House State Affairs Minutes 02/20/1998 10:00 AM

73rd Legislative Session -- 1998

Committee: House State Affairs

Friday, February 20, 1998

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P      Broderick
P      Brown (Richard)
P      Cutler
P      Hagg
P      Hunt
P      Jorgensen
P      Roe
P      Haley
P      Koetzle
P      Lucas
P      Schaunaman
P      Pederson (Gordon), Vice-Chair
P      Gabriel, Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Vice Chair Gordon Pederson.

MOTION:      TO APPROVE THE MINUTES OF FEBRUARY 18, 1998.

Moved by:      Representative Lucas
Second by:      Representative Koetzle
Action:      Prevailed by voice vote.

The Chair deferred SB 240 until Monday, February 23, 1998.

Chair Larry Gabriel assumed the chair.

SB 233: to reduce the property tax levies for general funds of a school district for the purposes of maintaining the relationship between state aid to general education and local effort and to provide for a five percent reduction in property taxes for certain types of property.

Presented by: Curt Everson, Commissioner, Bureau of Finance and Management

MOTION:      DO PASS SB 233

Moved by:      Representative Jorgensen
Second by:      Representative Roe
Action:      Prevailed by roll call vote. (11-0-2-0)

Voting yes:      Broderick, Brown (Richard), Cutler, Hagg, Jorgensen, Roe, Koetzle, Lucas, Schaunaman, Pederson (Gordon), Gabriel

Excused:      Hunt, Haley

          SB 92: to revise certain provisions regarding the recording of a social security number for the purposes of driver licensing.

Comments:      Cindy Gerber, Department of Commerce and Regulation

MOTION:      AMEND SB 92

On the previously adopted amendment, in the last sentence of the first section, delete " driver's license " and insert " social security " .

Moved by:      Representative Cutler
Second by:      Representative Brown (Richard)
Action:      Prevailed by voice vote.

MOTION:      DO PASS SB 92 AS AMENDED

Moved by:      Representative Cutler
Second by:      Representative Brown (Richard)
Action:      Prevailed by roll call vote. (10-0-3-0)

Voting yes:      Broderick, Brown (Richard), Cutler, Jorgensen, Roe, Koetzle, Lucas, Schaunaman, Pederson (Gordon), Gabriel

Excused:      Hagg, Hunt, Haley

MOTION:      TO AMEND TITLE OF SB 92

On page 1 , line 1 of the Senate State Affairs committee engrossed bill , delete everything after " to " and insert " limit the information that may be contained on a driver's license. " .

On page 1 , delete line 2 .

Moved by:      Representative Cutler
Second by:      Representative Brown (Richard)
Action:      Prevailed by voice vote.

          SB 165: to provide an exemption from the Uniform Unclaimed Property Act for certain unredeemed gift certificates.

Proponents:      Jerry Wheeler, lobbyist, SD Retailers Association
Opponents:      Representative Al Waltman, self
          Richard Butler, Treasurer, State of South Dakota
          Warren Foss, State Treasurer's Office
Presented by:      Senator Harold Halverson, prime sponsor

MOTION:      AMEND SB 165

On page 1 , line 12 of the Senate State Affairs committee engrossed bill , delete " one hundred " and insert " twenty " .

Moved by:      Representative Lucas
Second by:      Representative Haley
Action:      Prevailed by voice vote.

MOTION:      AMEND SB 165

On page 1 , line 12 of the Senate State Affairs committee engrossed bill , delete " twenty " and insert " fifty " .

Moved by:      Representative Brown (Richard)
Second by:      Representative Pederson (Gordon)
Action:      Was not acted on.

MOTION:      SUBSTITUTE MOTION TO TABLE THE BROWN AMENDMENT.

Moved by:      Representative Schaunaman
Second by:      Representative Broderick
Action:      Prevailed by voice vote.

MOTION:      DO PASS SB 165 AS AMENDED

Moved by:      Representative Lucas
Second by:      Representative Haley
Action:      Prevailed by roll call vote. (7-6-0-0)

Voting yes:      Cutler, Hunt, Jorgensen, Roe, Lucas, Pederson (Gordon), Gabriel

Voting no:      Broderick, Brown (Richard), Hagg, Haley, Koetzle, Schaunaman

          HCR 1011: Supporting the Dakota, Minnesota & Eastern Railroad's renovation and expansion project.

Presented by:      Representative Pat Haley, sponsor

MOTION:      TO TABLE HCR1011

Moved by:      Representative Pederson (Gordon)
Second by:      Representative Koetzle
Action:      Prevailed by roll call vote. (9-1-3-0)

Voting yes:      Broderick, Cutler, Hunt, Roe, Haley, Koetzle, Lucas, Schaunaman, Pederson (Gordon)

Voting no:      Gabriel

Excused:      Brown (Richard), Hagg, Jorgensen

Vice Chair Pederson assumed the chair.

          SB 147: to study the effects of gaming in South Dakota.

Proponents:      Bob Riter, Lobbyist, SD Music and Vending Machines

Opponents:      Representative Mike Derby
          Bob Riter (opposed to amendments)
          Tim Dougherty, lobbyist, SD Wholesale Liquor Dealers (opposed to amendments)
Presented by:      Senator Michael Rounds, sponsor

MOTION:      AMEND SB 147

On the printed bill, delete everything after the enacting clause and insert:

" Section 1. That § 42-7A-63 be amended to read as follows:

42-7A-63. The commission shall maximize revenues to the state from video lottery. The state's percentage of net machine income shall be fifty percent until June 30, 1999, forty-five percent from July 1, 1999 to June 30, 2000, inclusive, forty percent from July 1, 2000 to June 30, 2001, inclusive, thirty-five percent from July 1, 2001 to June 30, 2002, and thirty percent from July 1, 2002 to June 30, 2003. . The state's percentage of net machine income shall be directly deposited to the property

tax reduction fund, except for one-half of one percent of net machine income authorized for deposit into the video lottery operating fund. ~~The effective date of this section is July 1, 1996.~~

     Section 2. That chapter 42-7A be amended by adding thereto a NEW SECTION to read as follows:

    No additional video lottery machines may be placed in any licensed establishment.

Section 3. That § 42-7A-37.1 be amended to read as follows:

42-7A-37.1. A business licensed pursuant to subdivision 35-4-2 (12) and (16) may not be a licensed establishment for video lottery placement pursuant to subdivision 42-7A-1 (6) unless it is a bar or lounge. For the purposes of this section, a bar or lounge is an enterprise primarily maintained and operated for the selling, dispensing and consumption of alcoholic beverages on the premises and may also include the sale and service of food. A bar or lounge may be physically connected to another enterprise within the same building, which enterprise may be owned or operated by the same person. There may be interior access between a bar or lounge and a connected enterprise. However, there shall be a floor to ceiling opaque wall separation between the two enterprises. A separation wall may be constructed to provide visual and physical access for employees from areas in the building not open to the public. The bar or lounge shall have a separate entrance and exit. A separate entrance and exit is not required if entrance to the bar may only be obtained from the other distinct enterprise and the public may not enter the other enterprise by first passing through the bar or lounge. All video lottery machines shall be adequately monitored during business hours. Adequate monitoring shall be accomplished by the personal presence of an employee or by an employee using video cameras or mirrors and periodic inspections of the bar or lounge. No new license may be issued to any establishment after ~~July 1, 1992, unless such establishment complies with this section~~ the effective date of this section. No license may be transferred to any establishment after the effective date of this section . No license may be renewed to any establishment after July 1, 1993, unless such establishment complies with this section.

Section 4. That chapter 42-7A be amended by adding thereto a NEW SECTION to read as follows:

As a condition to holding a license as a licensed establishment, no licensee may use any phrase other than "video lottery" in any indoor sign installed for exterior advertising purposes or any outdoor sign to advertise such establishment as having video lottery machines or being a casino. This section applies to any sign which is physically attached to such establishment, located on or near the business property, or installed for exterior advertising purposes. The commission shall suspend the license of any establishment that violates this section. The suspension shall remain in effect until such time as the commission determines the licensed establishment does comply with this section.

Section 5. That chapter 10-45 be amended by adding thereto a NEW SECTION to read as follows:

There is imposed a tax of four percent upon the gross receipts from all sales of food, as defined by the Food Stamp Act of 1977 (P.L. 95-113), codified at 7 U.S.C. § 2012(g), as amended through January 1, 1998.

Section 6. That chapter 10-46 be amended by adding thereto a NEW SECTION to read as follows:

Section 7. That § 10-45-2 be amended to read as follows:

10-45-2. There is hereby imposed a tax upon the privilege of engaging in business as a retailer, a tax of four and one-half percent upon the gross receipts of all sales of tangible personal property consisting of goods, wares, or merchandise, except as taxed by § 10-45-3 and except as otherwise provided in this chapter, sold at retail in the State of South Dakota to consumers or users.

Section 8. That § 10-45-3 be amended to read as follows:

10-45-3. There is hereby imposed a tax of three and one-half percent on the gross receipts from the sale or resale of farm machinery and attachment units other than replacement parts; or irrigation equipment used exclusively for agricultural purposes by licensed South Dakota retailers; provided, however, that whenever any trade-in or exchange of used farm machinery is involved in the transaction, the tax shall only be due and collected on the cash difference.

Section 9. That § 10-45-5 be amended to read as follows:

10-45-5. There is imposed a tax at the rate of three and one-half percent upon the gross receipts of any person from engaging in the business of leasing farm machinery or irrigation equipment used for agricultural purposes and four and one-half percent upon the gross receipts of any person from engaging or continuing in any of the following businesses or services in this state: abstracters; accountants; architects; barbers; beauty shops; bill collection services; blacksmith shops; car washing; dry cleaning; dyeing; exterminators; garage and service stations; garment alteration; cleaning and pressing; janitorial services and supplies; specialty cleaners; laundry; linen and towel supply; membership or entrance fees for the use of a facility or for the right to purchase tangible personal property or services; photography; photo developing and enlarging; tire recapping; welding and all repair services; cable television; and rentals of tangible personal property except leases of tangible personal property between one telephone company and another telephone company, motor vehicles as defined by § 32-5-1 leased under a single contract for more than twenty-eight days and mobile homes provided, however, that the specific enumeration of businesses and professions made in this section does not, in any way, limit the scope and effect of § 10-45-4.

Section 10. That § 10-45-5.3 be amended to read as follows:

10-45-5.3. There is imposed, at the rate of three and one-half percent, an excise tax on the gross receipts of any person engaging in oil and gas field services (group no. 138) as enumerated in the Standard Industrial Classification Manual, 1987, as prepared by the Statistical Policy Division of the Office of Management and Budget, Office of the President.

Section 11. That § 10-45-6 be amended to read as follows:

10-45-6. There is hereby imposed a tax of four and one-half percent upon the gross receipts from sales, furnishing, or service of gas, electricity, and water, including the gross receipts from such sales by any municipal corporation furnishing gas, and electricity, to the public in its proprietary capacity, except as otherwise provided in this chapter, when sold at retail in the State of South Dakota to consumers or users.

Section 12. That § 10-45-6.1 be amended to read as follows:

10-45-6.1. There is hereby imposed on amounts paid for local telephone services, toll telephone services and teletypewriter services, a tax of four and one-half percent of the amount so paid. The taxes imposed by this section shall be paid by the person paying for the services. If a bill is rendered the taxpayer for local telephone service or toll telephone service, the amount on which the tax with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that if a person who renders the bill groups individual items for purposes of rendering the bill and computing the tax, then the amount on which the tax for each such group shall be based shall be the sum of all items within that group, and the tax on the remaining items not included in any such group shall be based on the charge for each item separately. If the tax imposed by this section with respect to toll telephone service is paid by inserting coins in coin operated telephones, the tax shall be computed to the nearest multiple of five cents, except that, where the tax is midway between multiples of five cents, the next higher multiple shall apply. The tax so paid shall be remitted at the same time as the sales tax imposed by this chapter.

Section 13. That § 10-45-8 be amended to read as follows:

10-45-8. There is imposed a tax of four and one-half percent upon the gross receipts from all sales of tickets or admissions to places of amusement and athletic events, except as otherwise provided in this chapter.

Section 14. That § 10-45-70 be amended to read as follows:

10-45-70. There is imposed a tax of four and one-half percent on the gross receipts from the transportation of tangible personal property. The tax imposed by this section shall apply to any transportation of tangible personal property if both the origin and destination of the tangible personal property are within this state.

Section 15. That § 10-45-71 be amended to read as follows:

10-45-71. There is imposed a tax of four and one-half percent on the gross receipts from the transportation of passengers. The tax imposed by this section shall apply to any transportation of passengers if the passenger boards and exits the mode of transportation within this state.

Section 16. That § 10-46-2.1 be amended to read as follows:

10-46-2.1. For the privilege of using services in South Dakota, except those types of services exempted by § 10-46-17.3, there is imposed on the person using the service an excise tax equal to four and one-half percent of the value of the services at the time they are rendered. However, this tax may not be imposed on any service rendered by a related corporation as defined in subdivision 10-43-1(11) for use by a financial institution as defined in subdivision 10-43-1(4) or on any service rendered by a financial institution as defined in subdivision 10-43-1(4) for use by a related corporation as defined in subdivision 10-43-1(11). For the purposes of this section, the term related corporation includes a corporation which together with the financial institution is part of a controlled group of corporations as defined in 26 U.S.C. § 1563 as in effect on January 1, 1989, except that the eighty percent ownership requirements set forth in 26 U.S.C. § 1563(a)(2)(A) for a brother-sister controlled group are reduced to fifty-one percent. For the purpose of this chapter, services rendered by an employee for the use of ~~his~~ the employer are not taxable.

Section 17. That § 10-46-2.2 be amended to read as follows:
10-46-2.2. An excise tax is imposed upon the privilege of the use of rented tangible personal property in this state at the rate of four and one-half percent of the rental payments upon the property.

Section 18. That § 10-46-57 be amended to read as follows:

10-46-57. There is imposed a tax of four and one-half percent on the privilege of the use of any transportation of tangible personal property. The tax imposed by this section shall apply to any transportation of tangible personal property if both the origin and destination of the tangible personal property are within this state.

Section 19. That § 10-46-58 be amended to read as follows:

10-46-58. There is imposed a tax of four and one-half percent on the privilege of the use of any transportation of passengers. The tax imposed by this section shall apply to any transportation of passengers if the passenger boards and exits the mode of transportation within this state.

Section 20. That § 10-58-1 be amended to read as follows:

10-58-1. There is imposed upon owners and operators a special amusement excise tax of four and one-half percent of the gross receipts from the operation of any mechanical or electronic amusement device.

Section 21. The secretary of revenue shall transfer the additional revenue received by the state from the increase of the sales and use tax imposed by this Act to the property tax reduction fund.

Section 22. That § 42-7A-1 be amended to read as follows:

42-7A-1. Terms used in this chapter mean:

(1) "Associated equipment," any proprietary device, machine or part used in the manufacture or maintenance of a video lottery machine, including but not limited to integrated circuit chips, printed wired assembly, printed wired boards, printing mechanisms, video display monitors and metering devices;

(2) "Commission," the South Dakota Lottery Commission;

(3) ~~"Credit," five, ten or twenty-five cents;~~

(4) "Executive director," the executive director of the South Dakota Lottery;

(5) "Instant lottery," a game that offers preprinted tickets that indicate immediately or in a grand prize drawing whether the player has won a prize;

(6) ~~"Licensed establishment," a bar or lounge owned or managed by an individual, partnership, corporation or association licensed to sell alcoholic beverages for consumption upon the premises where sold;~~

(7) "Lottery" or "state lottery," any lottery operated pursuant to this chapter;

(8) "Lottery retailer," any person with whom the South Dakota Lottery has contracted to sell lottery tickets to the public;

(9) "Lottery vendor" or "vendor," any person who has entered into a major procurement contract with the South Dakota Lottery;

(10) "Major procurement," any contract with any vendor directly involved in providing facilities, equipment, tickets and services unique to the lottery, but not including materials, supplies, equipment and services common to the ordinary operations of state agencies;

(11) ~~"Net machine income," money put into a video lottery machine minus credits paid out in cash;~~

(12) "On-line lottery," a game linked to a central computer via a telecommunications network in which the player selects a specified group of numbers or symbols out of a predetermined range of numbers or symbols as approved by the commission;

(13) "South Dakota Lottery," the state agency created by this chapter to operate a lottery pursuant to this chapter;

(14) "Ticket," any tangible evidence issued or authorized by the South Dakota Lottery to prove participation in an instant , or on-line ~~or video lottery~~ game ;

~~(14A) "Video lottery," any video game of chance played on video lottery machines;~~

~~(15) "Video lottery machine distributor," any individual, partnership, corporation or association that distributes or sells video lottery machines or associated equipment in this state;~~

(16) "Video lottery machine manufacturer," any individual, partnership, corporation or association that assembles or produces video lottery machines or associated equipment for sale or use in this state;

~~(17) "Video lottery machine operator," any individual, partnership, corporation or association that places video lottery machines or associated equipment for public use in this state; and~~

(18) "Video lottery machines," or "machine," any electronic video game machine that, upon insertion of cash, is available to play or simulate the play of a video game, including but not limited to video poker, keno and blackjack, authorized by the commission utilizing a video display and microprocessors in which, by chance, the player may receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses coins, cash or tokens .

Section 23. That § 42-7A-4 be amended to read as follows:

42-7A-4. The executive director may, subject to policy established by the commission:

(1) Supervise and administer the operation of the state lottery in accordance with the provisions of this chapter;

(2) Employ all other employees of the South Dakota Lottery;

(3) Enter into contracts for promotional services; annuities or other methods deemed appropriate for the payment of prizes; data processing and other technical products, equipment and services; and facilities as needed to operate the South Dakota Lottery including, without limitation, tickets and other services involved in major procurements;

(4) Contract with and license persons for the sale of lottery tickets ~~and the offering of video lottery games~~ to the public, as provided by this chapter and rules adopted pursuant thereto;

(5) Make demographic studies of lottery players and studies of reactions of citizens to existing and potential features of the lottery;

(6) Require lottery retailers and persons licensed pursuant to this chapter to furnish proof of financial stability or furnish surety in an amount based upon the expected volume of sales of lottery tickets ~~or net machine income~~ ;

(7) Provide for secure facilities to house the South Dakota Lottery;

(8) Provide for separate, distinct and secure data processing facilities to be used for the reliable operation of the state lottery;

(9) Examine, or cause to be examined by any agent or representative designated by the executive director, any books, papers, records or memoranda of any lottery retailer or person licensed pursuant to this chapter for the purpose of ascertaining compliance with any provision of this chapter or any rule adopted pursuant to this chapter;

(10) Issue subpoenas to compel access to or for the production of such books, papers, records or memoranda in the custody or control of any lottery retailer or person licensed pursuant to this chapter, or to compel the appearance of any of their employees, for the purpose of ascertaining compliance with any provision of this chapter or any rule adopted pursuant to this chapter;

(11) Administer oaths and take depositions to the same extent and subject to the same limitations as would apply if the deposition was in aid of a civil action in the circuit court;

(11A) ~~The lottery commission shall operate a video lottery undertaken pursuant to this chapter and may not contract or assign this responsibility to any other person;~~

(12) Impose civil fines not to exceed ten thousand dollars per violation and fifteen thousand dollars for any subsequent violation of any provision of this chapter or any rule adopted pursuant to this chapter; and

(13) Enter into written agreements or compacts with one or more other states for the operation, marketing and promotion of a joint lottery or joint lottery games.

Section 24. That § 42-7A-13 be amended to read as follows:

42-7A-13. To be selected as a lottery retailer ~~or video lottery machine operator~~ , a natural person acting as a sole proprietor shall:

(1) Be at least eighteen years of age;

(2) Be of good character and reputation;

(3) Have sufficient financial resources to support the activities required to sell lottery tickets ~~or place and service video lottery machines~~ ; and

(4) Be current in payment of all taxes, interest and penalties owed to the State of South Dakota, excluding items under formal dispute or appeal pursuant to applicable statutes.

A lottery retailer ~~or video lottery machine operator~~ may not be a lottery vendor or an employee or agent of any lottery vendor doing business with the South Dakota Lottery.

Section 25. That § 42-7A-15 be amended to read as follows:

42-7A-15. For a partnership to be selected as a lottery retailer ~~or video lottery machine operator~~ , the partnership shall meet the requirements of subdivisions 42-7A-13(3) and (4), and each partner thereof shall meet the requirements of subdivisions 42-7A-13(1) and (2) and subdivisions 42-7A-14(1) to (5), inclusive.

Section 26. That § 42-7A-16 be amended to read as follows:

42-7A-16. For an association or corporation to be selected as a lottery retailer ~~or video lottery machine operator~~ , the association or corporation shall meet the requirements of subdivisions 42-7A-13(3) and (4), and each officer and director and each stockholder who owns five percent or more of the stock of such association or corporation shall meet the requirements of subdivisions 42-7A-13(1) and (2) and subdivisions 42-7A-14(1) to (5), inclusive.

Section 27. That § 42-7A-21 be amended to read as follows:

42-7A-21. The commission shall promulgate rules pursuant to chapter 1-26 governing the establishment and operation of a state lottery as necessary to carry out the purposes of this chapter. The commission shall promulgate rules concerning the following:

(1) The types of ticket lottery games to be conducted as authorized pursuant to this chapter;

(2) The manner of selecting the winning tickets. However, if a lottery game utilizes a drawing of winning numbers, a drawing among entries, or a drawing among finalists, such drawings shall always be open to the public and shall be recorded on both video and audio tape;

(3) The manner of payment of prizes to the holders of winning tickets;

(4) The frequency of the drawings or selections of winning tickets;

(5) The types of locations at which tickets may be sold;

(6) The methods to be used in selling tickets;

(7) Additional qualifications for the selection of lottery retailers ~~, video lottery machine manufacturers, distributors or operators~~ and the amount of application fees to be paid by each;

(8) The amount and method of compensation to be paid to lottery retailers, including special bonuses and incentives;

(9) Deadlines for claims for prizes by winners of each lottery game. However, in no instance may such deadline be for more than one year; and

(10) ~~The mechanical and electronic specifications for each video lottery machine. At a minimum, each video lottery machine shall meet the requirements of § 42-7A-37;~~

(11) ~~Machine security testing and inspection procedures;~~

(12) ~~Liability for machine malfunction;~~

(13) ~~Machine maintenance and repair;~~

(14) ~~Financial responsibility of persons licensed under this chapter;~~

(15) ~~Accounting procedures for net machine income;~~

(16) ~~Licensing procedures under this chapter; and~~

(17) Such other matters necessary or desirable for the efficient or economical operation of the lottery or for the convenience of the public.

Section 28. That § 42-7A-24 be amended to read as follows:

42-7A-24. Net proceeds from the sale of instant lottery tickets shall be transferred to the state general fund on an annual basis after July first each year. The commission shall maximize the net proceeds to the state from the sale of instant and on-line lottery tickets. In no event may yearly lottery expenses for the sale of lottery tickets, excluding expenditures from retained earnings, exceed the amount of combined net proceeds transferred to the state general fund, the state corrections facility construction fund , and the state capital construction fund. ~~Net machine income from video lottery games shall be directly deposited in the state property tax reduction fund upon receipt.~~ Net proceeds are funds in the lottery operating fund which are not needed for the payment of prizes, lottery expenses, and total retained earnings up to one and one-half million dollars cash deemed necessary by the executive director and commission for replacement, maintenance and upgrade of business systems, product development, legal and operating contingencies of the lottery.

Beginning in fiscal year 1997 and each year thereafter, the commission shall transfer the first one million four hundred thousand dollars from the net proceeds from the sale of on-line ~~video~~ lottery tickets collected pursuant to § 42-7A-24 to the general fund. The commission shall then transfer an amount equal to the remaining net proceeds from the sale of on-line lottery tickets collected pursuant to § 42-7A-24 to the state capital construction fund created in § 5-27-1.

Section 29. That § § 35-4-103, 42-7A-37 to 42-7A-48, inclusive, 42-7A-57, 42-7A-58, 42-7A- 59, and 42-7A-61 to 42-7A-65, inclusive, be repealed.

Section 30. The effective date of sections 7 to 21, inclusive, of this Act is July 1, 1999 to July 1, 2009, inclusive.

Section 31. The effective date of sections 22 to 29, inclusive, of this Act is July 1, 2003.

Section 32. Whereas, sections 2 and 3 of this Act is necessary for the support of the state government and its existing public institutions, an emergency is hereby declared to exist, and sections 2 and 3 of this Act shall be in full force and effect from and after its passage and approval. "

Moved by:      Representative Gabriel
Second by:      Representative Schaunaman
Action:      Was not acted on.

MOTION:      SUBSTITUTE MOTION AMEND SB 147

On page 4 , after line 11 of the Senate engrossed bill , insert:

"      Section 5. That chapter 42-7A be amended by adding thereto a NEW SECTION to read as follows:

    No additional video lottery machines may be placed in any licensed establishment.

Section 6. That § 42-7A-37.1 be amended to read as follows:

42-7A-37.1. A business licensed pursuant to subdivision 35-4-2(12) and (16) may not be a licensed establishment for video lottery placement pursuant to subdivision 42-7A-1(6) unless it is a bar or lounge. For the purposes of this section, a bar or lounge is an enterprise primarily maintained and operated for the selling, dispensing and consumption of alcoholic beverages on the premises and may also include the sale and service of food. A bar or lounge may be physically connected to another enterprise within the same building, which enterprise may be owned or operated by the same person. There may be interior access between a bar or lounge and a connected enterprise. However, there shall be a floor to ceiling opaque wall separation between the two enterprises. A separation wall may be constructed to provide visual and physical access for employees from areas in the building not open to the public. The bar or lounge shall have a separate entrance and exit. A separate entrance and exit is not required if entrance to the bar may only be obtained from the other distinct enterprise and the public may not enter the other enterprise by first passing through the bar or lounge. All video lottery machines shall be adequately monitored during business hours. Adequate monitoring shall be accomplished by the personal presence of an employee or by an employee using video cameras or mirrors and periodic inspections of the bar or lounge. No new license may be issued to any establishment after ~~July 1, 1992, unless such establishment complies with this section~~ the effective date of this section. No license may be transferred to any establishment after the effective date of this section . No license may be renewed to any establishment after July 1, 1993, unless such establishment complies with this section.

Section 7. Whereas, this Act is necessary for the support of the state government and its existing public institutions, an emergency is hereby declared to exist, and this Act shall be in full force and effect from and after its passage and approval. "

Moved by:      Representative Gabriel
Second by:      Representative Jorgensen
Action:      Was not acted on.

The chair ruled to divide the question.

MOTION:      AMEND SB 147

On page 4 , after line 11 of the Senate engrossed bill , insert:

"      Section 5. That chapter 42-7A be amended by adding thereto a NEW SECTION to read as follows:

    No additional video lottery machines may be placed in any licensed establishment. "

Action: Prevailed by voice vote.

MOTION: AMEND SB 147

On page 4 , after line 11 of the Senate engrossed bill , insert:

" Section 6. That § 42-7A-37.1 be amended to read as follows:

42-7A-37.1. A business licensed pursuant to subdivision 35-4-2(12) and (16) may not be a licensed establishment for video lottery placement pursuant to subdivision 42-7A-1(6) unless it is a bar or lounge. For the purposes of this section, a bar or lounge is an enterprise primarily maintained and operated for the selling, dispensing and consumption of alcoholic beverages on the premises and may also include the sale and service of food. A bar or lounge may be physically connected to another enterprise within the same building, which enterprise may be owned or operated by the same person. There may be interior access between a bar or lounge and a connected enterprise. However, there shall be a floor to ceiling opaque wall separation between the two enterprises. A separation wall may be constructed to provide visual and physical access for employees from areas in the building not open to the public. The bar or lounge shall have a separate entrance and exit. A separate entrance and exit is not required if entrance to the bar may only be obtained from the other distinct enterprise and the public may not enter the other enterprise by first passing through the bar or lounge. All video lottery machines shall be adequately monitored during business hours. Adequate

monitoring shall be accomplished by the personal presence of an employee or by an employee using video cameras or mirrors and periodic inspections of the bar or lounge. No new license may be issued to any establishment after ~~July 1, 1992, unless such establishment complies with this section~~ the effective date of this section. No license may be transferred to any establishment after the effective date of this section . No license may be renewed to any establishment after July 1, 1993, unless such establishment complies with this section. "

Action: Failed by a show of hands.

MOTION: AMEND SB 147

On page 4 , after line 11 of the Senate engrossed bill , insert:

" Section 7. Whereas, this Act is necessary for the support of the state government and its existing public institutions, an emergency is hereby declared to exist, and this Act shall be in full force and effect from and after its passage and approval. "

Action: Prevailed by show of hands.

MOTION: AMEND SB 147

On page 1 , delete lines 3 to 15 of the Senate engrossed bill , inclusive , and insert:

" Section 1. The Executive Board of the Legislative Research Council shall appoint an interim legislative committee to study the effects that video lottery has had on the state and the citizens of the state, to study the possible effects of a repeal of video lottery, and to study the need to replace any revenues to the state if video lottery is repealed and, if necessary, to study possible options for replacement revenue. The committee shall make a report of its findings and its recommendations to the 1999 Legislature. "

Delete pages 2 and 3 .

On page 4 , delete lines 1 to 11 , inclusive .

Moved by:      Representative Cutler
Second by:      Representative Lucas
Action:      Was not acted on.

MOTION:      SUBSTITUTE MOTION AMEND SB 147

On page 1 , delete lines 3 to 15 of the Senate engrossed bill , inclusive , and insert:

" Section 1. The Executive Board of the Legislative Research Council shall retain an outside neutral independent firm to study the effects that video lottery has had on the state and the citizens of the state, to study the possible effects of a repeal of video lottery, and to study the need to replace any revenues to the state if video lottery is repealed and, if necessary, to study possible options for replacement revenue. The firm shall make a report of its findings and its recommendations to the 1999 Legislature. All costs of retaining an outside neutral independent firm shall be paid by the South Dakota Lottery from revenues generated from the state's share of video lottery revenues. "

Delete pages 2 and 3 .

On page 4 , delete lines 1 to 11 , inclusive .

Moved by:      Representative Schaunaman
Second by:      Representative Gabriel
Action:      Was not acted on.

MOTION:      DEFER SB 147 AND ALL PENDING AMENDMENTS UNTIL MONDAY, FEBRUARY 23, 1998

Moved by:      Representative Roe
Second by:      Representative Koetzle
Action:      Prevailed by a show of hands.

The Chair deferred SJR4 until Monday, February 23, 1998.

MOTION:      ADJOURN

Moved by:      Representative Koetzle
Second by:      Representative Hunt
Action:      Prevailed by voice vote.

Clara Shelbourn

_________________________________

Committee Secretary

Larry E. Gabriel, Chair

../02201000.HST Page 1