AGO 2004-10.

• Case Date: February 09, 2005
• Court: Indiana

Indiana Attorney General Opinions 2005. AGO 2004-10. February 9, 2005Originally issued August 6, 2003 OFFICIAL OPINION 2004-10The Honorable Tim Berry Treasurer of State Indianapolis,Indiana 46204 Re: Distribution of wagering tax under Indiana Code section 4-33-13-5Dear Treasurer Berry: This letter responds to your request for an advisory opinion on the appropriate interpretation of Indiana Code section 4-33-13-5 relating to the distribution of riverboat wagering taxes. That statute directs your office to pay certain expenses and gives detailed instructions for the distribution of the money in the state gaming fund. Your offices is also required to certify a "base year revenue" figure that puts a cap or upper limit on the total amount of wagering taxes annually distributed to a city or county having a riverboat. We have also received correspondence from a number of legislators representing districts in which riverboats are located suggesting that the legislative intent was that base year revenue be calculated before making deductions for the Commission's expenses, and that the statute is ambiguous in this regard. It is our opinion that the statute is not ambiguous, and that base year revenue is calculated after deducting from the state gaming fund the amount necessary to cover the Gaming Commission's expenses of administering riverboat gambling. ANALYSIS Money from riverboat gambling authorized by Indiana Code, title 4, article 33 flows to the state, its agencies, or its local units of government from two sources: the riverboat admissions tax and the riverboat wagering taxes. The riverboat admissions tax, authorized and described at Indiana Code section 4-33-12-6, is distributed primarily to the local units of government where the riverboat is located, with additional allocations also made to the State Fair Commission, to the Division of Mental Health and Addiction, and to the Horse Racing Commission. This guarantees the designated entities an annual, stable, recurring amount of revenue generated by admissions taxes. If the amount of admissions taxes available for distribution falls below the base amount, the entity receives a supplemental distribution pursuant to Indiana Code section 4-33-13-5(g). The tax on adjusted gross receipts from riverboat gambling (the "wagering tax") is authorized by Indiana Code section 4-33-13-1. Indiana Code section 4-33-13-2 establishes the state gaming fund, and-Indiana Code section 4-33-13-3 requires the department of revenue "to deposit tax revenue collected under this chapter in the state gaming fund." It is from this fund that the State's costs of administering riverboat gambling are paid: Sufficient funds are annually appropriated to the [Indiana gaming] commission from the state gaming fund to administer this article [Indiana Code article 4-33, Riverboat Gambling]. Ind. Code § 4-33-13-4. The General Assembly has enacted a very detailed statute covering how these wagering taxes are to be distributed. For purposes of our analysis the relevant sections of Indiana Code section 4-33-13-5, as amended by Public Law Number 192-20113, provides (emphasis added):(fn1)

(a) This subsection does not apply to tax revenue remitted by an operating agent operating a riverboat in a historic hotel district. After funds are appropriated under, echo 4of trig chapter, each month the treasurer of state shall distribute the tax revenue deposited in the state gaming fund under this chapter to the following:

(1) The first thirty-three million dollars ($33,000,000) of tax revenues collected under this chapter shall be set aside for revenue sharing under subsection (c).

(2) Subject to subsection (c), twenty-five percent (25/0) of the remaining tax revenue remitted by each licensed owner shall be paid:

(A) to the city that is designated as the home dock of the riverboat from which the tax revenue was collected, in the case of:

(i) a city described in IC 4-33-12-fi(b)(1)(A) [Michigan City]; or

(ii) a city located in a county having a population of more than four hundred thousand (400,000) but less than seven hundred thousand (700,000) fL ake County]; or

(B) to the county that is designated as the home dock of the riverboat

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