PART VI.  FRANCHISE PAYMENTS, FEES, DISTRIBUTION OF REVENUE

§435.  Licensing by division; fees; franchise payments; enforcement activities

A.  The division or the Louisiana Gaming Board shall issue the kinds of licenses set forth in this Section.  The kinds of licenses issued under this Section and the annual fee to be paid by the holder of each license shall be as follows:

(1)

Repealed by Acts 2001, No. 1222, §2, eff. July 2, 2001.

(2)

Distributor

$10,000

(3)

Service Entity

$  2,000

(4)

Device Owner

$  2,000

(5)

Device Operation:

(a)

A restaurant, bar, tavern, cocktail lounge,

club, motel, or hotel

$     250

(b)(i)

A Louisiana State Racing Commission

licensed pari-mutuel wagering facility

$  1,250

(ii)

A Louisiana State Racing Commission

licensed offtrack wagering facility

$  1,000

(c)

A qualified truck stop facility

$  1,000

(6)

Licensed Establishment

$     100

B.  A device owner shall pay a device owner fee for the privilege of owning and operating video draw poker devices and shall not be required to pay more than one device owner fee.  A separate device operation fee, payable by the device owner, shall be levied for each video draw poker device placed by the device owner at a licensed establishment.  The device operation fee may be paid in quarterly installments.

C.  The device owner fee shall be due and payable in addition to any licensed establishment fee resulting from the placement of a video draw poker device at that establishment.  If more than one video draw poker device is placed at a licensed establishment, only one licensed establishment fee is due for that establishment.

D.(1)  Each device owner shall remit to the division a franchise payment, in an amount equal to a percentage of the net device revenue derived from the operation of each video draw poker device owned by him.  The amount of the percentage shall be based on the type of licensed establishment authorized by the division for the placement of video draw poker devices, as follows:

(a)  A restaurant, bar, tavern, cocktail lounge, club, motel, or hotel ....... 26%.

(b)  A qualified truck stop facility ...... 32.5%.

(2)  Notwithstanding the provisions of Paragraph (1) of this Subsection, when the distribution of net device revenues is governed by R.S. 27:438, the franchise payment shall be twenty-two and one-half percent of the net device revenues after deducting the amount of the distribution required by R.S. 27:438.

(3)  Revenues received from franchise payments shall be deposited in the state treasury and may be used for enforcement activities, subject to legislative appropriation, in accordance with the provisions of R.S. 27:437.

(4)  Of the amount attributable to the payment of franchise fees as required in this Section, an amount equal to the avails of one-half of one percent of the franchise fee rate shall be allocated as provided in R.S. 27:437 and appropriated by the legislature as provided in R.S. 27:439.

(5)  The franchise payment authorized by the provisions of  this Section shall be securely held by the device owner on behalf of the state of Louisiana, until such time as the franchise payment is remitted to and received by the division.  Any  franchise payment held in accordance with the provisions of this Paragraph shall be deemed to be held in trust for the state of Louisiana.  Upon  the failure of a device owner to remit any portion of the franchise payment to the division, the device owner and its shareholders, officers, and directors if a corporation, its partners if a partnership, and its members, managers, and managing members if a limited liability company, shall be jointly and severally liable to the state of Louisiana for the franchise payment until it is remitted to and received by the division.

(6)  The Louisiana Gaming Control Board shall adopt rules to provide for the collection of franchise payments as provided for in this Section.  Such rules shall be adopted pursuant to the provisions of the Administrative Procedure Act and R.S. 27:15(B)(8).

E.  No license shall be issued by the division except upon receipt of a sworn application and a finding by the division that the applicant, the application, and all persons described in R.S. 27:427 meet the requirements of that Section.

F.(1)  A device owner shall not be required to maintain a minimum balance or security in their video gaming sweep account unless that device owner has had a nonsufficient fund return within the past three years.

(2)  In the event of a nonsufficient fund return, as provided for in Paragraph (1) of this Subsection, the device owner shall be fined two hundred fifty dollars for the first offense, five hundred dollars for the second offense, and for a third or subsequent offense, a fine of one thousand dollars or be subject to administrative action including but not limited to suspension or revocation of license, or both.

G.  Any license issued pursuant to the provisions of this Chapter shall be personal to the licensee to whom it was issued and shall not be transferable.

H.  A processing fee shall be charged by the division as follows:

(1)  New applications for establishments authorized to operate up to twelve devices, offtrack wagering facilities, and pari-mutuel wagering facilities, one thousand dollars.

(2)  New applications for truck stop facilities, ten thousand dollars.

(3)  License renewals or the submission of the annual fee required by the provisions of Paragraph (K)(4) of this Section for facilities authorized to operate up to twelve devices, offtrack wagering facilities, and pari-mutuel wagering facilities, one hundred dollars.

(4)  License renewals or the submission of the annual fee required by the provisions of Paragraph (K)(4) of this Section for truck stop facilities, one thousand dollars.

(5)  Stock or membership sales or transfers of fifty percent or more of a licensed corporation or limited liability company, one thousand dollars.

I.  No person who is licensed as a distributor, device owner, or service entity and whose business is located in a parish in which a majority of the electors voted against the continuance of the operation of video draw poker devices in the election authorized in R.S. 18:1300.21 shall be required to relocate his business in a parish in which a majority of the electors voted in favor of permitting the continuation of the operation of video draw poker devices in order to maintain his license.  The business or office location of any person who is licensed as a distributor, device owner, or service entity may be located in a parish in which a majority of the electors voted against the  continuance of the operation of video draw poker devices in the election authorized in R.S. 18:1300.21.

J.  Within a maximum period of one hundred twenty days from receipt of the license application, the Louisiana Gaming Control Board shall either issue the license or send a detailed explanation as to why the license has not been issued to the license applicant.

K.(1)  All licenses to operate video draw poker devices in parishes in which a majority of the electors voted against the operation of video draw poker devices in a valid election provided for by R.S. 18:1300.21 expired on June 30, 1999, and shall not be renewed.

(2)(a)  In any parish which, after June 30, 1999, withdraws such authority as the result of an election held in the parish on the question of the operation of video draw poker devices in the parish, the term of any licenses issued for the operation of video draw poker devices shall terminate on the date of termination of such authority in such parish regardless of when the license was issued or for what term.

(b)  If the state terminates the authority to operate video draw poker devices in the entire state or any part of the state, the term of any licenses issued for the operation of video draw poker devices shall terminate on the date of termination of such authority regardless of when the license was issued or for what term.

(3)  Except as provided in this Subsection, all licenses to operate video draw poker devices in parishes which have not voted against the operation of video draw poker devices shall be for a term of five years.  Licenses issued on and subsequent to July 1, 2004, shall expire on June thirtieth of the fifth year from the date of issuance.  The board may establish by rule a procedure to implement this provision.

(4)(a)  Each license issued is contingent upon the payment by July first of each year of the annual fees required in this Section.  Each license issued is also contingent on the continuation of the authority in each parish to operate video draw poker devices.  The payment of the annual fee provided for in this Paragraph shall apply to the fees authorized by the provisions of Subsections A and H of this Section.

(b)  If the required annual fees are submitted after July first but on or before July thirty-first, the licensee shall be subject to the following penalty:

(i)  Establishments authorized to operate up to three video draw poker devices, two hundred fifty dollars.

(ii)  Establishments authorized to operate more than three video draw poker devices, device owners, service entities, and distributors, five hundred dollars.

(c)  If the required annual fees are submitted after July thirty-first but on or before August thirty-first, the licensee shall be subject to the following penalty:

(i)  Establishments authorized to operate up to three video draw poker devices, five hundred dollars.

(ii)  Establishments authorized to operate more than three video draw poker devices, device owners, service entities, and distributors, one thousand dollars.

(d)  Failure to submit the annual fee on or before August thirty-first may be cause for suspension or revocation of the license.  In lieu of suspension or revocation of the license, the board may levy a fine not to exceed ten thousand dollars.

(5)  The Gaming Control Board shall establish by rule a procedure for issuing and renewing licenses that are issued or renewed prior to July 1, 2004, so that a similar number of licenses will come up for renewal in each subsequent year. The rule may provide for a one-time renewal period of less than a five-year duration. Licenses shall be issued to qualified persons who meet the definitions provided in R.S. 27:402 and the state license qualifications set forth in R.S. 27:412 and who comply with the provisions of this Chapter.

L.  If a complete application for renewal is filed with the division within thirty calendar days after the expiration of the license, the renewal application will be processed according to established procedures; however, the applicant shall be subject to a five-hundred dollar penalty for late submission of the application.

M.  If a complete application for renewal has not been filed with the division on or before the thirtieth calendar day from the date of expiration of the license, the license shall expire, and a new application, along with all appropriate fees, shall be required to be filed.

Acts 1991, No. 1062, §1, eff. July 30, 1991; Acts 1992, No. 1041, §1, eff. July 13, 1992; Acts 1992, No. 1045, §1, eff. July 1, 1992; Acts 1994, 3rd Ex. Sess., No. 12, §1, eff. July 1, 1994.  Redesignated from R.S. 33:4862.11 by Acts 1996, 1st Ex. Sess., No. 7, §3, eff. May 1, 1996; Acts 1997, No. 547, §1; Acts 1999, No. 51, §1; Acts 1999, No. 490, §1, eff. June 22, 1999; Acts 1999, No. 1385, §1; Acts 2001, No. 1222, §2, eff. July 2, 2001; Acts 2003, No. 349, §1; Acts 2003, No. 1290, §1; Acts 2004, No. 817, §1; Acts 2005, No. 61, §1; Acts 2007, No. 469, §1, eff. July 1, 2008; Acts 2012, No. 161, §4; Acts 2012, No. 709, §1.