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I'm pretty much ready to leave now, but I picked up KK next hand UTG+1, UTG raised to 10 I reraised to 40, BB calls, UTG+1 moves in for 56 (raising 16) I asked the dealer, "can i raise?" He looked at me like i was an idiot, "of course you can raise" he said.. correct me if I am wrong but UTG+1 made an imcomplete bet and I shouldnt be allowed to reraise?

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Actually UTG +1 made a raise of more than 1/2 the previous raise. I have never [played this kind of spread limit game, but it is entirely possible that they use the limit rule that a raise of 1/2 the previous raise is a complete raise.