9-1,101, Revised Statutes Supplement, 2023, is amended to read:
9-1,101 (1) The Nebraska Bingo Act, the Nebraska County and City Lottery Act, the Nebraska Lottery and Raffle Act, the Nebraska Pickle Card Lottery Act,
the Nebraska Small Lottery and Raffle Act, and section 9-701 shall be
administered and enforced by the Charitable Gaming Division of the Department of Revenue, which division is hereby created. The Department of Revenue shall make annual reports to the Governor, Legislature, Auditor of Public Accounts,
and Attorney General on all tax revenue received, expenses incurred, and other activities relating to the administration and enforcement of such acts. The report submitted to the Legislature shall be submitted electronically.
(2) The Charitable Gaming Operations Fund is hereby created. Any money in
the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.
(3)(a) Forty percent of the taxes collected pursuant to sections 9-239,
9-344, 9-429, and 9-648 shall be available to the Charitable Gaming Division for administering and enforcing the acts listed in subsection (1) of this section and providing administrative support for the Nebraska Commission on
Problem Gambling. The remaining sixty percent shall be transferred to the General Fund. Any portion of the forty percent not used by the division in the administration and enforcement of such acts and section shall be distributed as
provided in this subsection.
(b) Beginning July 1, 2019, through June 30, 2025, on or before the last day of the last month of each calendar quarter, the State Treasurer shall transfer one hundred thousand dollars from the Charitable Gaming Operations Fund to the Compulsive Gamblers Assistance Fund.
(c) Any money remaining in the Charitable Gaming Operations Fund after the transfer pursuant to subdivision (b) of this subsection not used by the Charitable Gaming Division in its administration and enforcement duties pursuant to this section may be transferred to the General Fund and the Compulsive Gamblers Assistance Fund at the direction of the Legislature.
(4) The Tax Commissioner shall employ investigators who shall be vested with the authority and power of a law enforcement officer to carry out the laws of this state administered by the Tax Commissioner or the Department of Revenue and to enforce sections 28-1101 to 28-1117 relating to possession of a gambling device. For purposes of enforcing sections 28-1101 to 28-1117, the authority of
the investigators shall be limited to investigating possession of a gambling device, notifying local law enforcement authorities, and reporting suspected violations to the county attorney for prosecution.
(5) The Charitable Gaming Division may charge a fee for publications and listings it produces. The fee shall not exceed the cost of publication and distribution of such items. The division may also charge a fee for making a copy of any record in its possession equal to the actual cost per page. The division shall remit the fees to the State Treasurer for credit to the Charitable Gaming Operations Fund.
(6) The taxes collected and available to the Charitable Gaming Division pursuant to section 17 of this act shall be used by the division for enforcement of the Mechanical Amusement Device Tax Act and maintenance of the central server established pursuant to section 16 of this act.
(7) (6) For administrative purposes only, the Nebraska Commission on
Problem Gambling shall be located within the Charitable Gaming Division. The division shall provide office space, furniture, equipment, and stationery and other necessary supplies for the commission. Commission staff shall be
appointed, supervised, and terminated by the director of the Gamblers Assistance Program pursuant to section 9-1004.
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Sec. 2. Section 53-101, Revised Statutes Supplement, 2023, is amended to
read:
53-101 Sections 53-101 to 53-1,122 and section 3 of this act shall be
known and may be cited as the Nebraska Liquor Control Act.
Sec. 3. (1) For purposes of this section:
(a) Co-branded alcoholic beverage means an alcoholic liquor beverage containing the same or similar brand name, logo, or packaging as a nonalcoholic beverage;
(b) Immediately adjacent means directly touching or immediately bordering one another from above, below, or the side. Immediately adjacent does not include a separate aisle; and
(c) Retail sales floor means the part of a retailer's premises that contains goods on display that are freely accessible to the consumer.
(2) Except as provided in subsection (4) of this section, the holder of a retail license to sell alcoholic liquor, beer, or wine at retail for consumption off the licensed premises with a retail sales floor that is larger than two thousand five hundred square feet shall not display any co-branded alcoholic beverage immediately adjacent to any soft drink, fruit juice, bottled water, candy, or snack food portraying cartoons or youth-oriented images.
(3) Except as provided in subsection (4) of this section, the holder of a retail license to sell alcoholic liquor, beer, or wine at retail for consumption off the licensed premises with a retail sales floor that is two thousand five hundred square feet or smaller shall either:
(a) Not place any co-branded alcoholic beverage immediately adjacent to
any soft drink, fruit juice, bottled water, candy, or snack food portraying cartoons or youth-oriented images; or
(b) Equip any such display containing any co-branded alcoholic beverage immediately adjacent to any soft drink, fruit juice, bottled water, candy, or snack food portraying cartoons or youth-oriented images with signage that indicates the product is an alcoholic beverage. Such signage shall be clearly visible to consumers, shall be not less than eight and one-half by eleven inches in size, and shall contain language substantially similar to: "This product is an alcoholic beverage available only to persons who are twenty-one years of age or older."
(4) This section does not apply to a shelf, aisle, display, or display area in which the primary items for sale contain alcoholic liquor or in an area in which persons younger than twenty-one years of age are prohibited from entering without a parent or legal guardian.
(5) The commission may cause inspection to be made on the premises of all retail licensees relating to co-branded alcoholic beverage displays, and if it is found that any such licensee is violating this section or any rules and regulations adopted and promulgated by the commission pursuant to this section,
the license may be suspended, canceled, or revoked after the licensee is given an opportunity to be heard in the licensee's defense.
Sec. 4. Section 77-3001, Revised Statutes Cumulative Supplement, 2022, is amended to read:
77-3001 For purposes of the Mechanical Amusement Device Tax Act, unless the context otherwise requires:
(1) Cash device means any mechanical amusement device capable of awarding
(a) cash, (b) anything redeemable for cash, (c) gift cards, credit, or other instruments which have a value denominated by reference to an amount of
currency, or (d) anything redeemable for anything described in subdivision (c)
of this subdivision;
(2) Department means the Department of Revenue;
(3) Distributor means any person who places and who either directly or
indirectly controls or manages sells, leases, or delivers possession or custody of a machine or mechanical amusement device within a retail establishment within the State of Nebraska to operators thereof for a consideration either directly or indirectly received;
(4) Manufacturer means an individual, partnership, corporation, or limited liability company that manufactures, builds, rebuilds, fabricates, assembles,
produces, programs, designs, or otherwise makes modifications to cash devices or associated equipment for use or play of cash devices;
(5)(a) (4) Mechanical amusement device means any machine which, upon insertion of a coin, currency, credit card, or substitute into the machine,
operates or may be operated or used for a game, contest, or amusement of any description, such as, by way of example, but not by way of limitation, pinball games, shuffleboard, bowling games, radio-ray rifle games, baseball, football,
racing, boxing games, electronic video games of skill, and coin-operated pool tables. Mechanical amusement device also includes game and draw lotteries and coin-operated automatic musical devices.
(b) Mechanical amusement device does not mean vending machines which dispense tangible personal property, devices located in private homes for private use, pickle card dispensing devices which are required to be registered with the department pursuant to section 9-345.03, gaming devices or limited gaming devices as defined in and operated pursuant to the Nebraska Racetrack Gaming Act, or devices which are mechanically constructed in a manner that would render their operation illegal under the laws of the State of Nebraska;
(6) Net operating revenue means the dollar amount collected by a distributor or operator of any cash device computed pursuant to applicable statutes, rules, and regulations less the total of cash awards paid out to
players by the cash device as described in subdivision (1) of this section;
(7) (5) Operator means any person who operates a place of business in
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which a mechanical amusement machine or device owned by him or her is
physically located or any person who places and who either directly or
indirectly controls or manages any machine or device;
(8) (6) Person means an individual, partnership, limited liability company, society, association, joint-stock company, corporation, estate,
receiver, lessee, trustee, assignee, referee, or other person acting in a fiduciary or representative capacity, whether appointed by a court or
otherwise, and any combination of individuals; and
(7) Whenever in the act, the words machine or device are used, they refer to mechanical amusement device;
(9) (8) Whenever in the Mechanical Amusement Device Tax Act act, the words electronic video games of skill, games of skill, or skill-based devices are used, they refer to mechanical amusement devices which produce an outcome predominantly caused by skill and not chance. ; and
(9) Whenever in the act, the words machine, device, person, operator, or distributor are used, the words in the singular include the plural and in the plural include the singular.
Sec. 5. Section 77-3002, Reissue Revised Statutes of Nebraska, is amended to read:
77-3002 (1) Any operator shall be required to procure an annual license from the Tax Commissioner permitting him or her to operate mechanical amusement machines or devices within the State of Nebraska. The Tax Commissioner, upon the application of any person, may issue a license, except that if the applicant (a) is not of good character and reputation in the community in which he or she resides, (b) has been convicted of or has pleaded guilty to a felony under the laws of the State of Nebraska, of any other state, or of the United States, or (c) has been convicted of or has pleaded guilty to being the proprietor of a gambling house, or of any other crime or misdemeanor opposed to
decency and morality, no license shall be issued. If the applicant is a corporation whose majority stockholders could not obtain a license, then such corporation shall not be issued a license. If the applicant is an individual,
the application shall include the applicant's social security number. Procuring
a license shall constitute sufficient contact with this state for the exercise of personal jurisdiction over such person in any action arising out of the operation of mechanical amusement machines or devices in this state.
(2)(a) Except for an applicant that holds a liquor license under the Nebraska Liquor Control Act, an applicant for a license as an operator of a cash device shall be subject to a one-time background check by the department prior to the issuance of a license. An applicant shall pay the costs associated with the background check along with any required fees as determined by the department.
(b) The Tax Commissioner has the authority to deny any application for a license as an operator of a cash device for cause. Cause for denial of a license application includes instances in which the applicant individually, or in the case of a business entity, any officer, director, employee, or limited liability company member of the applicant or licensee other than an employee whose duties are purely ministerial in nature:
(i) Violated the provisions, requirements, conditions, limitations, or duties imposed by the Mechanical Amusement Device Tax Act or any rules or
regulations adopted and promulgated pursuant to the act;
(ii) Knowingly caused, aided, abetted, or conspired with another to cause any person to violate any of the provisions of the act or any rules or
regulations adopted and promulgated pursuant to the act;
(iii) Obtained a license or permit under the act by fraud,
misrepresentation, or concealment;
(iv) Has been convicted of, forfeited bond upon a charge of, or pleaded guilty or nolo contendere to any offense or crime, whether a felony or a misdemeanor, involving any gambling activity or fraud, theft, willful failure to make required payments or reports, or filing false reports with a governmental agency at any level;
(v) Denied the department or its authorized representatives, including authorized law enforcement agencies, access to any place where activity required to be licensed under the act is being conducted or failed to produce for inspection or audit any book, record, document, or item required by law,
rule, or regulation;
(vi) Made a misrepresentation of or failed to disclose a material fact to
the department;
(vii) Failed to prove by clear and convincing evidence such applicant's qualifications to be licensed in accordance with the act;
(viii) Failed to pay any taxes and additions to taxes, including penalties and interest required by the act or any other taxes imposed pursuant to the Nebraska Revenue Act of 1967; or
(ix) Has been cited for a violation of the Nebraska Liquor Control Act and had a liquor license suspended, canceled, or revoked by the Nebraska Liquor Control Commission for illegal gambling activities on or about the premises licensed by the commission pursuant to the Nebraska Liquor Control Act or the rules and regulations adopted and promulgated pursuant to such act.
(c) No renewal of a license issued pursuant to this section shall be
issued when the applicant for renewal would not be eligible for a license upon
a first application.
(3) The Tax Commissioner has the authority to suspend or revoke the license of any operator that is in violation of the Mechanical Amusement Device Tax Act.
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(2)(a) For the period beginning July 1, 1998, through December 31, 1999,
if the applicant operates ten or more machines, the application shall be
accompanied by a fee of two hundred fifty dollars, and such license will remain in effect until December 31, 1999. If the applicant operates fewer than ten machines, no fee is due. Any licensee that places additional machines into operation during this period which results in a total of ten or more machines in operation becomes subject to the two-hundred-fifty-dollar fee.
(b) Beginning January 1, 2000, the application shall be filed on or before January 1 of each year, and no license fee will be required.
Sec. 6. Section 77-3003, Reissue Revised Statutes of Nebraska, is amended to read:
77-3003 (1) Any distributor shall be required to procure an annual license from the Tax Commissioner permitting him or her to place and either directly or indirectly control or manage sell, lease, or deliver possession or
custody of a mechanical amusement machine or device within the State of
Nebraska. The Tax Commissioner, upon the application of any person, may issue a license, subject to the same limitations as an operator's license under section
77-3002. If the applicant is an individual, the application shall include the applicant's social security number. For applications filed for the period beginning July 1, 1998, through December 31, 1999, such application shall be
accompanied by a fee of two hundred fifty dollars, and the license shall remain in effect until December 31, 1999. Beginning January 1, 2000, the application shall be filed on or before January 1 of each year, and no license fee will be
required.
(2)(a) Except for an applicant that holds a liquor license under the Nebraska Liquor Control Act, an applicant for a license as a distributor of a cash device shall be subject to a one-time background check by the department prior to issuance of the license. An applicant shall pay the costs associated with the background check along with any required fees as determined by