1.1 	A bill for an act
1.2 	relating to gambling; providing for the operation of
1.3 	lottery gaming machines and the conduct of lottery and
1.4 	nonlottery games at a gaming facility; licensing the
1.5 	gaming facility and imposing a license fee; imposing a
1.6 	gaming transaction fee on gaming at the gaming
1.7 	facility; amending Minnesota Statutes 2004, sections
1.8 	297A.94; 299L.07, subdivisions 2, 2a; 340A.410,
1.9 	subdivision 5; 349A.01, subdivision 10, by adding
1.10 	subdivisions; 349A.04; 349A.10, subdivisions 3, 6;
1.11 	349A.13; 541.20; 541.21; 609.75, subdivision 3;
1.12 	609.761, by adding a subdivision; proposing coding for
1.13 	new law in Minnesota Statutes, chapters 297A; 299L;
1.14 	349A.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	ARTICLE 1
1.17 	PURPOSE

1.18 	Section 1. PURPOSE.
 1.19 	The purpose of this act is to:
1.20 	(1) recognize the significant inequities created by the
1.21 	current status of casino gaming in Minnesota given the extreme
1.22 	disparity in revenues generated by tribal casinos for
1.23 	Minnesota's Indian tribes and tribal members and the lack of any
1.24 	significant direct revenue to the state of Minnesota;
1.25 	(2) provide an opportunity for increased economic
1.26 	development and tribal self-sufficiency to tribal governments
1.27 	which, because of their locations and tribal populations, have
1.28 	not benefited significantly from gaming opportunities under the
1.29 	federal Indian Gaming Regulatory Act, United States Code, title
1.30 	25, sections 2701 to 2721;
2.1 	(3) provide for the generation of revenues to the state,
2.2 	including proceeds for distribution as set forth in the
2.3 	Minnesota Constitution, article XI, section 14; and 
2.4 	(4) establish a structure that promotes tribal sovereignty
2.5 	and self-governance and that provides revenues from casino
2.6 	gaming to tribal governments for the development of programs to
2.7 	alleviate persistent poverty conditions and to advance tribal
2.8 	goals.

2.9 	ARTICLE 2
2.10 	LOTTERY OPERATIONS

2.11 	Section 1. Minnesota Statutes 2004, section 349A.01,
2.12 	subdivision 10, is amended to read:
2.13 		Subd. 10.Lottery procurement contract.  "Lottery
2.14 	procurement contract" means a contract to provide lottery
2.15 	products, gaming machines, maintenance of gaming machines,
2.16 	computer hardware and software used to monitor sales of lottery
2.17 	tickets and gaming machine plays, equipment used to conduct and
2.18 	monitor other lottery games at a gaming facility, equipment used
2.19 	for the conducting of other lottery games, and lottery tickets.
2.20 	"Lottery procurement contract" does not include a contract to
2.21 	provide an annuity or prize payment agreement or materials,
2.22 	supplies, equipment, or services common to the ordinary
2.23 	operation of a state agency.

2.24 	Sec. 2. Minnesota Statutes 2004, section 349A.01, is
2.25 	amended by adding a subdivision to read:
2.26 		Subd. 14.Gaming facility. "Gaming facility" means the
2.27 	site selected for the location of gaming machines and the
2.28 	conduct of other lottery games pursuant to a location contract
2.29 	under section 349A.17 and nonlottery casino games pursuant to a
2.30 	plan of operation approved under section 299L.094.

2.31 	Sec. 3. Minnesota Statutes 2004, section 349A.01, is
2.32 	amended by adding a subdivision to read:
2.33 		Subd. 15.Gaming machine. "Gaming machine" means any
2.34 	machine, system, or device which, upon payment of consideration
2.35 	in order to play a game, may award or entitle a player to a
2.36 	prize by reason of skill of the player or application of the
3.1 	element of chance, or both.

3.2 	Sec. 4. Minnesota Statutes 2004, section 349A.01, is
3.3 	amended by adding a subdivision to read:
3.4 		Subd. 16.Gaming machine game. "Gaming machine game"
3.5 	means a game operated by a gaming machine as authorized by the
3.6 	director.

3.7 	Sec. 5. Minnesota Statutes 2004, section 349A.01, is
3.8 	amended by adding a subdivision to read:
3.9 		Subd. 17.Gaming machine play. "Gaming machine play"
3.10 	means a record that proves participation in a gaming machine
3.11 	game.

3.12 	Sec. 6. Minnesota Statutes 2004, section 349A.01, is
3.13 	amended by adding a subdivision to read:
3.14 		Subd. 18.Adjusted gross gaming machine
3.15 	revenue. "Adjusted gross gaming machine revenue" means the sum
3.16 	of all money received for gaming machine plays less the amount
3.17 	paid out in prizes and for gaming machine games and promotional
3.18 	allowances approved by the director under section 349A.17.

3.19 	Sec. 7. Minnesota Statutes 2004, section 349A.01, is
3.20 	amended by adding a subdivision to read:
3.21 		Subd. 19.Other lottery game. "Other lottery game" means
3.22 	any game operated by the lottery at the gaming facility other
3.23 	than a gaming machine, where money or property are distributed
3.24 	to persons selected primarily by chance from among participants
3.25 	who have paid for a chance of being selected and any other game
3.26 	or activity determined to constitute a lottery within the
3.27 	meaning of the Minnesota Constitution, article XIII, section 5.
3.28 	Other lottery games do not include lottery games that are
3.29 	operated by the lottery at the gaming facility that are also
3.30 	sold by lottery retailers.

3.31 	Sec. 8. Minnesota Statutes 2004, section 349A.01, is
3.32 	amended by adding a subdivision to read:
3.33 		Subd. 20.Other lottery games adjusted gross
3.34 	revenue. "Other lottery games adjusted gross revenue" means the
3.35 	sum of all money from the operation of other lottery games at
3.36 	the gaming facility, less the amount paid out in prizes in the
4.1 	other lottery games and promotional allowances paid by the
4.2 	tribal entity under section 349A.17 and approved by the director.

4.3 	Sec. 9. Minnesota Statutes 2004, section 349A.04, is
4.4 	amended to read:
4.5 	349A.04 LOTTERY GAME PROCEDURES.
4.6 	The director may adopt game procedures governing the
4.7 	following elements of the lottery:
4.8 	(1) lottery games;
4.9 	(2) ticket prices;
4.10 	(3) number and size of prizes;
4.11 	(4) methods of selecting winning tickets; and 
4.12 	(5) frequency and method of drawings;
4.13 	(6) gaming machine games;
4.14 	(7) cost of gaming machine plays;
4.15 	(8) other lottery games; and 
4.16 	(9) cost to participate in other lottery games.
4.17 	The adoption of lottery game procedures is not subject to
4.18 	chapter 14.

4.19 	Sec. 10. Minnesota Statutes 2004, section 349A.10,
4.20 	subdivision 3, is amended to read:
4.21 		Subd. 3.Lottery operations.  (a) The director shall
4.22 	establish a lottery operations account in the lottery fund.  The
4.23 	director shall pay all costs of operating the lottery, including
4.24 	payroll costs or amounts transferred to the state treasury for
4.25 	payroll costs, but not including lottery prizes, from the
4.26 	lottery operating account.  The director shall credit to the
4.27 	lottery operations account amounts sufficient to pay the
4.28 	operating costs of the lottery.
4.29 	(b) Except as provided in paragraph (e), the director may
4.30 	not credit in any fiscal year thereafter amounts to the lottery
4.31 	operations account which when totaled exceed 15 percent of gross
4.32 	revenue to the lottery fund in that fiscal year.  In computing
4.33 	total amounts credited to the lottery operations account under
4.34 	this paragraph the director shall disregard amounts transferred
4.35 	to or retained by lottery retailers as sales commissions or
4.36 	other compensation and amounts transferred to or retained by the
5.1 	tribal entity pursuant to a location contract under section
5.2 	349A.17.
5.3 	(c) The director of the lottery may not expend after July
5.4 	1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
5.5 	year for contracts for the preparation, publication, and
5.6 	placement of advertising.
5.7 	(d) Except as the director determines, the lottery is not
5.8 	subject to chapter 16A relating to budgeting, payroll, and the
5.9 	purchase of goods and services.
5.10 	(e) In addition to the amounts credited to the lottery
5.11 	operations account under paragraph (b), the director is
5.12 	authorized, if necessary, to meet the current obligations of the
5.13 	lottery and to credit up to 25 percent of an amount equal to the
5.14 	average annual amount which was authorized to be credited to the
5.15 	lottery operations account for the previous three fiscal years
5.16 	but was not needed to meet the obligations of the lottery.
5.17 	(f) Notwithstanding the provisions of this subdivision, the
5.18 	director may not credit, in any fiscal year, to the lottery
5.19 	operations account which when totaled exceed ten percent of
5.20 	adjusted gross revenue from the operation of gaming machines and
5.21 	other lottery games at the gaming facility.

5.22 	Sec. 11. Minnesota Statutes 2004, section 349A.10,
5.23 	subdivision 6, is amended to read:
5.24 		Subd. 6.Budget; plans.  The director shall prepare and
5.25 	submit a biennial budget plan to the commissioner of finance.
5.26 	The governor shall recommend the maximum amount available for
5.27 	the lottery in the budget the governor submits to the
5.28 	legislature under section 16A.11.  The maximum amount available
5.29 	to the lottery for operating expenses and capital expenditures
5.30 	shall be determined by law.  Operating expenses shall not
5.31 	include expenses that are a direct function of lottery sales,
5.32 	which include the cost of lottery prizes, amounts paid to
5.33 	lottery retailers as sales commissions or other compensation,
5.34 	amounts paid to produce and deliver scratch lottery games, and 
5.35 	amounts paid to an outside vendor to operate and maintain an
5.36 	online gaming system, amounts paid to an outside vendor to
6.1 	operate and maintain a central system for gaming machines and
6.2 	for other lottery games, and amounts paid to acquire and
6.3 	maintain gaming machines and equipment used to conduct other
6.4 	lottery games.  In addition, the director shall appear at least
6.5 	once each fiscal year before the senate and house of
6.6 	representatives committees having jurisdiction over gambling
6.7 	policy to present and explain the lottery's plans for future
6.8 	games and the related advertising and promotions and spending
6.9 	plans for the next fiscal year.

6.10 	Sec. 12. Minnesota Statutes 2004, section 349A.13, is
6.11 	amended to read:
6.12 	349A.13 RESTRICTIONS.
6.13 	Nothing in this chapter:
6.14 	(1) authorizes the director to conduct a lottery game or
6.15 	contest the winner or winners of which are determined by the
6.16 	result of a sporting event other than a horse race conducted
6.17 	under chapter 240;
6.18 	(2) authorizes the director to install or operate a lottery
6.19 	device operated by coin or currency which when operated
6.20 	determines the winner of a game except as authorized under
6.21 	section 349A.17; and
6.22 	(3) authorizes the director to sell pull-tabs as defined
6.23 	under section 349.12, subdivision 32.

6.24 	Sec. 13. [349A.17] GAMING FACILITY.
6.25 		Subdivision 1.Definitions. (a) For the purposes of this
6.26 	section, the terms defined in this subdivision have the meanings
6.27 	given them.
6.28 	(b) "Tribal entity" means one or more entities, whether
6.29 	tribally or federally chartered corporations, or other legal
6.30 	entities, wholly owned by one or more tribal governments that
6.31 	are parties to the location contract under this section.
6.32 	(c) "Tribal government" means the governmental entity that
6.33 	represents one of the 11 federally recognized Indian tribes
6.34 	within the state of Minnesota.
6.35 	(d) "Site" means a parcel or contiguous parcels of land,
6.36 	and may be enlarged by the addition of contiguous parcels of
7.1 	land over time.
7.2 		Subd. 2.Location contract. (a) The director may enter
7.3 	into a contract with a tribal entity to provide locations for
7.4 	the operation of gaming machines and other lottery games at one
7.5 	site located in the seven-county metropolitan area as defined in
7.6 	section 473.121, subdivision 2, or any contiguous county
7.7 	thereto.  The site for the gaming facility shall be jointly
7.8 	selected by the director and the tribal entity.  Upon
7.9 	notification by the director that the gaming facility will be
7.10 	located in a particular city, the home rule charter or statutory
7.11 	city has 60 days after the notification to adopt a resolution
7.12 	that it does not consent to being considered as a site under
7.13 	this subdivision.  Upon receipt of the notification by the home
7.14 	rule charter or statutory city, the director shall not consider
7.15 	that city as a site for the facility.
7.16 	(b) The director may enter a location contract with a
7.17 	tribal entity that meets the following criteria:
7.18 	(1) the tribal entity must be comprised of tribal
7.19 	governments which are each federally recognized tribes which
7.20 	operate current casino gaming operations under the federal
7.21 	Indian Gaming Regulatory Act, United States Code, title 25,
7.22 	sections 2701 to 2721, pursuant to a compact with the state of
7.23 	Minnesota;
7.24 	(2) to be eligible to participate in the tribal entity, the
7.25 	tribal government must demonstrate to the director that the
7.26 	revenues available to the tribal government from currently
7.27 	available revenue sources are insufficient to adequately meet
7.28 	the basic needs of tribal members including, but not limited to,
7.29 	housing, medical care, education, or other governmental services
7.30 	to members;
7.31 	(3) each of the tribal governments participating in the
7.32 	tribal entity must within 30 days following final enactment of
7.33 	this act file with the director a formal resolution from its
7.34 	tribal council which provides that:
7.35 	(i) the tribal government intends to participate in a
7.36 	tribal entity which will enter a contract that complies with the
8.1 	requirements of this act;
8.2 	(ii) the tribal government meets the eligibility criteria
8.3 	set forth in this paragraph and provides adequate documentation
8.4 	to supports its eligibility to participate in the tribal entity;
8.5 	(iii) a statement of the tribal government's intent to
8.6 	participate in a tribal entity that waives the entity's
8.7 	sovereign immunity relating to disputes arising out of the
8.8 	location contract or the construction, management, or operation
8.9 	of the gaming facility and that the tribal government expressly
8.10 	consents that the tribal entity will be subject to the
8.11 	jurisdiction of the state court and the administrative and
8.12 	regulatory jurisdiction of the state.  The resolution must also
8.13 	include a limited waiver of sovereign immunity and consent by
8.14 	the tribal government to the jurisdiction of state court solely
8.15 	to resolve disputes alleging that assets have been transferred
8.16 	from the tribal entity to the tribe in violation of the location
8.17 	contract or other applicable law and limited to any improperly
8.18 	transferred assets; and 
8.19 	(iv) states the intention of the tribal government to
8.20 	ensure that revenues provided to the participating tribal
8.21 	governments from the tribal entity will be distributed between
8.22 	the participating tribal governments in a fair and equitable
8.23 	manner as determined solely by the participating tribal
8.24 	governments.
8.25 	(c) The location contract shall have no legal effect on the
8.26 	validity of existing tribal-state gaming compacts.
8.27 	(d) A contract signed with a tribal entity under this
8.28 	section shall run for not more than 20 years and shall be
8.29 	negotiable and renewable every 15 years thereafter.  The state,
8.30 	tribal entity, or participating tribal government that intends
8.31 	to not renegotiate and renew the location contract must, if
8.32 	reasonably possible, provide notice of its intent to the other
8.33 	parties at least one year before the location contract expires.
8.34 	A tribal government participating in the tribal entity may opt
8.35 	out of this arrangement as part of the renewal process without
8.36 	affecting the ability of the tribal entity to renew the contract
9.1 	with the participation of the remaining tribal governments.
9.2 	(e) The contract entered into under this section must
9.3 	provide for the following provisions:
9.4 	(1) The waiver of sovereign immunity by the tribal entity
9.5 	and the limited waiver of sovereign immunity by the tribal
9.6 	governments consistent with paragraph (b).
9.7 	(2) Liquidated damages to recover the initial investment by
9.8 	the tribal entity in the event the state, through legislation or
9.9 	constitutional amendment, revokes all or substantially all of
9.10 	the forms of gambling authorized under this section.  The
9.11 	liquidated damages may not be greater than the unpaid balance of
9.12 	any debt incurred by the tribal entity after the location
9.13 	contract has been executed and is limited to the debt incurred
9.14 	by the tribal entity for the gaming facility license, initial
9.15 	construction, or acquisition of the gaming facility less the
9.16 	present market value of the property or other assets related to
9.17 	the debt.  Any liquidated damages provision must expire within
9.18 	ten years.
9.19 	(3) The tribal entity, in the construction of the gaming
9.20 	facility, and the subsequent repair and maintenance of the
9.21 	facility, shall make good faith efforts to contract with
9.22 	American Indian and minority-owned businesses.
9.23 	(4) The tribal entity, in operating the gaming facility,
9.24 	shall make good faith efforts to ensure that American Indians
9.25 	and other minorities are employed in entry level, middle
9.26 	management, and upper management positions.
9.27 	(5) Payment of a fee to the tribal entity equal to 64
9.28 	percent of the adjusted gross gaming machine revenue and other
9.29 	lottery games adjusted gross revenue.
9.30 	(6) All costs associated with managing the day-to-day
9.31 	activity of gaming machines and other lottery games, including,
9.32 	but not limited to, routine and minor service and maintenance,
9.33 	security monitoring, verifying winners, paying winners,
9.34 	collecting money from gaming machines, collecting wagers from
9.35 	the operation of other lottery games, and advertising and
9.36 	marketing of gaming machines and other lottery games shall be
10.1 	borne by the tribal entity.
10.2 	(7) All costs associated with purchase or lease of gaming
10.3 	machines and costs associated with major maintenance of the
10.4 	gaming machines shall be borne by the lottery.
10.5 	(8) The tribal entity shall pay to the commissioner of
10.6 	human services an annual amount equal to the lesser of 0.5
10.7 	percent of adjusted gross gaming machine revenue, other lottery
10.8 	games' adjusted gross income, and nonlottery casino games'
10.9 	adjusted gross revenue or $2,500,000, for problem and compulsive
10.10 	gambling treatment or programs.
10.11 	(9) The tribal entity shall pay an annual amount equal to
10.12 	two percent of adjusted gross gaming machine revenue, other
10.13 	lottery games' adjusted gross income, and nonlottery casino
10.14 	games' adjusted gross revenue to the city and county where the
10.15 	gaming facility is located.  This payment is in lieu of an
10.16 	obligation to pay any portion of local property taxes
10.17 	attributable to the city and county.  The tribal entity is still
10.18 	responsible for payment of the portion of local property taxes
10.19 	attributable to the appropriate school district.
10.20 	(10) Any controversy or claim between the tribal entity and
10.21 	the director arising out of the location contract may be settled
10.22 	by arbitration except as provided in paragraphs (h) and (i).
10.23 	(11) The tribal entity must maintain adequate liability and
10.24 	casualty insurance for the gaming facility.
10.25 	(f) The tribal entity may establish reasonable standards
10.26 	for payment of promotional allowances to players and the
10.27 	proportional allocation of promotional allowances between
10.28 	revenue generated from gaming machines, other lottery games, and
10.29 	nonlottery casino games.  Upon approval of the standards for
10.30 	promotional allowances, the director shall reimburse the tribal
10.31 	entity for the cost of promotional allowances paid by the tribal
10.32 	entity.
10.33 	(g) As part of the location contract, the director may
10.34 	authorize the operation of gaming machines and the conduct of
10.35 	other lottery games at a temporary facility pending completion
10.36 	of a permanent facility and may establish reasonable conditions
11.1 	for the operation.  The operation of gaming machines and the
11.2 	conducting of other lottery games at a temporary facility shall
11.3 	be treated in the same manner as if it was conducted in a
11.4 	permanent facility.
11.5 	(h) The director may by administrative action cancel or
11.6 	suspend the location contract if the director reasonably
11.7 	determines that the tribal entity has materially breached any
11.8 	material provision of the location contract and has failed to
11.9 	cure that breach in a reasonable time, or if the tribal entity's
11.10 	gaming facility license has been suspended or revoked by the
11.11 	commissioner of public safety.
11.12 	A contract cancellation or suspension under this paragraph
11.13 	is a contested case under sections 14.57 to 14.69 and is in
11.14 	addition to any criminal penalties provided for a violation of
11.15 	law or rule.
11.16 	(i) The director may by administrative action impose a
11.17 	civil penalty, issue correction orders, or resolve in any other
11.18 	manner as determined appropriate by the director, if the
11.19 	director determines that the tribal entity has breached any term
11.20 	of the location contract.  The imposition of a civil penalty is
11.21 	a contested case under sections 14.57 to 14.69 and is in
11.22 	addition to any criminal penalties provided for a violation of
11.23 	law or rule.
11.24 	(j) The rights and interests provided by the location
11.25 	contract are specific to the state and the tribal entity and are
11.26 	not transferable without the written approval of the director.
11.27 	(k) Gaming machines may only be placed and other lottery
11.28 	games may only be conducted at a gaming facility that is owned
11.29 	or leased by the tribal entity.
11.30 	(l) The contract entered into under this subdivision is not
11.31 	subject to chapter 16C.
11.32 	(m) The amount paid by the tribal entity to the
11.33 	commissioner of human services pursuant to the location contract
11.34 	under this section is annually appropriated to the commissioner
11.35 	of human services for problem and compulsive gambling treatment
11.36 	or programs, including programs that are designed to address
12.1 	compulsive gambling in American Indian and minority communities.
12.2 		Subd. 3.Operation. (a) All gaming machines that are
12.3 	placed at a gaming facility or other lottery games conducted at
12.4 	the gaming facility must be operated and controlled by the
12.5 	director.
12.6 	(b) Gaming machines must be owned or leased by the director.
12.7 	(c) Major maintenance of the gaming machines shall be
12.8 	controlled by the director or by a vendor that is under the
12.9 	control and direction of the director.
12.10 	(d) The director must have a central communications system
12.11 	that monitors activities on each gaming machine.
12.12 	(e) Equipment used to conduct other lottery games at the
12.13 	gaming facility must be owned or leased by the director.
12.14 	(f) The director must approve the general security
12.15 	arrangements associated with and relating to the operation of
12.16 	the gaming machines and the conducting of other lottery games at
12.17 	the gaming facility.
12.18 	(g) Advertising and promotional material produced by the
12.19 	gaming facility relating to gaming machines and the conduct of
12.20 	other lottery games at the gaming facility must be approved by
12.21 	the director in a timely manner.
12.22 	(h) The director may authorize the tribal entity to manage
12.23 	the day-to-day operation of the gaming machines and the
12.24 	conducting of other lottery games at the gaming facility,
12.25 	provided that the director shall maintain overall control of the
12.26 	operation of the gaming machines and the conducting of other
12.27 	lottery games at the gaming facility.
12.28 	(i) The costs associated with procuring and maintaining
12.29 	gaming machines and equipment involved in operating other
12.30 	lottery games, and costs associated with acquiring, maintaining,
12.31 	and operating the central system used to monitor the activity of
12.32 	gaming machines, shall be borne by the lottery.
12.33 	(j) All proceeds from the operation of gaming machines and
12.34 	conduct of other lottery games received by the tribal entity
12.35 	constitute a trust fund until transmitted to the director.
12.36 	(k) The director may require the tribal entity to deposit
13.1 	in an account in a designated bank all money received by the
13.2 	tribal entity from the operation of gaming machines and the
13.3 	conduct of other lottery games.
13.4 	(l) If the tribal entity fails to pay any money due the
13.5 	director within the time prescribed by the director, the tribal
13.6 	entity shall pay interest on the amount owed at the rate set for
13.7 	lottery retailers under Minnesota Rules, part 7856.7020.
13.8 	(m) The director may implement policies, procedures, and
13.9 	other controls that are determined to be necessary by the
13.10 	director for the operation of gaming machines and the conducting
13.11 	of other lottery games pursuant to this section.
13.12 		Subd. 4.Games. The director shall specify the games
13.13 	that may be played on a gaming machine and the manner in which
13.14 	other lottery games are conducted at the gaming facility as set
13.15 	forth under section 349A.04.
13.16 		Subd. 5.Specifications. Gaming machines must:
13.17 	(1) maintain on nonresettable meters a permanent record,
13.18 	capable of being printed out, of all transactions by the machine
13.19 	and all entries into the machine.  There must be a reasonable
13.20 	number of gaming machines placed at a gaming facility which
13.21 	afford players the option to receive winnings in the form of
13.22 	either coins or tokens;
13.23 	(2) be capable of being linked to a central communications
13.24 	system to provide auditing program information as required by
13.25 	the director; and 
13.26 	(3) there must be a reasonable number of gaming machines at
13.27 	the facility which are accessible to individuals with
13.28 	disabilities.  For the purposes of this subdivision,
13.29 	"individuals with disabilities" includes any person who has a
13.30 	physical or sensory impairment which materially limits one or
13.31 	more life activities.
13.32 		Subd. 6.Examination of machines. The director shall
13.33 	examine prototypes of gaming machines and require that the
13.34 	manufacturer of the machine pay the cost of the examination.
13.35 	The director may contract for the examination of gaming
13.36 	machines.  The director may require working models of a gaming
14.1 	machine transported to the locations the director designates for
14.2 	testing, examination, and analysis.  The manufacturer shall pay
14.3 	all costs of any testing, examination, analysis, and
14.4 	transportation of the machine model.
14.5 		Subd. 7.Prizes. A person who plays a gaming machine or
14.6 	plays any other lottery game at the gaming facility agrees to be
14.7 	bound by the rules and game procedures applicable to that
14.8 	particular game.  The player acknowledges that the determination
14.9 	of whether the player has won a prize is subject to the rules
14.10 	and game procedures adopted by the director, claim procedures
14.11 	established by the director for that game, and any confidential
14.12 	or public validation tests established by the director for that
14.13 	game.  A person under 18 years of age may not claim a prize from
14.14 	the operation of a gaming machine or the conducting of any other
14.15 	lottery game at the gaming facility.  A prize claimed from the
14.16 	play of a gaming machine game or the conduct of any other
14.17 	lottery game is not subject to section 349A.08, subdivision 8.
14.18 		Subd. 8.Prohibitions. A person under the age of 18
14.19 	years may not play a game on a gaming machine or participate in
14.20 	any other lottery game at the gaming facility.
14.21 		Subd. 9.Compulsive gambling notice. The tribal entity
14.22 	shall prominently post, in areas of the gaming facility where
14.23 	gaming machines are located or where other lottery games are
14.24 	conducted, the toll-free telephone number established by the
14.25 	commissioner of human services in connection with the problem
14.26 	and compulsive gambling program.  The tribal entity shall
14.27 	establish, with the approval of the director, a proactive plan
14.28 	relating to problem and compulsive gambling.
14.29 		Subd. 10.Local licenses; local fees. A political
14.30 	subdivision may not require a license to operate a gaming
14.31 	machine or conduct other lottery games or nonlottery casino
14.32 	games as defined under section 299L.094, restrict or regulate
14.33 	the placement of gaming machines or the conducting of other
14.34 	lottery or nonlottery casino games, or impose a tax or fee on
14.35 	the business of operating gaming machines or the conducting of
14.36 	other lottery or nonlottery casino games at the gaming facility.

15.1 	Sec. 14. LOTTERY BUDGET; GAMING FACILITY.
 15.2 	The director of the State Lottery shall submit a budget for
15.3 	the operation of gaming machines and for the conduct of other
15.4 	lottery games at a gaming facility as authorized under Minnesota
15.5 	Statutes, section 349A.17, to the commissioner of finance.
15.6 	Notwithstanding Minnesota Statutes, section 349A.10, subdivision
15.7 	6, the director of the State Lottery may expend amounts
15.8 	necessary to operate gaming at the gaming facility.  Amounts
15.9 	expended by the director of the State Lottery for the conducting
15.10 	of gaming at the gaming facility in fiscal years 2006 and 2007
15.11 	are not subject to the maximum amount set in law for the
15.12 	operation of the lottery.

15.13 	Sec. 15. EFFECTIVE DATE.
 15.14 	This article is effective the day following final enactment.

15.15 	ARTICLE 3
15.16 	GAMING FACILITY REGULATION

15.17 	Section 1. [299L.09] GAMING FACILITY.
15.18 		Subdivision 1.Definitions. For the purposes of this
15.19 	section and sections 299L.09 to 299L.095, the following terms
15.20 	have the meanings given them.
15.21 	(a) "Direct financial interest" means ownership or control
15.22 	of at least five percent interest in the tribal entity or
15.23 	management entity, the debt, or other financial interest in the
15.24 	tribal entity or management entity.
15.25 	(b) "Lottery director" means the director of the Minnesota
15.26 	State Lottery under chapter 349A.
15.27 	(c) "Tribal entity" is as defined in section 349A.17.
15.28 	(d) "Management entity" means the entity applying for or
15.29 	holding a management license under section 299L.092.
15.30 		Subd. 2.License required. The tribal entity that will
15.31 	own and operate, whether directly or through another tribal or
15.32 	management entity, a gaming facility under section 349A.17 must
15.33 	obtain a gaming facility license from the commissioner.
15.34 		Subd. 3.Application. An application for a license under
15.35 	this section must be on a form prescribed by the commissioner.
15.36 	The commissioner may issue a gaming facility license to the
16.1 	tribal entity that will operate the gaming facility.
16.2 		Subd. 4.License fee. Upon issuance of the license, the
16.3 	tribal entity must pay a onetime license fee of $200,000,000 to
16.4 	the commissioner.
16.5 		Subd. 5.License issuance. (a) The commissioner shall
16.6 	issue a license under this section unless information obtained
16.7 	from the comprehensive background check establishes that
16.8 	issuance of the license would be adverse to the public interest
16.9 	or to the effective regulation of gaming.  If a license
16.10 	application is denied, the tribal entity may reapply for a
16.11 	license.
16.12 	(b) The commissioner may only issue a gaming facility
16.13 	license to a tribal entity that, through a valid limited waiver
16.14 	of sovereign immunity, is subject to the jurisdiction of the
16.15 	Minnesota state courts and the administrative jurisdiction and
16.16 	regulation of the state.
16.17 	(c) A license issued under this section may not be
16.18 	transferred without the written approval of the commissioner.
16.19 		Subd. 6.Background investigation. Before issuing a
16.20 	gaming facility license, the commissioner shall conduct a
16.21 	comprehensive background and financial investigation of the
16.22 	tribal entity, including its officers, directors, managers,
16.23 	supervisory personnel, and persons with a direct financial
16.24 	interest in the tribal entity but does not include the tribal
16.25 	governments that have formed the tribal entity.  The
16.26 	commissioner may charge the tribal entity an investigation fee
16.27 	to cover the cost of the investigation.  The commissioner may
16.28 	require that fingerprints be taken from officers, directors,
16.29 	managers, supervisory personnel, and persons with a direct
16.30 	financial interest in the tribal entity not including the tribal
16.31 	governments that have formed the tribal entity.  The
16.32 	commissioner may forward the fingerprints to the Federal Bureau
16.33 	of Investigation for a national criminal history check.
16.34 		Subd. 7.License refusal; suspension and revocation. (a)
16.35 	The commissioner may refuse to issue, or may revoke or suspend,
16.36 	the gaming facility license if the tribal entity or its
17.1 	officers, directors, managers, supervisory personnel, and
17.2 	persons with a direct financial interest in the tribal entity,
17.3 	not including the tribal governments that have formed the tribal
17.4 	entity, has:
17.5 	(1) engaged in a material violation of law, order, or rule
17.6 	relating to gambling within any jurisdiction;
17.7 	(2) operated a gaming facility in violation of approved
17.8 	game procedures or an approved security plan, which in the
17.9 	commissioner's opinion adversely and materially affects the
17.10 	public interest of the state in the effective regulation and
17.11 	control of gaming;
17.12 	(3) made an intentional false statement in a license
17.13 	application related to gaming;
17.14 	(4) failed to perform material covenants or representations
17.15 	made in a license application; or 
17.16 	(5) failed to notify the commissioner of a material change
17.17 	in the information provided in the application.
17.18 	(b) The commissioner may not revoke or suspend a license
17.19 	under this subdivision unless the commissioner has given the
17.20 	tribal entity and each participating tribal government express
17.21 	written notice of the reason for the proposed revocation or
17.22 	suspension and has granted the tribal entity a reasonable amount
17.23 	of time to cure the violation giving rise to the proposed
17.24 	revocation or suspension, and, in the commissioner's reasonable
17.25 	judgment, the tribal entity has failed to do so.  The
17.26 	commissioner is not required to provide a reasonable time to
17.27 	cure the violation before a license suspension if, in the
17.28 	commissioner's reasonable judgment, the violation cannot be
17.29 	cured by the tribal entity before significant harm will result
17.30 	to the public health, safety, or welfare.  The ability to cure
17.31 	may include creation of a reorganized or reformed tribal entity,
17.32 	provided that the reorganized or reformed tribal entity is
17.33 	approved by the commissioner and the lottery director.
17.34 	(c) A license revocation or suspension under this
17.35 	subdivision is conducted as a contested case under sections
17.36 	14.57 to 14.69 of the Administrative Procedure Act, and is in
18.1 	addition to any other civil, administrative, or criminal
18.2 	penalties imposed for a violation of law or rule.
18.3 		Subd. 8.Other license actions. (a) The commissioner may
18.4 	not issue the gaming facility license under this section or may
18.5 	by administrative action impose a civil penalty upon the
18.6 	licensee, issue correction orders, or take other administrative
18.7 	action if the commissioner determines that the tribal entity, or
18.8 	officer, director, manager, supervisory personnel, or other
18.9 	person with a direct financial or management interest in the
18.10 	licensee:
18.11 	(1) has been convicted of a felony or of a crime in another
18.12 	jurisdiction, which would be a felony in Minnesota;
18.13 	(2) has been convicted of any crime related to gaming;
18.14 	(3) has been found by a court, the lottery director, the
18.15 	commissioner, or other state or governmental body to have
18.16 	engaged in fraud, misrepresentation, or deceit;
18.17 	(4) has provided false or misleading information to the
18.18 	commissioner;
18.19 	(5) has violated or failed to comply with this section or
18.20 	any provision of this chapter or chapter 349A;
18.21 	(6) is permanently or temporarily enjoined by any gambling
18.22 	regulatory agency from engaging in or continuing any conduct or
18.23 	practice involving any aspect of gambling;
18.24 	(7) has had a gambling-related license revoked or
18.25 	suspended, or has paid or been required to pay a monetary
18.26 	penalty of $10,000 or more by a gambling regulator in another
18.27 	state or jurisdiction;
18.28 	(8) has been the subject of any of the following actions by
18.29 	the commissioner:
18.30 	(i) has had a license under this chapter denied, suspended,
18.31 	or revoked;
18.32 	(ii) has been censured or reprimanded, or has paid or been
18.33 	required to pay a monetary penalty or fine; or 
18.34 	(iii) has been the subject of any other discipline by the
18.35 	commissioner; or 
18.36 	(9) based on past activities or criminal record, poses a
19.1 	threat to the public interest or to the effective regulation and
19.2 	control of gambling, or creates or enhances the dangers of
19.3 	unsuitable, unfair, or illegal practices, methods, and
19.4 	activities in the conduct of gambling or the management of the
19.5 	business and financial arrangements incidental to the conduct of
19.6 	gambling.
19.7 	(b) Any conduct in violation of this section, or failure by
19.8 	the tribal entity to take reasonable action to cure a violation
19.9 	of this section, may be considered by the commissioner in
19.10 	determining whether to order revocation or suspension of the
19.11 	gaming facility license.  Any proposed revocation or suspension
19.12 	is subject to the notice and process requirements of subdivision
19.13 	7, paragraph (b).
19.14 	(c) Administrative action, including, but not limited to,
19.15 	imposition of a civil penalty, corrective order, or other
19.16 	administrative action under this paragraph, is a contested case
19.17 	under sections 14.57 to 14.69 and is in addition to any other
19.18 	civil, administrative, or criminal penalties provided for a
19.19 	violation of law or rule.
19.20 		Subd. 9.Required notification. (a) The tribal entity
19.21 	has the obligation to immediately report to the commissioner any
19.22 	substantial change in its management or ownership.  Any change
19.23 	of ownership in the tribal entity shall require approval by the
19.24 	legislature.  Any individual who later becomes an officer,
19.25 	director, or other individual with a direct financial or
19.26 	management interest in the tribal entity must undergo a
19.27 	comprehensive background and financial investigation as set
19.28 	forth in subdivision 6.  Prior to assuming any duties or
19.29 	responsibilities for the tribal entity the individual must file
19.30 	the appropriate license application information with the
19.31 	commissioner.
19.32 	(b) Following issuance of a gaming facility license, the
19.33 	licensee must annually certify to the commissioner its
19.34 	compliance with this section.
19.35 		Subd. 10.License review. The gaming facility license
19.36 	must be reviewed by the commissioner every five years.  An
20.1 	application for review must be on a form prescribed by the
20.2 	commissioner.  The commissioner shall review the application and
20.3 	conduct the comprehensive background investigation pursuant to
20.4 	subdivision 6.
20.5 		Subd. 11.Audit; investigation. (a) The tribal entity
20.6 	shall have an annual certified audit conducted of the tribal
20.7 	entity's operation of the gaming facility in accordance with
20.8 	generally accepted accounting principles.  The tribal entity
20.9 	shall file a copy of each audit report with the commissioner.
20.10 	(b) The commissioner has the right to conduct additional
20.11 	reasonable audits or investigations relating to the operation of
20.12 	the gaming facility.  The commissioner shall have access to all
20.13 	information, records, and accounts pertaining to the operation
20.14 	of the gaming facility.  The commissioner may recover the
20.15 	reasonable costs of additional audits and investigations from
20.16 	the tribal entity.
20.17 		Subd. 12.Sale of intoxicating liquor. Notwithstanding
20.18 	any other law, local ordinance, or charter provision, the host
20.19 	community shall issue to the tribal entity an on-sale license
20.20 	for the sale of intoxicating liquor at the gaming facility
20.21 	pursuant to chapter 340A.  The annual fee for the license issued
20.22 	pursuant to this subdivision shall be set by the host community
20.23 	at an amount comparable to the fee charged by municipalities in
20.24 	the surrounding area for a similar license.  Chapter 340A
20.25 	applies to the sale of intoxicating liquor at the gaming
20.26 	facility, except that the licensed premises need not be compact
20.27 	and contiguous if the licensed premises are limited to the
20.28 	interior and grounds of the facility.
20.29 		Subd. 13.Detention of suspects. (a) The commissioner
20.30 	may designate specific employees of the department, the lottery,
20.31 	or the gaming facility as persons authorized to detain a person
20.32 	if they have probable cause to believe that the person detained
20.33 	has violated section 609.651 or 609.76 while at the gaming
20.34 	facility.
20.35 	(b) A person authorized to detain an individual under
20.36 	paragraph (a) is not criminally or civilly liable for any
21.1 	detention authorized by this subdivision if the person has a
21.2 	good faith belief that probable cause exists for the detention,
21.3 	and the detention was not conducted with unreasonable force or
21.4 	in bad faith.
21.5 	(c) A peace officer or person authorized by the
21.6 	commissioner under paragraph (a) may exclude a person from the
21.7 	gaming facility or remove that person from the gaming facility
21.8 	if the person is suspected to have violated section 609.651 or
21.9 	609.76 or possesses contraband as provided in section 609.762,
21.10 	subdivision 1.
21.11 	(d) The tribal entity may establish a self-exclusion
21.12 	program by which persons, at their request, may be excluded from
21.13 	the gaming facility.
21.14 		Subd. 14.Reimbursement of costs. The commissioner shall
21.15 	require that the tribal entity, on a quarterly basis, reimburse
21.16 	the commissioner for the commissioner's actual costs, including
21.17 	personnel costs of licensing, regulating, enforcement, and
21.18 	oversight of the gaming facility under this section and sections
21.19 	299L.091 to 299L.094.  Money received by the commissioner under
21.20 	this subdivision must be deposited in the state treasury and
21.21 	credited to the commissioner reimbursement account and is
21.22 	annually appropriated to the commissioner to pay the costs of
21.23 	regulating activities at the gaming facility.

21.24 	Sec. 2. [299L.091] GAMING MANAGEMENT.
21.25 		Subdivision 1.License required. The tribal entity, or
21.26 	any entity formed by or engaged by the tribal entity to manage
21.27 	the operations of the gaming facility under section 349A.17,
21.28 	must obtain a gaming management license from the commissioner.
21.29 		Subd. 2.Application. An application for a license under
21.30 	this section must be on a form prescribed by the commissioner.
21.31 	The commissioner may issue a gaming management license to the
21.32 	management entity that will manage or operate the gaming
21.33 	facility or gaming operations for the tribal entity.
21.34 		Subd. 3.License issuance. (a) The commissioner shall
21.35 	issue a license under this section unless information obtained
21.36 	from the comprehensive background check establishes that
22.1 	issuance of the license would be adverse to the public interest
22.2 	or to the effective regulation of gaming.
22.3 	(b) The commissioner may only issue a gaming management
22.4 	license to an entity that is subject to the jurisdiction of the
22.5 	Minnesota state courts and the administrative jurisdiction and
22.6 	regulation of the state.
22.7 	(c) Any license issued under this section is
22.8 	nontransferable.
22.9 		Subd. 4.Background investigation. Before issuing a
22.10 	gaming management license, the commissioner must conduct a
22.11 	comprehensive background and financial investigation of the
22.12 	applicant including its officers, directors, managers,
22.13 	supervisory personnel, and persons with a direct financial
22.14 	interest in the management entity, not including the tribal
22.15 	governments that have an interest in the management entity,
22.16 	provided that if the management entity and the tribal entity are
22.17 	the same, the commissioner shall utilize the background
22.18 	investigation conducted as part of the application for a gaming
22.19 	facility license.  The commissioner may require that
22.20 	fingerprints be taken and the commissioner may forward the
22.21 	fingerprints to the Federal Bureau of Investigation for a
22.22 	national criminal history check on the officers, directors,
22.23 	managers, supervisory personnel, and persons with a direct
22.24 	financial interest in the management entity, not including the
22.25 	tribal governments that have an interest in the management
22.26 	entity.  The commissioner may charge an applicant for a gaming
22.27 	management license a reasonable fee to cover the costs of the
22.28 	investigation.  Money received by the commissioner under this
22.29 	subdivision must be deposited in the state treasury and credited
22.30 	to the commissioner reimbursement account and is annually
22.31 	appropriated to the commissioner to pay for costs incurred under
22.32 	this subdivision.
22.33 		Subd. 5.License actions. (a) The commissioner may not
22.34 	issue a license under this section, or may by administrative
22.35 	action revoke, suspend, or refuse to renew the gaming management
22.36 	license, impose a civil penalty upon the licensee, or issue
23.1 	correction orders, if the commissioner determines that the
23.2 	management entity, or officer, director, manager, supervisory
23.3 	personnel, other person with a direct financial interest in the
23.4 	management entity, not including the tribal government that have
23.5 	an interest in the management entity financial or management
23.6 	interest in the licensee:
23.7 	(1) has been convicted of a felony or of a crime in another
23.8 	jurisdiction, which would be a felony in Minnesota;
23.9 	(2) has been convicted of any crime related to gaming;
23.10 	(3) has been found by a court, the lottery director, the
23.11 	commissioner, or other state or governmental body to have
23.12 	engaged in fraud, misrepresentation, or deceit;
23.13 	(4) has provided false or misleading information to the
23.14 	commissioner;
23.15 	(5) has violated or failed to comply with this chapter or
23.16 	chapter 349A;
23.17 	(6) is permanently or temporarily enjoined by any gambling
23.18 	regulatory agency from engaging in or continuing any conduct or
23.19 	practice involving any aspect of gambling;
23.20 	(7) has had a gambling-related license revoked or
23.21 	suspended, or has paid or been required to pay a monetary
23.22 	penalty of $10,000 or more, by a gambling regulator in another
23.23 	state or jurisdiction; or 
23.24 	(8) has been the subject of any of the following actions by
23.25 	the commissioner:
23.26 	(i) has had a license under chapter 299L denied, suspended,
23.27 	or revoked;
23.28 	(ii) has been censured or reprimanded or has paid or been
23.29 	required to pay a monetary penalty or fine; or 
23.30 	(iii) has been the subject of any other discipline by the
23.31 	commissioner;
23.32 	(9) has engaged in conduct that is contrary to the public
23.33 	health, safety, or welfare, or to the integrity of gambling;
23.34 	(10) based on past activities or criminal record, poses a
23.35 	threat to the public interest or to the effective regulation and
23.36 	control of gambling, or creates or enhances the dangers of
24.1 	unsuitable, unfair, or illegal practices, methods, and
24.2 	activities in the conduct of gambling or the management of the
24.3 	business and financial arrangements incidental to the conduct of
24.4 	gambling;
24.5 	(11) has engaged in a material violation of law, order, or
24.6 	rule relating to gambling within any jurisdiction;
24.7 	(12) has operated gaming in violation of approved game
24.8 	procedures or an approved security plan, which in the
24.9 	commissioner's opinion adversely and materially affects the
24.10 	public interest of the state in the effective regulation and
24.11 	control of gaming;
24.12 	(13) has made an intentional false statement in a license
24.13 	application;
24.14 	(14) has failed to perform material covenants or
24.15 	representations made in a license application; or 
24.16 	(15) has failed to notify the commissioner of a material
24.17 	change in the information provided in a license application.
24.18 	(b) A license revocation, suspension, or imposition of a
24.19 	civil penalty under this paragraph is a contested case under
24.20 	sections 14.57 to 14.69 and is in addition to any criminal
24.21 	penalties provided for a violation of law or rule.
24.22 	(c) The commissioner shall provide notice of any license
24.23 	revocation, suspension, or imposition of a civil penalty to the
24.24 	tribal entity.
24.25 		Subd. 6.Required notification. (a) The gaming
24.26 	management licensee has the obligation to immediately report to
24.27 	the commissioner any change in its management or ownership.  Any
24.28 	individual who later becomes an officer, director, or other
24.29 	individual with a direct financial or management interest in the
24.30 	licensee must undergo a comprehensive background and financial
24.31 	investigation as set forth in subdivision 4.  Prior to assuming
24.32 	any duties or responsibilities for the licensee, the individual
24.33 	must file the appropriate license application information with
24.34 	the commissioner.
24.35 	(b) Following issuance of a gaming management license, the
24.36 	licensee must annually certify to the commissioner its
25.1 	compliance with this section.
25.2 		Subd. 7.License renewal. The gaming management license
25.3 	must be renewed every two years.  The commissioner must review
25.4 	an application for renewal of a gaming management license in the
25.5 	same manner as set forth in this section for issuance of a
25.6 	license, including the assessment of costs related to the
25.7 	background investigation.

25.8 	Sec. 3. [299L.092] EMPLOYEE LICENSES.
25.9 		Subdivision 1.Authority. The commissioner may issue
25.10 	employee licenses for persons employed at the gaming facility.
25.11 	All persons employed at the gaming facility must have the
25.12 	appropriate license issued by the commissioner.  The tribal
25.13 	entity must ensure that an employee has a valid employee license
25.14 	before the employee begins work at the gaming facility.
25.15 		Subd. 2.Application information. An application for an
25.16 	employee license must be on a form prescribed by the
25.17 	commissioner and include an affidavit of qualification that the
25.18 	applicant:
25.19 	(1) does not have a felony conviction of record in a state
25.20 	or federal court and does not have a state or federal felony
25.21 	charge pending;
25.22 	(2) is not and never has been connected with or engaged in
25.23 	an illegal business;
25.24 	(3) has never been found guilty of fraud or
25.25 	misrepresentation in connection with gambling; and 
25.26 	(4) has never been found guilty of a violation of law or
25.27 	rule relating to gambling within any jurisdiction.
25.28 		Subd. 3.Background investigations. The commissioner
25.29 	shall investigate each applicant for an employee license to the
25.30 	extent the commissioner deems necessary.  The commissioner must
25.31 	require the applicant to be fingerprinted or to furnish the
25.32 	applicant's fingerprints.  The commissioner may require the
25.33 	tribal entity to pay the costs of processing employee licenses,
25.34 	renewing employee licenses, and conducting background
25.35 	investigations on the employee.  Money received by the
25.36 	commissioner under this subdivision must be deposited in the
26.1 	state treasury and credited to the commissioner reimbursement
26.2 	account and are annually appropriated to the commissioner to pay
26.3 	for costs incurred under this subdivision.
26.4 		Subd. 4.License issuance and renewal. If the
26.5 	commissioner determines that the applicant is qualified for the
26.6 	occupation for which licensing is sought and will not adversely
26.7 	affect the public health, safety, and welfare or the integrity
26.8 	of gambling in Minnesota, the commissioner may issue an employee
26.9 	license to the applicant.  If the commissioner makes a similar
26.10 	finding for a renewal of an employee license, the commissioner
26.11 	may renew the license.  Employee licenses are effective for one
26.12 	year.
26.13 		Subd. 5.Revocation and suspension. (a) The commissioner
26.14 	may revoke an employee license for a violation of law or rule
26.15 	which in the commissioner's opinion adversely affects the
26.16 	integrity of gambling in Minnesota, or for an intentional false
26.17 	statement made in a license application.  The commissioner may
26.18 	suspend an employee license for up to one year or refuse to
26.19 	renew the license or impose a civil penalty for a violation of
26.20 	law, order, or rule.  A license revocation or suspension is a
26.21 	contested case under sections 14.57 to 14.69 of the
26.22 	Administrative Procedure Act and is in addition to criminal
26.23 	penalties imposed for a violation of law or rule.
26.24 	(b) The commissioner may summarily suspend an employee
26.25 	license prior to a contested case hearing where it is necessary
26.26 	to ensure the integrity of gambling.  A contested case hearing
26.27 	must be held within 20 days of the summary suspension and the
26.28 	administrative law judge's report must be issued within 20 days
26.29 	from the close of the hearing record.  In all cases involving
26.30 	summary suspension, the commissioner must issue its final
26.31 	decision within 30 days from receipt of the report of the
26.32 	administrative law judge and subsequent exceptions and argument
26.33 	under section 14.61.

26.34 	Sec. 4. [299L.093] VENDOR LICENSES.
26.35 		Subdivision 1.Issuance. The commissioner may issue a
26.36 	vendor license for any person or entity that sells or
27.1 	distributes products or provides services at the gaming
27.2 	facility.  No person may sell or distribute products or provide
27.3 	a service at the gaming facility unless the person has obtained
27.4 	a license from the commissioner.  All employees of the vendor
27.5 	whose work requires attendance at the gaming facility must
27.6 	obtain an employee license under section 299L.092.
27.7 		Subd. 2.Application information. An application for a
27.8 	vendor license must be on a form prescribed by the commissioner
27.9 	and include an affidavit of qualification that the applicant,
27.10 	and any officer, director, or person with direct financial
27.11 	interest in the applicant:
27.12 	(1) does not have a felony conviction of record in a state
27.13 	or federal court and does not have a state or federal felony
27.14 	charge pending;
27.15 	(2) is not and never has been connected with or engaged in
27.16 	an illegal business;
27.17 	(3) has never been found guilty of fraud or
27.18 	misrepresentation in connection with gambling; and 
27.19 	(4) has never been found guilty of a violation of law or
27.20 	rule relating to gambling within any jurisdiction.
27.21 		Subd. 3.Background investigations. The commissioner
27.22 	shall investigate each applicant for a vendor license to the
27.23 	extent the commissioner deems necessary.  The commissioner must
27.24 	require the applicant be fingerprinted or furnish the
27.25 	applicant's fingerprints.  The commissioner may require the
27.26 	vendor to pay the costs of processing employee licenses,
27.27 	renewing vendor licenses, and conducting background
27.28 	investigations on the vendor.  Money received by the
27.29 	commissioner under this subdivision must be deposited in the
27.30 	state treasury and credited to the commissioner reimbursement
27.31 	account, and are annually appropriated to the commissioner to
27.32 	pay for costs incurred under this subdivision.
27.33 		Subd. 4.License issuance and renewal. If the
27.34 	commissioner determines that the applicant is qualified and the
27.35 	issuance of the license will not adversely affect the public
27.36 	health, safety, and welfare or the integrity of gambling in
28.1 	Minnesota, the commissioner may issue a vendor license to the
28.2 	applicant.  If the commissioner makes a similar finding for a
28.3 	renewal of a vendor license, the commissioner may renew the
28.4 	license.  Vendor licenses are effective for one year.
28.5 		Subd. 5.Revocation and suspension. (a) The commissioner
28.6 	may revoke a vendor license for a violation of law or rule that,
28.7 	in the commissioner's opinion, adversely affects the integrity
28.8 	of gambling in Minnesota, or for an intentional false statement
28.9 	made in a license application.  The commissioner may suspend a
28.10 	vendor license for up to one year or refuse to renew the license
28.11 	or impose a civil penalty for a violation of law, order, or
28.12 	rule.  A license revocation or suspension is a contested case
28.13 	under sections 14.57 to 14.69 of the Administrative Procedure
28.14 	Act and is in addition to criminal penalties imposed for a
28.15 	violation of law or rule.
28.16 	(b) The commissioner may summarily suspend a vendor license
28.17 	for not more than 90 days prior to a contested case hearing
28.18 	where it is necessary to ensure the integrity of gambling.  A
28.19 	contested case hearing must be held within 20 days of the
28.20 	summary suspension and the administrative law judge's report
28.21 	must be issued within 20 days from the close of the hearing
28.22 	record.  In all cases involving summary suspension, the
28.23 	commissioner must issue its final decision within 30 days from
28.24 	receipt of the report of the administrative law judge and
28.25 	subsequent exceptions and argument under section 14.61.

28.26 	Sec. 5. [299L.094] NONLOTTERY CASINO GAMES.
28.27 		Subdivision 1.Definitions. (a) For the purposes of this
28.28 	section, the following terms have the meanings given them.
28.29 	(b) "Nonlottery casino games" means any game authorized by
28.30 	the commissioner to be conducted by the tribal entity at the
28.31 	gaming facility that is not a gaming machine or other lottery
28.32 	game as defined by section 349A.01.
28.33 	(c) "Nonlottery casino games' adjusted gross revenue" means
28.34 	the sum of all money received from the operation of nonlottery
28.35 	casino games, less the amounts paid out to players in prizes or
28.36 	winnings and promotional allowances approved by the lottery
29.1 	director under section 349A.17 in the nonlottery casino games.
29.2 		Subd. 2.Operation. Nonlottery casino games may be
29.3 	operated by the tribal entity in conformance with a plan of
29.4 	operation approved by the commissioner.  The plan of operation
29.5 	must include, at a minimum:
29.6 	(1) specifying and defining all nonlottery games to be
29.7 	played, including all governing aspects of each nonlottery
29.8 	casino game;
29.9 	(2) arrangements to ensure the security of nonlottery
29.10 	casino gaming;
29.11 	(3) internal control systems for play of nonlottery casino
29.12 	games; and 
29.13 	(4) a plan for the training of nonlottery casino games
29.14 	personnel in identification of problem gamblers and appropriate
29.15 	action to prevent or control problem gambling.
29.16 		Subd. 3.Plan amendment. The plan of operation may be
29.17 	amended only with the approval of the commissioner.
29.18 		Subd. 4.Actions. The commissioner may revoke, suspend,
29.19 	refuse to renew, or impose a civil penalty upon the tribal
29.20 	entity or the gaming management licensee for violation of the
29.21 	plan of operation.  An action under this subdivision shall be
29.22 	conducted as a contested case under sections 14.57 to 14.69 of
29.23 	the Administrative Procedures Act and is in addition to criminal
29.24 	penalties imposed for violation of the plan of operation.
29.25 		Subd. 5.Prizes. A person who plays a nonlottery casino
29.26 	game at the gaming facility agrees to be bound by the rules and
29.27 	game procedures applicable to that particular game.  The player
29.28 	acknowledges that the determination of whether the player has
29.29 	won a prize is subject to the rules and game procedures adopted
29.30 	by the plan of operation, claim procedures established by the
29.31 	plan of operation for that game, and any confidential or public
29.32 	validation tests established by the plan of operation for that
29.33 	game.  A person under 18 years of age may not claim a prize from
29.34 	a nonlottery casino game at the gaming facility.

29.35 	Sec. 6. [299L.095] EMPLOYMENT RESTRICTIONS; CIVIL
29.36 	PENALTY.
30.1 	(a) The lottery director, the commissioner, or any manager,
30.2 	director, or supervisor employed by the lottery or the
30.3 	Department of Public Safety whose job responsibilities include
30.4 	the oversight, audit, investigation, or regulation of gaming at
30.5 	a gaming facility licensed by the commissioner must not, while
30.6 	employed with or within one year after leaving employment,
30.7 	receive compensation directly or indirectly from, or enter into
30.8 	a contractual relationship with the tribal entity or any
30.9 	management entity licensed by the commissioner pursuant to
30.10 	section 299L.09 or 299L.091.
30.11 	(b) The tribal entity or management entity licensed by the
30.12 	commissioner must not negotiate with or offer to employ or
30.13 	compensate the lottery director; commissioner; or any manager,
30.14 	director, or supervisor employed by the lottery or the
30.15 	Department of Public Safety whose job responsibilities include
30.16 	the oversight, audit, investigation, or regulation of gaming at
30.17 	a gaming facility licensed by the commissioner pursuant to
30.18 	section 299L.09 or 299L.091 while the person is employed by the
30.19 	lottery or the Department of Public Safety or within one year
30.20 	after the person's employment has ended.
30.21 	(c) A state employee who violates this section is subject
30.22 	to a civil penalty not to exceed $10,000 for each violation.
30.23 	The attorney general may bring an action in district court to
30.24 	pursue a violation of this section.
30.25 	(d) The commissioner may take administrative action in
30.26 	relation to the gaming facility license or management license
30.27 	for a violation of this section by a tribal entity or management
30.28 	entity.

30.29 	Sec. 7. EFFECTIVE DATE.
 30.30 	This article is effective the day following final enactment.

30.31 	ARTICLE 4
30.32 	GAMING TRANSACTION FEE

30.33 	Section 1. [297A.651] GAMING FACILITY.
30.34 	(a) The State Lottery must, on or before the 20th day of
30.35 	each month, transmit to the commissioner an amount equal to the
30.36 	adjusted gross gaming machine revenue and other lottery games'
31.1 	adjusted gross revenue, as defined in section 349A.01, for the
31.2 	previous month multiplied by 26 percent.
31.3 	(b) A gaming transaction fee is imposed on nonlottery
31.4 	casino games at the gaming facility authorized under section
31.5 	299L.094 at the rate of 14 percent of nonlottery casino games'
31.6 	adjusted gross revenue, as defined in section 299L.094.  The
31.7 	tribal entity authorized to conduct nonlottery casino games at
31.8 	the gaming facility must make the payments due under this
31.9 	paragraph to the commissioner on or before the 20th day of each
31.10 	month for the adjusted gross revenue received for the previous
31.11 	month.
31.12 	(c) The commissioner shall deposit the money transmitted
31.13 	under this section in the state treasury to be credited as
31.14 	provided in section 297A.94.
31.15 	(d) The payments imposed by this section are in lieu of the
31.16 	tax imposed by section 297A.62 relating to wagering at the
31.17 	gaming facility and any local taxes relating to wagering at the
31.18 	gaming facility and local license fees relating to wagering at
31.19 	the gaming facility.

31.20 	Sec. 2. Minnesota Statutes 2004, section 297A.94, is
31.21 	amended to read:
31.22 	297A.94 DEPOSIT OF REVENUES.
31.23 	(a) Except as provided in this section, the commissioner
31.24 	shall deposit the revenues, including interest and penalties,
31.25 	derived from the taxes imposed by this chapter in the state
31.26 	treasury and credit them to the general fund.
31.27 	(b) The commissioner shall deposit taxes in the Minnesota
31.28 	agricultural and economic account in the special revenue fund if:
31.29 	(1) the taxes are derived from sales and use of property
31.30 	and services purchased for the construction and operation of an
31.31 	agricultural resource project; and
31.32 	(2) the purchase was made on or after the date on which a
31.33 	conditional commitment was made for a loan guaranty for the
31.34 	project under section 41A.04, subdivision 3.
31.35 	The commissioner of finance shall certify to the commissioner
31.36 	the date on which the project received the conditional
32.1 	commitment.  The amount deposited in the loan guaranty account
32.2 	must be reduced by any refunds and by the costs incurred by the
32.3 	Department of Revenue to administer and enforce the assessment
32.4 	and collection of the taxes.
32.5 	(c) The commissioner shall deposit the revenues, including
32.6 	interest and penalties, derived from the taxes imposed on sales
32.7 	and purchases included in section 297A.61, subdivision 3,
32.8 	paragraph (g), clauses (1) and (4), in the state treasury, and
32.9 	credit them as follows:
32.10 	(1) first to the general obligation special tax bond debt
32.11 	service account in each fiscal year the amount required by
32.12 	section 16A.661, subdivision 3, paragraph (b); and
32.13 	(2) after the requirements of clause (1) have been met, the
32.14 	balance to the general fund.
32.15 	(d) The commissioner shall deposit the revenues, including
32.16 	interest and penalties, collected under section 297A.64,
32.17 	subdivision 5, in the state treasury and credit them to the
32.18 	general fund.  By July 15 of each year the commissioner shall
32.19 	transfer to the highway user tax distribution fund an amount
32.20 	equal to the excess fees collected under section 297A.64,
32.21 	subdivision 5, for the previous calendar year.
32.22 	(e) For fiscal year 2001, 97 percent; for fiscal years 2002
32.23 	and 2003, 87 percent; and for fiscal year 2004 and thereafter,
32.24 	72.43 percent of the revenues, including interest and penalties,
32.25 	transmitted to the commissioner under section 297A.65, must be
32.26 	deposited by the commissioner in the state treasury as follows:
32.27 	(1) 50 percent of the receipts must be deposited in the
32.28 	heritage enhancement account in the game and fish fund, and may
32.29 	be spent only on activities that improve, enhance, or protect
32.30 	fish and wildlife resources, including conservation,
32.31 	restoration, and enhancement of land, water, and other natural
32.32 	resources of the state;
32.33 	(2) 22.5 percent of the receipts must be deposited in the
32.34 	natural resources fund, and may be spent only for state parks
32.35 	and trails;
32.36 	(3) 22.5 percent of the receipts must be deposited in the
33.1 	natural resources fund, and may be spent only on metropolitan
33.2 	park and trail grants;
33.3 	(4) three percent of the receipts must be deposited in the
33.4 	natural resources fund, and may be spent only on local trail
33.5 	grants; and
33.6 	(5) two percent of the receipts must be deposited in the
33.7 	natural resources fund, and may be spent only for the Minnesota
33.8 	Zoological Garden, the Como Park Zoo and Conservatory, and the
33.9 	Duluth Zoo.
33.10 	(f) The revenue dedicated under paragraph (e) may not be
33.11 	used as a substitute for traditional sources of funding for the
33.12 	purposes specified, but the dedicated revenue shall supplement
33.13 	traditional sources of funding for those purposes.  Land
33.14 	acquired with money deposited in the game and fish fund under
33.15 	paragraph (e) must be open to public hunting and fishing during
33.16 	the open season, except that in aquatic management areas or on
33.17 	lands where angling easements have been acquired, fishing may be
33.18 	prohibited during certain times of the year and hunting may be
33.19 	prohibited.  At least 87 percent of the money deposited in the
33.20 	game and fish fund for improvement, enhancement, or protection
33.21 	of fish and wildlife resources under paragraph (e) must be
33.22 	allocated for field operations.
33.23 	(g) The commissioner must deposit revenues, including
33.24 	interest and penalties, transmitted to the commissioner under
33.25 	section 297A.651 into the gaming facility proceeds fund
33.26 	established in section 297A.941.

33.27 	Sec. 3. [297A.941] GAMING FACILITY PROCEEDS FUND.
33.28 	A gaming facility proceeds fund is established in the state
33.29 	treasury, consisting of money deposited in the fund under
33.30 	section 297A.94, paragraph (g), and any other money credited to
33.31 	the fund by law.  Money in the fund is appropriated as follows:
33.32 	(1) ten percent of the receipts is annually appropriated to
33.33 	the community assets account; and 
33.34 	(2) the remaining 90 percent of the receipts shall be
33.35 	transferred to the general fund.

33.36 	Sec. 4. [297A.942] COMMUNITY ASSETS ACCOUNT.
34.1 	A community assets account is established in the state
34.2 	treasury, consisting of money deposited in the account under
34.3 	section 297A.941 and interest earned thereon.  Money in the
34.4 	account may be spent, as appropriated by law, to help finance
34.5 	capital projects that provide for facilities which provide a
34.6 	public benefit to the state and local communities.  Projects
34.7 	that may be financed through an appropriation from this account
34.8 	include, but are not limited to, the following:  stadiums and
34.9 	other athletic facilities for professional, college, and amateur
34.10 	sports; museums, theaters, and other facilities for the arts;
34.11 	recreational facilities; planetariums; and zoos.

34.12 	Sec. 5. EFFECTIVE DATE.
 34.13 	This article is effective the day following final enactment.

34.14 	ARTICLE 5
34.15 	MISCELLANEOUS PROVISIONS

34.16 	Section 1. Minnesota Statutes 2004, section 299L.07,
34.17 	subdivision 2, is amended to read:
34.18 		Subd. 2.Exclusions.  Notwithstanding subdivision 1, a
34.19 	gambling device:
34.20 	(1) may be sold by a person who is not licensed under this
34.21 	section, if the person (i) is not engaged in the trade or
34.22 	business of selling gambling devices, and (ii) does not sell
34.23 	more than one gambling device in any calendar year;
34.24 	(2) may be sold by the governing body of a federally
34.25 	recognized Indian tribe described in subdivision 2a, paragraph
34.26 	(b), clause (1), which is not licensed under this section, if
34.27 	(i) the gambling device was operated by the Indian tribe, (ii)
34.28 	the sale is to a distributor licensed under this section, and
34.29 	(iii) the licensed distributor notifies the commissioner of the
34.30 	purchase, in the same manner as is required when the licensed
34.31 	distributor ships a gambling device into Minnesota;
34.32 	(3) may be possessed by a person not licensed under this
34.33 	section if the person holds a permit issued under section
34.34 	299L.08; and 
34.35 	(4) may be possessed by a state agency, with the written
34.36 	authorization of the director, for display or evaluation
35.1 	purposes only and not for the conduct of gambling; and 
35.2 	(5) may be possessed by the State Lottery as authorized
35.3 	under chapter 349A.

35.4 	Sec. 2. Minnesota Statutes 2004, section 299L.07,
35.5 	subdivision 2a, is amended to read:
35.6 		Subd. 2a.Restrictions.  (a) A manufacturer licensed
35.7 	under this section may sell, offer to sell, lease, or rent, in
35.8 	whole or in part, a gambling device only to a distributor
35.9 	licensed under this section or to the State Lottery as
35.10 	authorized under chapter 349A.
35.11 	(b) A distributor licensed under this section may sell,
35.12 	offer to sell, market, rent, lease, or otherwise provide, in
35.13 	whole or in part, a gambling device only to:
35.14 	(1) the governing body of a federally recognized Indian
35.15 	tribe that is authorized to operate the gambling device under a
35.16 	tribal state compact under the Indian Gaming Regulatory Act,
35.17 	Public Law 100-497, and future amendments to it;
35.18 	(2) a person for use in the person's dwelling for display
35.19 	or amusement purposes in a manner that does not afford players
35.20 	an opportunity to obtain anything of value;
35.21 	(3) another distributor licensed under this section; or 
35.22 	(4) a person in another state who is authorized under the
35.23 	laws of that state to possess the gambling device; or 
35.24 	(5) the State Lottery as authorized under chapter 349A.

35.25 	Sec. 3. Minnesota Statutes 2004, section 340A.410,
35.26 	subdivision 5, is amended to read:
35.27 		Subd. 5.Gambling prohibited.  (a) Except as otherwise
35.28 	provided in this subdivision, no retail establishment licensed
35.29 	to sell alcoholic beverages may keep, possess, or operate, or
35.30 	permit the keeping, possession, or operation on the licensed
35.31 	premises of dice or any gambling device as defined in section
35.32 	349.30, or permit gambling therein.
35.33 	(b) Gambling equipment may be kept or operated and raffles
35.34 	conducted on licensed premises and adjoining rooms when the use
35.35 	of the gambling equipment is authorized by (1) chapter 349, (2)
35.36 	a tribal ordinance in conformity with the Indian Gaming
36.1 	Regulatory Act, Public Law 100-497, or (3) a tribal-state
36.2 	compact authorized under section 3.9221.
36.3 	(c) Lottery tickets may be purchased and sold within the
36.4 	licensed premises as authorized by the director of the lottery
36.5 	under chapter 349A.
36.6 	(d) Dice may be kept and used on licensed premises and
36.7 	adjoining rooms as authorized by section 609.761, subdivision 4.
36.8 	(e) Gambling devices may be operated and gambling permitted
36.9 	at a gaming facility as authorized by chapter 299L and 349A.

36.10 	Sec. 4. Minnesota Statutes 2004, section 541.20, is
36.11 	amended to read:
36.12 	541.20 RECOVERY OF MONEY LOST.
36.13 	Every person who, by playing at cards, dice, or other game,
36.14 	or by betting on the hands or sides of such as are gambling,
36.15 	shall lose to any person so playing or betting any sum of money
36.16 	or any goods, and pays or delivers the same, or any part
36.17 	thereof, to the winner, may sue for and recover such money by a
36.18 	civil action, before any court of competent jurisdiction.  For
36.19 	purposes of this section, gambling shall not include pari-mutuel
36.20 	wagering conducted under a license issued pursuant to chapter
36.21 	240, purchase or sale of tickets in the state lottery, purchase
36.22 	of gaming machine plays as authorized under chapter 349A,
36.23 	conduct of any lottery or nonlottery casino games at a gaming
36.24 	facility as authorized under chapters 299L and 349A,or gambling
36.25 	authorized under chapters 349 and 349A.

36.26 	Sec. 5. Minnesota Statutes 2004, section 541.21, is
36.27 	amended to read:
36.28 	541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
36.29 	Every note, bill, bond, mortgage, or other security or
36.30 	conveyance in which the whole or any part of the consideration
36.31 	shall be for any money or goods won by gambling or playing at
36.32 	cards, dice, or any other game whatever, or by betting on the
36.33 	sides or hands of any person gambling, or for reimbursing or
36.34 	repaying any money knowingly lent or advanced at the time and
36.35 	place of such gambling or betting, or lent and advanced for any
36.36 	gambling or betting to any persons so gambling or betting, shall
37.1 	be void and of no effect as between the parties to the same, and
37.2 	as to all persons except such as hold or claim under them in
37.3 	good faith, without notice of the illegality of the
37.4 	consideration of such contract or conveyance.  The provisions of
37.5 	this section shall not apply to:  (1) pari-mutuel wagering
37.6 	conducted under a license issued pursuant to chapter 240; (2)
37.7 	purchase of tickets in the state lottery or other wagering
37.8 	authorized under chapter 299L or 349A; (3) gaming activities
37.9 	conducted pursuant to the Indian Gaming Regulatory Act, 25
37.10 	U.S.C. 2701 et seq.; or (4) lawful gambling activities permitted
37.11 	under chapter 349.

37.12 	Sec. 6. Minnesota Statutes 2004, section 609.75,
37.13 	subdivision 3, is amended to read:
37.14 		Subd. 3.What are not bets.  The following are not bets:
37.15 	(1) A contract to insure, indemnify, guarantee or otherwise
37.16 	compensate another for a harm or loss sustained, even though the
37.17 	loss depends upon chance.
37.18 	(2) A contract for the purchase or sale at a future date of
37.19 	securities or other commodities.
37.20 	(3) Offers of purses, prizes or premiums to the actual
37.21 	contestants in any bona fide contest for the determination of
37.22 	skill, speed, strength, endurance, or quality or to the bona
37.23 	fide owners of animals or other property entered in such a
37.24 	contest.
37.25 	(4) The game of bingo when conducted in compliance with
37.26 	sections 349.11 to 349.23.
37.27 	(5) A private social bet not part of or incidental to
37.28 	organized, commercialized, or systematic gambling.
37.29 	(6) The operation of equipment or the conduct of a raffle
37.30 	under sections 349.11 to 349.22, by an organization licensed by
37.31 	the Gambling Control Board or an organization exempt from
37.32 	licensing under section 349.166.
37.33 	(7) Pari-mutuel betting on horse racing when the betting is
37.34 	conducted under chapter 240.
37.35 	(8) The purchase and sale of state lottery tickets under
37.36 	chapter 349A.
38.1 	(9) Plays on a gaming machine, or purchase or participating
38.2 	in any lottery or nonlottery casino game at a gaming facility
38.3 	authorized under chapter 299L or 349A.

38.4 	Sec. 7. Minnesota Statutes 2004, section 609.761, is
38.5 	amended by adding a subdivision to read:
38.6 		Subd. 6.Gaming facility. Sections 609.755 and 609.76 do
38.7 	not prohibit the manufacture, possession, sale, or operation of
38.8 	a gaming machine at a gaming facility under chapter 349A, or the
38.9 	conduct of any other lottery or nonlottery casino game at a
38.10 	gaming facility under chapters 299L and 349A.

38.11 	Sec. 8. SEVERABILITY; SAVINGS.
 38.12 	If any part of this act is found to be invalid because it
38.13 	is in conflict with a provision of the Constitution of the State
38.14 	of Minnesota or the Constitution of the United States, or for
38.15 	any other reason, all other provisions of this act shall remain
38.16 	valid and any rights, remedies, and privileges that have been
38.17 	otherwise accrued by this act, shall remain in effect and may be
38.18 	proceeded with and concluded under the provisions of this act.

38.19 	Sec. 9. EFFECTIVE DATE.
 38.20 	This article is effective the day following final enactment.