as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to education; proposing an amendment to the 1.3 Minnesota Constitution by adding a section to article 1.4 XIII; establishing merit-based scholarship programs; 1.5 establishing the Minnesota scholarship fund and 1.6 Minnesota scholarship program; creating a Casino 1.7 Control Commission and casino board; authorizing 1.8 issuance of a casino license; providing for regulation 1.9 and taxation of casino; reducing rate of lawful 1.10 gambling taxes; appropriating money; amending 1.11 Minnesota Statutes 2002, sections 297E.02, 1.12 subdivisions 1, 4, 6; 299L.01, subdivision 4; 299L.02, 1.13 by adding a subdivision; 299L.07, subdivisions 2, 2a; 1.14 340A.404, by adding a subdivision; 541.20; 541.21; 1.15 609.75, subdivision 3; 609.761, subdivision 2; 1.16 proposing coding for new law as Minnesota Statutes, 1.17 chapters 136H; 349C. 1.18 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.19 ARTICLE 1 1.20 CASINO CONTROL COMMISSION 1.21 Section 1. [349C.01] [DEFINITIONS.] 1.22 Subdivision 1. [GENERAL.] For purposes of this chapter the 1.23 following terms have the meanings given them. 1.24 Subd. 2. [BOARD.] "Board" means the Minnesota Casino Board. 1.25 Subd. 3. [CASINO.] "Casino" means a facility licensed 1.26 under this chapter at which games commonly recognized as casino 1.27 games are played. Casino does not include any facility located 1.28 on Indian land or any establishment issued a premises permit for 1.29 the conduct of gambling authorized by law. 1.30 Subd. 4. [COMMISSION.] "Commission" means the Casino 1.31 Control Commission. 2.1 Subd. 5. [GAME PROCEDURES.] "Game procedures" means 2.2 procedures that govern the conduct and operation of gaming at a 2.3 casino. Game procedures does not include ordinary business 2.4 activities of a casino operator, including promotional 2.5 activities. 2.6 Subd. 6. [GROSS GAMING RECEIPTS.] "Gross gaming receipts" 2.7 means all money collected by a casino from the sale of chips or 2.8 tokens, and all money received into gaming machines by coin, 2.9 currency, or credit or debit card transfer, less amounts paid 2.10 out as winnings or paid to redeem chips and tokens and less the 2.11 amount of any credit instruments or checks which are uncollected 2.12 as determined by the commission. 2.13 Sec. 2. [349C.02] [COMMISSION CREATED.] 2.14 Subdivision 1. [COMMISSION CREATED.] A Casino Control 2.15 Commission is created with the powers and duties specified in 2.16 this act. 2.17 Subd. 2. [MEMBERSHIP.] The commission consists of seven 2.18 members appointed as follows: 2.19 (1) three members appointed by the governor; 2.20 (2) one member appointed by the speaker of the house of 2.21 representatives; 2.22 (3) one member appointed by the leader of the minority 2.23 caucus in the house of representatives; 2.24 (4) one member appointed by the majority leader of the 2.25 senate; and 2.26 (5) one member appointed by the minority leader of the 2.27 senate. 2.28 At the time of appointment to the commission, and 2.29 throughout the time each member serves on the commission, each 2.30 member shall reside in Minnesota. The governor shall designate 2.31 one of the members to act as chair of the commission. The acts 2.32 of the chair, and all acts approved or ratified by the members, 2.33 shall be considered the acts of the commission. The commission 2.34 may elect from among the other members of the commission other 2.35 officers as necessary. Five members of the commission shall 2.36 constitute a quorum. The commission shall conduct regular 3.1 meetings no less than quarterly. The commission shall also meet 3.2 upon call of the chair or five or more members of the 3.3 commission. The commission shall keep accurate and complete 3.4 records of all its meetings. 3.5 Subd. 3. [TERMS; REMOVAL.] Members of the commission serve 3.6 terms of six years. Removal of members is as provided in 3.7 section 15.0575. 3.8 Subd. 4. [COMPENSATION.] The compensation of commission 3.9 members is as provided in section 15.0575, subdivision 3. 3.10 Subd. 5. [ATTORNEY GENERAL.] The attorney general is the 3.11 attorney for the commission. 3.12 Sec. 3. [349C.03] [COMMISSION POWERS AND DUTIES.] 3.13 The commission has the following powers and duties to: 3.14 (1) issue, renew, suspend, or revoke the license under this 3.15 chapter after receiving the recommendation of the board; 3.16 (2) adopt rules governing the conduct of gaming at a casino 3.17 licensed under this section; 3.18 (3) approve, after receiving the recommendation of the 3.19 board, plans of operation and security plans of a casino; 3.20 (4) direct the board to carry out investigations, 3.21 inspections, audits, and other enforcement activities the 3.22 commission deems necessary; 3.23 (5) act as an appellate tribunal for appeals of board 3.24 actions to enforce the provisions of this chapter and rules of 3.25 the commission; and 3.26 (6) prescribe schedules and deadlines for submission of 3.27 applications for a casino license as provided in section 349C.08. 3.28 ARTICLE 2 3.29 MINNESOTA CASINO BOARD 3.30 Section 1. [349C.04] [MINNESOTA CASINO BOARD.] 3.31 Subdivision 1. [BOARD CREATED.] A Minnesota Casino Board 3.32 is created with the powers and duties assigned by this chapter. 3.33 Subd. 2. [MEMBERSHIP.] The board consists of three members 3.34 appointed by the commission. The commission shall designate one 3.35 of the members to act as chair of the board. The board may 3.36 elect other officers as necessary. 4.1 Subd. 3. [TERMS; REMOVAL.] Members of the board serve 4.2 terms of four years. Removal of members is as provided in 4.3 section 15.0575. 4.4 Subd. 4. [COMPENSATION.] The compensation of board members 4.5 is as provided in section 15.0575, subdivision 3. 4.6 Subd. 5. [ATTORNEY GENERAL.] The attorney general is the 4.7 attorney for the board. 4.8 Subd. 6. [BACKGROUND INVESTIGATIONS.] The board may 4.9 request the director of alcohol and gambling enforcement to 4.10 investigate all applicants for a license under this chapter to 4.11 determine their compliance with licensing requirements. The 4.12 board has access to all criminal history data compiled by the 4.13 director of alcohol and gambling enforcement on any person 4.14 holding or applying for a license under this chapter. 4.15 Subd. 7. [AUDIT.] The legislative auditor shall audit the 4.16 books and accounts of the board annually, at the board's expense. 4.17 Subd. 8. [PERSONNEL.] The board shall appoint a director, 4.18 deputy director, and other employees as it deems necessary. 4.19 Except for the director and deputy director, employees serve in 4.20 the classified service. 4.21 Sec. 2. [349C.05] [BOARD POWERS AND DUTIES.] 4.22 The board has the following powers and duties to: 4.23 (1) investigate applicants for issuance and renewal of 4.24 licenses under this chapter and make recommendations to the 4.25 commission regarding issuance, renewal, suspension, and 4.26 revocation of licenses; 4.27 (2) enforce the provisions of this chapter and rules of the 4.28 board to ensure the integrity of casino gaming in Minnesota; 4.29 (3) make recommendations to the board on rules for the 4.30 conduct of casino gaming; 4.31 (4) employ and supervise personnel of the board; 4.32 (5) issue cease and desist orders under section 349C.06; 4.33 (6) conduct investigations, inspections, audits, and other 4.34 enforcement activities on its own motion or at the direction of 4.35 the commission; 4.36 (7) issue subpoenas to compel the attendance of witnesses 5.1 and the production of documents, books, records, and other 5.2 evidence relating to an investigation or audit the board is 5.3 authorized to conduct; 5.4 (8) require that any licensee under this chapter, or 5.5 shareholder or officer of such a licensee, be fingerprinted, or 5.6 otherwise submit to fingerprinting in a form and manner 5.7 acceptable to the board; 5.8 (9) inspect gaming machines on the premises of a licensed 5.9 casino, remove gaming machines from the premises for testing 5.10 where necessary, and issue orders requiring the removal of a 5.11 gaming machine from play and the terms under which it may be 5.12 returned to play; and 5.13 (10) provide administrative assistance to the commission 5.14 under section 349C.03. 5.15 Sec. 3. [349C.06] [CEASE AND DESIST ORDERS.] 5.16 (a) Whenever it appears to the board that any person has 5.17 engaged or is about to engage in any act or practice 5.18 constituting a violation of this chapter or any commission rule 5.19 or order, the director may issue and cause to be served upon the 5.20 person an order requiring the person to cease and desist from 5.21 violations of this chapter or rule or order. The order must 5.22 give reasonable notice of the rights of the person to request a 5.23 hearing and must state the reason for the entry of the order. 5.24 Unless otherwise agreed between the parties, a hearing shall be 5.25 held no later than seven days after the request for the hearing 5.26 is received by the board after which and within 20 days after 5.27 the receipt of the administrative law judge's report and 5.28 subsequent exceptions and argument, the board shall issue an 5.29 order vacating the cease and desist order, modifying the cease 5.30 and desist order, or making the cease and desist order permanent 5.31 as the facts require. If no hearing is requested within 30 days 5.32 of the service of the order, the order becomes final and remains 5.33 in effect until modified or vacated by the board or director. 5.34 All hearings shall be conducted in accordance with the 5.35 provisions of chapter 14. If the person to whom a cease and 5.36 desist order is issued fails to appear at the hearing after 6.1 being duly notified, the person shall be deemed in default, and 6.2 the proceeding may be determined against the person upon 6.3 consideration of the cease and desist order, the allegations of 6.4 which may be deemed to be true. 6.5 (b) Whenever it appears to the board that any person has 6.6 engaged or is about to engage in any act or practice that 6.7 violates this chapter or any commission rule or order, the board 6.8 may bring an action in the district court in the appropriate 6.9 county to enjoin the acts or practices and to enforce compliance 6.10 with this chapter or any board rule or order and may refer the 6.11 matter to the attorney general. Upon a proper showing, a 6.12 permanent or temporary injunction, restraining order, or writ of 6.13 mandamus shall be granted. The court may not require the board 6.14 to post a bond. 6.15 Sec. 4. [349C.07] [CONFLICT OF INTEREST.] 6.16 Subdivision 1. [FINANCIAL CONFLICT.] No person may be a 6.17 member of the commission or board or be an employee of the board 6.18 who has an interest in any corporation, association, limited 6.19 liability company, or partnership that holds a license or is an 6.20 applicant for a license under this chapter. 6.21 Subd. 2. [COMPENSATION PROHIBITED.] A member of the 6.22 commission or board or an employee of the board may not accept 6.23 employment with, receive compensation directly or indirectly 6.24 from, or enter into a contractual relationship with a 6.25 corporation, association, limited liability company, or 6.26 partnership that holds a license or is an applicant for a 6.27 license under this chapter while employed with or a member of 6.28 the commission or board or within one year after terminating 6.29 employment with or leaving the board. 6.30 Subd. 3. [HIRING RESTRICTIONS.] A corporation, 6.31 association, limited liability company, or partnership that 6.32 holds a license or is an applicant for a license under this 6.33 chapter may not hire a former member of the commission or board 6.34 or a former employee of the board for one year after the member 6.35 or employee has terminated membership or employment. 6.36 ARTICLE 3 7.1 CASINO LICENSE 7.2 Section 1. [349C.08] [CASINO AUTHORIZED.] 7.3 The commission may issue one license for the ownership and 7.4 operation of a casino to an applicant that meets the 7.5 requirements of this chapter. 7.6 Sec. 2. [349C.09] [CASINO LICENSE.] 7.7 Subdivision 1. [APPLICATION.] (a) An application for a 7.8 casino license must be on a form the board prescribes. The 7.9 application must contain: 7.10 (1) the name and address of the applicant and, if it is a 7.11 corporation, the names of all officers, directors, and five 7.12 percent or greater shareholders of the corporation and any of 7.13 its holding corporations; 7.14 (2) for applicants other than corporations, the names of 7.15 any person or persons holding directly, indirectly, or 7.16 beneficially an interest of any kind in the applicant, whether 7.17 the interest is financial, administrative, policy making, or 7.18 supervisory. For corporate applicants, the name of each person 7.19 or entity not otherwise disclosed under clause (1) who is an 7.20 affiliate or a beneficial owner of an affiliate of the applicant 7.21 as that term is defined in the Federal Securities Act of 1933; 7.22 (3) the certified and audited financial statements of the 7.23 applicant for the previous three fiscal years and, if 7.24 applicable, the complete Securities and Exchange Commission Form 7.25 10-K Annual Reports of the applicant for the past three fiscal 7.26 years; 7.27 (4) an affidavit executed by the applicant attesting that 7.28 no officer, director, or other person with a present or future 7.29 direct or indirect financial or management interest in the 7.30 casino, to the best of the applicant's knowledge: 7.31 (i) is in default in the payment of an obligation or debt 7.32 to the state under this chapter; 7.33 (ii) has a felony conviction of record in a state or 7.34 federal court or a state or federal felony charge pending; 7.35 (iii) is or has been connected with or engaged in any 7.36 illegal business; 8.1 (iv) has ever been found guilty of fraud or 8.2 misrepresentation in connection with any gambling activity; or 8.3 (v) has ever been found guilty of a violation of a law or 8.4 rule relating to gambling; 8.5 (5) an irrevocable consent, signed by the applicant, which 8.6 states that suits and actions relating to the subject matter of 8.7 the application or acts or omissions arising from it may be 8.8 commenced against the applicant in any court of competent 8.9 jurisdiction in the state by the service on the secretary of 8.10 state of any summons, process, or pleadings authorized by the 8.11 laws of this state. If any summons, process, or pleading is 8.12 served upon the secretary of state, it must be by duplicate 8.13 copies. One copy must be retained in the Office of the 8.14 Secretary of State and the other copy must be forwarded 8.15 immediately by certified mail to the address of the applicant, 8.16 as shown by the records of the commission; and 8.17 (6) an affirmative action plan establishing goals and 8.18 timetables consistent with the Minnesota Human Rights Act, 8.19 chapter 363. 8.20 (b) An applicant under this section must, as part of the 8.21 application, specify an amount of money that the licensee will 8.22 pay to the state upon issuance of the license as a onetime, 8.23 lump-sum payment under section 349C.11, subdivision 1. As 8.24 provided in subdivision 5, the amount of the onetime, lump-sum 8.25 payment shall be submitted under seal, and shall remain under 8.26 seal until the deadline for submission of applications has 8.27 expired. Thereafter, until the license is awarded by the 8.28 commission, the amount of the lump-sum payment proposed by each 8.29 applicant shall be classified as nonpublic data for purposes of 8.30 section 13.03. 8.31 (c) An applicant must at the time of submitting the 8.32 application hold a license issued by another state or province 8.33 of Canada to engage in casino gaming. 8.34 (d) An application under this section must include a 8.35 detailed description of the applicant's proposed casino 8.36 facility, including location and detailed plans, drawings, and 9.1 specifications for all buildings, parking areas, street and 9.2 highway access, and infrastructure improvements. In the case of 9.3 a facility located in the seven-county metropolitan area, the 9.4 site must be within one mile of an interstate highway 9.5 interchange and be of a size sufficient under all applicable 9.6 zoning and land use regulations to accommodate the construction 9.7 and operation of casino facilities with a minimum of 200,000 9.8 square feet devoted to gaming, food and beverage service, hotel 9.9 facilities, and related facilities and activities. 9.10 Subd. 2. [INVESTIGATION.] Before making a recommendation 9.11 to the commission for granting a license under this section, the 9.12 board shall conduct a comprehensive background and financial 9.13 investigation of the applicant and the proposed sources of 9.14 financing. The board may charge an applicant an investigation 9.15 fee to cover the actual, reasonable, and necessary costs of the 9.16 investigation. 9.17 Subd. 3. [HEARINGS.] Before making a recommendation to the 9.18 commission concerning granting a license under this section, the 9.19 board shall conduct one or more public hearings in the county 9.20 and municipality where a casino is proposed to be located. The 9.21 board shall also request comments on the application from the 9.22 county board and city council or town board of the city or town 9.23 where a casino is proposed to be located and, for proposals 9.24 located within the metropolitan area, from the Metropolitan 9.25 Council. The Metropolitan Council does not have authority or 9.26 jurisdiction under the provisions of section 473.173, upon 9.27 either its own initiative, by petition of allegedly affected 9.28 local government units, or by citizen petition, to undertake a 9.29 metropolitan significance review of a casino project proposed by 9.30 an applicant for a casino license under this chapter. 9.31 Subd. 4. [LICENSE ISSUANCE.] (a) The commission may issue 9.32 one casino license for a facility. The term of an initial 9.33 license under this section is 20 years, and the term of license 9.34 renewals under this section is ten years. 9.35 (b) Upon receiving and considering each application for a 9.36 casino license, investigations conducted of the applicant by or 10.1 on behalf of the board, the results of the hearings conducted 10.2 under subdivision 3, and the recommendation of the board on each 10.3 application, the commission shall determine in the case of each 10.4 applicant whether the applicant is qualified for a license under 10.5 this section based on: 10.6 (1) the effect of licensing the applicant on the public 10.7 interest in effective regulation and control of gaming; 10.8 (2) the applicant's financial resources and sources of 10.9 financing; 10.10 (3) the applicant's applicable experience; 10.11 (4) the applicant's fitness to operate a casino without 10.12 creating or enhancing the dangers of unsuitable, unfair, or 10.13 illegal practices, methods, and activities in the conduct of 10.14 gaming or the carrying on of business and financial arrangements 10.15 incident to conducting gaming; and 10.16 (5) the applicant's current ownership or leasehold interest 10.17 in the site where the applicant's proposed casino will be 10.18 located. 10.19 (c) The commission shall select the best qualified 10.20 applicant for each license authorized to be issued under 10.21 paragraph (a) based on the reasonably attainable economic 10.22 benefits to the state from the applicant's casino. The 10.23 commission shall make this selection based on: 10.24 (1) the amount of the applicant's onetime, lump-sum payment 10.25 submitted under seal with the license application; 10.26 (2) the long-term economic development potential of the 10.27 applicant's casino; 10.28 (3) the job creation potential of the applicant's casino; 10.29 (4) the tourism generation potential of the applicant's 10.30 casino, as measured by, among other things, the vehicular 10.31 traffic in the vicinity of the location, the location's 10.32 proximity to other tourist attractions, and the location's 10.33 proximity to an international airport; and 10.34 (5) the long-term revenue potential to be realized by the 10.35 state and political subdivisions of the state from the 10.36 applicant's casino. 11.1 Subd. 5. [REQUIREMENTS APPLICABLE TO LICENSE APPLICATIONS; 11.2 DATA PRACTICES.] (a) The commission shall establish and publish 11.3 notice in the State Register of the deadline for submission of 11.4 casino license applications. Without the prior unanimous 11.5 written consent of the governor and the majority and minority 11.6 leaders of the senate, the deadline must fall on a nonholiday 11.7 weekday on a date that is within 120 days following the 11.8 effective date of this chapter. 11.9 (b) The amount of the onetime lump-sum payment required by 11.10 subdivision 1, paragraph (b), and section 349C.11, subdivision 11.11 1, shall be submitted under seal, separate from the application, 11.12 to the commission. The amount of the onetime, lump-sum payment 11.13 so submitted shall remain sealed until the deadline established 11.14 by the commission has lapsed. The sealed submission shall be 11.15 and remain classified as nonpublic data for purposes of section 11.16 13.03 until the second calendar day following issuance by the 11.17 commission of notice of the license awards to the successful 11.18 applicants. After that time, the submission shall automatically 11.19 be reclassified as public data under section 13.03. 11.20 (c) Immediately after the deadline for submitting 11.21 applications has lapsed, the board and the commission shall 11.22 promptly unseal, review, and analyze each application as 11.23 provided in this chapter. The board shall undertake the 11.24 investigation and review prescribed in subdivisions 2 and 3. 11.25 The commission shall rank each application in priority, first to 11.26 last. The commission shall issue notice to the applicant the 11.27 commission determines submitted the first-ranked application 11.28 (the "successful license applicants"), and publish notice of the 11.29 license awards in the State Register by a date within 120 days 11.30 after the license application deadline. 11.31 (d) The license awarded by the commission shall be deemed 11.32 conditional for a period of 30 days. During the 30-day period 11.33 following notice of issuance of the license, any unsuccessful 11.34 license applicant may review all other applications and all data 11.35 accompanying the applications for the purpose of determining 11.36 whether the successful license applicant complied with the 12.1 requirements of this chapter and applicable commission rules. 12.2 (e) If, within the 30 days, an unsuccessful license 12.3 applicant reasonably concludes the successful applicant failed 12.4 in any material respect to comply with the requirements of this 12.5 chapter or applicable commission rules, the unsuccessful license 12.6 applicant may file a petition for review and reconsideration 12.7 with the commission and serve a copy of the petition on the 12.8 successful applicant. The petition must specifically identify 12.9 each of the requirements of this chapter and rules of the 12.10 commission the successful applicant failed to satisfy, and the 12.11 deficiencies in the application. The commission in its 12.12 discretion may invite the successful license applicant to submit 12.13 a written response with 14 days after the commission's receipt 12.14 of the petition. Petitions submitted under this section are 12.15 subject to the good faith pleading requirements and sanctions 12.16 provisions of Rule 11 of the Minnesota Rules of Civil Procedure 12.17 and section 549.211, subdivision 2. 12.18 (f) The commission must issue a final decision on a 12.19 petition within 30 days. The commission's options are (1) to 12.20 deny the petition and affirm the license award; or (2) grant the 12.21 petition and suspend issuance of the license for up to 90 days. 12.22 If the commission grants the petition and suspends issuance of 12.23 the license, the commission shall issue an order informing the 12.24 successful applicant of each requirement of this chapter or the 12.25 commission's rules the applicant failed to satisfy. Issuance of 12.26 the license shall remain suspended until the applicant has fully 12.27 complied with and satisfied the requirements of this chapter and 12.28 the commission's rules. If the successful applicant fails to do 12.29 so within 90 days, the commission may revoke the license and 12.30 award the license to the second-ranked license applicant. 12.31 Judicial review of commission actions under this subdivision 12.32 shall be accomplished by filing of a writ of prohibition or 12.33 mandamus with the Minnesota Court of Appeals. 12.34 Subd. 6. [CHANGES IN OWNERSHIP OR MANAGEMENT.] If a change 12.35 in the officers, directors, shareholders, or other persons with 12.36 a present or future direct or indirect financial or management 13.1 interest in the licensee, or a change of ownership of more than 13.2 five percent of the licensee's shares is made after the 13.3 application is filed or the license issued, the applicant or 13.4 licensee must notify the board of the changes within five 13.5 business days of their occurrence and provide the affidavit 13.6 required by subdivision 1, paragraph (a), clause (4). 13.7 Subd. 7. [CHANGES IN QUALIFICATION.] If any change occurs 13.8 that would affect the accuracy or validity of a statement in an 13.9 affidavit submitted under subdivision 1, paragraph (a), clause 13.10 (4), the applicant or licensee must notify the board of the 13.11 change within five days of its occurrence. 13.12 Subd. 8. [LICENSE SUSPENSION AND REVOCATION.] (a) The 13.13 commission may, after receiving the recommendation of the board, 13.14 suspend or revoke a license under this section for (1) a 13.15 material violation of law, order, or rule; (2) operation of a 13.16 casino in violation of approved game procedures or an approved 13.17 security plan, which in the commissioner's opinion adversely and 13.18 materially affects the public interest of the state in the 13.19 effective regulation and control of gaming; (3) an intentional 13.20 false statement made in a license application; or (4) failure to 13.21 perform material covenants or representations made in a license 13.22 application. 13.23 (b) The commission may, after receiving the recommendation 13.24 of the board: (1) suspend a casino license for up to one year 13.25 for an action described in paragraph (a), clause (1) or (2); and 13.26 (2) suspend a casino license indefinitely if the commissioner 13.27 determines that the licensee has as an officer, director, 13.28 shareholder, or other person with a direct, indirect, or 13.29 beneficial interest a person who is in the commission's opinion 13.30 inimical, or who cannot be certified under subdivision 1, 13.31 paragraph (d). 13.32 (c) The commission may not revoke or suspend a license 13.33 under this subdivision unless the commissioner has granted the 13.34 licensee a reasonable amount of time to cure the violation 13.35 giving rise to the revocation or suspension and, in the 13.36 commissioner's reasonable judgment, the licensee has failed to 14.1 do so. 14.2 (d) A license revocation or suspension under this 14.3 subdivision is conducted as a contested case under sections 14.4 14.57 to 14.69 of the Administrative Procedure Act, and is in 14.5 addition to criminal penalties imposed for a violation of law or 14.6 rule. 14.7 Sec. 3. [349C.10] [OCCUPATIONAL LICENSES.] 14.8 Subdivision 1. [LICENSE REQUIRED.] Any person employed at 14.9 a licensed casino in an occupation that the commissioner by rule 14.10 determines requires licensing in order to ensure the public 14.11 interest of the state in the effective regulation and control of 14.12 gaming must have a license issued by the commissioner. 14.13 Subd. 2. [APPLICATION.] (a) An application for a casino 14.14 occupational license must be submitted on a form and in a manner 14.15 prescribed by the board and approved by the commission. The 14.16 application must be accompanied by an affidavit of qualification 14.17 that the applicant: 14.18 (1) does not have a felony conviction of record in a state 14.19 or federal court and does not have a state or federal felony 14.20 charge pending; 14.21 (2) is not and never has been connected with or engaged in 14.22 an illegal business; 14.23 (3) has never been found guilty of fraud or 14.24 misrepresentation in connection with gambling; and 14.25 (4) has never been found guilty of a serious violation of 14.26 law or rule relating to gambling. 14.27 (b) The application must also contain an irrevocable 14.28 consent statement, to be signed by the applicant, which states 14.29 that suits and actions relating to the subject matter of the 14.30 application or acts or omissions arising from it may be 14.31 commenced against the applicant in any court of competent 14.32 jurisdiction in this state by the service on the secretary of 14.33 state of any summons, process, or pleadings authorized by the 14.34 laws of this state. If any summons, process, or pleading is 14.35 served upon the secretary of state, it must be by duplicate 14.36 copies. One copy must be retained in the Office of the 15.1 Secretary of State and the other copy must be forwarded 15.2 immediately by certified mail to the address of the applicant, 15.3 as shown by the records of the commissioner. 15.4 Subd. 3. [INVESTIGATIONS.] The board shall investigate 15.5 each applicant for a casino occupational license to the extent 15.6 the board or commission deems necessary. The board may require 15.7 that an applicant be fingerprinted or furnish the applicant's 15.8 fingerprints. The board may cooperate with national and 15.9 international organizations and agencies in conducting 15.10 investigations. The commission may by rule provide for 15.11 examining the qualifications of an applicant for the license 15.12 being applied for. 15.13 Subd. 4. [LICENSE ISSUANCE AND RENEWAL.] The board shall 15.14 make a recommendation to the commission on each application 15.15 received under this section. If, after receiving the 15.16 recommendation of the board, the commission determines that the 15.17 applicant is qualified for the occupation for which licensing is 15.18 sought and will not adversely affect the public health, welfare, 15.19 and safety or the integrity of gaming in Minnesota, the 15.20 commission may issue a casino occupational license to the 15.21 applicant. If, after receiving the recommendation of the board, 15.22 the commission makes a similar finding for a renewal of a casino 15.23 occupational license, the commission may renew the license. 15.24 Casino occupational licenses are effective for three years. 15.25 Subd. 5. [REVOCATION AND SUSPENSION.] (a) The commission 15.26 may on recommendation of the board or on its own motion revoke a 15.27 casino occupational license for a violation of law or rule which 15.28 in the commission's opinion adversely affects the integrity of 15.29 gaming in Minnesota, or for an intentional false statement made 15.30 in a license application. The commission may suspend a casino 15.31 occupational license for up to one year for a violation of law, 15.32 order, or rule. 15.33 (b) The commission may not revoke or suspend a license 15.34 under this subdivision unless the commission has granted the 15.35 licensee a reasonable amount of time to cure the violation 15.36 giving rise to the revocation or suspension and, in the 16.1 commission's reasonable judgment, the licensee has failed to do 16.2 so. 16.3 (c) A license revocation or suspension that remains in 16.4 effect for more than 90 days is a contested case under sections 16.5 14.57 to 14.69 of the Administrative Procedure Act and is in 16.6 addition to criminal penalties imposed for a violation of law or 16.7 rule. The commission may summarily suspend a license for more 16.8 than 90 days prior to a contested case hearing where it is 16.9 necessary to ensure the integrity of gaming. A contested case 16.10 hearing must be held within 20 days of the summary suspension 16.11 and the administrative law judge's report must be issued within 16.12 20 days from the close of the hearing record. In all cases 16.13 involving summary suspension, the commissioner must issue its 16.14 final decision within 30 days from receipt of the report of the 16.15 administrative law judge and subsequent exceptions and argument 16.16 under section 14.61. 16.17 Sec. 4. [349C.11] [LICENSE FEES AND PAYMENTS.] 16.18 Subdivision 1. [CASINO PAYMENT.] (a) As a condition of 16.19 issuance of an initial casino license under section 349C.09, the 16.20 applicant must make to the commission, for deposit into the 16.21 general fund, the onetime, lump-sum payment in the amount set 16.22 forth in the sealed submission accompanying the licensee's 16.23 approved casino license application. The payment must be made 16.24 before a casino license may be issued. 16.25 (b) No part of this payment may be refunded to the licensee 16.26 unless, during the 30 years immediately following the date of 16.27 license issuance the provisions of this chapter authorizing 16.28 operation of the casino are repealed, in which case the licensee 16.29 is entitled to a refund of the payment at the rate of 1/30 of 16.30 the payment amount for each full or partial year during the 16.31 30-year period in which the licensee is precluded from lawfully 16.32 conducting gaming operations at the licensed facility due to an 16.33 event described in this paragraph. The remedy provided in this 16.34 paragraph is not exclusive and is without prejudice to other 16.35 claims at law or in equity the license may have. 16.36 Subd. 2. [CASINO LICENSE FEE.] A casino licensed under 17.1 this chapter must pay to the board an annual license fee at the 17.2 time and in the manner prescribed by the commission. The 17.3 commission shall by rule set the fee or establish a procedure 17.4 for setting the fee in an amount sufficient only to compensate 17.5 the general fund for (1) appropriations from that fund to the 17.6 board for the costs of the board and commission in carrying out 17.7 their powers and duties under this chapter that have not 17.8 otherwise been recovered, (2) the appropriation for compulsive 17.9 gambling programs under section 349C.22, and (3) revenue 17.10 reductions that the commissioner of revenue determines are 17.11 attributable to lawful gambling tax reductions under section 17.12 297E.02, subdivisions 1, 4, and 6. The board shall deposit the 17.13 fee in the general fund. 17.14 Subd. 3. [CASINO OCCUPATIONAL LICENSES.] The commission 17.15 shall establish by rule a schedule of fees, not exceeding $100 17.16 per year, for casino occupational licenses. License payments 17.17 must be deposited in the general fund. 17.18 Sec. 5. [349C.12] [GAME PROCEDURES.] 17.19 Subdivision 1. [FILING.] A casino licensee under this 17.20 chapter must file with the board a complete set of procedures to 17.21 govern all forms of gaming authorized at the casino. The game 17.22 procedures must comply with all applicable rules of the 17.23 commission. The game procedures must specify payout percentages 17.24 or ranges of payout percentages for each form of gaming. The 17.25 board shall review the game procedures and make a recommendation 17.26 to the commission as to approval or disapproval. After 17.27 receiving the recommendation of the board, the commission may 17.28 approve the game procedures if the commission determines that 17.29 they adequately guarantee the integrity and fairness of gaming 17.30 and the interests of casino patrons. A casino licensee may not 17.31 conduct gaming at the casino except in conformity with the 17.32 approved game procedures. The board may conduct audits, 17.33 inspections, and investigations of gaming at the casino to 17.34 ensure compliance with this section. Game procedures filed 17.35 under this section are deemed approved 30 days after filing 17.36 unless they are disapproved by the commission. 18.1 Subd. 2. [AMENDMENTS.] A casino licensee may amend 18.2 approved game procedures only if (1) the amendments have been 18.3 filed with the board and approved by the commission, and (2) a 18.4 copy of the amended procedures have been available to the public 18.5 at the facility for at least three days before their adoption. 18.6 Subd. 3. [AGREEMENT.] An individual who participates in a 18.7 game authorized at the casino agrees to be bound by the rules 18.8 and procedures applicable to that particular game. 18.9 Sec. 6. [349C.13] [SECURITY PLAN.] 18.10 Subdivision 1. [FILING.] No later than 60 days before the 18.11 commencement of casino operations, a casino licensee under this 18.12 chapter must file with the board a comprehensive plan for 18.13 security and surveillance at the casino. The security plan must 18.14 comply with all applicable rules of the commission. The 18.15 security plan must provide that security and surveillance will 18.16 be undertaken only by persons holding casino occupational 18.17 licenses. The security plan must provide for the testing of all 18.18 gambling devices by the board, or by a private entity under 18.19 contract to the board. The board shall review the security plan 18.20 and make a recommendation to the commission as to approval or 18.21 disapproval. After receiving the board's recommendation, the 18.22 commission may approve it if the commissioner determines that it 18.23 meets customary industry standards and is reasonably adequate to 18.24 ensure the integrity and safety of casino operations. A casino 18.25 licensee may not operate the casino except in conformity with 18.26 the approved security plan. The board may conduct audits, 18.27 inspections, and investigations of gambling at a casino to 18.28 ensure compliance with this section. A security plan is deemed 18.29 approved 30 days after filing unless it is disapproved by the 18.30 commission. 18.31 Subd. 2. [AMENDMENTS.] A casino licensee may amend a 18.32 security plan only if the amendments have been filed with the 18.33 board and approved by the commissioner after receiving the 18.34 recommendation of the board on the amendments. 18.35 Sec. 7. [349C.14] [EXCLUSION OF CERTAIN PERSONS.] 18.36 Subdivision 1. [PERSONS EXCLUDED.] The board may by order 19.1 exclude from a licensed casino a person who: 19.2 (1) has a felony conviction of record under the laws of any 19.3 state or the United States; 19.4 (2) has had a gaming-related license suspended, revoked, or 19.5 denied by an authority in any jurisdiction; or 19.6 (3) is determined by the board, on the basis of evidence 19.7 presented to the board, to be a threat to the integrity of 19.8 gaming in Minnesota. 19.9 Subd. 2. [HEARING; APPEAL.] An order to exclude a person 19.10 from a licensed casino must be made by the board at a public 19.11 hearing of which the person to be excluded must have at least 19.12 five days' notice. If present at the hearing, the person must 19.13 be permitted to show cause why the exclusion should not be 19.14 ordered. An appeal of the order may be made to the commission 19.15 within ten days after a hearing. The commission shall consider 19.16 the evidence heard by the board and issue an order upholding, 19.17 modifying, or vacating the board's order. 19.18 Subd. 3. [REASONABLE TIME TO CURE.] The board may not 19.19 issue an order under this subdivision unless the board has 19.20 granted the person who is the subject of the order a reasonable 19.21 amount of time to cure the violation or condition giving rise to 19.22 the order and, in the board's reasonable judgment, the person 19.23 has failed to do so. 19.24 Subd. 4. [PROHIBITIONS.] It is a gross misdemeanor for a 19.25 person named in an exclusion order to enter, attempt to enter, 19.26 or be on the premises of a licensed casino while the order is in 19.27 effect, and for a casino licensee knowingly to permit an 19.28 excluded person to enter or be on the premises. 19.29 Subd. 5. [EXCLUSIONS BY CASINO.] A casino licensee may 19.30 eject and exclude from the casino premises any person who is in 19.31 violation of any state law, commission rule, posted casino 19.32 policy, or board or commission order, or who is a threat to the 19.33 integrity of gaming or the public safety. A person so excluded 19.34 from the casino premises may appeal the exclusion to the 19.35 commission and must be given a public hearing on the appeal upon 19.36 request. At the hearing the person must be given the 20.1 opportunity to show cause why the exclusion should not have been 20.2 ordered. If the commission after the hearing finds that the 20.3 integrity of gambling and the public safety do not justify the 20.4 exclusion, the commissioner shall order the casino licensee 20.5 making the exclusion to reinstate or readmit the person. 20.6 Reinstatement constitutes the sole remedy available in these 20.7 cases. 20.8 Sec. 8. [349C.15] [DETENTION OF SUSPECTS.] 20.9 Subdivision 1. [GENERALLY.] An agent of the board or a 20.10 security officer who is licensed under Minnesota Rules, chapter 20.11 7878, and is employed by a casino licensee, may detain a person 20.12 if probable cause exists to believe that the person detained has 20.13 violated section 609.76 or any provision of this chapter while 20.14 at a casino authorized by this chapter. 20.15 Subd. 2. [CIRCUMSTANCES JUSTIFYING DETENTION.] (a) A 20.16 person may be detained to: 20.17 (1) require the person to provide identification or to 20.18 verify identification; 20.19 (2) inquire as to whether the person possesses any 20.20 contraband as provided by section 609.762, subdivision 1; 20.21 (3) notify a peace officer of the alleged violation; or 20.22 (4) institute criminal proceedings against the person. 20.23 (b) The person detained must be promptly informed of the 20.24 purpose of the detention and may not be subjected to unnecessary 20.25 or unreasonable force, nor to interrogation against the person's 20.26 will. If at any time the person detained requests the licensee 20.27 to summon a peace officer, the licensee must notify a peace 20.28 officer immediately. A casino licensee must not detain a person 20.29 for more than one hour unless a peace officer requests 20.30 detention, in which case the person may be detained until the 20.31 peace officer has accepted custody of or released the person. 20.32 Subd. 3. [ARREST.] Upon a charge being made by a licensee, 20.33 a peace officer may arrest a person without a warrant if the 20.34 officer has probable cause to believe that the person has 20.35 committed or attempted to commit an offense described in section 20.36 609.76. 21.1 Subd. 4. [IMMUNITY.] No casino licensee or peace officer 21.2 is criminally or civilly liable for any detention authorized by 21.3 this section if probable cause exists for the detention, and the 21.4 detention was not conducted with unreasonable force or in bad 21.5 faith. 21.6 Sec. 9. [349C.16] [UNDERAGE PERSONS PROHIBITED.] 21.7 (a) No person under the age of 21 years may participate in 21.8 gambling in a licensed casino. If any person under the age of 21.9 21 participates in gambling at a licensed casino and qualifies 21.10 for any prize or payout, the casino licensee must return the 21.11 estimated amount of the wager to the person. 21.12 (b) A casino licensed under this section may not pay any 21.13 prize or winnings to a person under the age of 21. 21.14 Sec. 10. [349C.17] [AUDIT.] 21.15 The board shall take all actions the board or commission 21.16 determines necessary, including appointment of one or more 21.17 on-site auditors who are employees of the board, to ensure 21.18 adequate accounting and auditing of funds and finances of the 21.19 casino. The board shall arrange with the licensee for an annual 21.20 outside audit of the casino's financial operations. The board 21.21 shall assess to the licensee all actual, reasonable, and 21.22 necessary costs incurred by the board in complying with this 21.23 section. 21.24 Sec. 11. [349C.18] [GAMING RECEIPTS TAX.] 21.25 Subdivision 1. [TAX IMPOSED.] There is imposed a tax on 21.26 gaming conducted at a licensed casino under this chapter at the 21.27 rate of 25 percent of gross gaming receipts for deposit in the 21.28 Minnesota scholarship fund under section 136H.07. A casino may 21.29 not voluntarily make tax payments in excess of this rate. 21.30 Subd. 2. [PAYMENT.] A casino licensee must make payments 21.31 of the tax due under subdivision 1 to the board at a time and in 21.32 a manner the board prescribes. The casino licensee must make 21.33 payments for each month within 30 days after the end of the 21.34 month. Payments under this subdivision must be made in a manner 21.35 and on a form prescribed by the board. 21.36 Sec. 12. [349C.19] [COMPULSIVE GAMBLING HOTLINE POSTING.] 22.1 A casino licensee must post prominently at locations 22.2 throughout the casino, in a manner approved by the commissioner 22.3 of human services, the toll-free telephone number established by 22.4 the commissioner of human services in connection with the 22.5 compulsive gambling program. 22.6 Sec. 13. [349C.20] [LOCAL LICENSE.] 22.7 No political subdivision may require a license, permit, or 22.8 any other means of approval to operate a casino, regulate or 22.9 restrict gaming authorized at a casino, or impose a tax or fee 22.10 on the conduct of gaming authorized at the casino. 22.11 Sec. 14. [349C.21] [VIOLATIONS.] 22.12 (a) Except as otherwise provided, a violation of this 22.13 chapter is a gross misdemeanor. 22.14 (b) A violation of section 349C.16, paragraph (a), is a 22.15 misdemeanor. 22.16 Sec. 15. [349C.22] [COMPULSIVE GAMBLING TREATMENT 22.17 APPROPRIATION.] 22.18 $2,500,000 is appropriated on July 1 of each fiscal year 22.19 from the general fund to the Board of Regents of the University 22.20 of Minnesota for the assessment and treatment of compulsive 22.21 gambling and other addictive behaviors by the Impulse Control 22.22 Disorder Clinic in the Minnesota Department of Psychiatry at the 22.23 University of Minnesota School of Medicine. The board must 22.24 assess applicants, treat qualified applicants, and track the 22.25 efficacy of the program through existing performance measures. 22.26 ARTICLE 4 22.27 CONSTITUTIONAL AMENDMENT 22.28 Section 1. [CONSTITUTIONAL AMENDMENT PROPOSED.] 22.29 An amendment to the Minnesota Constitution, article XIII, 22.30 section 5, is proposed to the people. If the amendment is 22.31 adopted, article XIII, section 5, will read: 22.32 Sec. 5. The legislature shall not authorize any lottery or 22.33 the sale of lottery tickets, other than (1) authorizing a 22.34 lottery and sale of lottery tickets for a lottery operated by 22.35 the state, or (2) authorizing the licensing, regulation, and 22.36 taxation of a single private casino in the state, if the net 23.1 revenue from any tax on casino gaming proceeds as defined by law 23.2 is dedicated to a merit-based higher education scholarship 23.3 program and other purposes prescribed by law. 23.4 Sec. 2. [SUBMISSION TO VOTERS.] 23.5 The proposed amendment shall be submitted to the people at 23.6 the 2004 general election. The question submitted shall be: 23.7 "Shall the Minnesota Constitution be amended to permit the 23.8 licensing, regulation, and taxation of a single private casino 23.9 in the state, if the net proceeds from any tax on casino gaming 23.10 proceeds as defined by law is dedicated to a merit-based higher 23.11 education scholarship program and other purposes prescribed by 23.12 law? 23.13 Yes ....... 23.14 No ........" 23.15 ARTICLE 5 23.16 CONFORMING AMENDMENTS 23.17 Section 1. Minnesota Statutes 2002, section 299L.01, 23.18 subdivision 4, is amended to read: 23.19 Subd. 4. [CONFLICT OF INTEREST.] (a) The director and any 23.20 person employed by the division may not have a direct or 23.21 indirect financial interest in: 23.22 (1) a class A or B licensee of the Racing Commission; 23.23 (2) a lottery retailer under contract with the State 23.24 Lottery; 23.25 (3) a person who is under a lottery procurement contract 23.26 with the State Lottery; 23.27 (4) a bingo hall, manufacturer, or distributor licensed 23.28 under chapter 349;or23.29 (5) a manufacturer or distributor licensed under this 23.30 chapter; or 23.31 (6) a casino licensee under chapter 349C. 23.32 (b) The director or an employee of the Division of Alcohol 23.33 and Gambling Enforcement may not participate in the conducting 23.34 of lawful gambling under chapter 349. 23.35 Sec. 2. Minnesota Statutes 2002, section 299L.02, is 23.36 amended by adding a subdivision to read: 24.1 Subd. 3a. [CASINO.] The director shall conduct background 24.2 investigations of applicants for licensing under chapter 349C at 24.3 the request of the Minnesota Casino Board. The director may 24.4 charge applicants a reasonable fee to cover the costs of the 24.5 investigation. 24.6 Sec. 3. Minnesota Statutes 2002, section 299L.07, 24.7 subdivision 2, is amended to read: 24.8 Subd. 2. [EXCLUSIONS.] Notwithstanding subdivision 1, a 24.9 gambling device: 24.10 (1) may be sold by a person who is not licensed under this 24.11 section, if the person (i) is not engaged in the trade or 24.12 business of selling gambling devices, and (ii) does not sell 24.13 more than one gambling device in any calendar year; 24.14 (2) may be sold by the governing body of a federally 24.15 recognized Indian tribe described in subdivision 2a, paragraph 24.16 (b), clause (1), which is not licensed under this section, if 24.17 (i) the gambling device was operated by the Indian tribe, (ii) 24.18 the sale is to a distributor licensed under this section, and 24.19 (iii) the licensed distributor notifies the commissioner of the 24.20 purchase, in the same manner as is required when the licensed 24.21 distributor ships a gambling device into Minnesota; 24.22 (3) may be possessed by a person not licensed under this 24.23 section if the person holds a permit issued under section 24.24 299L.08;and24.25 (4) may be possessed by a state agency, with the written 24.26 authorization of the director, for display or evaluation 24.27 purposes only and not for the conduct of gambling; and 24.28 (5) may be possessed by the holder of a casino license 24.29 under chapter 349C, for use only in the licensed casino. 24.30 Sec. 4. Minnesota Statutes 2002, section 299L.07, 24.31 subdivision 2a, is amended to read: 24.32 Subd. 2a. [RESTRICTIONS.] (a) A manufacturer licensed 24.33 under this section may sell, offer to sell, lease, or rent, in 24.34 whole or in part, a gambling device only to a distributor 24.35 licensed under this section. 24.36 (b) A distributor licensed under this section may sell, 25.1 offer to sell, market, rent, lease, or otherwise provide, in 25.2 whole or in part, a gambling device only to: 25.3 (1) the governing body of a federally recognized Indian 25.4 tribe that is authorized to operate the gambling device under a 25.5 tribal state compact under the Indian Gaming Regulatory Act, 25.6 Public Law 100-497, and future amendments to it; 25.7 (2) a person for use in the person's dwelling for display 25.8 or amusement purposes in a manner that does not afford players 25.9 an opportunity to obtain anything of value; 25.10 (3) another distributor licensed under this section;or25.11 (4) a person in another state who is authorized under the 25.12 laws of that state to possess the gambling device; or 25.13 (5) the holder of a casino license under chapter 349C. 25.14 Sec. 5. Minnesota Statutes 2002, section 340A.404, is 25.15 amended by adding a subdivision to read: 25.16 Subd. 8a. [LICENSES TO CASINOS.] The commissioner may 25.17 issue an on-sale intoxicating liquor license to a holder of a 25.18 casino license under chapter 349C. The premises licensed under 25.19 this subdivision need not be compact and contiguous but must be 25.20 limited to the casino premises as described in the approved 25.21 casino license application. The commissioner shall set the fee 25.22 for the license in an amount sufficient to cover the 25.23 commissioner's costs of issuing and inspecting and other 25.24 directly related costs of enforcement. Section 340A.410, 25.25 subdivision 5, does not apply to a casino licensed under this 25.26 section. 25.27 Sec. 6. Minnesota Statutes 2002, section 541.20, is 25.28 amended to read: 25.29 541.20 [RECOVERY OF MONEY LOST.] 25.30 Every person who, by playing at cards, dice, or other game, 25.31 or by betting on the hands or sides of such as are gambling, 25.32 shall lose to any person so playing or betting any sum of money 25.33 or any goods, and pays or delivers the same, or any part 25.34 thereof, to the winner, may sue for and recover such money by a 25.35 civil action, before any court of competent jurisdiction. For 25.36 purposes of this section, gambling shall not include pari-mutuel 26.1 wagering conducted under a license issued pursuant to chapter 26.2 240, purchase or sale of tickets in the state 26.3 lottery, participation in gambling at a casino licensed under 26.4 chapter 349C, or gambling authorized under chapters 349 and 349A. 26.5 Sec. 7. Minnesota Statutes 2002, section 541.21, is 26.6 amended to read: 26.7 541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 26.8 Every note, bill, bond, mortgage, or other security or 26.9 conveyance in which the whole or any part of the consideration 26.10 shall be for any money or goods won by gambling or playing at 26.11 cards, dice, or any other game whatever, or by betting on the 26.12 sides or hands of any person gambling, or for reimbursing or 26.13 repaying any money knowingly lent or advanced at the time and 26.14 place of such gambling or betting, or lent and advanced for any 26.15 gambling or betting to any persons so gambling or betting, shall 26.16 be void and of no effect as between the parties to the same, and 26.17 as to all persons except such as hold or claim under them in 26.18 good faith, without notice of the illegality of the 26.19 consideration of such contract or conveyance. The provisions of 26.20 this section shall not apply to: (1) pari-mutuel wagering 26.21 conducted under a license issued pursuant to chapter 240; (2) 26.22 purchase of tickets in the state lottery under chapter 349A; (3) 26.23 gaming activities conducted pursuant to the Indian Gaming 26.24 Regulatory Act, 25 U.S.C. 2701 et seq.;or(4) lawful gambling 26.25 activities permitted under chapter 349; or (5) gambling licensed 26.26 under chapter 349C. 26.27 Sec. 8. Minnesota Statutes 2002, section 609.75, 26.28 subdivision 3, is amended to read: 26.29 Subd. 3. [WHAT ARE NOT BETS.] The following are not bets: 26.30 (1) A contract to insure, indemnify, guarantee or otherwise 26.31 compensate another for a harm or loss sustained, even though the 26.32 loss depends upon chance. 26.33 (2) A contract for the purchase or sale at a future date of 26.34 securities or other commodities. 26.35 (3) Offers of purses, prizes or premiums to the actual 26.36 contestants in any bona fide contest for the determination of 27.1 skill, speed, strength, endurance, or quality or to the bona 27.2 fide owners of animals or other property entered in such a 27.3 contest. 27.4 (4) The game of bingo when conducted in compliance with 27.5 sections 349.11 to 349.23. 27.6 (5) A private social bet not part of or incidental to 27.7 organized, commercialized, or systematic gambling. 27.8 (6) The operation of equipment or the conduct of a raffle 27.9 under sections 349.11 to 349.22, by an organization licensed by 27.10 the Gambling Control Board or an organization exempt from 27.11 licensing under section 349.166. 27.12 (7) Pari-mutuel betting on horse racing when the betting is 27.13 conducted under chapter 240. 27.14 (8) The purchase and sale of state lottery tickets under 27.15 chapter 349A. 27.16 (9) Participation in gambling at a casino licensed under 27.17 chapter 349C. 27.18 Sec. 9. Minnesota Statutes 2002, section 609.761, 27.19 subdivision 2, is amended to read: 27.20 Subd. 2. [STATE LOTTERY; CASINO.] Sections 609.755 and 27.21 609.76 do not prohibit the operation of the state lottery or the 27.22 sale, possession,orpurchase of tickets for the state lottery 27.23 under chapter 349A, or operation of or participation in gambling 27.24 at a casino licensed under chapter 349C. 27.25 Sec. 10. [COMMISSIONER OF ADMINISTRATION.] 27.26 The commissioner of administration shall submit a report to 27.27 the legislature by February 1, 2006, on the feasibility of 27.28 establishing or designating a single regulatory body that 27.29 combines the powers and duties of the Casino Control Commission, 27.30 the Minnesota Casino Board, and the Gambling Control Board. The 27.31 commissioner shall include in the report a draft of legislation 27.32 to accomplish this purpose. 27.33 ARTICLE 6 27.34 STAR PROGRAM 27.35 Section 1. [136H.01] [MINNESOTA STUDENTS TAKING ACADEMIC 27.36 RESPONSIBILITY (STAR) SCHOLARSHIP PROGRAMS; ESTABLISHMENT; 28.1 PURPOSE.] 28.2 The student financial aid programs authorized in this 28.3 chapter are known as the Minnesota students taking academic 28.4 responsibility scholarship (STAR) programs. The purpose of the 28.5 Minnesota STAR programs is to: (1) promote and reward academic 28.6 achievement in secondary education; (2) provide enhanced access 28.7 to postsecondary education for Minnesota students who meet 28.8 academic standards for success; and (3) recognize and meet the 28.9 needs of the Minnesota workforce by providing opportunity for 28.10 training and education in skilled professions. The Minnesota 28.11 STAR programs provide two types of scholarships to enable 28.12 eligible students to attend a public or eligible private 28.13 postsecondary institution in Minnesota. The Minnesota STAR 28.14 scholarship under section 136H.05 is awarded to eligible 28.15 students to attend eligible public and private postsecondary 28.16 institutions in Minnesota based on high achievement in high 28.17 school and continued high academic achievement in college or 28.18 university. The Minnesota TechSTAR scholarship for workforce 28.19 development under section 136H.06 is awarded to students to 28.20 attend public two-year colleges to study for occupations that 28.21 meet locally identified workforce needs. 28.22 Sec. 2. [136H.02] [DEFINITIONS.] 28.23 For the purposes of this chapter, the terms defined in this 28.24 section have the meanings given. 28.25 Subdivision 1. [CORE SECONDARY CURRICULUM.] "Core 28.26 secondary curriculum" is defined as the course credit 28.27 requirements under section 120B.024, clauses (1) to (4). 28.28 Subd. 2. [DIRECTOR.] "Director" means the director of the 28.29 higher education services office. 28.30 Subd. 3. [ELIGIBLE INSTITUTION.] "Eligible institution" 28.31 means postsecondary institutions located in Minnesota that are 28.32 (1) for Minnesota STAR scholarships, public institutions that 28.33 offer instruction leading to associate or baccalaureate degrees 28.34 or private institutions accredited by a national or regional 28.35 accrediting agency recognized by the United States Department of 28.36 Education that offer instruction leading to associate or 29.1 baccalaureate degrees, and (2) for the Minnesota TechSTAR 29.2 scholarships, public two-year institutions that offer 29.3 instruction leading to certification or associate degrees in the 29.4 identified workforce skills or occupations identified by the 29.5 regional needs analysis under section 136H.06. 29.6 Subd. 4. [FULL TIME.] "Full time" means enrollment in an 29.7 eligible institution for a minimum of 15 credits each academic 29.8 semester or the equivalent for scholarships under section 29.9 136H.06. 29.10 Subd. 5. [OFFICE.] "Office" means the higher education 29.11 services office. 29.12 Subd. 6. [SCHOOL.] "School" has the meaning given in 29.13 section 120A.22, subdivision 4. 29.14 Subd. 7. [SCORE.] "Score" means a student's reported score 29.15 on the ACT or other standardized college entrance exam. 29.16 Sec. 3. [136H.03] [ADMINISTRATION.] 29.17 Subdivision 1. [HIGHER EDUCATION SERVICES OFFICE.] The 29.18 office shall administer the Minnesota STAR programs. The office 29.19 shall adopt rules to provide a Minnesota STAR scholarship or a 29.20 Minnesota TechSTAR scholarship to an eligible student enrolled 29.21 in an eligible institution consistent with the requirements of 29.22 this chapter. The director shall prescribe application forms, 29.23 procedures, and other requirements for awarding Minnesota STAR 29.24 scholarships and Minnesota TechSTAR scholarships. 29.25 Subd. 2. [AWARD LIMITS.] The annual award amount of all 29.26 Minnesota STAR scholarships and Minnesota TechSTAR scholarships 29.27 may not exceed the amount appropriated from the Minnesota 29.28 scholarship fund under section 136H.07. 29.29 Subd. 3. [INFORMATION.] The office shall provide 29.30 information on the Minnesota STAR programs to all eligible 29.31 institutions. The office in cooperation with the commissioner 29.32 of education must provide and distribute information on the 29.33 requirements and benefits of the Minnesota STAR programs to all 29.34 Minnesota schools, school counselors, and to students and 29.35 parents of students who are enrolled in grades 7 through 12. 29.36 Sec. 4. [136H.04] [STUDENT ELIGIBILITY.] 30.1 (a) To be eligible for an initial Minnesota STAR 30.2 scholarship or an initial Minnesota TechSTAR scholarship, a 30.3 student must meet the requirements in this section. A student 30.4 must: 30.5 (1) be a resident of Minnesota for 12 months prior to high 30.6 school graduation; 30.7 (2) be a graduate of a Minnesota school no earlier than May 30.8 2006; 30.9 (3) be a United States citizen or a person who meets the 30.10 definition of an eligible noncitizen under the federal Higher 30.11 Education Act, Title IV requirements; 30.12 (4) meet the relevant academic achievement requirements 30.13 under sections 136H.05 and 136H.06; 30.14 (5) apply for a scholarship no later than 12 months after 30.15 graduating from a Minnesota school or 12 months after separation 30.16 from active military service; and 30.17 (6) meet nonacademic requirements of the scholarship 30.18 programs as determined by the office. 30.19 (b) An eligible student may be awarded a scholarship under 30.20 either section 136H.05 or 136H.06, but may not be awarded both a 30.21 Minnesota STAR scholarship and a Minnesota TechSTAR scholarship. 30.22 Sec. 5. [136H.05] [MINNESOTA STAR SCHOLARSHIP.] 30.23 Subdivision 1. [INITIAL AWARD.] To be eligible for an 30.24 initial Minnesota STAR scholarship a student must meet the 30.25 requirements of section 136H.04 and the requirements of this 30.26 subdivision. An eligible student must: 30.27 (1) have a cumulative grade point average of 3.0 on a 30.28 four-point scale or the equivalent for the core secondary 30.29 curriculum; 30.30 (2) report the results of the student's ACT test or an 30.31 equivalent standardized college entrance exam as part of the 30.32 scholarship application; and 30.33 (3) enroll as a full-time undergraduate student at an 30.34 eligible institution. 30.35 Each school must calculate and report each applicant's 30.36 grade point average to the office in a form and manner 31.1 determined by the office. The calculation of grade point 31.2 averages must recognize and account for the increased difficulty 31.3 of advanced courses taken by students. The office must develop 31.4 a method to compare and rank applicant scores on college 31.5 entrance exams. 31.6 Subd. 2. [CONTINUING AWARD.] (a) A student who was awarded 31.7 an initial Minnesota STAR scholarship is eligible to receive a 31.8 continuing STAR scholarship if the student: 31.9 (1) applies for the scholarship by the deadline established 31.10 by the office; 31.11 (2) completes at least 75 percent of the credits the 31.12 student registered for in the most recent prior academic year; 31.13 (3) earns an overall grade point average of at least 3.0 on 31.14 a four-point scale or the equivalent on coursework taken at 31.15 eligible institutions; and 31.16 (4) is enrolled as a full-time undergraduate student in an 31.17 eligible institution. 31.18 (b) A student who is eligible for a Minnesota STAR 31.19 scholarship continues to be eligible for a Minnesota STAR 31.20 scholarship if the student enrolls in or transfers to another 31.21 eligible institution. 31.22 (c) A student is not eligible for a continuing Minnesota 31.23 STAR scholarship if the student: 31.24 (1) has been awarded a baccalaureate degree; 31.25 (2) has completed nine semesters of study at one or more 31.26 eligible institutions; or 31.27 (3) fails to meet the academic standards under this 31.28 subdivision. 31.29 (d) A student's eligibility for Minnesota STAR scholarship 31.30 expires on the sixth anniversary of the initial award to that 31.31 student. The office shall adopt rules to allow otherwise 31.32 eligible students to receive a Minnesota STAR scholarship if the 31.33 student can demonstrate hardship or other good cause including 31.34 illness or another condition that would affect the student's 31.35 academic performance or ability to complete a baccalaureate 31.36 degree within six years. 32.1 Subd. 3. [AWARDING SCHOLARSHIPS.] Of the amount 32.2 appropriated under section 136H.07, the office shall award 32.3 Minnesota STAR scholarships to eligible applicants in the amount 32.4 specified in subdivision 5. Beginning with fiscal year 2007, 32.5 the office shall make initial awards of Minnesota STAR 32.6 scholarships to eligible applicants in descending order of the 32.7 applicant's reported score. Beginning with fiscal year 2008, 32.8 the office shall first make continuing awards of Minnesota STAR 32.9 scholarships to eligible students and then make initial awards 32.10 in descending order of the applicant's reported score up to the 32.11 full amount of the annual appropriation for Minnesota STAR 32.12 scholarships. 32.13 Subd. 4. [SCHOLARSHIP USE.] A Minnesota STAR scholarship 32.14 is paid to an eligible institution and may be used for the cost 32.15 of tuition and mandatory fees of the student who is awarded the 32.16 Minnesota STAR scholarship. 32.17 Subd. 5. [AWARD AMOUNT.] Beginning in fiscal year 2007, a 32.18 Minnesota STAR scholarship of $2,500 is awarded to eligible 32.19 students up to the limits of appropriations under section 32.20 136H.07. The director may use any unexpended balance of the 32.21 annual appropriation for Minnesota STAR scholarships to increase 32.22 the award amount under this subdivision. 32.23 Sec. 6. [136H.06] [MINNESOTA TECHSTAR SCHOLARSHIPS.] 32.24 Subdivision 1. [ESTABLISHMENT.] The Minnesota TechSTAR 32.25 scholarship is established to provide funding for eligible 32.26 Minnesota students to attend Minnesota's public two-year 32.27 postsecondary institutions to receive certification or degrees 32.28 in occupations or skill areas that have been identified as a 32.29 critical employment need of the Minnesota workforce. 32.30 Subd. 2. [INITIAL AWARD.] To be eligible for an initial 32.31 TechSTAR scholarship, a student must: 32.32 (1) be eligible under section 136H.04; 32.33 (2) have at least a 2.0 grade point average on a four-point 32.34 scale or the equivalent in the core secondary curriculum; 32.35 (3) enroll in an eligible institution as a full-time 32.36 student in a program leading to a degree or a certificate in an 33.1 occupation or skill area identified by the regional employment 33.2 needs analysis under subdivision 6; and 33.3 (4) apply to the office by the established deadline. 33.4 Subd. 3. [CONTINUING AWARD.] To receive a continuing 33.5 Minnesota TechSTAR scholarship, a student must maintain at least 33.6 a 3.0 grade point average on a four-point scale or the 33.7 equivalent. A student who transfers to or enrolls in an 33.8 eligible program at another eligible institution continues to be 33.9 eligible for a Minnesota TechSTAR scholarship. A student who 33.10 does not meet the academic standards under this section or 33.11 transfers to an ineligible institution or an ineligible program 33.12 is no longer eligible for a continuing Minnesota TechSTAR 33.13 scholarship. A student is eligible for a maximum of five 33.14 semesters or the equivalent of awards under this section. A 33.15 student's eligibility for a TechSTAR scholarship expires on the 33.16 third anniversary of the initial TechSTAR award made to that 33.17 student. The office shall adopt rules to allow otherwise 33.18 eligible students to receive a Minnesota TechSTAR scholarship if 33.19 the student can demonstrate hardship or other good cause 33.20 including illness or another condition that would affect the 33.21 student's academic performance or ability to complete a 33.22 certificate program or an associate degree within three years. 33.23 Subd. 4. [SCHOLARSHIP USE.] A Minnesota TechSTAR 33.24 scholarship is paid to an eligible institution and may be used 33.25 for the cost of tuition and mandatory fees of the student who is 33.26 awarded the TechSTAR scholarship. A TechSTAR scholarship must 33.27 be used for a program identified through the regional skills 33.28 analysis under subdivision 6. 33.29 Subd. 5. [AWARD AMOUNT.] Beginning in fiscal year 2007, a 33.30 Minnesota TechSTAR scholarship of $2,000 is awarded to eligible 33.31 students up to the limits of the appropriations under section 33.32 136H.07. The director may use any unexpended balance of the 33.33 annual appropriation for TechSTAR scholarships to increase the 33.34 award amount under this subdivision. 33.35 Subd. 6. [REGIONAL EMPLOYMENT NEEDS ANALYSIS.] Each 33.36 regional organization as defined in section 116J.415, 34.1 subdivisions 2 and 3, must convene a group of business and 34.2 economic development leaders to identify the region's critical 34.3 employment needs for occupations that require less than a 34.4 baccalaureate degree. Each group must base its recommendations 34.5 on industry and labor market information from the Department of 34.6 Employment and Economic Development and the Office of Employment 34.7 Statistics. Regional employment needs must be identified by 34.8 industry, occupation, and skill set. The industry and labor 34.9 market information provided to each group must include at a 34.10 minimum: 34.11 (1) industries with a weighted average wage at or above the 34.12 region's designated livable wage ranked by number of employees; 34.13 (2) occupations, including emerging occupations, requiring 34.14 greater than a high school diploma but less than a baccalaureate 34.15 degree for each identified industry; and 34.16 (3) occupations which are experiencing a current shortage 34.17 or a projected shortage over the next five years. 34.18 Each group must make annual recommendations on critical 34.19 regional employment needs to the office. The office must 34.20 identify the eligible institutions that offer programs to meet 34.21 the regional needs. All TechSTAR scholarships must be awarded 34.22 to eligible students for an institution and a program that meets 34.23 a critical workforce need identified under this subdivision. 34.24 Sec. 7. [136H.07] [MINNESOTA SCHOLARSHIP FUND.] 34.25 Subdivision 1. [ESTABLISHMENT.] There is created in the 34.26 state treasury the Minnesota scholarship fund as a special 34.27 revenue fund for deposit of revenues received under section 34.28 349C.18. 34.29 Subd. 2. [APPROPRIATIONS.] (a) For fiscal years 2007 to 34.30 2009, annual deposits to the Minnesota scholarship fund are 34.31 appropriated to the director as follows: 34.32 (1) for fiscal year 2007, 25 percent for initial Minnesota 34.33 STAR scholarships under section 136H.05, and ten percent for 34.34 initial Minnesota TechSTAR scholarships under section 136H.06; 34.35 (2) for fiscal year 2008, 25 percent for initial Minnesota 34.36 STAR scholarships and 20 percent for continuing Minnesota STAR 35.1 scholarships under section 136H.05, and 20 percent for initial 35.2 and continuing Minnesota TechSTAR scholarships under section 35.3 136H.06; and 35.4 (3) for fiscal year 2009, 25 percent for initial Minnesota 35.5 STAR scholarships and 40 percent for continuing Minnesota STAR 35.6 scholarships under section 136H.05, and 20 percent for initial 35.7 and continuing Minnesota TechSTAR scholarships under section 35.8 136H.06. 35.9 (b) Beginning with fiscal year 2010, annual deposits to the 35.10 Minnesota scholarship fund are appropriated to the director as 35.11 follows: 35.12 (1) 80 percent for Minnesota STAR scholarships under 35.13 section 136H.05 for initial and continuing Minnesota STAR 35.14 scholarships; and 35.15 (2) 20 percent for initial and continuing Minnesota 35.16 TechSTAR scholarships under section 136H.06. 35.17 (c) Beginning in 2010, a balance in the Minnesota 35.18 scholarship fund after appropriations under this section may be 35.19 appropriated in law for postsecondary education purposes. 35.20 ARTICLE 7 35.21 APPROPRIATION 35.22 Section 1. [APPROPRIATION.] 35.23 $....... is appropriated from the general fund to the 35.24 Minnesota Casino Board for fiscal year 2005 to carry out the 35.25 purposes of articles 1 to 3. 35.26 ARTICLE 8 35.27 LAWFUL GAMBLING TAXES 35.28 Section 1. Minnesota Statutes 2002, section 297E.02, 35.29 subdivision 1, is amended to read: 35.30 Subdivision 1. [IMPOSITION.] A tax is imposed on all 35.31 lawful gambling other than (1) pull-tab deals or games; (2) 35.32 tipboard deals or games; and (3) items listed in section 35.33 297E.01, subdivision 8, clauses (4) and (5), at the rate of8.535.34 7.5 percent on the gross receipts as defined in section 297E.01, 35.35 subdivision 8, less prizes actually paid. The tax imposed by 35.36 this subdivision is in lieu of the tax imposed by section 36.1 297A.62 and all local taxes and license fees except a fee 36.2 authorized under section 349.16, subdivision 8, or a tax 36.3 authorized under subdivision 5. 36.4 The tax imposed under this subdivision is payable by the 36.5 organization or party conducting, directly or indirectly, the 36.6 gambling. 36.7 Sec. 2. Minnesota Statutes 2002, section 297E.02, 36.8 subdivision 4, is amended to read: 36.9 Subd. 4. [PULL-TAB AND TIPBOARD TAX.] (a) A tax is imposed 36.10 on the sale of each deal of pull-tabs and tipboards sold by a 36.11 distributor. The rate of the tax is1.71.5 percent of the 36.12 ideal gross of the pull-tab or tipboard deal. The sales tax 36.13 imposed by chapter 297A on the sale of the pull-tabs and 36.14 tipboards by the distributor is imposed on the retail sales 36.15 price less the tax imposed by this subdivision. The retail sale 36.16 of pull-tabs or tipboards by the organization is exempt from 36.17 taxes imposed by chapter 297A and is exempt from all local taxes 36.18 and license fees except a fee authorized under section 349.16, 36.19 subdivision 8. 36.20 (b) The liability for the tax imposed by this section is 36.21 incurred when the pull-tabs and tipboards are delivered by the 36.22 distributor to the customer or to a common or contract carrier 36.23 for delivery to the customer, or when received by the customer's 36.24 authorized representative at the distributor's place of 36.25 business, regardless of the distributor's method of accounting 36.26 or the terms of the sale. 36.27 The tax imposed by this subdivision is imposed on all sales 36.28 of pull-tabs and tipboards, except the following: 36.29 (1) sales to the governing body of an Indian tribal 36.30 organization for use on an Indian reservation; 36.31 (2) sales to distributors licensed under the laws of 36.32 another state or of a province of Canada, as long as all 36.33 statutory and regulatory requirements are met in the other state 36.34 or province; 36.35 (3) sales of promotional tickets as defined in section 36.36 349.12; and 37.1 (4) pull-tabs and tipboards sold to an organization that 37.2 sells pull-tabs and tipboards under the exemption from licensing 37.3 in section 349.166, subdivision 2. A distributor shall require 37.4 an organization conducting exempt gambling to show proof of its 37.5 exempt status before making a tax-exempt sale of pull-tabs or 37.6 tipboards to the organization. A distributor shall identify, on 37.7 all reports submitted to the commissioner, all sales of 37.8 pull-tabs and tipboards that are exempt from tax under this 37.9 subdivision. 37.10 (c) A distributor having a liability of $120,000 or more 37.11 during a fiscal year ending June 30 must remit all liabilities 37.12 in the subsequent calendar year by electronic means. 37.13 (d) Any customer who purchases deals of pull-tabs or 37.14 tipboards from a distributor may file an annual claim for a 37.15 refund or credit of taxes paid pursuant to this subdivision for 37.16 unsold pull-tab and tipboard tickets. The claim must be filed 37.17 with the commissioner on a form prescribed by the commissioner 37.18 by March 20 of the year following the calendar year for which 37.19 the refund is claimed. The refund must be filed as part of the 37.20 customer's February monthly return. The refund or credit is 37.21 equal to1.71.5 percent of the face value of the unsold 37.22 pull-tab or tipboard tickets, provided that the refund or credit 37.23 will be1.751.6 percent of the face value of the unsold 37.24 pull-tab or tipboard tickets for claims for a refund or credit 37.25 of taxes filed on the February20012003 monthly return. The 37.26 refund claimed will be applied as a credit against tax owing 37.27 under this chapter on the February monthly return. If the 37.28 refund claimed exceeds the tax owing on the February monthly 37.29 return, that amount will be refunded. The amount refunded will 37.30 bear interest pursuant to section 270.76 from 90 days after the 37.31 claim is filed. 37.32 Sec. 3. Minnesota Statutes 2002, section 297E.02, 37.33 subdivision 6, is amended to read: 37.34 Subd. 6. [COMBINED RECEIPTS TAX.] In addition to the taxes 37.35 imposed under subdivisions 1 and 4, a tax is imposed on the 37.36 combined receipts of the organization. As used in this section, 38.1 "combined receipts" is the sum of the organization's gross 38.2 receipts from lawful gambling less gross receipts directly 38.3 derived from the conduct of bingo, raffles, and paddlewheels, as 38.4 defined in section 297E.01, subdivision 8, for the fiscal year. 38.5 The combined receipts of an organization are subject to a tax 38.6 computed according to the following schedule: 38.7 If the combined receipts for the The tax is: 38.8 fiscal year are: 38.9 Not over $500,000 zero 38.10 Over $500,000, but not over 38.11 $700,0001.71.5 percent of the 38.12 amount over $500,000, but 38.13 not over $700,000 38.14 Over $700,000, but not over 38.15 $900,000$3,400$3,000 plus 38.163.43.0 percent of the 38.17 amount over $700,000, 38.18 but not over $900,000 38.19 Over $900,000$10,200$9,000 38.20 plus5.14.5 percent 38.21 of the amount over 38.22 $900,000 38.23 ARTICLE 9 38.24 EFFECTIVE DATE 38.25 Section 1. [EFFECTIVE DATE.] 38.26 This act is effective December 1, 2004, if the 38.27 constitutional amendment proposed in article 4 is adopted by the 38.28 people at the 2004 general election.