IN THE CIRCUIT COURT OF HOUSTON COUNTY, ALABAMA STATE OF ALABAMA by and through Attorney General Luther Strange, Plaintiff,

v. $283,657.68 U.S. Currency, et al. Defendants. MOTION TO DISMISS Comes now Houston Economic Development Authority (hereinafter "HEDA"), in a limited appearance for the limited purpose set forth herein and without waving any
defenses or claims and states that HEDA is a rightful and legal owner of Defendant United
States Currency (the "Currency") in this case and the rightful and legal possessor and lessee of Defendant computers, monitors and RuBingo equipment (the "Electronics") (jointly, the "Property"). Pursuant to Rules 12(b)(2), (4), (5) and (6) of the Alabama Rules of Civil Procedure, HEDA respectfully moves this Honorable Court to enter an Order dismissing Plaintiff' s Complaint on the following grounds:

FILED
AUG 2 4 2012
Carla Woodall, Clerk b-rouston County, AL

Case Number: CV-2012-900266

1.

Facts

a.

Charitable bingo in Houston County is exempt from Section 13A-12-20,

et. seq. pursuant to passage of local Houston County Amendment 569 to the Constitution of the State of Alabama which legalizes "[t]he operation of bingo games for prizes or money by certain nonprofit organizations and certain private clubs for charitable, educational, or other lawful

purposes in Houston County, subject to any resolution or ordinance by the county commission as provided by law regulating the operation of bingo." b. The Houston County Commission passed Resolution 10-10, which regulates

charitable bingo operations, including the requirement that any charitable bingo operation within Houston County, Alabama is required to obtain a permit from the County in order to operate legally. (Exhibit A, attached hereto). HEDA holds a Class C Special Permit for the operation of charitable bingo at 300 Country Crossing Parkway, Cottonwood, Houston County, Alabama. (Exhibit B, attached hereto). c. states as follows: "Bingo Equipment and Supplies" shall mean any electronic or mechanical equipment, machine or device, or computer or other technologic hardware or device, (i) which is installed, or is to be installed, at a Bingo facility and (ii) which is used, or can be used, to play Bingo as herein defined. Bingo Equipment shall not be deemed to be for any purpose a "gambling device" or "slot machine" within the meaning of the Code of Alabama 1975, Sections 13A-12-20(5) and (10) or any other provision of law, whether now in effect or hereinafter enacted. Section 8 of Resolution 10-10 requires that Bingo games that use an electronic player station ("EPS device") shall have a Machine Bingo Stamp issued by Houston County affixed to each EPS device. Each EPS device seized from the premises on July 25, 2012 bore the required Houston County Machine Bingo Stamp. d. On or about July 25, 2012 a search warrant was executed at 300 Country Additionally, Section 1(b) of Houston County, Alabama Resolution 10-10

Crossing Parkway, Cottonwood, Alabama (the "Premises"). Currency and Electronics were seized, but no one was arrested at that time and, to date, no criminal charges that relate to the activities at the Premises or to the seized property have been filed against anyone.

e.

On July 26, 2012, the State filed a forfeiture petition (the "Complaint")

which commenced the instant cause of action. f. The Complaint states as to the Currency only that said "Currency was in

violation of the law of the State of Alabama, and was used as bets or stakes in gambling activity in violation of the law of the State of Alabama concerning gambling, in violation of and contrary to Section 13A-12-20, et seq., including Section 13A-12-30, Code of Alabama, (1975)." (Plaintiffs Complaint, p.11). Similarly, the Complaint as to the Electronics states only that the "property constituted gambling devices and slot machines in violation of the law of the State of Alabama, and contrary to Section 13A-12-20, et seq.,including Section 13A-12-30, Code of Alabama, (1975)." (Plaintiffs Complaint, p. 23). 2.
Lack of Jurisdiction Over HEDA, Insufficiency of Process and Insufficiency of Service of Process (Rules 12(b)(2), (4) and (5))

a.

Rule 81(a)(12) Alabama Rules of Civil Procedure mandates that the State's

action seeking "forfeiture of contraband property," is governed by the Alabama Rules of Civil Procedure. Rule 4 Alabama Rules of Civil Procedure provides as follows: Upon the filing of the complaint...the clerk shall forthwith issue the required summons or other process for service upon each defendant." Rule 4(a)(2) states that "[t]he summons, or other process or each of them in cases involving multiple defendants, shall be signed by the clerk, contain the name of the court and the name of the first party on each side with an appropriate indication of the other parties in cases involving multiple parties, be directed to the defendant or each defendant in cases involving multiple defendants, state the name and address of the plaintiffs attorney..., and the time within which these rules require the defendant to appear and defend, and shall notify the defendant that, in case of the defendants failure to do so, judgment by default will be rendered against the defendant for the relief demanded in the complaint.

Rule 4(i) then sets forth the acceptable means of service including delivery by a process server or by certified mail. b. In the instant case the State has directed the issuance and service of a

summons on only one entity, Center Stage Alabama, Inc.' The State has failed to direct the clerk to issue a summons to HEDA, despite the state's knowledge that HEDA is a real party in interest with respect to the Property and HEDA's participation in the case is essential to finality of any judgment entered in this case. See Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 110 (1969)(judgment against Hazeltine vacated because it was not named as a party or served, even though, as the parent corporation of one of the parties, it clearly knew of the claim against it and had made a special appearance to contest jurisdiction). c. It is well settled that "[t]he law does not impose upon any person

absolutely entitled to a hearing the burden of voluntary intervention in a suit to which he is a stranger...unless duly summoned to appear in a legal proceeding, a person not privy may rest assured that a judgment recovered therein will not affect his legal rights." Martin v. Wilks, 490

U.S. 755, 763 (1989). "Joinder as a party...is the method by which potential parties are subjected to the jurisdiction of the court and bound by a judgment or decree. The parties to a lawsuit presumably know better than anyone else the nature and scope of relief sought in the action, and at whose expense such relief might be granted. It makes sense, therefore, to place on them a burden of bringing in additional parties where such a step is indicated, rather than placing on potential additional parties a duty to intervene when they acquire knowledge of the lawsuit." Id. at 765. "A party seeking a judgment binding on another cannot obligate that person to Id. at 782. See also Frahn v. Greyling Realization Corp., 239

intervene; he must be joined."

1 Center Stage Alabama, Inc. owns the name "Center Stage" but on information and belief, has no interest in any of the Property seized during the execution of the search warrant.

Ala. 580, 583, (1940) ("it is a rule as old as the law that no one shall be personally bound until he
has had his day in court, by which is meant, until he has been duly cited to appear, and has been afforded an opportunity to be heard.") (Emphasis Added) d. Because no summons has been issued to or served upon HEDA, there is

insufficiency of service of process. Additionally, if a defect in a summons is sufficient to establish insufficiency of process, then it necessarily follows that the absence of any summons would clearly constitute insufficiency of process. Heise v. Olympus Optical Co., 111 F.R.D. 1, 5 (N.D. Ind. 1986); Northland Paper Co. v. Mohawk Tablet Co., 271 F. Supp. 763 (S.D. N.Y. 1967). Furthermore, with the absence of sufficient service of process, this Court lacks personal
jurisdiction over HEDA. Martin v. Wilks, 490 U.S. 755, 765 (1989).
3.

Failure to State a Claim on Which Relief Can Be Granted

a. In the Complaint, the Attorney General's office is seeking to have all

electronic equipment and all Currency seized from the Premises on July 25, 2012, forfeited on the ground that the Currency was used as bets or stakes in alleged gambling activity and the Electronics constituted alleged gambling devices and slot machines, both in violation of Section 13A-12-20, et seq., including Section 13A-12-30, Code of Alabama, (1975). (Plaintiff's
Complaint, p.11, 23).

b.

As authority for the forfeiture, the Complaint cites only to "Alabama Code

13A-12-20, et seq., including 13A-12-30 (1975)." Section 13A-12-30(a), Code of Alabama, states that "any gambling device or gambling record possessed or used in violation of this
article is forfeited to the state, and shall by court order be destroyed or otherwise disposed of as the court directs." (emphasis added). Section 13A-12-20 (12) defines "unlawful" as "not

specifically authorized by law." "Used in violation" means exactly what it says, that the items

sought to be forfeited were used in violation of Section 13A-12-20, et seq. Therefore, the forfeiture section of this article is directly tied to the penal provision requiring that the State prove either possession of an illegal gambling device as defined in the statutory language above or other violation of the article in order to seek forfeiture. c. The Supreme Court of Alabama has consistently stated that "[p]enal

statutes are to reach no further in meaning than their words." Clements v. State, 370 So.2d 723, 725 (Ala. 1979), overruled on other grounds, Beck v. State, 396 So.2d 645 (Ala. 1980); See also State ex rel. Graddick v. Jebsen S. (U.K.) Ltd., 377 So.2d 940, 942 (Ala. 1979) (holding that `penal statutes are to be strictly construed in favor of the persons sought to be subjected to their operation'). Furthermore, "[n]o person is to be made subject to penal statutes by implication and all doubts concerning their interpretation are to predominate in favor of the accused." Clements,

370 So.2d at 725. It is clear that this proceeding is essentially and effectively penal in nature and the Complaint is deficient because HEDA is being denied the requirement of adequate notice of the factual basis and elements of the alleged offense, that was allegedly committed. Thus, HEDA is being denied its due process rights under the Fifth and/or Fourteenth Amendments to the United States Constitution. d. Additionally the Complaint ignores that in Houston County charitable bingo

is exempt from Section 13A-12-20 and that Bingo Equipment and Supplies as defined in 1(b) of Houston County, Alabama Resolution 10-10 are specifically excluded from the provisions of 13A-12-20 (5) and (10). The Complaint also ignores that in addition to charitable bingo, three other businesses and venues operate at the address searched: a restaurant, a lounge and an entertainment venue offering karaoke and comedy contests. None of these businesses operated charity bingo, yet the State made no distinction and seized the Property of these businesses as

well. The State has not charged or alleged that any individual or entity is in violation of Section 13A-12-20 et seq. Holding the statute at issue in this case to the plain "meaning of their words" requires that the Property had to be an illegal possession or "used in violation" of the law. Section 13A-12-30(a). This Court has no jurisdiction under the cited statute to order the forfeiture of property that does not violate state law. e. Plaintiff's Complaint makes conclusory allegations that the Property is

criminal contraband without specifying how HEDA's charitable bingo operation, that has been authorized by the Houston County Commission, falls outside of the protective umbrella of Constitutional Amendment 569 and into the illegal activity described in 13A-12-20, et seq., Code of Alabama, (1975). Plaintiffs complaint does not even specify which criminal statute has been violated, broadly citing Section 13A-12-20 through Section 13A-12-30, which contains eleven code sections defining at least six separate and distinct criminal violations. Such generalized pleading fails to show that the pleader is entitled to relief, as required by Rule 8(a)(1) Alabama Rules of Civil Procedure, and more importantly, fails to give HEDA fair notice of the ground on which the Attorney General's claim rests. f. The State's Complaint thus fails to meet the general notice requirement of

Rule 8(1) Alabama Rules of Civil Procedure in that it fails to provide notice of even the most basic allegations as to how the Property has violated any law, or which of the eleven code sections was violated. 1977). g. Assuming solely for the purposes of argument that the Complaint did comply with the basic notice requirement of Rule 8, in the instant case, because the Complaint is based on alleged criminal violations, but no criminal charges have been brought, a more rigorous Carter v. Calhoun County Board of Education, 345 So. 2d 1351 (Ala.

pleading standard similar to that found in Rule 9(b) should be required. While Rule 9(b) was written to address pleadings that allege fraud, the heightened standard of pleading has been extended in some cases. Magouirk v. Colvin, 669 So. 2d 201 (Ala. Civ. App. 1995)( extending a heightened standard to pleading civil conspiracy); Nabors v. St. Paul Ins. Co., 489 So. 2d 573, 574 (Ala. 1986)(extending a heightened standard to pleading the tort of outrage); Fullman

Graddick, 739 F.2d 553, 558-59 (11th Cir. 1984)(extending a heightened pleading standard to
cases where absolute immunity is applicable). A similar extension would be appropriate in this case where the Plaintiffs Complaint is based entirely on accusations of criminal activity, without any factual allegations from which such criminal activity can be inferred. Furthermore, despite these criminal allegations, no arrests have been made and no criminal charge has been brought. Because no arrests have been made or charges brought, there has been no arrest warrant or indictment to provide notice of the specific conduct alleged to be illegal. Had an arrest been made, such arrest would be ineffective based merely upon the conclusory allegations contained in Plaintiffs complaint. (See Swain v. State, 504 So.2d 347 (Ala.Crim.App. 1986) (affidavit giving rise to arrest warrant is wholly insufficient to support a warrant of arrest because it is purely conclusory); Crittendon v. State, 476 So.2d 626 (Ala.Crim.App. 1985) (nothing more than the affiant's conclusion that the individual named therein had perpetrated the described offense, without setting out any factual basis for such conclusion held insufficient); Malone v. State, 282 So.2d 367 (Ala.Crim.App. 1973)). h. A more appropriate standard in a case such as this, where a criminal case

is masquerading as a civil forfeiture, is found in Rule 2.3 of the Alabama Rules of Criminal

Procedure, which requires a criminal complaint to set forth "essential facts constituting an
offense and alleging that the defendant committed the offense." The State's pleadings should be

required to state with particularity how it claims the Property and/or HEDA is in violation of Alabama law. i. Furthermore, it appears that the search warrant was issued in contravention of clearly established law. Both the United States and Alabama Constitutions prohibit warrantless searches outside of limited exceptions. The Alabama Constitution provides: "[t]hat the people shall be secure in their persons, houses, papers, and possessions from unreasonable seizure or searches, and that no wan -ants shall issue to search any place or to seize any person or thing without probable cause, supported by oath or affirmation." Ala. Const. Art. I, Section 5 (emphasis added). This requirement is also codified and provides that "[a] search warrant can only be issued on probable cause, supported by an affidavit naming or describing the person and particularly describing the property and the place to be searched." Ala. Code Section 15-5-3 (1975) (emphasis added). It is essential that an application for a search warrant must be supported by an affidavit showing the existence of probable cause to believe there is a violation of the law. In the absence of such a showing, a search warrant is not valid. A search warrant issued without substantially conforming to some law authorizing its issue is void. Thrash v.

Bennett, 57 Ala. 156, 1876 WL 1331, *4 (Ala. 1876); Coleman v. State ex rel. Wild, 61 So. 20, 22 (Ala. 1913). Furthermore, "the magistrate cannot rely upon other factors not set forth in the affidavit and not made known to the magistrate but which are within the personal knowledge of the complaining officer." Murry v. State, 261 So.2d 922, 926 (Ala. Crim. App. 1972). The remedy for this defect is suppression of the evidence. Id. An affidavit in support of a search

warrant is also insufficient where it is conclusory and does not set out any facts from which the magistrate could make a finding of probable cause for the search. Mayes v. State, 260 So.2d 403,

405-06 (Ala. Crim. App. 1972). Goodman v. State, 278 So.2d 729, 733 (Ala. Crim. App. 1973).

It necessarily follows that if a search is invalid for lack of particularity in the affidavit, that a

search warrant with no affidavit at all is likewise invalid. J. In this case, no probable cause affidavit was filed with the return on the

warrant. Counsel for HEDA has twice requested that the State provide a copy of the affidavit upon which probable cause was supposedly based and the State has refused. Because no affidavit was filed with the return and because the State has refused all requests to provide the affidavit, it appears that there was no affidavit made to support the search warrant. There is likewise no indication that a record was created by any information given to the issuing magistrate under oath. Because there is no affidavit or any other documentation supporting the assertions contained in the warrant filed with the clerk by the State, the warrant is facially invalid and, therefore, the warrant and the fruits of its search are due to be suppressed. Because the items seized under an invalid warrant are due to be suppressed, it stands to reason that the instant action is due to be dismissed. k. In addition to the foregoing, because the seizure was executed in order to

initiate a civil forfeiture, the seizure is really nothing more than a prejudgment seizure of property governed by Rule 64 Alabama Rules of Civil Procedure. Rule 64(a) states "[t]here can be no seizure of property through judicial process prior to the entry of judgment other than by a judicial officer acting pursuant to the procedure set forth in paragraph (b) of this rule." Paragraph (b) provides: "[w]henever any provision of law is invoked through which there is an attempt to seize property through judicial process prior to the entry of judgment, the procedure on application for such a prejudgment seizure shall be as follows: (1) Affidavit. The plaintiff shall file with the court an affidavit on personal knowledge, except where specifically provided otherwise, containing the following information: (A) Description of the property... (B) Statement of title or right...(C) Statement of wrongful detention...(D) Statement 10

of risk of injury...." (Rule 64 (b)(2) Alabama Rules of Civil Procedure) Once an affidavit containing the preceding information has been filed the court is to examine the complaint, application, affidavit, and any other supporting documents or evidence provided by the plaintiff and if the court after such preliminary examination fails to find that there is real risk of concealment, transfer or other disposal of or damage to the property if it remains in the possession of the defendant the application is due to be set for hearing, and the order setting such hearing shall direct the defendant to not dispose of or alter the property in question in any way pending the hearing. Because the State has elected to pursue a civil forfeiture governed by the Alabama Rules of Civil Procedure and has failed to comply with the requirements of Rule 64 Alabama Rules of Civil Procedure the Complaint is due to be dismissed. 1. By proceeding against these defendants and the subject property under the

Rules of Civil Procedure, rather than the Rules of Criminal Procedure, the State has necessarily elected to be subject to the procedures established by Rule 64. It is quite evident that the State has made no attempt to charge any person or the subject property in this case, under the criminal rules. In fact, it is manifest under the criminal rules that there is not even a criminal proceeding pending with regard to these defendants, because there has been no criminal complaint or indictment instituted against them. See Alabama Rules of Criminal Procedures 2.1 (criminal proceeding is instituted by a criminal complaint or indictment). m. The State of Alabama has engaged in a pattern and practice of denying

due process by exploiting what the State perceives is a loophole between the criminal rules and civil rules that permits it to seize property without notice or a hearing, in violation of the Fourteenth Amendment to the United States Constitution and the corresponding provisions of the

Alabama Constitution.
11

4.

Demand for Relief The State should not be rewarded for its manipulation of the Alabama Rules of

Civil and Criminal Procedure. Based on the above and foregoing, HEDA moves this Honorable Court for an order dismissing Plaintiffs Complaint and directing that the Property be returned to its rightful owners because: 1) the insufficiency of process and of service of process fails to create jurisdiction in this court over HEDA; and 2) the Complaint, using conclusory allegations only and failing to provide facts supporting its allegations, fails to state a claim on which relief can be granted.

FARMER, PRICE, HORNSBY & WEATHERFORD, L.L.P.

By:

Cecc.;

4-1AA4

ERNEST H. HORNSBY (H Attorney DA By:

010)

dry 0 al TT ( OL080)
Attorney for HEDA

OF COUNSEL: FARMER, PRICE, HORNSBY & WEATHERFORD, L.L.P. P. 0. Drawer 2228 Dothan, AL 36302 (334) 793-2424 ehornsby@fphw-law.com OF COUNSEL:
William C. White, II

PARKMAN & WHITE, LLC 1929 Third Avenue North Suite 700 Birmingham, AL 35203 (205) 244-1920 wwhite@parkmanlawfirm.com
12

CERTIFICATE OF SERVICE
The undersigned hereby certifies that on the Z4 day of August, 2012, a true and correct copy of the foregoing was served either electronically or by first class mail with the United States Postal Service and addressed as follows: Luther Strange Henry T. Reagan Jess R. Nix Office of the Attorney General 501 Washington Avenue P. 0. Box 300152 Montgomery, AL 36130-0152 Center Stage Alabama Inc. 111 East Main Street Dothan, AL 36301

OF COUNSEL

13

EXHIBIT A

RESOLUTION
Number 10-10

Promulgating Updated Rules and Regulations for the Operation of Charitable Bingo in Houston County
DATE APPROVED: 2 8 10 MINUTE BOOK 37 PAGE
-

WHEREAS, pursuant to the authority granted in Amendment Number 569 to the Constitution of Alabama of 1901, the Houston County Commission ("the Commission"), for the welfare and benefit of the citizens of Houston County ("the County") and the State of Alabama, desires to ensure that all forms of bingo made lawful in Houston County by Amendment Number 569, Constitution of Alabama of 1901 (designated in the official recompiled Constitution of Alabama of 1901 as Local Amendments to the Constitution of Alabama of 1901, Houston County 1) shall be regulated according to law.; WHEREAS, Amendment Number 569 to the Constitution of Alabama of 1901, ("Amendment 569") provides that

[t]he operation of bingo games for prizes or money by certain nonprofit organizations and certain private clubs for charitable, educational, or other lawful purposes (hereinafter referred to collectively as "Charitable Bingo" or "Charity Bingo') shall be legal in Houston County, subject to any resolution or ordinance by the county commission as provided by law regulating the operation of bingo. The county commission may promulgate rules and regulations for issuing permits or licenses and for operating bingo games within the county jurisdiction.
WHEREAS, on December 1, 2004, Alabama Attorney General Troy King ("the Attorney General") announced the findings from his unprecedented, hands-on evaluation and review of gambling occurring in Alabama ("A.G. Review"). WHEREAS, the Attorney General states in the findings of his A.G. Review that, notwithstanding his personal opposition to gambling, "Nt is not my job as Attorney General, however, to determine whether Alabama will allow gambling. It is not my personal belief on a public policy matter that controls my actions as Attorney General, but, instead, it is the law and my duty to faithfully enforce it that must guide me."

WHEREAS, the Attorney General in his A.G. Review states that "Alabama is a state with an unusual provision in her constitution that allows for the enactment of constitutional amendments affecting less than the whole state."

2655 v3

WHEREAS, Amendment 569 is one of eighteen different local constitutional amendments authorizing some form of bingo in a given city or county within the State of Alabama. WHEREAS, the Attorney General notes that "I'd he use of the word bingo is the source of much of the debate regarding what type of gambling is allowed in Alabama." He went on to describe what is meant by the term "bingo" under Alabama law as follows: Bingo evolved from a game that has been played in Italy since 1530. The game made its way across Europe and to the United States some time in the 1920s under the name "beano." It is a game played on a grid consisting of five horizontal and five vertical squares containing numbers that are covered up as numbers are randomly drawn and that is won when a preordained pattern is covered on the card. There are believed to be over 1.4 million variations of the "bingo" card. This is a game that must be played against other players and not played as a house banked game. Bingo has evolved from its origins hundreds of years ago to cards where the numbers are covered by buttons or other markers, to sheets of paper where the numbers are daubed with a paint pen, to laptop computer-like devices where multiple cards can be played simultaneously, to video consoles where the bingo game is simulated using computer chips.

The games played on these video consoles must have certain important features to be bingo: First, the game must incorporate the typical features of traditional bingo, including, but not limited to, a grid of five horizontal and five vertical squares, numbers randomly selected, and a preordained winning pattern. Spinning wheels and other video graphics must not affect game play. Second, just as in traditional bingo halls, players on the machines must compete against one another. Consequently, the electronic machines must be linked so that players are competing against each other to permit the machines to comply with the constitutional requirement of "bingo." For example, such a machine might depict a bingo card in the upper left hand corner of the machine, and as the game play commences, balls containing numbers begin to fall. When a number depicted on the card is dropped, it would be marked on the cards of those playing and players would win prizes in the same manner that they win prizes in traditional bingo halls. If the machines at any facility should ever be determined to be operating independently or hosting games for single participants, then these facilities would be operating outside the bounds of the constitutional grant and would be subject to the appropriate legal action.

2655 vl

WHEREAS, the Attorney General in his .A.G. Review, recognizes the impact of technology upon the game of "bingo" as he addresses the confusion that may ensue from the appearance or form of today's technologically advanced and computer generated "media" bingo games. The Attorney General states that Nt cannot be concluded, as some have, that just because the game is being played on video consoles, it is not "bingo." Just as no one would contend that e-mails are any less a form of correspondence than are letters written with a quill pen, but instead represent a technological evolution in correspondence, similarly, bingo games that are depicted on a video console can still be bingo albeit a technologically advanced form of bingo but bingo nonetheless. WHEREAS, the Attorney General has concluded "that, as a matter of law, machines that operate in the manner described above are permissible" in counties "operating under a valid constitutional amendment." WHEREAS, Amendment 569 as adopted by the Legislature and approved by vote of the people is a valid constitutional amendment which provides that Charitable Bingo "shall be legal in Houston County, subject to any resolution or ordinance by the county commission as provided by law regulating the operation of bingo." WHEREAS, Alabama Attorney General Opinion Number 97-072 held that once a valid constitutional amendment makes Charitable Bingo legal within the limits of a city or county, the city or county "does not have the authority to decline to permit bingo operations by qualified organizations, but that its power is limited to the authority to regulate bingo operations." WHEREAS, Amendment 569 related to Charitable Bingo in Houston County does not contemplate the impact of the technological evolution in computer technology upon the game of "bingo" and current "media" forms of "bingo" that have emerged from said technological advances; WHEREAS, the Houston County Commission, in exercising its delegated regulatory authority over the operation of Charity Bingo, seeks to implement licensing and permitting requirements that will foster effective long-term economic development within Houston County. WHEREAS, in exercising its delegated regulatory authority over the operation of Charity Bingo, it is the further intention of the Houston County Commission to establish independent and comprehensive regulations governing the lawful operation of Charity Bingo in Houston County. WHEREAS, the Houston County Commission, believes that economic development will best be furthered if all forms of the game known as "bingo," including but not limited to, "media" forms of "bingo", are subject to licensure and regulation in Houston County.

2655 v3

WHEREAS, Amendment Number 569 to the Constitution of Alabama, 1901, also requires that the County Commission shall, pursuant to Amendment 569, insure compliance with the following minimum requirements: (1) No person under the age of 19 shall be permitted to play any game or games of bingo. No person under the age of 19 shall be permitted to conduct or assist in the conduct of any game of bingo. Except for special permit holders, no bingo permit or license shall be issued to any nonprofit organization or qualified club, unless the organization or club shall have been in existence for at least five years and owned real property in the county for five years immediately prior to the issuance of the permit or license, except the following: (a) A fraternal, or benevolent, or charitable organization which qualifies as an exempt organization under Section 501(c) of the Internal Revenue Code. (b). A private club with annual membership dues of three hundred dollars ($300) or more. (3) Bingo games shall be operated only on the premises owned or leased by the nonprofit organization or club operating the bingo game. If the premises are leased, the rate of rental shall not be based on a percentage of receipts or profits resulting from operating the bingo games. No nonprofit organization or club shall enter into any contract with any individual, firm, association, or corporation to have the individual or entity operate bingo games or concessions on behalf of the nonprofit organization or club. No nonprofit organization or club may pay consulting fees, any compensation or salary to any individual or entity for any services performed relating to operating or conducting any bingo game. A nonprofit organization or club shall not lend its name or allow any other person or entity to use its identity in operating or advertising a bingo game in which the nonprofit organization or club is not directly and solely operating the bingo game or concessions. Prizes given by any qualified nonprofit organization or qualified private club for playing bingo games shall not exceed the cash amount or gifts of equivalent value, set by the Legislature, during any bingo session. The Legislature shall set a maximum amount for any calendar week.

(2)

(4)

(5)

.(6)

2655 v3

(7)

One hundred percent of the net revenues derived from operating bingo games shall be designated and expended for charitable or educational purposes, No person, or organization, or club, by whatever name or composition, shall take any expenses for operating a bingo game except as permitted by law.

(8)

WHEREAS, the Houston County Commission seeks to close any potential "loophole" that may exist in Amendment 569 with respect to the phrase "Except for special permit holders" by delineating those entities that are qualified to obtain a bingo permit in Houston County. WHEREAS, the Houston County Commission believes that the provision in Section 4 of Amendment 569 that prohibits a qualified organization or qualified club from "pay[ing] consulting fees, any compensation or salary to any individual or entity for any services performed relating to operating or conducting any bingo game" is an important restriction ensuring that persons who are involved in the operation of Charity Bingo do not and cannot hold a personal or vested stake in outcome Charity Bingo. WHEREAS, the Houston County Commission is aware of the proliferation of small-scale electronic bingo operations in other Alabama counties. WHEREAS, the Houston County Commission believes that expansive small-scale electronic bingo operations do not further effective long-term economic development. WHEREAS, the Houston County Commission further believes that it is more difficult to regulate expansive small-scale electronic bingo operations, thereby creating an increased risk of illegal gambling and adverse societal consequences. WHEREAS, the Houston County Commission believes that, in order to ensure compliance with the above minimum requirements, to achieve effective long-term economic growth, and to minimize the risk of adverse societal consequences, it must exercise its regulatory authority over the types of establishments in which Charity Bingo can take place, as well as over the types of bingo that will be offered at a given establishment, and must retain a role in future oversight of bingo permitting. NOW, THEREFORE, BE IT RESOLVED as follows: The following Rules and Regulations for the Permitting and Operation of Bingo Games by Special Permit in Houston County (hereinafter sometimes referred to as "Rules", "Regulations" or "Rules and Regulations") are hereby promulgated by the Houston County Commission to regulate the, issuance of permits for and the operation of Bingo Games by certain Qualifying Nonprofit Organizations in Houston County, Alabama pursuant to Amendment No. 569 to the Constitution of Alabama 1901.
Section 1 Definitions. As used herein the following words shall have the following meanings as described herein, unless the context clearly indicates otherwise:

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(a)

"Bingo" or "Bingo Games" shall mean the game commonly or traditionally known as bingo. The characteristics of that game include the following: (1) each player uses one or more cards with spaces arranged in five columns and five rows, with an alphanumeric or similar designation assigned to each space; (2) alphanumeric or similar designations are randomly drawn and announced one by one; (3) in order to play, each player must pay attention to the values announced; if one of the values matches a value on one or more of the player's cards, the player must physically act by marking his or her card accordingly; (4) a player can fail to pay proper attention or to properly mark his or her card, and thereby miss an opportunity to be declared a winner; (5) a player must recognize that his or her card has a "bingo," i.e., a predetermined pattern of matching values, and in turn announce to the other players and the announcer that this is the case before any other player does so; and (6) the game of bingo contemplates a group activity in which multiple players compete against each other to be the first to properly mark a card with the predetermined winning pattern and announce that fact. The definition of the word bingo set forth above shall be deemed amended to incorporate the definition of bingo adopted by the Alabama legislature should the Alabama legislature choose to adopt a definition of bingo. As such, the above definition shall only apply if the legislature has not otherwise adopted a definition of bingo. If the legislature has adopted a definition of bingo, that definition is expressly incorporated into these Rules and Regulations.

(b)

"Bingo Equipment and Supplies" shall mean any electronic or mechanical equipment, machine or device, or computer or other technologic hardware or device, (i) which is installed, or is to be installed, at a bingo facility and (ii) which is used, or can be used, to play Bingo as herein defined. Bingo Equipment and Supplies includes any machine, device or hardware that assists a player in the playing of Bingo Games, broadens the participation levels in a common game and includes all of the ancillary Bingo supplies. Examples of Bingo Equipment and Supplies include, but are not limited to, dispensers, readers, electronic player stations, player terminals, central computer servers containing random number generators and other processing capabilities for remote player terminals, electronic consoles capable of providing game results in different display modes, telephones and telephone circuits, televisions, cables and other telecommunication circuits, and satellites and related transmitting and receiving equipment. Bingo Equipment shall not be deemed to be for any purpose a "gambling device" or "slot machine" within the meaning of the Code of Alabama 1975, Sections 13A12-20(5) and (10) or any other provision of law, whether now in effect or hereafter enacted. "Bingo Expenses" shall mean all expenses incurred in connection with the holding, operating and conducting of Bingo Games by a Special Permit Holder in accordance with Amendment 569 to the Constitution of Alabama 1901, including

(c)

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but not limited to, the following expenses: the purchase or rental of Bingo Equipment, the purchase or rental of other equipment or items needed for the operation of bingo, the payment of services necessary for the repair, maintenance, or upgrade of Bingo Equipment, payment of prizes, rental of the premises, utilities, janitorial services, first aid services, security services, security equipment, professional services (including but not limited to banking services, legal services, and accounting services), interest, application fees, permit fees, license fees, intellectual property fees, taxes, whether local, state, or federal of whatever nature, specifically including but not limited to income taxes, insurance premiums, advertising, promotion, and the cost of repairing, maintaining, upgrading, or improving a bingo facility, equipment in a bingo facility, or fixtures in a bingo facility. (d) "Bingo Session" shall mean a consecutive period of time up to twenty-four consecutive hours during which Bingo is played on as many as seven (7) days in a given week; provided, however, that on Sundays, Bingo shall not be played between the hours of 4:00 a.m. and 1:00 p.m. Central Time. Except with regard to Sundays, a holder of a Class C Bingo Permit shall not be limited in the number of Bingo Sessions it operates during any twenty-four (24) hour period. "Class A Bingo Permit" shall mean a Special Permit issued to an applicant who desires to operate only paper card Bingo at a Class A Temporary Qualified Location five (5) or fewer days per year. "Class B Bingo Permit" shall mean a Special Permit issued to an applicant who desires to operate only paper card Bingo at a Class B Qualified Location for no more than one five-hour session per week. "Class C Bingo Permit" shall mean a Special Permit issued to an applicant who desires to operate any and all games of Bingo at a Class C Qualified Location. "Class A Temporary Qualified Location" for the holder of a Class A Bingo Permit shall mean a Location which has been inspected and approved by the Sheriff of the county for the conduct of Bingo Games no more than five days per year. It is contemplated that such locations will be suitable for Qualifying Nonprofit Organizations that do not operate Bingo games on a regular basis. "Class B Qualified Location" for the holder of a Class B Bingo Permit shall mean a Location which has been inspected and approved by the Sheriff of the county for the conduct of Bingo Games for no more than one five-hour session per week. "Class C Qualified Location" for the holder of a Class C Bingo Permit shall mean a Location which has been inspected and approved by the Sheriff of the county for the conduct of Bingo Games and other lawful activities and for which the holder of a Class C Bingo Permit or Operator has submitted satisfactory evidence

(e)

(f)

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that the Location has in place at all times that any Bingo Gaines are being conducted or operated the following: (i) liability insurance in an amount not less than $2,000,000; (ii) liquor liability insurance in the amount of not less than $500,000; (iii) adequate parking for patrons and employees; (iv) onsite security as reasonably prescribed by the Sheriff of the county; (v) onsite first aid personnel as reasonably prescribed by the Sheriff of the county; (vi) such accounting procedures, controls and security monitoring as are reasonably necessary to preserve and promote the integrity of the operation of Bingo Games and the protection of the Qualifying Nonprofit Organization and the patrons of the Bingo Games; and (vii) satisfactory evidence that the Location is fully compliant with the Americans with Disabilities Act. No Class C Bingo Permit shall be issued with respect to a location which is not part of a mixed- or multi-use development that incorporates a hotel, restaurants, dinner theaters, other entertainment and amusement related retail space, and an entertainment venue with the capacity for at least 3144 persons to view live entertainment such as music ("Multi-use Development"). In addition to the foregoing, in order for a location to qualify as a Class C Qualified Location, the Commission shall first have made a specific finding that said location and the overall development to be situated thereon, aids, is beneficial to or otherwise assists the County in its efforts to promote industry and economic development, develop trade and further the utilization of agricultural products as well as the natural and human resources of the State of Alabama. Any Class C Bingo Permit for the operation of Charitable Bingo at a Class C Qualified Location shall at a minimum require the following preconditions to the actual operation or playing of Charitable Bingo games: (1) At least seventy percent (70%) of the qualifying separate elements of the agreed upon multi-use development shall be completed and operational as a condition precedent to the conducting of any charitable bingo operations; (2) A branded franchise hotel shall either be constructed or substantially completed as a condition precedent to the conduct of any charitable bingo operations; (3) A capital investment in the mixed- or multi-use development of a minimum of $200 million, and (4) A development agreement between the Commission and the developer describing in detail the scope, elements and planning of the master planned multi-use development, including the planned capital investment, with conditions and assurances reasonably required by the Commission to assure the intent of the Rules and Regulations is effectuated. It is specifically intended that Class C Bingo, as well as other forms of bingo, be regulated, and not every development that has an economic effect, however small, will be found to justify a Class C bingo permit. (k) "Permit Holder" shall mean any holder of a Class A Bingo Permit, Class B Bingo Permit, or Class C Bingo Permit, and the holder of any permit issued pursuant to these Rules and Regulations shall be deemed to be a special permit holder.

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"Location" shall mean a building, hall, enclosure, room, premises, grounds and/or outdoor area that complies with all federal, state and local laws and applicable building and fire codes. (m) "Qualifying Nonprofit Organization" shall mean any of the following: (1) a bona fide, not-for-profit organization that exists for charitable, educational, or other lawful purposes and that has been in existence for at least five years immediately prior to receiving a permit to operate bingo games; (2) a fraternal, benevolent, or fraternal organization that has qualified as an exempt organization under section 501(c) of the Internal Revenue Code, or (3) a private club that is organized as an Alabama Nonprofit Corporation and that either (a) has been in existence for five years and owned real property in Houston County for five years, or (b) has annual membership dues of Three Hundred Dollars ($300.00) or more and has at least one member of its board of directors appointed by the County Commission. "Net Revenues" shall mean all monies earned from the operation of bingo following payment of Bingo Expenses. "Machine Bingo Stamp" shall mean a stamp issued by the County Commission with a cost of $1,000 per stamp. "Person" shall mean any human being, corporation, partnership, business organization, association or legal entity of any kind whatsoever.

(n) (o) (p)

Section 2 Operation of Bingo Games in Houston County, Alabama. Pursuant to Amendment No. 569 to the Constitution of Alabama 1901, the operation of Bingo Games for prizes or money by Qualifying Nonprofit Organizations is allowed in Houston County, provided that the Qualifying Nonprofit Organization shall first obtain a Class A Bingo Permit, Class B Bingo Permit, or Class C Bingo Permit. The holder of a Class A Bingo Permit, a Class B Bingo Permit, or a Class C Bingo Permit shall be authorized to conduct Bingo Games and pay Bingo Expenses in accordance with these Rules and Regulations the terms and conditions stipulated in the Permit and Amendment Number 569 to the Constitution of Alabama 1901. Section 3 Bingo Permit Required. Except as specifically provided in Section 13.5 of these Rules and Regulations, no Qualifying Nonprofit Organization shall be allowed to operate a Bingo Game unless the Sheriff of the county first issues a permit to said organization authorizing it to do so. The permit described herein shall be in a form designated by the Sheriff. Each Class A Bingo Permit, Class B Bingo Permit, or Class C Bingo Permit issued hereunder shall be issued to a specific qualified organization to conduct bingo at a specific Location in Houston County, Alabama. A permit is not assignable or transferable without the express, written consent of the Sheriff and shall become automatically void upon the dissolution of the Permit Holder. If a Qualifying Nonprofit Organization changes its name, the Sheriff shall issue an amended permit bearing such name and such Qualifying Nonprofit Organization shall be required to comply with the permit amendment provisions set forth herein.

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Section 4 Application for Permit; Submission; Form Contents.

(a) Any Qualifying Nonprofit Organization desiring to obtain a Special Permit to operate Bingo Games hereunder shall make application to the Sheriff on forms prescribed by the Sheriff and shall pay such application fee and other fees as may be provided by the Legislature pursuant to local legislation, except that if no application fee is set by the Legislature, the one-time application fee shall be as follows: for a Class A Bingo Permit, One Hundred DoMrs ($100.00); for a Class B Bingo Permit, Three Hundred Dollars ($300.00); and for a Class C Bingo Permit, Five Hundred Dollars ($500.00). Such permit shall be valid for a period of up to fifteen (15) years. Renewal applications shall be filed with the Sheriff at least forty-five (45) days prior to expiration of any permit term and shall be on forms prescribed by the Sheriff. Renewal applications shall be subject to the same application fee as provided for an original application. All moneys collected by the Sheriff hereunder shall be paid to Houston County and shall be maintained as a separate Bingo account, and deposited within three business days of the collection of said fees. All expenses incurred by the Sheriff in the administration and enforcement hereof shall be paid from this account, with the balance, if any, in said account to be paid to the Houston County General Fund to be used by the Commission for law enforcement purposes. To the extent allowed by law, in the public interest, the said account shall be subject to audit by the State of Alabama Examiners of Public Accounts. The Sheriff shall refuse to grant a Bingo Permit or renewal to any applicant qualified hereunder unless and until the applicant fully provides the information required hereunder, such being provided in a form and in sufficient detail to satisfy the Sheriff of the county of its validity and sufficiency. The Sheriff may require any reasonable confirming documentation as to any information required hereunder and shall have a reasonable time to check or confirm by any available method the accuracy or validity of any information provided hereunder. Each application for a Bingo Permit or renewal thereof shall contain the following information and exhibits: (i) (ii) The date of incorporation and other evidence showing that the applicant is a Qualifying Nonprofit Organization as defined in Section 1(m) above. A certified copy of the charter, certificate of incorporation, by-laws, or other evidence of legal existence of the Qualifying Nonprofit Organization. The names and residence addresses of each of the officers and directors of, as well as the names and residence addresses of the individuals working

(b)

(c)

(d)

(iii)

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for, the Qualifying Nonprofit Organization who are responsible for the operation of Bingo Games by the Qualifying Nonprofit Organization. (iv) The exact physical Location at which the applicant will conduct the Bingo Games, and proof that such Location is either owned or leased by the Qualifying Nonprofit Organization which is conducting Bingo Games. If such Location is not owned by such Qualifying Nonprofit Organization, the application shall include the names and addresses of the owners thereof and a copy of the lease or rental agreement for the location. A statement listing all known convictions, if any, for criminal offenses, other than minor traffic offenses, of each of the Persons for whom names are required in subsections (ii), (iii), and (iv) above.

(v)

Section 5 Issuance of Permit.

(a)

Upon receipt of a fully completed and documented application for a permit meeting all of the requirements set out herein, the Sheriff shall make such investigation as the Sheriff may deem necessary or proper of the qualifications of each applicant as required herein and the truth and veracity of the information contained or attached to the application. After making such investigation and after being satisfied that all qualifications and requirements as set out herein have been fulfilled, the Sheriff shall issue such permit to said applicant upon the terms and conditions herein set forth. As part of said investigation, any Person named in paragraphs (ii), (iii), and (iv) of Section 4(c) herein may be required to furnish a consent for background and criminal history check. A Class A Bingo Permit shall be issued to .an applicant who desires to operate paper card Bingo only at a Class A Temporary Qualified Location. A Class B Bingo Permit shall be issued to an applicant who desires to operate paper card Bingo only at a Class B Qualified Location. A Class C Bingo Permit shall be issued to an applicant who desires to operate any and all games of Bingo, only at a Class C Qualified Location.

(b)

Section 6 Amendments: Applications: Permits.

(a)

An applicant may amend an application filed hereunder to correct or complete the information contained therein or to change said information to comply with a change in circumstances at any time prior to the denial thereof by the Sheriff or the issuance of a permit thereon, provided that said amendment is made in or on a form satisfactory to the Sheriff and the applicant pays a substitution or amendment fee of $50.00 per amendment. A permit, once issued, may be amended only upon resubmission of a new, completed application satisfactory to the Sheriff and payment of a new

(b)

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1I

application fee by the Permit Holder. The Sheriff may deny amendments for any reason for which an original application may be denied. If such amendment is approved, a new permit will be issued in place of the permit being amended. Section 7 Contents and Display of Permits. (a) Each Bingo Permit shall contain, at a minimum, the name and address of the Permit Holder, the Location at which the Permit Holder is permitted to conduct Bingo Games, the days of the week on which the Permit Holder is permitted to conduct Bingo Games, and the date on which the permit was issued and upon which it expires. The Permit Holder shall display the permit conspicuously at the Location where Bingo is being conducted at all times during the conduct of a Bingo Game.

(b)

Section 8 Machine Stamp Required; Fee Proceeds. (a) No Qualifying Nonprofit Organization shall be allowed to operate Bingo Games on an electronic player station ("EPS Device") unless there is a current calendar year Machine Bingo Stamp affixed on each EPS Device on which Bingo Games are played in a Class C Qualified Location. The Machine Bingo Stamp fees are assessed against the permit holder for each EPS Device. Machine Bingo Stamps are renewable January 1 of each year. Fees for Machine Bingo Stamps acquired during a calendar year will be prorated based on the calendar month in which the stamp is issued. The full acquisition month will be included in the calculation. All monies collected by the Commission in issuance of Machine Bingo Stamps shall be deposited in the Houston County General Fund within three business days of the collection of said fees. All expenses incurred by the Commission in the administration and enforcement hereof shall be paid from this account. To the extent allowed by law, the said account shall be subject to audit by the State of Alabama Examiners of Public Accounts. Any Qualifying Nonprofit Organization utilizing an EPS Device without current and valid Machine Bingo Stamps affixed will subject its Class C Bingo Permit to revocation.

(b)

Section 9 General Regulations; Prizes.

(a)

The holder of a Class A Bingo Permit, a Class B Bingo Permit, or a Class C Bingo Permit shall be authorized to conduct Bingo Games and pay Bingo Expenses in accordance with these Rules and Regulations and Amendment Number 569 to the Constitution of Alabama 1901. No Person under the age of nineteen (19) years shall be permitted to play any Bingo Game, nor shall any Person under the age of nineteen (19) years be permitted to conduct or assist in the operation of any game of Bingo.

(b)

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(c)

No Class A Bingo Permit, Class B Bingo Permit, or Class C Bingo Permit shall be issued to any applicant that is not a Qualifying Nonprofit Organization as defined in Section 1(m) above. Bingo Games may be operated at the Location owned or leased by the Qualifying Nonprofit Organization operating the Bingo Games. The Qualifying Nonprofit Organization may lease the Location from any Person, provided that the rate of rental for the Location shall not be calculated based on a percentage of receipts or profits earned by the operation of Bingo Games. The Qualifying Nonprofit Organization may lease Bingo Equipment from any Person at the reasonable rate of rental for said Bingo Equipment A Qualifying_Nonprofit Organization may not enter into any contract with any individual, firm, association or corporation, to have the individual or entity operate Bingo Games or concessions on behalf of the Qualifying Nonprofit Organization. A Qualifying Nonprofit Organization may not pay consulting fees, compensation, or salary, to any individual or entity for any services performed in relation to the operation or conduct of a Bingo Game. A Qualifying Nonprofit Organization may not lend its name or allow its identity to be used by another Person in the operating or advertising of a Bingo Game in which the Qualifying Nonprofit Organization is not directly and solely operating the Bingo Game. Prizes given by any Qualifying Nonprofit Organization for the playing of Bingo Games shall not exceed the cash amount or gifts of equivalent value set by the Legislature and these Rules and Regulations for any Bingo Session. For the purposes of these Rules and Regulations, prizes given by any Qualifying Nonprofit Organization, or on its behalf for the playing of Bingo Games, shall not be less than 50 percent of the gross receipts in cash or equivalent value during any Bingo Session. One hundred percent of the net revenues derived from operating Bingo Games shall be designated and expended for charitable or educational purposes. No person or organization, by whatsoever name or composition thereof, shall take any expense for the operation of Bingo Games except as permitted by Amendment No. 569 to the Constitution of Alabama 1901 and the Rules and Regulations set forth herein.

(d)

(e)

(f)

(g)

(j)

No Person who has been convicted of a felony offense, and whose civil rights have not been restored by law, shall conduct or in any way participate in the operation of any Bingo Game permitted hereunder, nor shall any Person who has been convicted of any gambling offense be permitted to conduct or in any way

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participate in the operation of any Bingo Game permitted hereunder within twelve (12) months of the conviction.
Section 10 Records and Accounting. Each holder of a Class A Bingo Permit, Class B Bingo Permit, or Class C Bingo Permit shall keep and maintain the following records and accounts pertaining to each Bingo Session conducted by it for at least three (3) years from the date of such session:

(a)

An itemized list of all gross receipts for each bingo session, which shall include all receipts derived from the sale of Bingo cards, entrance fees, donations, or from any other source whatsoever pertaining to the operation of such session. An itemized list of all Bingo Expenses, costs and disbursements, other than prizes paid or given as a result of the operation of Bingo Games, together with the name and address of each Person to whom said Bingo Expenses, disbursements or consideration was paid or given; a receipt or invoice for all items purchased and for all services rendered; and such other records as will adequately reflect the amount and nature of such expenses, costs and disbursements. All records, receipts, accounts and/or lists required to be kept and maintained hereunder shall be open to inspection by the Sheriff or the Sheriff's authorized agents or representatives during reasonable business hours. All Locations at which Bingo Games are being held by a Permit Holder, or at which a Permit Holder intends to conduct Bingo Games, shall be open to the Sheriff, or the Sheriff's authorized representatives, during all times at which Bingo Games are being conducted and during all other reasonable business hours. On or before April 15th of each calendar year, each holder of a Class A Bingo Permit, Class B Bingo Permit, or Class C Bingo Permit who held a permit for all or any part of the preceding calendar year shall file with the Sheriff an affidavit stating the location of all records, receipts, accounts, contracts and/or lists required to be kept or maintained hereunder relating to the operation of Bingo Games for said previous calendar year, and further stating that such records are complete and ready for

(b)

(c)

inspection.
Section 11 Enforcement and Supervision; Rules. The Sheriff shall be charged with the duty to and shall enforce and supervise the *administration and enforcement of all of the rules, regulations and reporting required hereunder. In addition to these Regulations, the Sheriff shall enforce all applicable criminal and civil laws of the State of Alabama to prevent and discourage any illegal activity. When Charity Bingo is operated within Houston County "pursuant to" these Rules and Regulations, and in full compliance therewith, the exemption from lajny other law providing a penalty or disability" set forth in Section 16 of Act 95-420 shall be fully applicable. Provided that these Rules and Regulations are incorporated by reference into any development agreement contemplated in Section 1(j) hereof, compliance with the terms of said development agreement shall be deemed to constitute compliance with these Rules and Regulations.

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Section 12 Revocation of Permits; Appeal. The Sheriff, for good cause shown, may revoke any permit issued pursuant hereto if the Permit Holder violates any of the material Regulations herein promulgated, provided, however, that no permit may be revoked without complying with the following procedures: The Sheriff must first deliver to any Person named in the permit application pursuant to Section 4, subsections (c)(iii) and (c)(iv) hereunder ninety (90) days' written notice of its intention to revoke said permit and the grounds therefor in specific detail to allow the Permit Holder to cure any alleged violation of any of the Regulations herein provided. In curing any alleged violation, the Sheriff may require a Permit Holder to post a bond for an amount which will ensure that additional violation will not occur. If the Permit.Holder cures any alleged violation within the ninety-day notice period, no revocation shall be effective. In the event that the Sheriff does not, in good faith, consider the violation cured within the ninety-day notice period, the Sheriff shall give additional notice to the Permit Holder, in the manner set forth above, that the Sheriff intends to proceed with revocation and give the Permit Holder the opportunity to pursue an appeal of such decision to the Circuit Court of Houston County. As may be provided by law, the Permit Holder may request a trial by jury. Pending appeal to the Circuit Court hereunder, the permit shall remain in full force and effect. If the Circuit Court shall order the permit revoked, the Circuit Court shall, at the request of the Permit Holder, stay the revocation and shall set a reasonable bond pending any and all appeals. Only when all appeals are exhausted may the stay be lifted and the permit revoked. Section 13 Effect of Revocation. A Permit Holder whose permit is revoked as herein set out shall return such permit to the Sheriff on or before the effective date of such revocation and whether returned or not such permit shall be void and not valid beyond the effective date of revocation. A Permit Holder whose permit is revoked in consequence of a violation of any rule or regulation promulgated herein shall be ineligible to apply for or have issued to it another permit hereunder for a period of three months after the effective date of such revocation. Nor shall any permit be issued to any Person which is directed or controlled by Persons listed in the application for permit filed pursuant to Section 4, subsections (c)(iii) and (c)(iv) hereof, in regard to the revoked permit or to any organization of which the membership is substantially the same as any organization whose permit has been revoked hereunder, for a period of three (3) months after the effective date of such revocation.
Section 14 Alternative Permitting Process for Class C Bingo Permits. Notwithstanding the
foregoing, an applicant for a Class C Bingo Permit may request such a permit directly from the Houston County Commission, rather than from the Sheriff. In such event, the Commission shall consider the economic impact of the development of which the Bingo Games would be part, and shall also review the information required by Section 4 above. A Class C Bingo Permit issued by the Houston County Commission may not be revoked by the Sheriff, but rather must be revoked by action of the Commission. Upon receipt of an application containing the information required by Section 4 above, the Commission shall determine whether the application is complete. If the application is complete, the Commission may immediately consider the application.

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Section 15 Appeal of Denial of Permit. Any Person whose application for a permit hereunder shall be denied by the Sheriff of the county pursuant to these Regulations shall have the right to appeal such denial to the Houston County Commission and to the Circuit Court in the same manner as an appeal of revocation of a permit issued hereunder may be appealed pursuant hereto provided, however, that such Person shall not operate any Bingo Game until such application shall have been granted, and a permit issued, pursuant to any order of the said Houston County Commission or Circuit Court.

Section 16 Amendments to Regulations. If the Houston County Commission should make any amendment to these Regulations, such amendment shall not be applicable to any Permit Holder for the term of such permit, unless the Permit Holder should voluntarily choose to be subject to such amendment by submission of a written notification to the Houston County Commission. Section 17 Severability. The provisions hereto and the Regulations promulgated hereunder are severable. If any part hereof shall be declared invalid or unconstitutional, such declaration shall not affect any parts hereof which shall remain. Section 18 Repeal of Prior Resolutions and Ordinances. All resolutions or ordinances or parts of resolutions or ordinances heretofore adopted by the Commission which conflict with this Resolution are hereby repealed. The above and foregoing Resolution is adopted and approved on this the 8 th day of February 2010, by the Houston County Commission
,

VER, CHAIRMAN OF THE HOUSTON COUNTY COMMISSION Authenticated: 1.01C\ William J. Dempsey Chief Administrative Officer moved that said Resolution be Commissioner Frances Cook , and, adopted, which motion was seconded by Commissioner Curtis Harvey upon said motion being put to vote, the following vote was recorded:

YEAS 4

NAYS 0

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the Chairman thereupon announced that said motion had passed and the Resolution was adopted.

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EXHIBIT 6

CLASS C SPECIAL PERMIT FOR THE OPERATION OF CHARITABLE BINGO GAMES The Houston County Commission has received an Application fora Class C Special Permit to Operate Bingo Games ("Application") from Houston Economic Development Association ("Applicant") that requests issuance of a Class C Bingo Permit to operate Bingo Games at a facility that is to be located at a leased bingo location to be constructed upon the parcel further described in Exhibit A (the "Location"). With regard to the Application, the Commission hereby makes the
following findings:

Based on a thorough review, the Application is found to be complete, including the 1. required application fee and all information required by the Rules and Regulations for the Operation of Charitable Bingo in Houston County (the "Rules"). The Applicant, an Alabama nonprofit corporation, meets the definitional 2. requirements of "Qualifying Nonprofit Organization" under the Rules. 3. The Commission has considered the Plans and description of the Location, the Resolution Promulgating Updated Rules and Regulations for the Operation of Charitable Bingo in Houston County, Resolution Number 08-25 (hereinafter "Rules"), the Development Agreement dated September 24, 2008 (hereinafter "Development Agreement") and other relevant documents and determined The Location will be a part of a mixed-or multi-use development (herein the "Multi-Use Development") as defined by the Rules and Development Agreement. The Applicant, by the acceptance of this Permit, agrees to be bound and shall at all times be bound by and shall comply with the terms and preconditions contained in the Rules and Development Agreement as a condition precedent to the conduct and with regard to the operation of any Charitable Bingo game. 4. Notwithstanding anything in the Rules or Development Agreement to the contrary, by its joint execution of this Special Permit and its acceptance of this Special Permit, the Applicant specifically covenants and agrees that should any of the preconditions set forth in the Rules not be complied with prior to the conducting or operating of Charitable Bingo Games, this Permit shall be void. When the preconditions to the operation of Charitable Bingo Games set forth in the Rules are deemed by the Applicant to have been satisfied, the Applicant shall give written notice of same to the Chairman of the Commission no fewer than fourteen (14), calendar days prior to a regularly scheduled meeting of the Commission. If the Commission does not, at such regularly scheduled meeting, adopt a resolution disputing such purported compliance, the Applicant/Permit Holder shall be conclusively deemed to have complied with the preconditions of the Rules for the actual operation or playing of Charitable Bingo Games and, pursuant to this Special Permit, the Applicant shall be entitled to commence operation or playing of Charitable Bingo Games. Thereafter, the enforcement and supervision of the operating and conducting of Charitable Bingo Games shall be governed by the enforcement and revocation provisions set forth in the Rules. 5. No person under the age of nineteen (19) years of age shall be permitted to play any Bingo Game nor shall any Person under the age of nineteen (19) years be permitted to conduct or assist in the operation of any game of Bingo.

6. Except as otherwise provided hereinabove, the term of this Special Permit shall be fifteen (15) years from the date issued. ACCORDINGLY, the Undersigned hereby finds that the Location meets the definitional requirements of a Class C Qualified Facility under the Rules and therefore is under a legal obligation to issue Applicant a Class C Special Permit for the Operation of Bingo Games at the Location. Expiration Date: December 7, 2023 Formally Approved and Issued pursuant to my authority and obligations as the Chairman of the Houston County Commission, Alabama on this 7:11 day of 06-Teev 6420 0 9 .

As to acceptance of and agreement with the terms, conditions and preconditions of this Permit. HOUSTON ECONOMIC DEVELOPMENT ASSOCIATION, Applicant

By: Funk lA Aci+

, Its President

EXHIBIT A
DESCRIPTION (By Surveyor) One lot or parcel of land in Houston County. Alabama and being more particularly described as follows: BEGINNING at an iron pipe found (5/8") marking the Southwest Corner of the NW f/4 of the SW1/4 of Section 13. 'FIN, R26E; thence N0141'42"E for a distance of 1,322.17 feet to an iron pipe found (3/4"); thence N891658"W for a distance of 912.52 feet to an iron pipe found (3/4") on the East Right of Way (R/W) line of U.S. Highway 4231; thence along said R/W line, NO2'45 1 54"1-.:, for a distance of 832.65 feet to an iron pin set (IPS) (1/2" rebar, cap 1/CA07174,S); thence continue along said R/W line, NO126'37"E for a distance of 781.67 feet to a railroad spike found in asphalt; thence leaving said R/W line, N3844`54"E for a distance of 402.51 feet to an iron pin found (IFF) (1/2" rebar) in asphalt; thence N4050'05" E. for a distance of 526.02 feet to an iron pipe found (5/8"); thence S4229'07"E for a distance of 800.15 feet to an iron pipe found (5/8"); thence N4128'12"E for a distance of 409.63 feet to an IPS on the North side of a creek; thence along the North side of said creek for the following 17 calls, S 032'32"F, for a distance of 58.12 feet to an 1PF (1/2" rebar, cap /119258) (disturbed); thence S3617'29"E for a distance of 26.13 feet to an IPS; thence S2728'28"E for a distance of 64.02 feet to an IPF(1/2" rebar, no cap); thence S6226'02"E for a distance of 95.64 feet to an IPF (1/2" rebar, cap #19258); thence S2708'3 I "E for a distance of 213.54 feet to an I P F (1/2" mbar, cap 1119258); thence S4656'59"E for a distance of 31.45 feet to an IPF (1/2" rebar, cap 1119258); thence S50 18'47"E for a distance of 34.07 feet to an IPF (1/2" rebar, cap 1119258); thence S1 106'18"E for a distance of 43.34 feet to an IPF (1/2" rebar, cap //19258): thence S7148'I I"E for a distance of 102.58 feet to an IPS; thence S13"04'33"E for a distance of 80.11 feet to an 1FF (1/2" rebar, cap #19258); thence S I 4'57'02"W for a distance of 51.20 feet to an IPF (1/2" rebar, cap 1119258); thence S2120'00"E for a distance of 61.29 feet to an IPS; thence N5 130 1 19"E for a distance of 74.90 feet to an 1PF (1/2" rebar, cap 1119258); thence S8024'22"E for a distance of 79.62 feet to an IPS; thence S8440'57"E for a distance of 71.96 feet to an 'PE (1/2" rebar, cap 1119258); thence N87I2'31"E for a distance of 90.70 feet to an WE (1/2" rebar, cap # 19258); thence S7427'25''E for a distance of 96.43 feet to an IPF (1/2" rebar, cap #19258); thence leaving said creek, S2829'37"W for a distance of 589.86 feet to an iron pipe found (5/8"); thence S4227'481:: for a distance of 1,209.56 feet to an IPS; thence S8916'58"E for a distance of 1,150.48 feet to an IPS; thence S00I 8'59"E for a distance of 2,668.74 feet to an iron pipe found (5/8"); thence N8906'15"W for a distance of 2,607.18 feet to an IPS; thence S0114'51"W for a distance of 1,322.82 feet to a point on a fence post; thence N8912'16"W for a distance of 526.71 feet to an iron pipe found (3/4") (disturbed); thence SOI14`51"W for a distance of 643.23 feet to an IPS; thence N8755'32"W for a distance of 330.28 feet to an iron pipe found (3/4"); thence N8713'17"W for a distance of 692.45 feet to an iron pipe found (3/4") on the above mentioned East R/W line of U.S. Highway 11231; thence along said R/W line, NO243'4113, for a distance of 3,273.25 feet to an iron pipe found (3/4"); thence leaving said R/W line, S8915'0 I"E for a distance 01935,58 feet to the POINT OF BEGINNING. Said land is located in the West Half of the SE1/4, the SW 1/4, the SF,1/4 of the N W 1/4, the West Half of the NW1/4 of Section 13, the East Half of the NE 1/4, the SE I/4 of the SEI/4 of Section 14, the East 1/2 of the NEI/4 of Section 23 and the NW 1/4 of

the N W1/4 of Section 24 all in TIN, R26E, and contains 375.17 acres, more or less.