1.1 	A bill for an act
1.2 	relating to gambling; authorizing the operation of
1.3 	lottery gaming machines and the conduct of other
1.4 	nonlottery games at a gaming facility; licensing and
1.5 	regulating the gaming facility; imposing a gaming
1.6 	transaction fee; appropriating money; amending
1.7 	Minnesota Statutes 2004, sections 240.13, by adding a
1.8 	subdivision; 240.135; 240.30, subdivision 1; 299L.07,
1.9 	subdivisions 2, 2a; 340A.410, subdivision 5; 349A.01,
1.10 	subdivision 10, by adding subdivisions; 349A.04;
1.11 	349A.10, subdivisions 3, 6; 349A.13; 541.20; 541.21;
1.12 	609.75, subdivision 3; 609.761, by adding a
1.13 	subdivision; proposing coding for new law in Minnesota
1.14 	Statutes, chapters 16A; 299L; 349A.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	ARTICLE 1
1.17 	LOTTERY OPERATIONS

1.18 	Section 1. PURPOSE.
 1.19 	The purpose of articles 1 to 6 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 	Sec. 2. Minnesota Statutes 2004, section 349A.01,
2.10 	subdivision 10, is amended to read:
2.11 		Subd. 10.Lottery procurement contract.  "Lottery
2.12 	procurement contract" means a contract to provide lottery
2.13 	products, gaming machines, maintenance of gaming machines,
2.14 	computer hardware and software used to monitor sales of lottery
2.15 	tickets and gaming machine plays, equipment used to conduct and
2.16 	monitor other lottery games at a gaming facility, equipment used
2.17 	for the conducting of other lottery games, and lottery tickets.
2.18 	"Lottery procurement contract" does not include a contract to
2.19 	provide an annuity or prize payment agreement or materials,
2.20 	supplies, equipment, or services common to the ordinary
2.21 	operation of a state agency.

2.22 	Sec. 3. Minnesota Statutes 2004, section 349A.01, is
2.23 	amended by adding a subdivision to read:
2.24 		Subd. 14.Gaming facility. "Gaming facility" means the
2.25 	site selected for the location of gaming machines and the
2.26 	conduct of other lottery games pursuant to a location contract
2.27 	under section 349A.17 and nonlottery casino games pursuant to a
2.28 	plan of operation approved under section 299L.094.

2.29 	Sec. 4. Minnesota Statutes 2004, section 349A.01, is
2.30 	amended by adding a subdivision to read:
2.31 		Subd. 15.Gaming machine. "Gaming machine" means any
2.32 	machine, system, or device which, upon payment of consideration
2.33 	in order to play a game, may award or entitle a player to a
2.34 	prize by reason of skill of the player or application of the
2.35 	element of chance, or both.

2.36 	Sec. 5. Minnesota Statutes 2004, section 349A.01, is
3.1 	amended by adding a subdivision to read:
3.2 		Subd. 16.Gaming machine game. "Gaming machine game"
3.3 	means a game operated by a gaming machine as authorized by the
3.4 	director.

3.5 	Sec. 6. Minnesota Statutes 2004, section 349A.01, is
3.6 	amended by adding a subdivision to read:
3.7 		Subd. 17.Gaming machine play. "Gaming machine play"
3.8 	means a record that proves participation in a gaming machine
3.9 	game.

3.10 	Sec. 7. Minnesota Statutes 2004, section 349A.01, is
3.11 	amended by adding a subdivision to read:
3.12 		Subd. 18.Adjusted gross gaming machine
3.13 	revenue. "Adjusted gross gaming machine revenue" means the sum
3.14 	of all money received for gaming machine plays less the amount
3.15 	paid out in prizes and for gaming machine games and promotional
3.16 	allowances approved by the director under section 349A.17.

3.17 	Sec. 8. Minnesota Statutes 2004, section 349A.01, is
3.18 	amended by adding a subdivision to read:
3.19 		Subd. 19.Other lottery game. "Other lottery game" means
3.20 	any game operated by the lottery at the gaming facility other
3.21 	than a gaming machine, where money or property are distributed
3.22 	to persons selected primarily by chance from among participants
3.23 	who have paid for a chance of being selected and any other game
3.24 	or activity determined to constitute a lottery within the
3.25 	meaning of the Minnesota Constitution, article XIII, section 5.
3.26 	Other lottery games do not include lottery games that are
3.27 	operated by the lottery at the gaming facility that are also
3.28 	sold by lottery retailers.

3.29 	Sec. 9. Minnesota Statutes 2004, section 349A.01, is
3.30 	amended by adding a subdivision to read:
3.31 		Subd. 20.Other lottery games adjusted gross
3.32 	revenue. "Other lottery games adjusted gross revenue" means the
3.33 	sum of all money from the operation of other lottery games at
3.34 	the gaming facility, less the amount paid out in prizes in the
3.35 	other lottery games and promotional allowances approved by the
3.36 	director under section 349A.17.

4.1 	Sec. 10. Minnesota Statutes 2004, section 349A.04, is
4.2 	amended to read:
4.3 	349A.04 LOTTERY GAME PROCEDURES.
4.4 	The director may adopt game procedures governing the
4.5 	following elements of the lottery:
4.6 	(1) lottery games;
4.7 	(2) ticket prices;
4.8 	(3) number and size of prizes;
4.9 	(4) methods of selecting winning tickets; and 
4.10 	(5) frequency and method of drawings;
4.11 	(6) gaming machine games;
4.12 	(7) cost of gaming machine plays;
4.13 	(8) other lottery games; and 
4.14 	(9) cost to participate in other lottery games.
4.15 	The adoption of lottery game procedures is not subject to
4.16 	chapter 14.

4.17 	Sec. 11. Minnesota Statutes 2004, section 349A.10,
4.18 	subdivision 3, is amended to read:
4.19 		Subd. 3.Lottery operations.  (a) The director shall
4.20 	establish a lottery operations account in the lottery fund.  The
4.21 	director shall pay all costs of operating the lottery, including
4.22 	payroll costs or amounts transferred to the state treasury for
4.23 	payroll costs, but not including lottery prizes, from the
4.24 	lottery operating account.  The director shall credit to the
4.25 	lottery operations account amounts sufficient to pay the
4.26 	operating costs of the lottery.
4.27 	(b) Except as provided in paragraph (e), the director may
4.28 	not credit in any fiscal year thereafter amounts to the lottery
4.29 	operations account which when totaled exceed 15 percent of gross
4.30 	revenue to the lottery fund in that fiscal year.  In computing
4.31 	total amounts credited to the lottery operations account under
4.32 	this paragraph the director shall disregard amounts transferred
4.33 	to or retained by lottery retailers as sales commissions or
4.34 	other compensation and amounts transferred to or retained by the
4.35 	tribal entity or racetrack pursuant to a location contract under
4.36 	section 349A.17.
5.1 	(c) The director of the lottery may not expend after July
5.2 	1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
5.3 	year for contracts for the preparation, publication, and
5.4 	placement of advertising.
5.5 	(d) Except as the director determines, the lottery is not
5.6 	subject to chapter 16A relating to budgeting, payroll, and the
5.7 	purchase of goods and services.
5.8 	(e) In addition to the amounts credited to the lottery
5.9 	operations account under paragraph (b), the director is
5.10 	authorized, if necessary, to meet the current obligations of the
5.11 	lottery and to credit up to 25 percent of an amount equal to the
5.12 	average annual amount which was authorized to be credited to the
5.13 	lottery operations account for the previous three fiscal years
5.14 	but was not needed to meet the obligations of the lottery.
5.15 	(f) Notwithstanding the provisions of this subdivision, the
5.16 	director may not credit, in any fiscal year, to the lottery
5.17 	operations account which when totaled exceed ten percent of
5.18 	adjusted gross revenue from the operation of gaming machines and
5.19 	other lottery games at each gaming facility.

5.20 	Sec. 12. Minnesota Statutes 2004, section 349A.10,
5.21 	subdivision 6, is amended to read:
5.22 		Subd. 6.Budget; plans.  The director shall prepare and
5.23 	submit a biennial budget plan to the commissioner of finance.
5.24 	The governor shall recommend the maximum amount available for
5.25 	the lottery in the budget the governor submits to the
5.26 	legislature under section 16A.11.  The maximum amount available
5.27 	to the lottery for operating expenses and capital expenditures
5.28 	shall be determined by law.  Operating expenses shall not
5.29 	include expenses that are a direct function of lottery sales,
5.30 	which include the cost of lottery prizes, amounts paid to
5.31 	lottery retailers as sales commissions or other compensation,
5.32 	amounts paid to produce and deliver scratch lottery games, and 
5.33 	amounts paid to an outside vendor to operate and maintain an
5.34 	online gaming system, amounts paid to an outside vendor to
5.35 	operate and maintain a central system for gaming machines and
5.36 	for other lottery games, and amounts paid to acquire and
6.1 	maintain gaming machines and equipment used to conduct other
6.2 	lottery games.  In addition, the director shall appear at least
6.3 	once each fiscal year before the senate and house of
6.4 	representatives committees having jurisdiction over gambling
6.5 	policy to present and explain the lottery's plans for future
6.6 	games and the related advertising and promotions and spending
6.7 	plans for the next fiscal year.

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

6.22 	Sec. 14. [349A.17] GAMING FACILITY.
6.23 		Subdivision 1.Definitions. (a) For the purposes of this
6.24 	section, the terms defined in this subdivision have the meanings
6.25 	given them.
6.26 	(b) "Fiscal year" means the period between July 1 and June
6.27 	30.
6.28 	(c) "Racetrack" means an entity that holds a class A
6.29 	license from the Racing Commission under chapter 240.
6.30 	(d) "Racetrack location" means land owned by a racetrack as
6.31 	set forth in the racetrack's license application with the Racing
6.32 	Commission that is used to conduct horse racing and related
6.33 	activities under chapter 240.
6.34 	(e) "Tribal entity" means one or more entities, whether
6.35 	tribally or federally chartered corporations, or other legal
6.36 	entities, wholly owned by one or more tribal governments that
7.1 	are parties to the location contract under this section.
7.2 	(f) "Tribal government" means the governmental entity that
7.3 	represents one of the 11 federally recognized Indian tribes
7.4 	within the state of Minnesota.
7.5 	(g) "Site" means a parcel or contiguous parcels of land,
7.6 	and may be enlarged by the addition of contiguous parcels of
7.7 	land over time.
7.8 		Subd. 2.Location contract. (a) The director may enter
7.9 	into a contract with a tribal entity and a racetrack to provide
7.10 	locations for the operation of gaming machines and other lottery
7.11 	games.  The director may not enter into more than two location
7.12 	contracts for the operation of gaming machines and other lottery
7.13 	games under this section.
7.14 	(b) The director may enter into a contract with a racetrack
7.15 	under this section if the racetrack has conducted at least 50
7.16 	days of live racing at the racetrack each year within the last
7.17 	five preceding calendar years.
7.18 	(c) The director may enter a location contract with a
7.19 	tribal entity that meets the following criteria:
7.20 	(1) the tribal entity will operate a single gaming facility
7.21 	at one site which is on, adjacent to, or contiguous to a
7.22 	racetrack location on which the racetrack has conducted at least
7.23 	50 days of live racing each year within the last five preceding
7.24 	calendar years;
7.25 	(2) the tribal entity must be comprised of tribal
7.26 	governments which are each federally recognized tribes which
7.27 	operate current casino gaming operations under the federal
7.28 	Indian Gaming Regulatory Act, United States Code, title 25,
7.29 	sections 2701 to 2721, pursuant to a compact with the state of
7.30 	Minnesota;
7.31 	(3) to be eligible to participate in the tribal entity, the
7.32 	tribal government must demonstrate to the director that the
7.33 	revenues available to the tribal government from currently
7.34 	available revenue sources are insufficient to adequately meet
7.35 	the basic needs of tribal members including, but not limited to,
7.36 	housing, medical care, education, or other governmental services
8.1 	to members;
8.2 	(4) each of the tribal governments participating in the
8.3 	tribal entity must within 30 days following final enactment of
8.4 	this act file with the director a formal resolution from its
8.5 	tribal council which provides that:
8.6 	(i) the tribal government intends to participate in a
8.7 	tribal entity which will enter a contract that complies with the
8.8 	requirements of this act;
8.9 	(ii) the tribal government meets the eligibility criteria
8.10 	set forth in this paragraph and provides adequate documentation
8.11 	to supports its eligibility to participate in the tribal entity;
8.12 	(iii) a statement of the tribal government's intent to
8.13 	participate in a tribal entity that waives the entity's
8.14 	sovereign immunity relating to disputes arising out of the
8.15 	location contract or the construction, management, or operation
8.16 	of the gaming facility and that the tribal government expressly
8.17 	consents that the tribal entity will be subject to the
8.18 	jurisdiction of the state court and the administrative and
8.19 	regulatory jurisdiction of the state;
8.20 	(iv) a limited waiver of sovereign immunity and consent by
8.21 	the tribal government to the jurisdiction of state court solely
8.22 	to resolve disputes alleging that assets have been transferred
8.23 	from the tribal entity to the tribe in violation of the location
8.24 	contract or other applicable law and limited to any improperly
8.25 	transferred assets; and 
8.26 	(v) states the intention of the tribal government to ensure
8.27 	that revenues provided to the participating tribal governments
8.28 	from the tribal entity will be distributed between the
8.29 	participating tribal governments in a fair and equitable manner
8.30 	as determined solely by the participating tribal governments.
8.31 	(d) The location contract with the tribal entity shall have
8.32 	no legal effect on the validity of existing tribal-state gaming
8.33 	compacts.
8.34 	(e) A location contract entered into under this section
8.35 	must provide for the following provisions:
8.36 	(1) That the contract shall run for not more than 20 years
9.1 	and shall be negotiable and renewable every 15 years
9.2 	thereafter.  The director, tribal entity, participating tribal
9.3 	government, or racetrack that intends to not renegotiate and
9.4 	renew a location contract must, if reasonably possible, provide
9.5 	notice of its intent to the other parties at least one year
9.6 	before the location contract expires.
9.7 	(2) Liquidated damages to recover the initial investment by
9.8 	the tribal entity or the racetrack in the event the state,
9.9 	through legislation or constitutional amendment, revokes all or
9.10 	substantially all of the forms of gambling authorized under this
9.11 	section.  The liquidated damages may not be greater than the
9.12 	unpaid balance of any debt incurred by the tribal entity or the
9.13 	racetrack after the location contract has been executed and is
9.14 	limited to the debt incurred by the tribal entity or the
9.15 	racetrack for the gaming facility license, initial construction,
9.16 	or acquisition of the gaming facility less the present market
9.17 	value of the property or other assets related to the debt.  Any
9.18 	liquidated damages provision must expire within ten years.
9.19 	(3) All costs associated with managing the routine
9.20 	day-to-day activity of gaming machines and other lottery games,
9.21 	including, but not limited to, routine and minor service and
9.22 	maintenance, security monitoring, verifying winners, paying
9.23 	winners, collecting money from gaming machines, collecting
9.24 	wagers from the operation of other lottery games, and
9.25 	advertising and marketing of gaming machines and other lottery
9.26 	games shall be borne by the tribal entity or the racetrack.
9.27 	(4) All costs associated with purchase or lease of gaming
9.28 	machines, major maintenance of the gaming machines, and
9.29 	monitoring the activity of the gaming machines through a central
9.30 	system shall be borne by the lottery.
9.31 	(5) The tribal entity and the racetrack must maintain
9.32 	adequate liability and casualty insurance for the gaming
9.33 	facility.
9.34 	(6) Payment by each entity that has entered into a location
9.35 	contract to the commissioner of human services in an annual
9.36 	amount equal to the lesser of 0.5 percent of adjusted gross
10.1 	gaming machine revenue, other lottery games' adjusted gross
10.2 	income, and nonlottery casino games' adjusted gross revenue or
10.3 	$2,500,000 at that gaming facility, for problem and compulsive
10.4 	gambling treatment or programs.
10.5 	(7) Payment by each entity that has entered into a location
10.6 	contract to the city and county where the gaming facility is
10.7 	located in an annual amount equal to one percent of adjusted
10.8 	gross gaming machine revenue, other lottery games' adjusted
10.9 	gross income, and nonlottery casino games' adjusted gross
10.10 	revenue at that gaming facility.
10.11 	(8) Any controversy or claim between the parties to a
10.12 	location contract that arises out of a location contract may be
10.13 	settled by arbitration except as provided in paragraphs (j) and
10.14 	(k).
10.15 	(9) Authorization for the operation of gaming machines and
10.16 	the conduct of other lottery games at a temporary facility
10.17 	pending completion of a permanent facility subject to reasonable
10.18 	conditions for the operation of the temporary facility set by
10.19 	the director.  The operation of gaming machines and the
10.20 	conducting of other lottery games at a temporary facility shall
10.21 	be treated in the same manner as if it was conducted in a
10.22 	permanent facility.
10.23 	(10) The tribal entity and the racetrack must establish
10.24 	internal controls to ensure that no person shall lose more than
10.25 	$500 per day at the gaming facility.  The internal controls
10.26 	shall specify the manner in which the $500 limit is enforced.
10.27 	(f) In addition to the provisions required under paragraph
10.28 	(e), the location contract with the tribal entity must contain
10.29 	the following provisions:
10.30 	(1) The waiver of sovereign immunity by the tribal entity
10.31 	and the limited waiver of sovereign immunity by the tribal
10.32 	governments consistent with paragraph (c).
10.33 	(2) In the construction of the gaming facility, and the
10.34 	subsequent repair and maintenance of the facility, the tribal
10.35 	entity shall make good faith efforts to contract with American
10.36 	Indian and minority-owned businesses.
11.1 	(3) In operating the gaming facility, the tribal entity
11.2 	shall make good faith efforts to ensure that American Indians
11.3 	and other minorities are employed in entry level, middle
11.4 	management, and upper management positions.
11.5 	(4) If a tribal government participating in the tribal
11.6 	entity opts out of the tribal entity as part of the renewal
11.7 	process it does not affect the ability of the tribal entity to
11.8 	renew the location contract with the participation of any
11.9 	remaining tribal governments.
11.10 	(5) Payment of a fee by the lottery to the tribal entity in
11.11 	an amount equal to 70 percent of the adjusted gross gaming
11.12 	machine revenue and other lottery games' adjusted gross
11.13 	revenue.  Provided that beginning on January 1 following the
11.14 	first full year that the tribal entity's permanent facility has
11.15 	been in operation, (i) if the adjusted gross revenue from the
11.16 	conducting of gaming machines and other lottery games is less
11.17 	than $50,000,000 for that quarter, the fee due to the tribal
11.18 	entity from the lottery will be increased to 72 percent for that
11.19 	quarter; and (ii) if the adjusted gross revenue from the
11.20 	conducting of gaming machines and other lottery games is less
11.21 	than $25,000,000 for that quarter, the fee due to the tribal
11.22 	entity from the lottery will be increased to 74 percent for that
11.23 	quarter.  The lottery will pay an adjustment to the tribal
11.24 	entity to reflect the increased fee payments within 30 days
11.25 	after the end of the quarter.
11.26 	(g) In addition to the provisions required under paragraph
11.27 	(e), the location contract with the racetrack must contain the
11.28 	following provisions:
11.29 	(1) The location contract terminates on the first day of
11.30 	any calendar year following a calendar year during which the
11.31 	class A licensee has not conducted at least 50 days of live
11.32 	racing at the licensee's racetrack.
11.33 	(2) Payment of a fee by the lottery to the racetrack in an
11.34 	amount equal to 64 percent of the adjusted gross gaming machine
11.35 	revenue and other lottery games' adjusted gross revenue.
11.36 	Provided that beginning on January 1 following the first full
12.1 	year that the racetrack's permanent facility has been in
12.2 	operation, (i) if the adjusted gross revenue from the conducting
12.3 	of gaming machines and other lottery games is less than
12.4 	$50,000,000 for that quarter, the fee due to the racetrack from
12.5 	the lottery will be increased to 66 percent for that quarter;
12.6 	and (ii) if the adjusted gross revenue from the conducting of
12.7 	gaming machines and other lottery games is less than $25,000,000
12.8 	for that quarter, the fee due to the racetrack for that quarter
12.9 	will be increased to 68 percent for that quarter.  The lottery
12.10 	will pay an adjustment to the racetrack to reflect the increased
12.11 	fee payments within 30 days after the end of the quarter.
12.12 	(h) No gaming facility may be located within a home rule
12.13 	charter or statutory city, or town, unless the governing body of
12.14 	the city or town adopts a resolution approving the site of the
12.15 	gaming facility within the city or town.
12.16 	(i) The tribal entity and the racetrack may establish
12.17 	reasonable standards for payment of promotional allowances to
12.18 	players and the proportional allocation of promotional
12.19 	allowances between revenue generated from gaming machines, other
12.20 	lottery games, and nonlottery casino games.  Upon approval of
12.21 	the standards for promotional allowances, the director shall
12.22 	reimburse the tribal entity for the cost of promotional
12.23 	allowances paid by the tribal entity.
12.24 	(j) The director may by administrative action cancel or
12.25 	suspend a location contract if the director reasonably
12.26 	determines that the tribal entity or the racetrack has
12.27 	materially breached any material provision of the location
12.28 	contract and has failed to cure that breach in a reasonable
12.29 	time, or if the tribal entity's or racetrack's gaming facility
12.30 	license has been suspended or revoked by the commissioner of
12.31 	public safety.
12.32 	A contract cancellation or suspension under this paragraph
12.33 	is a contested case under sections 14.57 to 14.69 and is in
12.34 	addition to any criminal penalties provided for a violation of
12.35 	law or rule.
12.36 	(k) The director may by administrative action impose a
13.1 	civil penalty, issue correction orders, or resolve in any other
13.2 	manner as determined appropriate by the director, if the
13.3 	director determines that the tribal entity or the racetrack has
13.4 	breached any term of the location contract.  The imposition of a
13.5 	civil penalty is a contested case under sections 14.57 to 14.69
13.6 	and is in addition to any criminal penalties provided for a
13.7 	violation of law or rule.
13.8 	(l) The rights and interests provided by a location
13.9 	contract are specific to the parties to the location contract
13.10 	and are not transferable without the written approval of the
13.11 	director.
13.12 	(m) Gaming machines may only be placed and other lottery
13.13 	games may only be conducted at a gaming facility that is owned
13.14 	or leased by the tribal entity or a racetrack.
13.15 	(n) A contract entered into under this subdivision is not
13.16 	subject to chapter 16C.
13.17 	(o) The amounts paid by the tribal entity and the racetrack
13.18 	to the commissioner of human services pursuant to a location
13.19 	contract under this section are annually appropriated to the
13.20 	commissioner of human services for problem and compulsive
13.21 	gambling treatment or programs, including programs that are
13.22 	designed to address compulsive gambling in American Indian and
13.23 	minority communities.
13.24 		Subd. 3.Operation. (a) All gaming machines that are
13.25 	placed at a gaming facility or other lottery games conducted at
13.26 	a gaming facility must be operated and controlled by the
13.27 	director.
13.28 	(b) Gaming machines must be owned or leased by the director.
13.29 	(c) Major maintenance of the gaming machines shall be
13.30 	controlled by the director or by a vendor that is under the
13.31 	control and direction of the director.
13.32 	(d) The director must establish and control a central
13.33 	communications system that monitors activities on each gaming
13.34 	machine.
13.35 	(e) Equipment used to conduct other lottery games at a
13.36 	gaming facility must be owned or leased by the director.
14.1 	(f) The director must approve the security plans and
14.2 	implementation of security measures associated with and relating
14.3 	to the operation of the gaming machines and the conducting of
14.4 	other lottery games at a gaming facility.
14.5 	(g) Advertising and promotional material produced by a
14.6 	gaming facility relating to gaming machines and the conduct of
14.7 	other lottery games at a gaming facility must be approved by the
14.8 	director in a timely manner.
14.9 	(h) The director may authorize the tribal entity and the
14.10 	racetrack to manage the routine day-to-day operation of the
14.11 	gaming machines and the conducting of other lottery games at a
14.12 	gaming facility, provided that the director shall maintain
14.13 	overall control of the operation of the gaming machines and the
14.14 	conducting of other lottery games at the gaming facility.
14.15 	(i) The costs associated with procuring and maintaining
14.16 	gaming machines and equipment involved in operating other
14.17 	lottery games, and costs associated with acquiring, maintaining,
14.18 	and operating the central system used to monitor the activity of
14.19 	gaming machines, shall be borne by the lottery.
14.20 	(j) All proceeds from the operation of gaming machines and
14.21 	conduct of other lottery games received by the tribal entity and
14.22 	the racetrack constitute a trust fund until transmitted to the
14.23 	director.
14.24 	(k) The director may require the tribal entity and the
14.25 	racetrack to deposit in a trust account or other agreed upon
14.26 	form of account, in a designated bank, all money received by the
14.27 	tribal entity and the racetrack from the operation of gaming
14.28 	machines and the conduct of other lottery games.
14.29 	(l) If the tribal entity or the racetrack fail to pay any
14.30 	money due the director within the time prescribed by the
14.31 	director, the tribal entity or the racetrack shall pay interest
14.32 	on the amount owed at the rate set for lottery retailers under
14.33 	Minnesota Rules, part 7856.7020.
14.34 	(m) The director may implement policies, procedures, and
14.35 	other controls that are determined to be necessary by the
14.36 	director for the operation of gaming machines and the conducting
15.1 	of other lottery games pursuant to this section.
15.2 		Subd. 4.Games. The director shall specify the games
15.3 	that may be played on a gaming machine and the manner in which
15.4 	other lottery games are conducted at a gaming facility as set
15.5 	forth under section 349A.04.
15.6 		Subd. 5.Specifications. Gaming machines must:
15.7 	(1) maintain on nonresettable meters a permanent record,
15.8 	capable of being printed out, of all transactions by the machine
15.9 	and all entries into the machine.  There must be a reasonable
15.10 	number of gaming machines placed at a gaming facility which
15.11 	afford players the option to receive winnings in the form of
15.12 	either coins or tokens;
15.13 	(2) be capable of being linked to a central communications
15.14 	system to provide auditing program information as required by
15.15 	the director; and 
15.16 	(3) there must be a reasonable number of gaming machines at
15.17 	the facility which are accessible to individuals with
15.18 	disabilities.  For the purposes of this subdivision,
15.19 	"individuals with disabilities" includes any person who has a
15.20 	physical or sensory impairment which materially limits one or
15.21 	more life activities.
15.22 		Subd. 6.Examination of machines. The director shall
15.23 	examine prototypes of gaming machines and require that the
15.24 	manufacturer of the machine pay the cost of the examination.
15.25 	The director may contract for the examination of gaming
15.26 	machines.  The director may require working models of a gaming
15.27 	machine transported to the locations the director designates for
15.28 	testing, examination, and analysis.  The manufacturer shall pay
15.29 	all costs of any testing, examination, analysis, and
15.30 	transportation of the machine model.
15.31 		Subd. 7.Prizes. A person who plays a gaming machine or
15.32 	plays any other lottery game at the gaming facility agrees to be
15.33 	bound by the rules and game procedures applicable to that
15.34 	particular game.  The player acknowledges that the determination
15.35 	of whether the player has won a prize is subject to the rules
15.36 	and game procedures adopted by the director, claim procedures
16.1 	established by the director for that game, and any confidential
16.2 	or public validation tests established by the director for that
16.3 	game.  A person under 18 years of age may not claim a prize from
16.4 	the operation of a gaming machine or the conducting of any other
16.5 	lottery game at the gaming facility.  A prize claimed from the
16.6 	play of a gaming machine game or the conduct of any other
16.7 	lottery game is not subject to section 349A.08, subdivision 8.
16.8 		Subd. 8.Prohibitions. A person under the age of 18
16.9 	years may not play a game on a gaming machine or participate in
16.10 	any other lottery game at the gaming facility.
16.11 		Subd. 9.Compulsive gambling notice. The tribal entity
16.12 	or racetrack shall prominently post, in areas of the gaming
16.13 	facility where gaming machines are located or where other
16.14 	lottery games are conducted, the toll-free telephone number
16.15 	established by the commissioner of human services in connection
16.16 	with the problem and compulsive gambling program.  The tribal
16.17 	entity or racetrack shall establish, with the approval of the
16.18 	director, a proactive plan relating to problem and compulsive
16.19 	gambling.
16.20 		Subd. 10.Local licenses; local fees. A political
16.21 	subdivision may not require a license to operate a gaming
16.22 	machine or conduct other lottery games or nonlottery casino
16.23 	games as defined under section 299L.094, restrict or regulate
16.24 	the placement of gaming machines or the conducting of other
16.25 	lottery or nonlottery casino games, or impose a fee or charge on
16.26 	the business of operating gaming machines or the conducting of
16.27 	other lottery or nonlottery casino games at the gaming facility.

16.28 	Sec. 15. LOTTERY BUDGET; GAMING FACILITY.
 16.29 	The director of the State Lottery shall submit a budget for
16.30 	the operation of gaming machines and for the conduct of other
16.31 	lottery games at a gaming facility as authorized under Minnesota
16.32 	Statutes, section 349A.17, to the commissioner of finance.
16.33 	Notwithstanding Minnesota Statutes, section 349A.10, subdivision
16.34 	6, the director of the State Lottery may expend amounts
16.35 	necessary to operate gaming at a gaming facility.  Amounts
16.36 	expended by the director of the State Lottery for the conducting
17.1 	of gaming at the gaming facility in fiscal years 2006 and 2007
17.2 	are not subject to the maximum amount set in law for the
17.3 	operation of the lottery.

17.4 	Sec. 16. EFFECTIVE DATE.
 17.5 	This article is effective the day following final enactment.

17.6 	ARTICLE 2
17.7 	DEPARTMENT OF PUBLIC SAFETY

17.8 	Section 1. [299L.09] GAMING FACILITY.
17.9 		Subdivision 1.Definitions. For the purposes of this
17.10 	section and sections 299L.09 to 299L.095, the following terms
17.11 	have the meanings given them.
17.12 	(a) "Direct financial interest" means ownership or control
17.13 	of at least five percent interest in the racetrack, tribal
17.14 	entity or management entity, the debt, or other financial
17.15 	interest in the tribal entity or management entity.
17.16 	(b) "Gaming facility" is as defined in section 349A.01.
17.17 	(c) "Lottery director" means the director of the Minnesota
17.18 	State Lottery under chapter 349A.
17.19 	(d) "Management entity" means the entity applying for or
17.20 	holding a management license under section 299L.092.
17.21 	(e) "Racetrack" is as defined in section 349A.17.
17.22 	(f) "Tribal entity" is as defined in section 349A.17.
17.23 		Subd. 2.License required. The tribal entity or
17.24 	racetrack that will own and operate, whether directly or through
17.25 	another tribal or management entity, a gaming facility under
17.26 	section 349A.17 must obtain a gaming facility license from the
17.27 	commissioner.
17.28 		Subd. 3.Application. An application for a license under
17.29 	this section must be on a form prescribed by the commissioner.
17.30 	The commissioner may issue a gaming facility license to the
17.31 	tribal entity or a racetrack that will operate the gaming
17.32 	facility.
17.33 		Subd. 4.License fee. Upon issuance of the license, each
17.34 	licensee must pay a onetime license fee of $100,000,000 to the
17.35 	commissioner.  The racetrack that has received a license under
17.36 	this section must pay an additional $25,000,000, payable to the
18.1 	commissioner, upon opening of a permanent gaming facility or
18.2 	within two years of issuance of the initial license, whichever
18.3 	occurs first.
18.4 		Subd. 5.License issuance. (a) The commissioner shall
18.5 	issue a license under this section unless information obtained
18.6 	from the comprehensive background check establishes that
18.7 	issuance of the license would be adverse to the public interest
18.8 	or to the effective regulation of gaming.  If a license
18.9 	application is denied, the applicant may reapply for a license.
18.10 	(b) The commissioner may only issue a gaming facility
18.11 	license to a tribal entity that, through a valid limited waiver
18.12 	of sovereign immunity, is subject to the jurisdiction of the
18.13 	Minnesota state courts and the administrative jurisdiction and
18.14 	regulation of the state.
18.15 	(c) A license issued under this section may not be
18.16 	transferred without the written approval of the commissioner.
18.17 		Subd. 6.Background investigation. Before issuing a
18.18 	gaming facility license, the commissioner shall conduct a
18.19 	comprehensive background and financial investigation of the
18.20 	applicant, including its officers, directors, managers,
18.21 	supervisory personnel, and persons with a direct financial
18.22 	interest in the applicant.  The commissioner may charge the
18.23 	applicant an investigation fee to cover the cost of the
18.24 	investigation.  The commissioner may require that fingerprints
18.25 	be taken from officers, directors, managers, supervisory
18.26 	personnel, and persons with a direct financial interest in the
18.27 	applicant.  The commissioner may forward the fingerprints to the
18.28 	Federal Bureau of Investigation for a national criminal history
18.29 	check.  As to the tribal entity applying for a license under
18.30 	this section, the provisions of this subdivision do not apply or
18.31 	include the officers and employees of tribal governments who are
18.32 	not officers or employees of the tribal entity.
18.33 		Subd. 7.License refusal; suspension and revocation. (a)
18.34 	The commissioner may refuse to issue, or may revoke or suspend,
18.35 	the gaming facility license if the applicant or licensee or its
18.36 	officers, directors, managers, supervisory personnel, and
19.1 	persons with a direct financial interest in the applicant or
19.2 	licensee has:
19.3 	(1) engaged in a material violation of law, order, or rule
19.4 	relating to gambling within any jurisdiction;
19.5 	(2) operated a gaming facility in violation of approved
19.6 	game procedures or an approved security plan, which in the
19.7 	commissioner's opinion adversely and materially affects the
19.8 	public interest of the state in the effective regulation and
19.9 	control of gaming;
19.10 	(3) made an intentional false statement in a license
19.11 	application related to gaming;
19.12 	(4) failed to perform material covenants or representations
19.13 	made in a license application; or 
19.14 	(5) failed to notify the commissioner of a material change
19.15 	in the information provided in the application.
19.16 	(b) The commissioner may not revoke or suspend a license
19.17 	under this subdivision unless the commissioner has given the
19.18 	licensee and, as to a tribal entity each participating tribal
19.19 	government, express written notice of the reason for the
19.20 	proposed revocation or suspension and has granted the licensee a
19.21 	reasonable amount of time to cure the violation giving rise to
19.22 	the proposed revocation or suspension, and, in the
19.23 	commissioner's reasonable judgment, the tribal entity has failed
19.24 	to do so.  The commissioner is not required to provide a
19.25 	reasonable time to cure the violation before a license
19.26 	suspension if, in the commissioner's reasonable judgment, the
19.27 	violation cannot be cured by the licensee before significant
19.28 	harm will result to the public health, safety, or welfare.  The
19.29 	ability to cure may include creation of a reorganized or
19.30 	reformed licensee, provided that the reorganized or reformed
19.31 	licensee is approved by the commissioner and the lottery
19.32 	director.
19.33 	(c) A license revocation or suspension under this
19.34 	subdivision is conducted as a contested case under sections
19.35 	14.57 to 14.69 of the Administrative Procedure Act, and is in
19.36 	addition to any other civil, administrative, or criminal
20.1 	penalties imposed for a violation of law or rule.
20.2 		Subd. 8.Other license actions. (a) The commissioner may
20.3 	not issue the gaming facility license under this section or may
20.4 	by administrative action impose a civil penalty upon the
20.5 	licensee, issue correction orders, or take other administrative
20.6 	action if the commissioner determines that the licensee, or
20.7 	officer, director, manager, supervisory personnel, or other
20.8 	person with a direct financial or management interest in the
20.9 	licensee:
20.10 	(1) has been convicted of a felony or of a crime in another
20.11 	jurisdiction, which would be a felony in Minnesota;
20.12 	(2) has been convicted of any crime related to gaming;
20.13 	(3) has been found by a court, the lottery director, the
20.14 	commissioner, or other state or governmental body to have
20.15 	engaged in fraud, misrepresentation, or deceit;
20.16 	(4) has provided false or misleading information to the
20.17 	commissioner;
20.18 	(5) has violated or failed to comply with this section or
20.19 	any provision of this chapter or chapter 349A;
20.20 	(6) is permanently or temporarily enjoined by any gambling
20.21 	regulatory agency from engaging in or continuing any conduct or
20.22 	practice involving any aspect of gambling;
20.23 	(7) has had a gambling-related license revoked or
20.24 	suspended, or has paid or been required to pay a monetary
20.25 	penalty of $10,000 or more by a gambling regulator in another
20.26 	state or jurisdiction;
20.27 	(8) has been the subject of any of the following actions by
20.28 	the commissioner:
20.29 	(i) has had a license under this chapter denied, suspended,
20.30 	or revoked;
20.31 	(ii) has been censured or reprimanded, or has paid or been
20.32 	required to pay a monetary penalty or fine; or 
20.33 	(iii) has been the subject of any other discipline by the
20.34 	commissioner; or 
20.35 	(9) based on past activities or criminal record, poses a
20.36 	threat to the public interest or to the effective regulation and
21.1 	control of gambling, or creates or enhances the dangers of
21.2 	unsuitable, unfair, or illegal practices, methods, and
21.3 	activities in the conduct of gambling or the management of the
21.4 	business and financial arrangements incidental to the conduct of
21.5 	gambling.
21.6 	(b) Any conduct in violation of this section, or failure by
21.7 	the licensee to take reasonable action to cure a violation of
21.8 	this section, may be considered by the commissioner in
21.9 	determining whether to order revocation or suspension of the
21.10 	gaming facility license.  Any proposed revocation or suspension
21.11 	is subject to the notice and process requirements of subdivision
21.12 	7, paragraph (b).
21.13 	(c) Administrative action, including, but not limited to,
21.14 	imposition of a civil penalty, corrective order, or other
21.15 	administrative action under this paragraph, is a contested case
21.16 	under sections 14.57 to 14.69 and is in addition to any other
21.17 	civil, administrative, or criminal penalties provided for a
21.18 	violation of law or rule.
21.19 		Subd. 9.Required notification. (a) The licensee has the
21.20 	obligation to immediately report to the commissioner any
21.21 	substantial change in its management or ownership.  Any
21.22 	individual who later becomes an officer, director, or other
21.23 	individual with a direct financial or management interest in the
21.24 	licensee must undergo a comprehensive background and financial
21.25 	investigation as set forth in subdivision 6.  Prior to assuming
21.26 	any duties or responsibilities for the licensee the individual
21.27 	must file the appropriate license application information with
21.28 	the commissioner.
21.29 	(b) Following issuance of a gaming facility license, the
21.30 	licensee must annually certify to the commissioner its
21.31 	compliance with this section.
21.32 		Subd. 10.License review. The gaming facility license
21.33 	must be reviewed by the commissioner every five years.  An
21.34 	application for review must be on a form prescribed by the
21.35 	commissioner.  The commissioner shall review the application and
21.36 	conduct the comprehensive background investigation pursuant to
22.1 	subdivision 6.
22.2 		Subd. 11.Audit; investigation. (a) The licensee shall
22.3 	have an annual certified audit conducted of the licensee's
22.4 	operation of the gaming facility in accordance with generally
22.5 	accepted accounting principles.  The licensee shall file a copy
22.6 	of each audit report with the commissioner.
22.7 	(b) The commissioner has the right to conduct additional
22.8 	reasonable audits or investigations relating to the operation of
22.9 	the gaming facility.  The commissioner shall have access to all
22.10 	information, records, and accounts pertaining to the operation
22.11 	of the gaming facility.  The commissioner may recover the
22.12 	reasonable costs of additional audits and investigations from
22.13 	the licensee.
22.14 		Subd. 12.Sale of intoxicating liquor. Notwithstanding
22.15 	any other law, local ordinance, or charter provision, the host
22.16 	community may issue to the licensee an on-sale license for the
22.17 	sale of intoxicating liquor at the gaming facility pursuant to
22.18 	chapter 340A.  The annual fee for the license issued pursuant to
22.19 	this subdivision shall be set by the host community at an amount
22.20 	comparable to the fee charged by municipalities in the
22.21 	surrounding area for a similar license.  Chapter 340A applies to
22.22 	the sale of intoxicating liquor at the gaming facility, except
22.23 	that the licensed premises need not be compact and contiguous if
22.24 	the licensed premises are limited to the interior and grounds of
22.25 	the gaming facility.
22.26 		Subd. 13.Detention of suspects. (a) The commissioner
22.27 	may designate specific employees of the department, the lottery,
22.28 	or the gaming facility as persons authorized to detain a person
22.29 	if they have probable cause to believe that the person detained
22.30 	has violated section 609.651 or 609.76 while at the gaming
22.31 	facility.
22.32 	(b) A person authorized to detain an individual under
22.33 	paragraph (a) is not criminally or civilly liable for any
22.34 	detention authorized by this subdivision if the person has a
22.35 	good faith belief that probable cause exists for the detention,
22.36 	and the detention was not conducted with unreasonable force or
23.1 	in bad faith.
23.2 	(c) A peace officer or person authorized by the
23.3 	commissioner under paragraph (a) may exclude a person from the
23.4 	gaming facility or remove that person from the gaming facility
23.5 	if the person is suspected to have violated section 609.651 or
23.6 	609.76 or possesses contraband as provided in section 609.762,
23.7 	subdivision 1.
23.8 	(d) The licensee may establish a self-exclusion program by
23.9 	which persons, at their request, may be excluded from the gaming
23.10 	facility.
23.11 		Subd. 14.Reimbursement of costs. The commissioner shall
23.12 	require that the licensee, on a quarterly basis, reimburse the
23.13 	commissioner for the commissioner's actual costs, including
23.14 	personnel costs of licensing, regulating, enforcement, and
23.15 	oversight of the gaming facility under this section and sections
23.16 	299L.091 to 299L.094.  Money received by the commissioner under
23.17 	this subdivision must be deposited in the state treasury and
23.18 	credited to the commissioner reimbursement account and is
23.19 	annually appropriated to the commissioner to pay the costs of
23.20 	regulating activities at the gaming facility.

23.21 	Sec. 2. [299L.091] GAMING MANAGEMENT.
23.22 		Subdivision 1.License required. The tribal entity or
23.23 	racetrack, or any entity formed by or engaged by the tribal
23.24 	entity or the racetrack to manage the operations of the gaming
23.25 	facility under section 349A.17, must obtain a gaming management
23.26 	license from the commissioner.
23.27 		Subd. 2.Application. An application for a license under
23.28 	this section must be on a form prescribed by the commissioner.
23.29 	The commissioner may issue a gaming management license to the
23.30 	management entity that will manage or operate the gaming
23.31 	facility or gaming operations for the tribal entity or the
23.32 	racetrack.
23.33 		Subd. 3.License issuance. (a) The commissioner shall
23.34 	issue a license under this section unless information obtained
23.35 	from the comprehensive background check establishes that
23.36 	issuance of the license would be adverse to the public interest
24.1 	or to the effective regulation of gaming.
24.2 	(b) The commissioner may only issue a gaming management
24.3 	license to an entity that is subject to the jurisdiction of the
24.4 	Minnesota state courts and the administrative jurisdiction and
24.5 	regulation of the state.
24.6 	(c) Any license issued under this section is
24.7 	nontransferable.
24.8 		Subd. 4.Background investigation. (a) Before issuing a
24.9 	gaming management license, the commissioner must conduct a
24.10 	comprehensive background and financial investigation of the
24.11 	applicant including its officers, directors, managers,
24.12 	supervisory personnel, and persons with a direct financial
24.13 	interest in the management entity, provided that if the
24.14 	management entity applying for the gaming management license and
24.15 	the gaming facility licensee are the same, the commissioner
24.16 	shall utilize the background investigation conducted as part of
24.17 	the application for a gaming facility license.  The commissioner
24.18 	may require that fingerprints be taken and the commissioner may
24.19 	forward the fingerprints to the Federal Bureau of Investigation
24.20 	for a national criminal history check on the officers,
24.21 	directors, managers, supervisory personnel, and persons with a
24.22 	direct financial interest in the management entity, not
24.23 	including the tribal governments that have an interest in the
24.24 	management entity.  The provisions of this paragraph do not
24.25 	apply or include the tribal government having an interest in the
24.26 	management entity.
24.27 	(b) The commissioner may charge an applicant for a gaming
24.28 	management license a reasonable fee to cover the costs of the
24.29 	investigation.  Money received by the commissioner under this
24.30 	subdivision must be deposited in the state treasury and credited
24.31 	to the commissioner reimbursement account and is annually
24.32 	appropriated to the commissioner to pay for costs incurred under
24.33 	this subdivision.
24.34 		Subd. 5.License actions. (a) The commissioner may not
24.35 	issue a license under this section, or may by administrative
24.36 	action revoke, suspend, or refuse to renew the gaming management
25.1 	license, impose a civil penalty upon the licensee, or issue
25.2 	correction orders, if the commissioner determines that the
25.3 	management entity, or officer, director, manager, supervisory
25.4 	personnel, other person with a direct financial interest in the
25.5 	management entity, not including the tribal government that have
25.6 	an interest in the management entity financial or management
25.7 	interest in the licensee:
25.8 	(1) has been convicted of a felony or of a crime in another
25.9 	jurisdiction, which would be a felony in Minnesota;
25.10 	(2) has been convicted of any crime related to gaming;
25.11 	(3) has been found by a court, the lottery director, the
25.12 	commissioner, or other state or governmental body to have
25.13 	engaged in fraud, misrepresentation, or deceit;
25.14 	(4) has provided false or misleading information to the
25.15 	commissioner;
25.16 	(5) has violated or failed to comply with this chapter or
25.17 	chapter 349A;
25.18 	(6) is permanently or temporarily enjoined by any gambling
25.19 	regulatory agency from engaging in or continuing any conduct or
25.20 	practice involving any aspect of gambling;
25.21 	(7) has had a gambling-related license revoked or
25.22 	suspended, or has paid or been required to pay a monetary
25.23 	penalty of $10,000 or more, by a gambling regulator in another
25.24 	state or jurisdiction;
25.25 	(8) has been the subject of any of the following actions by
25.26 	the commissioner:
25.27 	(i) has had a license under chapter 299L denied, suspended,
25.28 	or revoked;
25.29 	(ii) has been censured or reprimanded or has paid or been
25.30 	required to pay a monetary penalty or fine; or 
25.31 	(iii) has been the subject of any other discipline by the
25.32 	commissioner;
25.33 	(9) has engaged in conduct that is contrary to the public
25.34 	health, safety, or welfare, or to the integrity of gambling;
25.35 	(10) based on past activities or criminal record, poses a
25.36 	threat to the public interest or to the effective regulation and
26.1 	control of gambling, or creates or enhances the dangers of
26.2 	unsuitable, unfair, or illegal practices, methods, and
26.3 	activities in the conduct of gambling or the management of the
26.4 	business and financial arrangements incidental to the conduct of
26.5 	gambling;
26.6 	(11) has engaged in a material violation of law, order, or
26.7 	rule relating to gambling within any jurisdiction;
26.8 	(12) has operated gaming in violation of approved game
26.9 	procedures or an approved security plan, which in the
26.10 	commissioner's opinion adversely and materially affects the
26.11 	public interest of the state in the effective regulation and
26.12 	control of gaming;
26.13 	(13) has made an intentional false statement in a license
26.14 	application;
26.15 	(14) has failed to perform material covenants or
26.16 	representations made in a license application; or 
26.17 	(15) has failed to notify the commissioner of a material
26.18 	change in the information provided in a license application.
26.19 	(b) A license revocation, suspension, or imposition of a
26.20 	civil penalty under this paragraph is a contested case under
26.21 	sections 14.57 to 14.69 and is in addition to any criminal
26.22 	penalties provided for a violation of law or rule.
26.23 	(c) The commissioner shall provide notice of any license
26.24 	revocation, suspension, or imposition of a civil penalty to the
26.25 	tribal entity.
26.26 		Subd. 6.Required notification. (a) The gaming
26.27 	management licensee has the obligation to immediately report to
26.28 	the commissioner any change in its management or ownership.  Any
26.29 	individual who later becomes an officer, director, or other
26.30 	individual with a direct financial or management interest in the
26.31 	licensee must undergo a comprehensive background and financial
26.32 	investigation as set forth in subdivision 4.  Prior to assuming
26.33 	any duties or responsibilities for the licensee, the individual
26.34 	must file the appropriate license application information with
26.35 	the commissioner.
26.36 	(b) Following issuance of a gaming management license, the
27.1 	licensee must annually certify to the commissioner its
27.2 	compliance with this section.
27.3 		Subd. 7.License renewal. The gaming management license
27.4 	must be renewed every two years.  The commissioner must review
27.5 	an application for renewal of a gaming management license in the
27.6 	same manner as set forth in this section for issuance of a
27.7 	license, including the assessment of costs related to the
27.8 	background investigation.

27.9 	Sec. 3. [299L.092] EMPLOYEE LICENSES.
27.10 		Subdivision 1.Authority. The commissioner may issue
27.11 	employee licenses for persons employed at a gaming facility.
27.12 	All persons employed at a gaming facility must have the
27.13 	appropriate license issued by the commissioner.  The gaming
27.14 	facility licensee must ensure that an employee has a valid
27.15 	employee license before the employee begins work at the gaming
27.16 	facility.
27.17 		Subd. 2.Application information. An application for an
27.18 	employee license must be on a form prescribed by the
27.19 	commissioner and include an affidavit of qualification that the
27.20 	applicant:
27.21 	(1) does not have a felony conviction of record in a state
27.22 	or federal court and does not have a state or federal felony
27.23 	charge pending;
27.24 	(2) is not and never has been connected with or engaged in
27.25 	an illegal business;
27.26 	(3) has never been found guilty of fraud or
27.27 	misrepresentation in connection with gambling; and 
27.28 	(4) has never been found guilty of a violation of law or
27.29 	rule relating to gambling within any jurisdiction.
27.30 		Subd. 3.Background investigations. The commissioner
27.31 	shall investigate each applicant for an employee license to the
27.32 	extent the commissioner deems necessary.  The commissioner must
27.33 	require the applicant to be fingerprinted or to furnish the
27.34 	applicant's fingerprints.  The commissioner may require the
27.35 	tribal entity or racetrack to pay the costs of processing
27.36 	employee licenses, renewing employee licenses, and conducting
28.1 	background investigations on the employee.  Money received by
28.2 	the commissioner under this subdivision must be deposited in the
28.3 	state treasury and credited to the commissioner reimbursement
28.4 	account and are annually appropriated to the commissioner to pay
28.5 	for costs incurred under this subdivision.
28.6 		Subd. 4.License issuance and renewal. If the
28.7 	commissioner determines that the applicant is qualified for the
28.8 	occupation for which licensing is sought and will not adversely
28.9 	affect the public health, safety, and welfare or the integrity
28.10 	of gambling in Minnesota, the commissioner may issue an employee
28.11 	license to the applicant.  If the commissioner makes a similar
28.12 	finding for a renewal of an employee license, the commissioner
28.13 	may renew the license.  Employee licenses are effective for one
28.14 	year.
28.15 		Subd. 5.Revocation and suspension. (a) The commissioner
28.16 	may revoke an employee license for a violation of law or rule
28.17 	which in the commissioner's opinion adversely affects the
28.18 	integrity of gambling in Minnesota, or for an intentional false
28.19 	statement made in a license application.  The commissioner may
28.20 	suspend an employee license for up to one year or refuse to
28.21 	renew the license or impose a civil penalty for a violation of
28.22 	law, order, or rule.  A license revocation or suspension is a
28.23 	contested case under sections 14.57 to 14.69 of the
28.24 	Administrative Procedure Act and is in addition to criminal
28.25 	penalties imposed for a violation of law or rule.
28.26 	(b) The commissioner may summarily suspend an employee
28.27 	license prior to a contested case hearing where it is necessary
28.28 	to ensure the integrity of gambling.  A contested case hearing
28.29 	must be held within 20 days of the summary suspension and the
28.30 	administrative law judge's report must be issued within 20 days
28.31 	from the close of the hearing record.  In all cases involving
28.32 	summary suspension, the commissioner must issue its final
28.33 	decision within 30 days from receipt of the report of the
28.34 	administrative law judge and subsequent exceptions and argument
28.35 	under section 14.61.

28.36 	Sec. 4. [299L.093] VENDOR LICENSES.
29.1 		Subdivision 1.Issuance. The commissioner may issue a
29.2 	vendor license for any person or entity that sells or
29.3 	distributes products or provides services at a gaming facility.
29.4 	No person may sell or distribute products or provide a service
29.5 	at a gaming facility unless the person has obtained a license
29.6 	from the commissioner.  All employees of the vendor whose work
29.7 	requires attendance at a gaming facility must obtain an employee
29.8 	license under section 299L.092.
29.9 		Subd. 2.Application information. An application for a
29.10 	vendor license must be on a form prescribed by the commissioner
29.11 	and include an affidavit of qualification that the applicant,
29.12 	and any officer, director, or person with direct financial
29.13 	interest in the applicant:
29.14 	(1) does not have a felony conviction of record in a state
29.15 	or federal court and does not have a state or federal felony
29.16 	charge pending;
29.17 	(2) is not and never has been connected with or engaged in
29.18 	an illegal business;
29.19 	(3) has never been found guilty of fraud or
29.20 	misrepresentation in connection with gambling; and 
29.21 	(4) has never been found guilty of a violation of law or
29.22 	rule relating to gambling within any jurisdiction.
29.23 		Subd. 3.Background investigations. The commissioner
29.24 	shall investigate each applicant for a vendor license to the
29.25 	extent the commissioner deems necessary.  The commissioner must
29.26 	require the applicant be fingerprinted or furnish the
29.27 	applicant's fingerprints.  The commissioner may require the
29.28 	vendor to pay the costs of processing employee licenses,
29.29 	renewing vendor licenses, and conducting background
29.30 	investigations on the vendor.  Money received by the
29.31 	commissioner under this subdivision must be deposited in the
29.32 	state treasury and credited to the commissioner reimbursement
29.33 	account, and are annually appropriated to the commissioner to
29.34 	pay for costs incurred under this subdivision.
29.35 		Subd. 4.License issuance and renewal. If the
29.36 	commissioner determines that the applicant is qualified and the
30.1 	issuance of the license will not adversely affect the public
30.2 	health, safety, and welfare or the integrity of gambling in
30.3 	Minnesota, the commissioner may issue a vendor license to the
30.4 	applicant.  If the commissioner makes a similar finding for a
30.5 	renewal of a vendor license, the commissioner may renew the
30.6 	license.  Vendor licenses are effective for one year.
30.7 		Subd. 5.Revocation and suspension. (a) The commissioner
30.8 	may revoke a vendor license for a violation of law or rule that,
30.9 	in the commissioner's opinion, adversely affects the integrity
30.10 	of gambling in Minnesota, or for an intentional false statement
30.11 	made in a license application.  The commissioner may suspend a
30.12 	vendor license for up to one year or refuse to renew the license
30.13 	or impose a civil penalty for a violation of law, order, or
30.14 	rule.  A license revocation or suspension is a contested case
30.15 	under sections 14.57 to 14.69 of the Administrative Procedure
30.16 	Act and is in addition to criminal penalties imposed for a
30.17 	violation of law or rule.
30.18 	(b) The commissioner may summarily suspend a vendor license
30.19 	for not more than 90 days prior to a contested case hearing
30.20 	where it is necessary to ensure the integrity of gambling.  A
30.21 	contested case hearing must be held within 20 days of the
30.22 	summary suspension and the administrative law judge's report
30.23 	must be issued within 20 days from the close of the hearing
30.24 	record.  In all cases involving summary suspension, the
30.25 	commissioner must issue its final decision within 30 days from
30.26 	receipt of the report of the administrative law judge and
30.27 	subsequent exceptions and argument under section 14.61.

30.28 	Sec. 5. [299L.094] NONLOTTERY CASINO GAMES.
30.29 		Subdivision 1.Definitions. (a) For the purposes of this
30.30 	section, the following terms have the meanings given them.
30.31 	(b) "Nonlottery casino games" means any game authorized by
30.32 	the commissioner to be conducted by a gaming facility licensee
30.33 	at the gaming facility that is not a gaming machine or other
30.34 	lottery game as defined by section 349A.01.
30.35 	(c) "Nonlottery casino games' adjusted gross revenue" means
30.36 	the sum of all money received from the operation of nonlottery
31.1 	casino games, less the amounts paid out to players in prizes or
31.2 	winnings and promotional allowances approved by the lottery
31.3 	director under section 349A.17 in the nonlottery casino games.
31.4 		Subd. 2.Operation. Nonlottery casino games may be
31.5 	operated by the gaming facility licensee in conformance with a
31.6 	plan of operation approved by the commissioner.  The plan of
31.7 	operation must include, at a minimum:
31.8 	(1) specifying and defining all nonlottery games to be
31.9 	played, including all governing aspects of each nonlottery
31.10 	casino game;
31.11 	(2) arrangements to ensure the security of nonlottery
31.12 	casino gaming;
31.13 	(3) internal control systems for play of nonlottery casino
31.14 	games; and 
31.15 	(4) a plan for the training of nonlottery casino games
31.16 	personnel in identification of problem gamblers and appropriate
31.17 	action to prevent or control problem gambling.
31.18 		Subd. 3.Plan amendment. The plan of operation may be
31.19 	amended only with the approval of the commissioner.
31.20 		Subd. 4.Actions. The commissioner may revoke, suspend,
31.21 	refuse to renew, or impose a civil penalty upon the gaming
31.22 	facility or the gaming management licensee for violation of the
31.23 	plan of operation.  An action under this subdivision shall be
31.24 	conducted as a contested case under sections 14.57 to 14.69 of
31.25 	the Administrative Procedures Act and is in addition to criminal
31.26 	penalties imposed for violation of the plan of operation.
31.27 		Subd. 5.Prizes. A person who plays a nonlottery casino
31.28 	game at a gaming facility agrees to be bound by the rules and
31.29 	game procedures applicable to that particular game.  The player
31.30 	acknowledges that the determination of whether the player has
31.31 	won a prize is subject to the rules and game procedures adopted
31.32 	by the plan of operation, claim procedures established by the
31.33 	plan of operation for that game, and any confidential or public
31.34 	validation tests established by the plan of operation for that
31.35 	game.  A person under 18 years of age may not claim a prize from
31.36 	a nonlottery casino game at a gaming facility.

32.1 	Sec. 6. [299L.095] EMPLOYMENT RESTRICTIONS; CIVIL
32.2 	PENALTY.
32.3 	(a) The lottery director, the commissioner, or any manager,
32.4 	director, or supervisor employed by the lottery or the
32.5 	Department of Public Safety whose job responsibilities include
32.6 	the oversight, audit, investigation, or regulation of gaming at
32.7 	a gaming facility licensed by the commissioner must not, while
32.8 	employed with or within one year after leaving employment,
32.9 	receive compensation directly or indirectly from, or enter into
32.10 	a contractual relationship with the tribal entity, racetrack, or
32.11 	any management entity licensed by the commissioner pursuant to
32.12 	section 299L.09 or 299L.091.
32.13 	(b) The tribal entity, racetrack, or management entity
32.14 	licensed by the commissioner must not negotiate with or offer to
32.15 	employ or compensate the lottery director; commissioner; or any
32.16 	manager, director, or supervisor employed by the lottery or the
32.17 	Department of Public Safety whose job responsibilities include
32.18 	the oversight, audit, investigation, or regulation of gaming at
32.19 	a gaming facility licensed by the commissioner pursuant to
32.20 	section 299L.09 or 299L.091 while the person is employed by the
32.21 	lottery or the Department of Public Safety or within one year
32.22 	after the person's employment has ended.
32.23 	(c) A state employee who violates this section is subject
32.24 	to a civil penalty not to exceed $10,000 for each violation.
32.25 	The attorney general may bring an action in district court to
32.26 	pursue a violation of this section.
32.27 	(d) The commissioner may take administrative action in
32.28 	relation to the gaming facility license or management license
32.29 	for a violation of this section by a tribal entity, racetrack,
32.30 	or management entity.

32.31 	Sec. 7. EFFECTIVE DATE.
 32.32 	This article is effective the day following final enactment.

32.33 	ARTICLE 3
32.34 	RACING COMMISSION

32.35 	Section 1. Minnesota Statutes 2004, section 240.13, is
32.36 	amended by adding a subdivision to read:
33.1 		Subd. 5a.Purses; gaming machines. From the fee received
33.2 	by a licensee pursuant to a location contract entered into under
33.3 	section 349A.17, the licensee must set aside an amount equal to
33.4 	not less than 7.25 percent of the adjusted gross gaming machine
33.5 	revenues as defined under chapter 349A, for purses for live
33.6 	horse races conducted by the licensee.  Purse payments made
33.7 	pursuant to this subdivision are in addition to purse payments
33.8 	otherwise established by law or contract.  Twenty percent of the
33.9 	money set aside for purses pursuant to this subdivision shall be
33.10 	transferred to the commission and used for the purposes in
33.11 	section 240.18, subdivisions 2, paragraph (d), and 3, paragraph
33.12 	(b), subject to the proportionality requirement in section
33.13 	240.18, subdivision 1.  The licensee and the horseperson's
33.14 	organization representing the majority of horsepersons who have
33.15 	raced at the racetrack during the preceding 12 months may
33.16 	negotiate percentages different from those stated in this
33.17 	section if the agreement is in writing and filed with the Racing
33.18 	Commission.

33.19 	Sec. 2. Minnesota Statutes 2004, section 240.135, is
33.20 	amended to read:
33.21 	240.135 CARD CLUB REVENUE.
33.22 	(a) From the amounts received from charges authorized under
33.23 	section 240.30, subdivision 4, or from revenue received from the
33.24 	conducting of nonlottery casino games under section 299L.04,the
33.25 	licensee shall set aside the amounts specified in this section
33.26 	to be used for purse payments. These amounts are in addition to
33.27 	the breeders fund and purse requirements set forth elsewhere in
33.28 	this chapter.
33.29 	(1) For amounts between zero and $6,000,000, the licensee
33.30 	shall set aside ten percent to be used as purses.
33.31 	(2) For amounts in excess of $6,000,000, the licensee shall
33.32 	set aside 14 percent to be used as purses.
33.33 	(b) From all amounts set aside under paragraph (a), the
33.34 	licensee shall set aside ten percent to be deposited in the
33.35 	breeders fund.  The licensee and the horseperson's organization
33.36 	representing the majority of horsepersons who have raced at the
34.1 	racetrack during the preceding 12 months may negotiate
34.2 	percentages different from those stated in this section if the
34.3 	agreement is in writing and filed with the Racing Commission.
34.4 	(c) It is the intent of the legislature that the proceeds
34.5 	of the card playing activities authorized by this chapter be
34.6 	used to improve the horse racing industry by improving purses.
34.7 	The commission shall annually review the financial details of
34.8 	card playing activities and determine if the present use of card
34.9 	playing proceeds is consistent with the policy established by
34.10 	this paragraph.  If the commission determines that the use of
34.11 	the proceeds does not comply with the policy set forth herein,
34.12 	then the commission shall direct the parties to make the changes
34.13 	necessary to ensure compliance.  If these changes require
34.14 	legislation, the commission shall make the appropriate
34.15 	recommendations to the legislature.

34.16 	Sec. 3. Minnesota Statutes 2004, section 240.30,
34.17 	subdivision 1, is amended to read:
34.18 		Subdivision 1.Card club operation. If a class A
34.19 	licensee is not operating a gaming facility under chapter 299L
34.20 	or 349A,a class B licensee conducting pari-mutuel betting on
34.21 	horse racing at a class A racetrack may operate a card club at
34.22 	the racetrack and offer card playing services to patrons only if
34.23 	the commission has authorized the licensee to operate a card
34.24 	club operation under section 240.07, subdivision 3, paragraph
34.25 	(b), and the commission has approved the licensee's plan of
34.26 	operation under subdivision 6.  The commission may withdraw its
34.27 	authorization for operation of a card club at any time for a
34.28 	violation of a law or rule governing card club operation.

34.29 	ARTICLE 4
34.30 	GAMING TRANSACTION FEE

34.31 	Section 1. [16A.901] GAMING FACILITY.
34.32 		Subdivision 1.State lottery. (a) The State Lottery
34.33 	must, on or before the 20th day of each month, transmit to the
34.34 	commissioner, an amount equal to the adjusted gross gaming
34.35 	machine revenue and other lottery games' adjusted gross revenue,
34.36 	as defined in section 349A.01, for revenue derived from a gaming
35.1 	facility operated by an entity other than a tribal entity as
35.2 	defined in section 349A.17, for the previous month multiplied by
35.3 	26 percent.  Provided that if the lottery pays an adjustment to
35.4 	the racetrack pursuant to section 349A.17, subdivision 2,
35.5 	paragraph (g), clause (2), the lottery must deduct from its next
35.6 	payment to the commissioner the amount paid by the lottery to
35.7 	the racetrack as an adjustment.
35.8 	(b) The State Lottery must, on or before the 20th day of
35.9 	each month, transmit to the commissioner, an amount equal to the
35.10 	adjusted gross gaming machine revenue and other lottery games'
35.11 	adjusted gross revenue as defined in section 349A.01, for
35.12 	revenue derived from a gaming facility operated by a tribal
35.13 	entity as defined in section 349A.17, for the previous month
35.14 	multiplied by 20 percent.  Provided that if the lottery pays an
35.15 	adjustment to the tribal entity pursuant to section 349A.17,
35.16 	subdivision 2, paragraph (f), clause (5), the lottery must
35.17 	deduct from its next payment to the commissioner the amount paid
35.18 	by the lottery to the tribal entity as an adjustment.
35.19 	(c) The payments imposed by this section are in lieu of the
35.20 	tax imposed by section 297A.62 relating to wagering at the
35.21 	gaming facility and any local taxes relating to wagering at the
35.22 	gaming facility.
35.23 		Subd. 2.Gaming facility licensee. A racetrack
35.24 	authorized to conduct nonlottery casino games at a gaming
35.25 	facility under section 299L.094, shall pay a gaming transaction
35.26 	fee at the rate of 14 percent of nonlottery casino games'
35.27 	adjusted gross revenue, as defined in section 299L.094.  A
35.28 	tribal entity authorized to conduct nonlottery casino games at a
35.29 	gaming facility under section 299L.094 shall pay a gaming
35.30 	transaction fee at the rate of ten percent of nonlottery casino
35.31 	games' adjusted gross revenue, as defined in section 299L.094.
35.32 	The racetrack and tribal entity authorized to conduct nonlottery
35.33 	casino games at the gaming facility must make the payments due
35.34 	under this subdivision to the commissioner on or before the 20th
35.35 	day of each month for the adjusted gross revenue received for
35.36 	the previous month.
36.1 		Subd. 3.Deposit of receipts. The commissioner shall
36.2 	deposit the money transmitted under this section in the state
36.3 	treasury to be credited as provided in section 2.

36.4 	Sec. 2. [16A.902] GAMING FACILITY PROCEEDS FUND.
36.5 	A gaming facility proceeds fund is established in the state
36.6 	treasury, consisting of money deposited in the fund under
36.7 	section 16A.901, and any other money credited to the fund by law.
36.8 	Money in the fund is appropriated as follows:
36.9 	(1) ten percent of the receipts is annually appropriated to
36.10 	the community assets account; and 
36.11 	(2) the remaining 90 percent of the receipts shall be
36.12 	transferred to the general fund.

36.13 	Sec. 3. [16A.903] COMMUNITY ASSETS ACCOUNT.
36.14 	A community assets account is established in the state
36.15 	treasury, consisting of money deposited in the account under
36.16 	section 16A.902, and interest earned thereon.  Money in the
36.17 	account may be spent, as appropriated by law, to help finance
36.18 	capital projects that provide for facilities which provide a
36.19 	public benefit to the state and local communities.  Projects
36.20 	that may be financed through an appropriation from this account
36.21 	include, but are not limited to, the following:  stadiums and
36.22 	other athletic facilities for professional, college, and amateur
36.23 	sports; museums, theaters, and other facilities for the arts;
36.24 	recreational facilities; planetariums; and zoos.

36.25 	Sec. 4. EFFECTIVE DATE.
 36.26 	This article is effective the day following final enactment.

36.27 	ARTICLE 5
36.28 	MISCELLANEOUS PROVISIONS

36.29 	Section 1. Minnesota Statutes 2004, section 299L.07,
36.30 	subdivision 2, is amended to read:
36.31 		Subd. 2.Exclusions.  Notwithstanding subdivision 1, a
36.32 	gambling device:
36.33 	(1) may be sold by a person who is not licensed under this
36.34 	section, if the person (i) is not engaged in the trade or
36.35 	business of selling gambling devices, and (ii) does not sell
36.36 	more than one gambling device in any calendar year;
37.1 	(2) may be sold by the governing body of a federally
37.2 	recognized Indian tribe described in subdivision 2a, paragraph
37.3 	(b), clause (1), which is not licensed under this section, if
37.4 	(i) the gambling device was operated by the Indian tribe, (ii)
37.5 	the sale is to a distributor licensed under this section, and
37.6 	(iii) the licensed distributor notifies the commissioner of the
37.7 	purchase, in the same manner as is required when the licensed
37.8 	distributor ships a gambling device into Minnesota;
37.9 	(3) may be possessed by a person not licensed under this
37.10 	section if the person holds a permit issued under section
37.11 	299L.08; and 
37.12 	(4) may be possessed by a state agency, with the written
37.13 	authorization of the director, for display or evaluation
37.14 	purposes only and not for the conduct of gambling; and 
37.15 	(5) may be possessed by the State Lottery as authorized
37.16 	under chapter 349A.

37.17 	Sec. 2. Minnesota Statutes 2004, section 299L.07,
37.18 	subdivision 2a, is amended to read:
37.19 		Subd. 2a.Restrictions.  (a) A manufacturer licensed
37.20 	under this section may sell, offer to sell, lease, or rent, in
37.21 	whole or in part, a gambling device only to a distributor
37.22 	licensed under this section or to the State Lottery as
37.23 	authorized under chapter 349A.
37.24 	(b) A distributor licensed under this section may sell,
37.25 	offer to sell, market, rent, lease, or otherwise provide, in
37.26 	whole or in part, a gambling device only to:
37.27 	(1) the governing body of a federally recognized Indian
37.28 	tribe that is authorized to operate the gambling device under a
37.29 	tribal state compact under the Indian Gaming Regulatory Act,
37.30 	Public Law 100-497, and future amendments to it;
37.31 	(2) a person for use in the person's dwelling for display
37.32 	or amusement purposes in a manner that does not afford players
37.33 	an opportunity to obtain anything of value;
37.34 	(3) another distributor licensed under this section; or 
37.35 	(4) a person in another state who is authorized under the
37.36 	laws of that state to possess the gambling device; or 
38.1 	(5) the State Lottery as authorized under chapter 349A.

38.2 	Sec. 3. Minnesota Statutes 2004, section 340A.410,
38.3 	subdivision 5, is amended to read:
38.4 		Subd. 5.Gambling prohibited.  (a) Except as otherwise
38.5 	provided in this subdivision, no retail establishment licensed
38.6 	to sell alcoholic beverages may keep, possess, or operate, or
38.7 	permit the keeping, possession, or operation on the licensed
38.8 	premises of dice or any gambling device as defined in section
38.9 	349.30, or permit gambling therein.
38.10 	(b) Gambling equipment may be kept or operated and raffles
38.11 	conducted on licensed premises and adjoining rooms when the use
38.12 	of the gambling equipment is authorized by (1) chapter 349, (2)
38.13 	a tribal ordinance in conformity with the Indian Gaming
38.14 	Regulatory Act, Public Law 100-497, or (3) a tribal-state
38.15 	compact authorized under section 3.9221.
38.16 	(c) Lottery tickets may be purchased and sold within the
38.17 	licensed premises as authorized by the director of the lottery
38.18 	under chapter 349A.
38.19 	(d) Dice may be kept and used on licensed premises and
38.20 	adjoining rooms as authorized by section 609.761, subdivision 4.
38.21 	(e) Gambling devices may be operated and gambling permitted
38.22 	at a gaming facility as authorized by chapters 299L and 349A.

38.23 	Sec. 4. Minnesota Statutes 2004, section 541.20, is
38.24 	amended to read:
38.25 	541.20 RECOVERY OF MONEY LOST.
38.26 	Every person who, by playing at cards, dice, or other game,
38.27 	or by betting on the hands or sides of such as are gambling,
38.28 	shall lose to any person so playing or betting any sum of money
38.29 	or any goods, and pays or delivers the same, or any part
38.30 	thereof, to the winner, may sue for and recover such money by a
38.31 	civil action, before any court of competent jurisdiction.  For
38.32 	purposes of this section, gambling shall not include pari-mutuel
38.33 	wagering conducted under a license issued pursuant to chapter
38.34 	240, purchase or sale of tickets in the state lottery, purchase
38.35 	of gaming machine plays as authorized under chapter 349A,
38.36 	conduct of any lottery or nonlottery casino games at a gaming
39.1 	facility as authorized under chapters 299L and 349A,or gambling
39.2 	authorized under chapters 349 and 349A.

39.3 	Sec. 5. Minnesota Statutes 2004, section 541.21, is
39.4 	amended to read:
39.5 	541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
39.6 	Every note, bill, bond, mortgage, or other security or
39.7 	conveyance in which the whole or any part of the consideration
39.8 	shall be for any money or goods won by gambling or playing at
39.9 	cards, dice, or any other game whatever, or by betting on the
39.10 	sides or hands of any person gambling, or for reimbursing or
39.11 	repaying any money knowingly lent or advanced at the time and
39.12 	place of such gambling or betting, or lent and advanced for any
39.13 	gambling or betting to any persons so gambling or betting, shall
39.14 	be void and of no effect as between the parties to the same, and
39.15 	as to all persons except such as hold or claim under them in
39.16 	good faith, without notice of the illegality of the
39.17 	consideration of such contract or conveyance.  The provisions of
39.18 	this section shall not apply to:  (1) pari-mutuel wagering
39.19 	conducted under a license issued pursuant to chapter 240; (2)
39.20 	purchase of tickets in the state lottery or other wagering
39.21 	authorized under chapter 299L or 349A; (3) gaming activities
39.22 	conducted pursuant to the Indian Gaming Regulatory Act, 25
39.23 	U.S.C. 2701 et seq.; or (4) lawful gambling activities permitted
39.24 	under chapter 349.

39.25 	Sec. 6. Minnesota Statutes 2004, section 609.75,
39.26 	subdivision 3, is amended to read:
39.27 		Subd. 3.What are not bets.  The following are not bets:
39.28 	(1) A contract to insure, indemnify, guarantee or otherwise
39.29 	compensate another for a harm or loss sustained, even though the
39.30 	loss depends upon chance.
39.31 	(2) A contract for the purchase or sale at a future date of
39.32 	securities or other commodities.
39.33 	(3) Offers of purses, prizes or premiums to the actual
39.34 	contestants in any bona fide contest for the determination of
39.35 	skill, speed, strength, endurance, or quality or to the bona
39.36 	fide owners of animals or other property entered in such a
40.1 	contest.
40.2 	(4) The game of bingo when conducted in compliance with
40.3 	sections 349.11 to 349.23.
40.4 	(5) A private social bet not part of or incidental to
40.5 	organized, commercialized, or systematic gambling.
40.6 	(6) The operation of equipment or the conduct of a raffle
40.7 	under sections 349.11 to 349.22, by an organization licensed by
40.8 	the Gambling Control Board or an organization exempt from
40.9 	licensing under section 349.166.
40.10 	(7) Pari-mutuel betting on horse racing when the betting is
40.11 	conducted under chapter 240.
40.12 	(8) The purchase and sale of state lottery tickets under
40.13 	chapter 349A.
40.14 	(9) Plays on a gaming machine, or purchase or participating
40.15 	in any lottery or nonlottery casino game at a gaming facility
40.16 	authorized under chapter 299L or 349A.

40.17 	Sec. 7. Minnesota Statutes 2004, section 609.761, is
40.18 	amended by adding a subdivision to read:
40.19 		Subd. 6.Gaming facility. Sections 609.755 and 609.76 do
40.20 	not prohibit the manufacture, possession, sale, or operation of
40.21 	a gaming machine at a gaming facility under chapter 349A, or the
40.22 	conduct of any other lottery or nonlottery casino game at a
40.23 	gaming facility under chapters 299L and 349A.

40.24 	Sec. 8. SEVERABILITY; SAVINGS.
 40.25 	If any part of this act is found to be invalid because it
40.26 	is in conflict with a provision of the Constitution of the State
40.27 	of Minnesota or the Constitution of the United States, or for
40.28 	any other reason, all other provisions of this act shall remain
40.29 	valid and any rights, remedies, and privileges that have been
40.30 	otherwise accrued by this act, shall remain in effect and may be
40.31 	proceeded with and concluded under the provisions of this act.

40.32 	Sec. 9. EFFECTIVE DATE.
 40.33 	This article is effective the day following final enactment.

40.34 	ARTICLE 6
40.35 	APPROPRIATIONS

40.36 	Section 1. APPROPRIATIONS.
 41.1 	Revenue raised by this act is appropriated from the general
41.2 	fund in fiscal years 2006 and 2007 as specified in this article.

41.3 	Sec. 2. EDUCATION.
 41.4 	$134,000,000 is appropriated to offset the reduction in
41.5 	spending in H.F. No. 872, article 5, that would become effective
41.6 	if H.F. No. 1664 is not passed by the house of representatives.
41.7 	Reductions in appropriations under H.F. No. 872, article 5,
41.8 	section 13, are negated by the appropriation in this section.

41.9 	Sec. 3. HIGHER EDUCATION.
 41.10 	$25,450,000 is appropriated to the agencies and for the
41.11 	purposes indicated in H.F. No. 1385, article 5.  This
41.12 	appropriation replaces the appropriations in H.F. No. 1385,
41.13 	article 5, that otherwise would only become effective if H.F. No.
41.14 	1664 is passed by the house of representatives.

41.15 	Sec. 4. HEALTH.
 41.16 	$20,000,000 is appropriated to the agencies and for the
41.17 	purposes indicated in H.F. No. 1422, article 11.  This
41.18 	appropriation replaces the appropriations in of H.F. No. 1422,
41.19 	article 11, that otherwise would only become effective if H.F.
41.20 	No. 1664 is passed by the house of representatives.

41.21 	Sec. 5. JOBS AND ECONOMIC OPPORTUNITY.
 41.22 	$15,000,000 is appropriated to the agencies and for the
41.23 	purposes indicated in H.F. No. 1976, article 7.  This
41.24 	appropriation replaces the appropriations in of H.F. No. 1976,
41.25 	article 7, that otherwise would only become effective if H.F. No.
41.26 	1664 is passed by the house of representatives.

41.27 	Sec. 6. ENVIRONMENT AND NATURAL RESOURCES.
 41.28 	$11,400,000 is appropriated to the agencies and for the
41.29 	purposes that would otherwise be reduced in H.F. No. 902,
41.30 	article 2, if H.F. No. 1664 is not passed by the house of
41.31 	representatives.  Reductions in appropriations under H.F. No.
41.32 	902, article 2, are negated by the appropriation in this section.

41.33 	Sec. 7. PUBLIC SAFETY.
 41.34 	$4,500,000 is appropriated to the agencies and for the
41.35 	purposes indicated in H.F. No. 1, article 19.  This
41.36 	appropriation replaces the appropriation in H.F. No. 1, article
42.1 	19, that otherwise would only become effective if H.F. No. 1664
42.2 	is passed by the house of representatives.