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Capital IconMinnesota Legislature

HF 19

as introduced - 84th Legislature, 2005 1st Special Session (2005 - 2005) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 05/26/2005

Current Version - as introduced

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A bill for an act
relating to gambling; authorizing the operation of
lottery gaming machines and the conduct of other
nonlottery games at a gaming facility; licensing and
regulating the gaming facility; imposing a gaming
transaction fee; appropriating money; amending
Minnesota Statutes 2004, sections 240.13, by adding a
subdivision; 240.135; 240.30, subdivision 1; 299L.07,
subdivisions 2, 2a; 340A.410, subdivision 5; 349A.01,
subdivision 10, by adding subdivisions; 349A.04;
349A.10, subdivisions 3, 6; 349A.13; 541.20; 541.21;
609.75, subdivision 3; 609.761, by adding a
subdivision; proposing coding for new law in Minnesota
Statutes, chapters 16A; 299L; 349A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

LOTTERY OPERATIONS

Section 1. new text beginPURPOSE.
new text end

new text begin The purpose of articles 1 to 6 is to:
new text end

new text begin (1) recognize the significant inequities created by the
current status of casino gaming in Minnesota given the extreme
disparity in revenues generated by tribal casinos for
Minnesota's Indian tribes and tribal members and the lack of any
significant direct revenue to the state of Minnesota;
new text end

new text begin (2) provide an opportunity for increased economic
development and tribal self-sufficiency to tribal governments
which, because of their locations and tribal populations, have
not benefited significantly from gaming opportunities under the
federal Indian Gaming Regulatory Act, United States Code, title
25, sections 2701 to 2721;
new text end

new text begin (3) provide for the generation of revenues to the state,
including proceeds for distribution as set forth in the
Minnesota Constitution, article XI, section 14; and
new text end

new text begin (4) establish a structure that promotes tribal sovereignty
and self-governance and that provides revenues from casino
gaming to tribal governments for the development of programs to
alleviate persistent poverty conditions and to advance tribal
goals.
new text end

Sec. 2.

Minnesota Statutes 2004, section 349A.01,
subdivision 10, is amended to read:


Subd. 10.

Lottery procurement contract.

"Lottery
procurement contract" means a contract to provide lottery
products, new text begingaming machines, maintenance of gaming machines,
new text end computer hardware and software used to monitor sales of lottery
tickets new text beginand gaming machine plays, equipment used to conduct and
monitor other lottery games at a gaming facility, equipment used
for the conducting of other lottery games
new text end, and lottery tickets.
"Lottery procurement contract" does not include a contract to
provide an annuity or prize payment agreement or materials,
supplies, equipment, or services common to the ordinary
operation of a state agency.

Sec. 3.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 14. new text end

new text begin Gaming facility. new text end

new text begin "Gaming facility" means the
site selected for the location of gaming machines and the
conduct of other lottery games pursuant to a location contract
under section 349A.17 and nonlottery casino games pursuant to a
plan of operation approved under section 299L.094.
new text end

Sec. 4.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 15. new text end

new text begin Gaming machine. new text end

new text begin "Gaming machine" means any
machine, system, or device which, upon payment of consideration
in order to play a game, may award or entitle a player to a
prize by reason of skill of the player or application of the
element of chance, or both.
new text end

Sec. 5.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 16. new text end

new text begin Gaming machine game. new text end

new text begin "Gaming machine game"
means a game operated by a gaming machine as authorized by the
director.
new text end

Sec. 6.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 17. new text end

new text begin Gaming machine play. new text end

new text begin "Gaming machine play"
means a record that proves participation in a gaming machine
game.
new text end

Sec. 7.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 18. new text end

new text begin Adjusted gross gaming machine
revenue.
new text end

new text begin "Adjusted gross gaming machine revenue" means the sum
of all money received for gaming machine plays less the amount
paid out in prizes and for gaming machine games and promotional
allowances approved by the director under section 349A.17.
new text end

Sec. 8.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 19. new text end

new text begin Other lottery game. new text end

new text begin "Other lottery game" means
any game operated by the lottery at the gaming facility other
than a gaming machine, where money or property are distributed
to persons selected primarily by chance from among participants
who have paid for a chance of being selected and any other game
or activity determined to constitute a lottery within the
meaning of the Minnesota Constitution, article XIII, section 5.
Other lottery games do not include lottery games that are
operated by the lottery at the gaming facility that are also
sold by lottery retailers.
new text end

Sec. 9.

Minnesota Statutes 2004, section 349A.01, is
amended by adding a subdivision to read:


new text begin Subd. 20. new text end

new text begin Other lottery games adjusted gross
revenue.
new text end

new text begin "Other lottery games adjusted gross revenue" means the
sum of all money from the operation of other lottery games at
the gaming facility, less the amount paid out in prizes in the
other lottery games and promotional allowances approved by the
director under section 349A.17.
new text end

Sec. 10.

Minnesota Statutes 2004, section 349A.04, is
amended to read:


349A.04 LOTTERY GAME PROCEDURES.

The director may adopt game procedures governing the
following elements of the lottery:

(1) lottery games;

(2) ticket prices;

(3) number and size of prizes;

(4) methods of selecting winning tickets; deleted text beginand
deleted text end

(5) frequency and method of drawingsnew text begin;
new text end

new text begin (6) gaming machine games;
new text end

new text begin (7) cost of gaming machine plays;
new text end

new text begin (8) other lottery games; and
new text end

new text begin (9) cost to participate in other lottery gamesnew text end.

The adoption of lottery game procedures is not subject to
chapter 14.

Sec. 11.

Minnesota Statutes 2004, section 349A.10,
subdivision 3, is amended to read:


Subd. 3.

Lottery operations.

(a) The director shall
establish a lottery operations account in the lottery fund. The
director shall pay all costs of operating the lottery, including
payroll costs or amounts transferred to the state treasury for
payroll costs, but not including lottery prizes, from the
lottery operating account. The director shall credit to the
lottery operations account amounts sufficient to pay the
operating costs of the lottery.

(b) Except as provided in paragraph (e), the director may
not credit in any fiscal year thereafter amounts to the lottery
operations account which when totaled exceed 15 percent of gross
revenue to the lottery fund in that fiscal year. In computing
total amounts credited to the lottery operations account under
this paragraph the director shall disregard amounts transferred
to or retained by lottery retailers as sales commissions or
other compensation new text beginand amounts transferred to or retained by the
tribal entity or racetrack pursuant to a location contract under
section 349A.17
new text end.

(c) The director of the lottery may not expend after July
1, 1991, more than 2-3/4 percent of gross revenues in a fiscal
year for contracts for the preparation, publication, and
placement of advertising.

(d) Except as the director determines, the lottery is not
subject to chapter 16A relating to budgeting, payroll, and the
purchase of goods and services.

(e) In addition to the amounts credited to the lottery
operations account under paragraph (b), the director is
authorized, if necessary, to meet the current obligations of the
lottery and to credit up to 25 percent of an amount equal to the
average annual amount which was authorized to be credited to the
lottery operations account for the previous three fiscal years
but was not needed to meet the obligations of the lottery.

new text begin (f) Notwithstanding the provisions of this subdivision, the
director may not credit, in any fiscal year, to the lottery
operations account which when totaled exceed ten percent of
adjusted gross revenue from the operation of gaming machines and
other lottery games at each gaming facility.
new text end

Sec. 12.

Minnesota Statutes 2004, section 349A.10,
subdivision 6, is amended to read:


Subd. 6.

Budget; plans.

The director shall prepare and
submit a biennial budget plan to the commissioner of finance.
The governor shall recommend the maximum amount available for
the lottery in the budget the governor submits to the
legislature under section 16A.11. The maximum amount available
to the lottery for operating expenses and capital expenditures
shall be determined by law. Operating expenses shall not
include expenses that are a direct function of lottery sales,
which include the cost of lottery prizes, amounts paid to
lottery retailers as sales commissions or other compensation,
amounts paid to produce and deliver scratch lottery games, deleted text beginand
deleted text end amounts paid to an outside vendor to operate and maintain an
online gaming systemnew text begin, amounts paid to an outside vendor to
operate and maintain a central system for gaming machines and
for other lottery games, and amounts paid to acquire and
maintain gaming machines and equipment used to conduct other
lottery games
new text end. In addition, the director shall appear at least
once each fiscal year before the senate and house of
representatives committees having jurisdiction over gambling
policy to present and explain the lottery's plans for future
games and the related advertising and promotions and spending
plans for the next fiscal year.

Sec. 13.

Minnesota Statutes 2004, section 349A.13, is
amended to read:


349A.13 RESTRICTIONS.

Nothing in this chapter:

(1) authorizes the director to conduct a lottery game or
contest the winner or winners of which are determined by the
result of a sporting event other than a horse race conducted
under chapter 240;

(2) authorizes the director to install or operate a lottery
device operated by coin or currency which when operated
determines the winner of a game new text beginexcept as authorized under
section 349A.17
new text end; and

(3) authorizes the director to sell pull-tabs as defined
under section 349.12, subdivision 32.

Sec. 14.

new text begin [349A.17] GAMING FACILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this
section, the terms defined in this subdivision have the meanings
given them.
new text end

new text begin (b) "Fiscal year" means the period between July 1 and June
30.
new text end

new text begin (c) "Racetrack" means an entity that holds a class A
license from the Racing Commission under chapter 240.
new text end

new text begin (d) "Racetrack location" means land owned by a racetrack as
set forth in the racetrack's license application with the Racing
Commission that is used to conduct horse racing and related
activities under chapter 240.
new text end

new text begin (e) "Tribal entity" means one or more entities, whether
tribally or federally chartered corporations, or other legal
entities, wholly owned by one or more tribal governments that
are parties to the location contract under this section.
new text end

new text begin (f) "Tribal government" means the governmental entity that
represents one of the 11 federally recognized Indian tribes
within the state of Minnesota.
new text end

new text begin (g) "Site" means a parcel or contiguous parcels of land,
and may be enlarged by the addition of contiguous parcels of
land over time.
new text end

new text begin Subd. 2. new text end

new text begin Location contract. new text end

new text begin (a) The director may enter
into a contract with a tribal entity and a racetrack to provide
locations for the operation of gaming machines and other lottery
games. The director may not enter into more than two location
contracts for the operation of gaming machines and other lottery
games under this section.
new text end

new text begin (b) The director may enter into a contract with a racetrack
under this section if the racetrack has conducted at least 50
days of live racing at the racetrack each year within the last
five preceding calendar years.
new text end

new text begin (c) The director may enter a location contract with a
tribal entity that meets the following criteria:
new text end

new text begin (1) the tribal entity will operate a single gaming facility
at one site which is on, adjacent to, or contiguous to a
racetrack location on which the racetrack has conducted at least
50 days of live racing each year within the last five preceding
calendar years;
new text end

new text begin (2) the tribal entity must be comprised of tribal
governments which are each federally recognized tribes which
operate current casino gaming operations under the federal
Indian Gaming Regulatory Act, United States Code, title 25,
sections 2701 to 2721, pursuant to a compact with the state of
Minnesota;
new text end

new text begin (3) to be eligible to participate in the tribal entity, the
tribal government must demonstrate to the director that the
revenues available to the tribal government from currently
available revenue sources are insufficient to adequately meet
the basic needs of tribal members including, but not limited to,
housing, medical care, education, or other governmental services
to members;
new text end

new text begin (4) each of the tribal governments participating in the
tribal entity must within 30 days following final enactment of
this act file with the director a formal resolution from its
tribal council which provides that:
new text end

new text begin (i) the tribal government intends to participate in a
tribal entity which will enter a contract that complies with the
requirements of this act;
new text end

new text begin (ii) the tribal government meets the eligibility criteria
set forth in this paragraph and provides adequate documentation
to supports its eligibility to participate in the tribal entity;
new text end

new text begin (iii) a statement of the tribal government's intent to
participate in a tribal entity that waives the entity's
sovereign immunity relating to disputes arising out of the
location contract or the construction, management, or operation
of the gaming facility and that the tribal government expressly
consents that the tribal entity will be subject to the
jurisdiction of the state court and the administrative and
regulatory jurisdiction of the state;
new text end

new text begin (iv) a limited waiver of sovereign immunity and consent by
the tribal government to the jurisdiction of state court solely
to resolve disputes alleging that assets have been transferred
from the tribal entity to the tribe in violation of the location
contract or other applicable law and limited to any improperly
transferred assets; and
new text end

new text begin (v) states the intention of the tribal government to ensure
that revenues provided to the participating tribal governments
from the tribal entity will be distributed between the
participating tribal governments in a fair and equitable manner
as determined solely by the participating tribal governments.
new text end

new text begin (d) The location contract with the tribal entity shall have
no legal effect on the validity of existing tribal-state gaming
compacts.
new text end

new text begin (e) A location contract entered into under this section
must provide for the following provisions:
new text end

new text begin (1) That the contract shall run for not more than 20 years
and shall be negotiable and renewable every 15 years
thereafter. The director, tribal entity, participating tribal
government, or racetrack that intends to not renegotiate and
renew a location contract must, if reasonably possible, provide
notice of its intent to the other parties at least one year
before the location contract expires.
new text end

new text begin (2) Liquidated damages to recover the initial investment by
the tribal entity or the racetrack in the event the state,
through legislation or constitutional amendment, revokes all or
substantially all of the forms of gambling authorized under this
section. The liquidated damages may not be greater than the
unpaid balance of any debt incurred by the tribal entity or the
racetrack after the location contract has been executed and is
limited to the debt incurred by the tribal entity or the
racetrack for the gaming facility license, initial construction,
or acquisition of the gaming facility less the present market
value of the property or other assets related to the debt. Any
liquidated damages provision must expire within ten years.
new text end

new text begin (3) All costs associated with managing the routine
day-to-day activity of gaming machines and other lottery games,
including, but not limited to, routine and minor service and
maintenance, security monitoring, verifying winners, paying
winners, collecting money from gaming machines, collecting
wagers from the operation of other lottery games, and
advertising and marketing of gaming machines and other lottery
games shall be borne by the tribal entity or the racetrack.
new text end

new text begin (4) All costs associated with purchase or lease of gaming
machines, major maintenance of the gaming machines, and
monitoring the activity of the gaming machines through a central
system shall be borne by the lottery.
new text end

new text begin (5) The tribal entity and the racetrack must maintain
adequate liability and casualty insurance for the gaming
facility.
new text end

new text begin (6) Payment by each entity that has entered into a location
contract to the commissioner of human services in an annual
amount equal to the lesser of 0.5 percent of adjusted gross
gaming machine revenue, other lottery games' adjusted gross
income, and nonlottery casino games' adjusted gross revenue or
$2,500,000 at that gaming facility, for problem and compulsive
gambling treatment or programs.
new text end

new text begin (7) Payment by each entity that has entered into a location
contract to the city and county where the gaming facility is
located in an annual amount equal to one percent of adjusted
gross gaming machine revenue, other lottery games' adjusted
gross income, and nonlottery casino games' adjusted gross
revenue at that gaming facility.
new text end

new text begin (8) Any controversy or claim between the parties to a
location contract that arises out of a location contract may be
settled by arbitration except as provided in paragraphs (j) and
(k).
new text end

new text begin (9) Authorization for the operation of gaming machines and
the conduct of other lottery games at a temporary facility
pending completion of a permanent facility subject to reasonable
conditions for the operation of the temporary facility set by
the director. The operation of gaming machines and the
conducting of other lottery games at a temporary facility shall
be treated in the same manner as if it was conducted in a
permanent facility.
new text end

new text begin (10) The tribal entity and the racetrack must establish
internal controls to ensure that no person shall lose more than
$500 per day at the gaming facility. The internal controls
shall specify the manner in which the $500 limit is enforced.
new text end

new text begin (f) In addition to the provisions required under paragraph
(e), the location contract with the tribal entity must contain
the following provisions:
new text end

new text begin (1) The waiver of sovereign immunity by the tribal entity
and the limited waiver of sovereign immunity by the tribal
governments consistent with paragraph (c).
new text end

new text begin (2) In the construction of the gaming facility, and the
subsequent repair and maintenance of the facility, the tribal
entity shall make good faith efforts to contract with American
Indian and minority-owned businesses.
new text end

new text begin (3) In operating the gaming facility, the tribal entity
shall make good faith efforts to ensure that American Indians
and other minorities are employed in entry level, middle
management, and upper management positions.
new text end

new text begin (4) If a tribal government participating in the tribal
entity opts out of the tribal entity as part of the renewal
process it does not affect the ability of the tribal entity to
renew the location contract with the participation of any
remaining tribal governments.
new text end

new text begin (5) Payment of a fee by the lottery to the tribal entity in
an amount equal to 70 percent of the adjusted gross gaming
machine revenue and other lottery games' adjusted gross
revenue. Provided that beginning on January 1 following the
first full year that the tribal entity's permanent facility has
been in operation, (i) if the adjusted gross revenue from the
conducting of gaming machines and other lottery games is less
than $50,000,000 for that quarter, the fee due to the tribal
entity from the lottery will be increased to 72 percent for that
quarter; and (ii) if the adjusted gross revenue from the
conducting of gaming machines and other lottery games is less
than $25,000,000 for that quarter, the fee due to the tribal
entity from the lottery will be increased to 74 percent for that
quarter. The lottery will pay an adjustment to the tribal
entity to reflect the increased fee payments within 30 days
after the end of the quarter.
new text end

new text begin (g) In addition to the provisions required under paragraph
(e), the location contract with the racetrack must contain the
following provisions:
new text end

new text begin (1) The location contract terminates on the first day of
any calendar year following a calendar year during which the
class A licensee has not conducted at least 50 days of live
racing at the licensee's racetrack.
new text end

new text begin (2) Payment of a fee by the lottery to the racetrack in an
amount equal to 64 percent of the adjusted gross gaming machine
revenue and other lottery games' adjusted gross revenue.
Provided that beginning on January 1 following the first full
year that the racetrack's permanent facility has been in
operation, (i) if the adjusted gross revenue from the conducting
of gaming machines and other lottery games is less than
$50,000,000 for that quarter, the fee due to the racetrack from
the lottery will be increased to 66 percent for that quarter;
and (ii) if the adjusted gross revenue from the conducting of
gaming machines and other lottery games is less than $25,000,000
for that quarter, the fee due to the racetrack for that quarter
will be increased to 68 percent for that quarter. The lottery
will pay an adjustment to the racetrack to reflect the increased
fee payments within 30 days after the end of the quarter.
new text end

new text begin (h) No gaming facility may be located within a home rule
charter or statutory city, or town, unless the governing body of
the city or town adopts a resolution approving the site of the
gaming facility within the city or town.
new text end

new text begin (i) The tribal entity and the racetrack may establish
reasonable standards for payment of promotional allowances to
players and the proportional allocation of promotional
allowances between revenue generated from gaming machines, other
lottery games, and nonlottery casino games. Upon approval of
the standards for promotional allowances, the director shall
reimburse the tribal entity for the cost of promotional
allowances paid by the tribal entity.
new text end

new text begin (j) The director may by administrative action cancel or
suspend a location contract if the director reasonably
determines that the tribal entity or the racetrack has
materially breached any material provision of the location
contract and has failed to cure that breach in a reasonable
time, or if the tribal entity's or racetrack's gaming facility
license has been suspended or revoked by the commissioner of
public safety.
new text end

new text begin A contract cancellation or suspension under this paragraph
is a contested case under sections 14.57 to 14.69 and is in
addition to any criminal penalties provided for a violation of
law or rule.
new text end

new text begin (k) The director may by administrative action impose a
civil penalty, issue correction orders, or resolve in any other
manner as determined appropriate by the director, if the
director determines that the tribal entity or the racetrack has
breached any term of the location contract. The imposition of a
civil penalty is a contested case under sections 14.57 to 14.69
and is in addition to any criminal penalties provided for a
violation of law or rule.
new text end

new text begin (l) The rights and interests provided by a location
contract are specific to the parties to the location contract
and are not transferable without the written approval of the
director.
new text end

new text begin (m) Gaming machines may only be placed and other lottery
games may only be conducted at a gaming facility that is owned
or leased by the tribal entity or a racetrack.
new text end

new text begin (n) A contract entered into under this subdivision is not
subject to chapter 16C.
new text end

new text begin (o) The amounts paid by the tribal entity and the racetrack
to the commissioner of human services pursuant to a location
contract under this section are annually appropriated to the
commissioner of human services for problem and compulsive
gambling treatment or programs, including programs that are
designed to address compulsive gambling in American Indian and
minority communities.
new text end

new text begin Subd. 3. new text end

new text begin Operation. new text end

new text begin (a) All gaming machines that are
placed at a gaming facility or other lottery games conducted at
a gaming facility must be operated and controlled by the
director.
new text end

new text begin (b) Gaming machines must be owned or leased by the director.
new text end

new text begin (c) Major maintenance of the gaming machines shall be
controlled by the director or by a vendor that is under the
control and direction of the director.
new text end

new text begin (d) The director must establish and control a central
communications system that monitors activities on each gaming
machine.
new text end

new text begin (e) Equipment used to conduct other lottery games at a
gaming facility must be owned or leased by the director.
new text end

new text begin (f) The director must approve the security plans and
implementation of security measures associated with and relating
to the operation of the gaming machines and the conducting of
other lottery games at a gaming facility.
new text end

new text begin (g) Advertising and promotional material produced by a
gaming facility relating to gaming machines and the conduct of
other lottery games at a gaming facility must be approved by the
director in a timely manner.
new text end

new text begin (h) The director may authorize the tribal entity and the
racetrack to manage the routine day-to-day operation of the
gaming machines and the conducting of other lottery games at a
gaming facility, provided that the director shall maintain
overall control of the operation of the gaming machines and the
conducting of other lottery games at the gaming facility.
new text end

new text begin (i) The costs associated with procuring and maintaining
gaming machines and equipment involved in operating other
lottery games, and costs associated with acquiring, maintaining,
and operating the central system used to monitor the activity of
gaming machines, shall be borne by the lottery.
new text end

new text begin (j) All proceeds from the operation of gaming machines and
conduct of other lottery games received by the tribal entity and
the racetrack constitute a trust fund until transmitted to the
director.
new text end

new text begin (k) The director may require the tribal entity and the
racetrack to deposit in a trust account or other agreed upon
form of account, in a designated bank, all money received by the
tribal entity and the racetrack from the operation of gaming
machines and the conduct of other lottery games.
new text end

new text begin (l) If the tribal entity or the racetrack fail to pay any
money due the director within the time prescribed by the
director, the tribal entity or the racetrack shall pay interest
on the amount owed at the rate set for lottery retailers under
Minnesota Rules, part 7856.7020.
new text end

new text begin (m) The director may implement policies, procedures, and
other controls that are determined to be necessary by the
director for the operation of gaming machines and the conducting
of other lottery games pursuant to this section.
new text end

new text begin Subd. 4. new text end

new text begin Games. new text end

new text begin The director shall specify the games
that may be played on a gaming machine and the manner in which
other lottery games are conducted at a gaming facility as set
forth under section 349A.04.
new text end

new text begin Subd. 5. new text end

new text begin Specifications. new text end

new text begin Gaming machines must:
new text end

new text begin (1) maintain on nonresettable meters a permanent record,
capable of being printed out, of all transactions by the machine
and all entries into the machine. There must be a reasonable
number of gaming machines placed at a gaming facility which
afford players the option to receive winnings in the form of
either coins or tokens;
new text end

new text begin (2) be capable of being linked to a central communications
system to provide auditing program information as required by
the director; and
new text end

new text begin (3) there must be a reasonable number of gaming machines at
the facility which are accessible to individuals with
disabilities. For the purposes of this subdivision,
"individuals with disabilities" includes any person who has a
physical or sensory impairment which materially limits one or
more life activities.
new text end

new text begin Subd. 6. new text end

new text begin Examination of machines. new text end

new text begin The director shall
examine prototypes of gaming machines and require that the
manufacturer of the machine pay the cost of the examination.
The director may contract for the examination of gaming
machines. The director may require working models of a gaming
machine transported to the locations the director designates for
testing, examination, and analysis. The manufacturer shall pay
all costs of any testing, examination, analysis, and
transportation of the machine model.
new text end

new text begin Subd. 7. new text end

new text begin Prizes. new text end

new text begin A person who plays a gaming machine or
plays any other lottery game at the gaming facility agrees to be
bound by the rules and game procedures applicable to that
particular game. The player acknowledges that the determination
of whether the player has won a prize is subject to the rules
and game procedures adopted by the director, claim procedures
established by the director for that game, and any confidential
or public validation tests established by the director for that
game. A person under 18 years of age may not claim a prize from
the operation of a gaming machine or the conducting of any other
lottery game at the gaming facility. A prize claimed from the
play of a gaming machine game or the conduct of any other
lottery game is not subject to section 349A.08, subdivision 8.
new text end

new text begin Subd. 8. new text end

new text begin Prohibitions. new text end

new text begin A person under the age of 18
years may not play a game on a gaming machine or participate in
any other lottery game at the gaming facility.
new text end

new text begin Subd. 9. new text end

new text begin Compulsive gambling notice. new text end

new text begin The tribal entity
or racetrack shall prominently post, in areas of the gaming
facility where gaming machines are located or where other
lottery games are conducted, the toll-free telephone number
established by the commissioner of human services in connection
with the problem and compulsive gambling program. The tribal
entity or racetrack shall establish, with the approval of the
director, a proactive plan relating to problem and compulsive
gambling.
new text end

new text begin Subd. 10. new text end

new text begin Local licenses; local fees. new text end

new text begin A political
subdivision may not require a license to operate a gaming
machine or conduct other lottery games or nonlottery casino
games as defined under section 299L.094, restrict or regulate
the placement of gaming machines or the conducting of other
lottery or nonlottery casino games, or impose a fee or charge on
the business of operating gaming machines or the conducting of
other lottery or nonlottery casino games at the gaming facility.
new text end

Sec. 15. new text beginLOTTERY BUDGET; GAMING FACILITY.
new text end

new text begin The director of the State Lottery shall submit a budget for
the operation of gaming machines and for the conduct of other
lottery games at a gaming facility as authorized under Minnesota
Statutes, section 349A.17, to the commissioner of finance.
Notwithstanding Minnesota Statutes, section 349A.10, subdivision
6, the director of the State Lottery may expend amounts
necessary to operate gaming at a gaming facility. Amounts
expended by the director of the State Lottery for the conducting
of gaming at the gaming facility in fiscal years 2006 and 2007
are not subject to the maximum amount set in law for the
operation of the lottery.
new text end

Sec. 16. new text beginEFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

ARTICLE 2

DEPARTMENT OF PUBLIC SAFETY

Section 1.

new text begin [299L.09] GAMING FACILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this
section and sections 299L.09 to 299L.095, the following terms
have the meanings given them.
new text end

new text begin (a) "Direct financial interest" means ownership or control
of at least five percent interest in the racetrack, tribal
entity or management entity, the debt, or other financial
interest in the tribal entity or management entity.
new text end

new text begin (b) "Gaming facility" is as defined in section 349A.01.
new text end

new text begin (c) "Lottery director" means the director of the Minnesota
State Lottery under chapter 349A.
new text end

new text begin (d) "Management entity" means the entity applying for or
holding a management license under section 299L.092.
new text end

new text begin (e) "Racetrack" is as defined in section 349A.17.
new text end

new text begin (f) "Tribal entity" is as defined in section 349A.17.
new text end

new text begin Subd. 2. new text end

new text begin License required. new text end

new text begin The tribal entity or
racetrack that will own and operate, whether directly or through
another tribal or management entity, a gaming facility under
section 349A.17 must obtain a gaming facility license from the
commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin An application for a license under
this section must be on a form prescribed by the commissioner.
The commissioner may issue a gaming facility license to the
tribal entity or a racetrack that will operate the gaming
facility.
new text end

new text begin Subd. 4. new text end

new text begin License fee. new text end

new text begin Upon issuance of the license, each
licensee must pay a onetime license fee of $100,000,000 to the
commissioner. The racetrack that has received a license under
this section must pay an additional $25,000,000, payable to the
commissioner, upon opening of a permanent gaming facility or
within two years of issuance of the initial license, whichever
occurs first.
new text end

new text begin Subd. 5. new text end

new text begin License issuance. new text end

new text begin (a) The commissioner shall
issue a license under this section unless information obtained
from the comprehensive background check establishes that
issuance of the license would be adverse to the public interest
or to the effective regulation of gaming. If a license
application is denied, the applicant may reapply for a license.
new text end

new text begin (b) The commissioner may only issue a gaming facility
license to a tribal entity that, through a valid limited waiver
of sovereign immunity, is subject to the jurisdiction of the
Minnesota state courts and the administrative jurisdiction and
regulation of the state.
new text end

new text begin (c) A license issued under this section may not be
transferred without the written approval of the commissioner.
new text end

new text begin Subd. 6. new text end

new text begin Background investigation. new text end

new text begin Before issuing a
gaming facility license, the commissioner shall conduct a
comprehensive background and financial investigation of the
applicant, including its officers, directors, managers,
supervisory personnel, and persons with a direct financial
interest in the applicant. The commissioner may charge the
applicant an investigation fee to cover the cost of the
investigation. The commissioner may require that fingerprints
be taken from officers, directors, managers, supervisory
personnel, and persons with a direct financial interest in the
applicant. The commissioner may forward the fingerprints to the
Federal Bureau of Investigation for a national criminal history
check. As to the tribal entity applying for a license under
this section, the provisions of this subdivision do not apply or
include the officers and employees of tribal governments who are
not officers or employees of the tribal entity.
new text end

new text begin Subd. 7. new text end

new text begin License refusal; suspension and revocation. new text end

new text begin (a)
The commissioner may refuse to issue, or may revoke or suspend,
the gaming facility license if the applicant or licensee or its
officers, directors, managers, supervisory personnel, and
persons with a direct financial interest in the applicant or
licensee has:
new text end

new text begin (1) engaged in a material violation of law, order, or rule
relating to gambling within any jurisdiction;
new text end

new text begin (2) operated a gaming facility in violation of approved
game procedures or an approved security plan, which in the
commissioner's opinion adversely and materially affects the
public interest of the state in the effective regulation and
control of gaming;
new text end

new text begin (3) made an intentional false statement in a license
application related to gaming;
new text end

new text begin (4) failed to perform material covenants or representations
made in a license application; or
new text end

new text begin (5) failed to notify the commissioner of a material change
in the information provided in the application.
new text end

new text begin (b) The commissioner may not revoke or suspend a license
under this subdivision unless the commissioner has given the
licensee and, as to a tribal entity each participating tribal
government, express written notice of the reason for the
proposed revocation or suspension and has granted the licensee a
reasonable amount of time to cure the violation giving rise to
the proposed revocation or suspension, and, in the
commissioner's reasonable judgment, the tribal entity has failed
to do so. The commissioner is not required to provide a
reasonable time to cure the violation before a license
suspension if, in the commissioner's reasonable judgment, the
violation cannot be cured by the licensee before significant
harm will result to the public health, safety, or welfare. The
ability to cure may include creation of a reorganized or
reformed licensee, provided that the reorganized or reformed
licensee is approved by the commissioner and the lottery
director.
new text end

new text begin (c) A license revocation or suspension under this
subdivision is conducted as a contested case under sections
14.57 to 14.69 of the Administrative Procedure Act, and is in
addition to any other civil, administrative, or criminal
penalties imposed for a violation of law or rule.
new text end

new text begin Subd. 8. new text end

new text begin Other license actions. new text end

new text begin (a) The commissioner may
not issue the gaming facility license under this section or may
by administrative action impose a civil penalty upon the
licensee, issue correction orders, or take other administrative
action if the commissioner determines that the licensee, or
officer, director, manager, supervisory personnel, or other
person with a direct financial or management interest in the
licensee:
new text end

new text begin (1) has been convicted of a felony or of a crime in another
jurisdiction, which would be a felony in Minnesota;
new text end

new text begin (2) has been convicted of any crime related to gaming;
new text end

new text begin (3) has been found by a court, the lottery director, the
commissioner, or other state or governmental body to have
engaged in fraud, misrepresentation, or deceit;
new text end

new text begin (4) has provided false or misleading information to the
commissioner;
new text end

new text begin (5) has violated or failed to comply with this section or
any provision of this chapter or chapter 349A;
new text end

new text begin (6) is permanently or temporarily enjoined by any gambling
regulatory agency from engaging in or continuing any conduct or
practice involving any aspect of gambling;
new text end

new text begin (7) has had a gambling-related license revoked or
suspended, or has paid or been required to pay a monetary
penalty of $10,000 or more by a gambling regulator in another
state or jurisdiction;
new text end

new text begin (8) has been the subject of any of the following actions by
the commissioner:
new text end

new text begin (i) has had a license under this chapter denied, suspended,
or revoked;
new text end

new text begin (ii) has been censured or reprimanded, or has paid or been
required to pay a monetary penalty or fine; or
new text end

new text begin (iii) has been the subject of any other discipline by the
commissioner; or
new text end

new text begin (9) based on past activities or criminal record, poses a
threat to the public interest or to the effective regulation and
control of gambling, or creates or enhances the dangers of
unsuitable, unfair, or illegal practices, methods, and
activities in the conduct of gambling or the management of the
business and financial arrangements incidental to the conduct of
gambling.
new text end

new text begin (b) Any conduct in violation of this section, or failure by
the licensee to take reasonable action to cure a violation of
this section, may be considered by the commissioner in
determining whether to order revocation or suspension of the
gaming facility license. Any proposed revocation or suspension
is subject to the notice and process requirements of subdivision
7, paragraph (b).
new text end

new text begin (c) Administrative action, including, but not limited to,
imposition of a civil penalty, corrective order, or other
administrative action under this paragraph, is a contested case
under sections 14.57 to 14.69 and is in addition to any other
civil, administrative, or criminal penalties provided for a
violation of law or rule.
new text end

new text begin Subd. 9. new text end

new text begin Required notification. new text end

new text begin (a) The licensee has the
obligation to immediately report to the commissioner any
substantial change in its management or ownership. Any
individual who later becomes an officer, director, or other
individual with a direct financial or management interest in the
licensee must undergo a comprehensive background and financial
investigation as set forth in subdivision 6. Prior to assuming
any duties or responsibilities for the licensee the individual
must file the appropriate license application information with
the commissioner.
new text end

new text begin (b) Following issuance of a gaming facility license, the
licensee must annually certify to the commissioner its
compliance with this section.
new text end

new text begin Subd. 10. new text end

new text begin License review. new text end

new text begin The gaming facility license
must be reviewed by the commissioner every five years. An
application for review must be on a form prescribed by the
commissioner. The commissioner shall review the application and
conduct the comprehensive background investigation pursuant to
subdivision 6.
new text end

new text begin Subd. 11. new text end

new text begin Audit; investigation. new text end

new text begin (a) The licensee shall
have an annual certified audit conducted of the licensee's
operation of the gaming facility in accordance with generally
accepted accounting principles. The licensee shall file a copy
of each audit report with the commissioner.
new text end

new text begin (b) The commissioner has the right to conduct additional
reasonable audits or investigations relating to the operation of
the gaming facility. The commissioner shall have access to all
information, records, and accounts pertaining to the operation
of the gaming facility. The commissioner may recover the
reasonable costs of additional audits and investigations from
the licensee.
new text end

new text begin Subd. 12. new text end

new text begin Sale of intoxicating liquor. new text end

new text begin Notwithstanding
any other law, local ordinance, or charter provision, the host
community may issue to the licensee an on-sale license for the
sale of intoxicating liquor at the gaming facility pursuant to
chapter 340A. The annual fee for the license issued pursuant to
this subdivision shall be set by the host community at an amount
comparable to the fee charged by municipalities in the
surrounding area for a similar license. Chapter 340A applies to
the sale of intoxicating liquor at the gaming facility, except
that the licensed premises need not be compact and contiguous if
the licensed premises are limited to the interior and grounds of
the gaming facility.
new text end

new text begin Subd. 13. new text end

new text begin Detention of suspects. new text end

new text begin (a) The commissioner
may designate specific employees of the department, the lottery,
or the gaming facility as persons authorized to detain a person
if they have probable cause to believe that the person detained
has violated section 609.651 or 609.76 while at the gaming
facility.
new text end

new text begin (b) A person authorized to detain an individual under
paragraph (a) is not criminally or civilly liable for any
detention authorized by this subdivision if the person has a
good faith belief that probable cause exists for the detention,
and the detention was not conducted with unreasonable force or
in bad faith.
new text end

new text begin (c) A peace officer or person authorized by the
commissioner under paragraph (a) may exclude a person from the
gaming facility or remove that person from the gaming facility
if the person is suspected to have violated section 609.651 or
609.76 or possesses contraband as provided in section 609.762,
subdivision 1.
new text end

new text begin (d) The licensee may establish a self-exclusion program by
which persons, at their request, may be excluded from the gaming
facility.
new text end

new text begin Subd. 14. new text end

new text begin Reimbursement of costs. new text end

new text begin The commissioner shall
require that the licensee, on a quarterly basis, reimburse the
commissioner for the commissioner's actual costs, including
personnel costs of licensing, regulating, enforcement, and
oversight of the gaming facility under this section and sections
299L.091 to 299L.094. Money received by the commissioner under
this subdivision must be deposited in the state treasury and
credited to the commissioner reimbursement account and is
annually appropriated to the commissioner to pay the costs of
regulating activities at the gaming facility.
new text end

Sec. 2.

new text begin [299L.091] GAMING MANAGEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin License required. new text end

new text begin The tribal entity or
racetrack, or any entity formed by or engaged by the tribal
entity or the racetrack to manage the operations of the gaming
facility under section 349A.17, must obtain a gaming management
license from the commissioner.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin An application for a license under
this section must be on a form prescribed by the commissioner.
The commissioner may issue a gaming management license to the
management entity that will manage or operate the gaming
facility or gaming operations for the tribal entity or the
racetrack.
new text end

new text begin Subd. 3. new text end

new text begin License issuance. new text end

new text begin (a) The commissioner shall
issue a license under this section unless information obtained
from the comprehensive background check establishes that
issuance of the license would be adverse to the public interest
or to the effective regulation of gaming.
new text end

new text begin (b) The commissioner may only issue a gaming management
license to an entity that is subject to the jurisdiction of the
Minnesota state courts and the administrative jurisdiction and
regulation of the state.
new text end

new text begin (c) Any license issued under this section is
nontransferable.
new text end

new text begin Subd. 4. new text end

new text begin Background investigation. new text end

new text begin (a) Before issuing a
gaming management license, the commissioner must conduct a
comprehensive background and financial investigation of the
applicant including its officers, directors, managers,
supervisory personnel, and persons with a direct financial
interest in the management entity, provided that if the
management entity applying for the gaming management license and
the gaming facility licensee are the same, the commissioner
shall utilize the background investigation conducted as part of
the application for a gaming facility license. The commissioner
may require that fingerprints be taken and the commissioner may
forward the fingerprints to the Federal Bureau of Investigation
for a national criminal history check on the officers,
directors, managers, supervisory personnel, and persons with a
direct financial interest in the management entity, not
including the tribal governments that have an interest in the
management entity. The provisions of this paragraph do not
apply or include the tribal government having an interest in the
management entity.
new text end

new text begin (b) The commissioner may charge an applicant for a gaming
management license a reasonable fee to cover the costs of the
investigation. Money received by the commissioner under this
subdivision must be deposited in the state treasury and credited
to the commissioner reimbursement account and is annually
appropriated to the commissioner to pay for costs incurred under
this subdivision.
new text end

new text begin Subd. 5. new text end

new text begin License actions. new text end

new text begin (a) The commissioner may not
issue a license under this section, or may by administrative
action revoke, suspend, or refuse to renew the gaming management
license, impose a civil penalty upon the licensee, or issue
correction orders, if the commissioner determines that the
management entity, or officer, director, manager, supervisory
personnel, other person with a direct financial interest in the
management entity, not including the tribal government that have
an interest in the management entity financial or management
interest in the licensee:
new text end

new text begin (1) has been convicted of a felony or of a crime in another
jurisdiction, which would be a felony in Minnesota;
new text end

new text begin (2) has been convicted of any crime related to gaming;
new text end

new text begin (3) has been found by a court, the lottery director, the
commissioner, or other state or governmental body to have
engaged in fraud, misrepresentation, or deceit;
new text end

new text begin (4) has provided false or misleading information to the
commissioner;
new text end

new text begin (5) has violated or failed to comply with this chapter or
chapter 349A;
new text end

new text begin (6) is permanently or temporarily enjoined by any gambling
regulatory agency from engaging in or continuing any conduct or
practice involving any aspect of gambling;
new text end

new text begin (7) has had a gambling-related license revoked or
suspended, or has paid or been required to pay a monetary
penalty of $10,000 or more, by a gambling regulator in another
state or jurisdiction;
new text end

new text begin (8) has been the subject of any of the following actions by
the commissioner:
new text end

new text begin (i) has had a license under chapter 299L denied, suspended,
or revoked;
new text end

new text begin (ii) has been censured or reprimanded or has paid or been
required to pay a monetary penalty or fine; or
new text end

new text begin (iii) has been the subject of any other discipline by the
commissioner;
new text end

new text begin (9) has engaged in conduct that is contrary to the public
health, safety, or welfare, or to the integrity of gambling;
new text end

new text begin (10) based on past activities or criminal record, poses a
threat to the public interest or to the effective regulation and
control of gambling, or creates or enhances the dangers of
unsuitable, unfair, or illegal practices, methods, and
activities in the conduct of gambling or the management of the
business and financial arrangements incidental to the conduct of
gambling;
new text end

new text begin (11) has engaged in a material violation of law, order, or
rule relating to gambling within any jurisdiction;
new text end

new text begin (12) has operated gaming in violation of approved game
procedures or an approved security plan, which in the
commissioner's opinion adversely and materially affects the
public interest of the state in the effective regulation and
control of gaming;
new text end

new text begin (13) has made an intentional false statement in a license
application;
new text end

new text begin (14) has failed to perform material covenants or
representations made in a license application; or
new text end

new text begin (15) has failed to notify the commissioner of a material
change in the information provided in a license application.
new text end

new text begin (b) A license revocation, suspension, or imposition of a
civil penalty under this paragraph is a contested case under
sections 14.57 to 14.69 and is in addition to any criminal
penalties provided for a violation of law or rule.
new text end

new text begin (c) The commissioner shall provide notice of any license
revocation, suspension, or imposition of a civil penalty to the
tribal entity.
new text end

new text begin Subd. 6. new text end

new text begin Required notification. new text end

new text begin (a) The gaming
management licensee has the obligation to immediately report to
the commissioner any change in its management or ownership. Any
individual who later becomes an officer, director, or other
individual with a direct financial or management interest in the
licensee must undergo a comprehensive background and financial
investigation as set forth in subdivision 4. Prior to assuming
any duties or responsibilities for the licensee, the individual
must file the appropriate license application information with
the commissioner.
new text end

new text begin (b) Following issuance of a gaming management license, the
licensee must annually certify to the commissioner its
compliance with this section.
new text end

new text begin Subd. 7. new text end

new text begin License renewal. new text end

new text begin The gaming management license
must be renewed every two years. The commissioner must review
an application for renewal of a gaming management license in the
same manner as set forth in this section for issuance of a
license, including the assessment of costs related to the
background investigation.
new text end

Sec. 3.

new text begin [299L.092] EMPLOYEE LICENSES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin The commissioner may issue
employee licenses for persons employed at a gaming facility.
All persons employed at a gaming facility must have the
appropriate license issued by the commissioner. The gaming
facility licensee must ensure that an employee has a valid
employee license before the employee begins work at the gaming
facility.
new text end

new text begin Subd. 2. new text end

new text begin Application information. new text end

new text begin An application for an
employee license must be on a form prescribed by the
commissioner and include an affidavit of qualification that the
applicant:
new text end

new text begin (1) does not have a felony conviction of record in a state
or federal court and does not have a state or federal felony
charge pending;
new text end

new text begin (2) is not and never has been connected with or engaged in
an illegal business;
new text end

new text begin (3) has never been found guilty of fraud or
misrepresentation in connection with gambling; and
new text end

new text begin (4) has never been found guilty of a violation of law or
rule relating to gambling within any jurisdiction.
new text end

new text begin Subd. 3. new text end

new text begin Background investigations. new text end

new text begin The commissioner
shall investigate each applicant for an employee license to the
extent the commissioner deems necessary. The commissioner must
require the applicant to be fingerprinted or to furnish the
applicant's fingerprints. The commissioner may require the
tribal entity or racetrack to pay the costs of processing
employee licenses, renewing employee licenses, and conducting
background investigations on the employee. Money received by
the commissioner under this subdivision must be deposited in the
state treasury and credited to the commissioner reimbursement
account and are annually appropriated to the commissioner to pay
for costs incurred under this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin License issuance and renewal. new text end

new text begin If the
commissioner determines that the applicant is qualified for the
occupation for which licensing is sought and will not adversely
affect the public health, safety, and welfare or the integrity
of gambling in Minnesota, the commissioner may issue an employee
license to the applicant. If the commissioner makes a similar
finding for a renewal of an employee license, the commissioner
may renew the license. Employee licenses are effective for one
year.
new text end

new text begin Subd. 5. new text end

new text begin Revocation and suspension. new text end

new text begin (a) The commissioner
may revoke an employee license for a violation of law or rule
which in the commissioner's opinion adversely affects the
integrity of gambling in Minnesota, or for an intentional false
statement made in a license application. The commissioner may
suspend an employee license for up to one year or refuse to
renew the license or impose a civil penalty for a violation of
law, order, or rule. A license revocation or suspension is a
contested case under sections 14.57 to 14.69 of the
Administrative Procedure Act and is in addition to criminal
penalties imposed for a violation of law or rule.
new text end

new text begin (b) The commissioner may summarily suspend an employee
license prior to a contested case hearing where it is necessary
to ensure the integrity of gambling. A contested case hearing
must be held within 20 days of the summary suspension and the
administrative law judge's report must be issued within 20 days
from the close of the hearing record. In all cases involving
summary suspension, the commissioner must issue its final
decision within 30 days from receipt of the report of the
administrative law judge and subsequent exceptions and argument
under section 14.61.
new text end

Sec. 4.

new text begin [299L.093] VENDOR LICENSES.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance. new text end

new text begin The commissioner may issue a
vendor license for any person or entity that sells or
distributes products or provides services at a gaming facility.
No person may sell or distribute products or provide a service
at a gaming facility unless the person has obtained a license
from the commissioner. All employees of the vendor whose work
requires attendance at a gaming facility must obtain an employee
license under section 299L.092.
new text end

new text begin Subd. 2. new text end

new text begin Application information. new text end

new text begin An application for a
vendor license must be on a form prescribed by the commissioner
and include an affidavit of qualification that the applicant,
and any officer, director, or person with direct financial
interest in the applicant:
new text end

new text begin (1) does not have a felony conviction of record in a state
or federal court and does not have a state or federal felony
charge pending;
new text end

new text begin (2) is not and never has been connected with or engaged in
an illegal business;
new text end

new text begin (3) has never been found guilty of fraud or
misrepresentation in connection with gambling; and
new text end

new text begin (4) has never been found guilty of a violation of law or
rule relating to gambling within any jurisdiction.
new text end

new text begin Subd. 3. new text end

new text begin Background investigations. new text end

new text begin The commissioner
shall investigate each applicant for a vendor license to the
extent the commissioner deems necessary. The commissioner must
require the applicant be fingerprinted or furnish the
applicant's fingerprints. The commissioner may require the
vendor to pay the costs of processing employee licenses,
renewing vendor licenses, and conducting background
investigations on the vendor. Money received by the
commissioner under this subdivision must be deposited in the
state treasury and credited to the commissioner reimbursement
account, and are annually appropriated to the commissioner to
pay for costs incurred under this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin License issuance and renewal. new text end

new text begin If the
commissioner determines that the applicant is qualified and the
issuance of the license will not adversely affect the public
health, safety, and welfare or the integrity of gambling in
Minnesota, the commissioner may issue a vendor license to the
applicant. If the commissioner makes a similar finding for a
renewal of a vendor license, the commissioner may renew the
license. Vendor licenses are effective for one year.
new text end

new text begin Subd. 5. new text end

new text begin Revocation and suspension. new text end

new text begin (a) The commissioner
may revoke a vendor license for a violation of law or rule that,
in the commissioner's opinion, adversely affects the integrity
of gambling in Minnesota, or for an intentional false statement
made in a license application. The commissioner may suspend a
vendor license for up to one year or refuse to renew the license
or impose a civil penalty for a violation of law, order, or
rule. A license revocation or suspension is a contested case
under sections 14.57 to 14.69 of the Administrative Procedure
Act and is in addition to criminal penalties imposed for a
violation of law or rule.
new text end

new text begin (b) The commissioner may summarily suspend a vendor license
for not more than 90 days prior to a contested case hearing
where it is necessary to ensure the integrity of gambling. A
contested case hearing must be held within 20 days of the
summary suspension and the administrative law judge's report
must be issued within 20 days from the close of the hearing
record. In all cases involving summary suspension, the
commissioner must issue its final decision within 30 days from
receipt of the report of the administrative law judge and
subsequent exceptions and argument under section 14.61.
new text end

Sec. 5.

new text begin [299L.094] NONLOTTERY CASINO GAMES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this
section, the following terms have the meanings given them.
new text end

new text begin (b) "Nonlottery casino games" means any game authorized by
the commissioner to be conducted by a gaming facility licensee
at the gaming facility that is not a gaming machine or other
lottery game as defined by section 349A.01.
new text end

new text begin (c) "Nonlottery casino games' adjusted gross revenue" means
the sum of all money received from the operation of nonlottery
casino games, less the amounts paid out to players in prizes or
winnings and promotional allowances approved by the lottery
director under section 349A.17 in the nonlottery casino games.
new text end

new text begin Subd. 2. new text end

new text begin Operation. new text end

new text begin Nonlottery casino games may be
operated by the gaming facility licensee in conformance with a
plan of operation approved by the commissioner. The plan of
operation must include, at a minimum:
new text end

new text begin (1) specifying and defining all nonlottery games to be
played, including all governing aspects of each nonlottery
casino game;
new text end

new text begin (2) arrangements to ensure the security of nonlottery
casino gaming;
new text end

new text begin (3) internal control systems for play of nonlottery casino
games; and
new text end

new text begin (4) a plan for the training of nonlottery casino games
personnel in identification of problem gamblers and appropriate
action to prevent or control problem gambling.
new text end

new text begin Subd. 3. new text end

new text begin Plan amendment. new text end

new text begin The plan of operation may be
amended only with the approval of the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Actions. new text end

new text begin The commissioner may revoke, suspend,
refuse to renew, or impose a civil penalty upon the gaming
facility or the gaming management licensee for violation of the
plan of operation. An action under this subdivision shall be
conducted as a contested case under sections 14.57 to 14.69 of
the Administrative Procedures Act and is in addition to criminal
penalties imposed for violation of the plan of operation.
new text end

new text begin Subd. 5. new text end

new text begin Prizes. new text end

new text begin A person who plays a nonlottery casino
game at a gaming facility agrees to be bound by the rules and
game procedures applicable to that particular game. The player
acknowledges that the determination of whether the player has
won a prize is subject to the rules and game procedures adopted
by the plan of operation, claim procedures established by the
plan of operation for that game, and any confidential or public
validation tests established by the plan of operation for that
game. A person under 18 years of age may not claim a prize from
a nonlottery casino game at a gaming facility.
new text end

Sec. 6.

new text begin [299L.095] EMPLOYMENT RESTRICTIONS; CIVIL
PENALTY.
new text end

new text begin (a) The lottery director, the commissioner, or any manager,
director, or supervisor employed by the lottery or the
Department of Public Safety whose job responsibilities include
the oversight, audit, investigation, or regulation of gaming at
a gaming facility licensed by the commissioner must not, while
employed with or within one year after leaving employment,
receive compensation directly or indirectly from, or enter into
a contractual relationship with the tribal entity, racetrack, or
any management entity licensed by the commissioner pursuant to
section 299L.09 or 299L.091.
new text end

new text begin (b) The tribal entity, racetrack, or management entity
licensed by the commissioner must not negotiate with or offer to
employ or compensate the lottery director; commissioner; or any
manager, director, or supervisor employed by the lottery or the
Department of Public Safety whose job responsibilities include
the oversight, audit, investigation, or regulation of gaming at
a gaming facility licensed by the commissioner pursuant to
section 299L.09 or 299L.091 while the person is employed by the
lottery or the Department of Public Safety or within one year
after the person's employment has ended.
new text end

new text begin (c) A state employee who violates this section is subject
to a civil penalty not to exceed $10,000 for each violation.
The attorney general may bring an action in district court to
pursue a violation of this section.
new text end

new text begin (d) The commissioner may take administrative action in
relation to the gaming facility license or management license
for a violation of this section by a tribal entity, racetrack,
or management entity.
new text end

Sec. 7. new text beginEFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

ARTICLE 3

RACING COMMISSION

Section 1.

Minnesota Statutes 2004, section 240.13, is
amended by adding a subdivision to read:


new text begin Subd. 5a. new text end

new text begin Purses; gaming machines. new text end

new text begin From the fee received
by a licensee pursuant to a location contract entered into under
section 349A.17, the licensee must set aside an amount equal to
not less than 7.25 percent of the adjusted gross gaming machine
revenues as defined under chapter 349A, for purses for live
horse races conducted by the licensee. Purse payments made
pursuant to this subdivision are in addition to purse payments
otherwise established by law or contract. Twenty percent of the
money set aside for purses pursuant to this subdivision shall be
transferred to the commission and used for the purposes in
section 240.18, subdivisions 2, paragraph (d), and 3, paragraph
(b), subject to the proportionality requirement in section
240.18, subdivision 1. The licensee and the horseperson's
organization representing the majority of horsepersons who have
raced at the racetrack during the preceding 12 months may
negotiate percentages different from those stated in this
section if the agreement is in writing and filed with the Racing
Commission.
new text end

Sec. 2.

Minnesota Statutes 2004, section 240.135, is
amended to read:


240.135 CARD CLUB REVENUE.

(a) From the amounts received from charges authorized under
section 240.30, subdivision 4, new text beginor from revenue received from the
conducting of nonlottery casino games under section 299L.04,
new text endthe
licensee shall set aside the amounts specified in this section
to be used for purse payments. These amounts are in addition to
the breeders fund and purse requirements set forth elsewhere in
this chapter.

(1) For amounts between zero and $6,000,000, the licensee
shall set aside ten percent to be used as purses.

(2) For amounts in excess of $6,000,000, the licensee shall
set aside 14 percent to be used as purses.

(b) From all amounts set aside under paragraph (a), the
licensee shall set aside ten percent to be deposited in the
breeders fund. The licensee and the horseperson's organization
representing the majority of horsepersons who have raced at the
racetrack during the preceding 12 months may negotiate
percentages different from those stated in this section if the
agreement is in writing and filed with the Racing Commission.

(c) It is the intent of the legislature that the proceeds
of the card playing activities authorized by this chapter be
used to improve the horse racing industry by improving purses.
The commission shall annually review the financial details of
card playing activities and determine if the present use of card
playing proceeds is consistent with the policy established by
this paragraph. If the commission determines that the use of
the proceeds does not comply with the policy set forth herein,
then the commission shall direct the parties to make the changes
necessary to ensure compliance. If these changes require
legislation, the commission shall make the appropriate
recommendations to the legislature.

Sec. 3.

Minnesota Statutes 2004, section 240.30,
subdivision 1, is amended to read:


Subdivision 1.

Card club operation.

new text beginIf a class A
licensee is not operating a gaming facility under chapter 299L
or 349A,
new text enda class B licensee conducting pari-mutuel betting on
horse racing at a class A racetrack may operate a card club at
the racetrack and offer card playing services to patrons only if
the commission has authorized the licensee to operate a card
club operation under section 240.07, subdivision 3, paragraph
(b), and the commission has approved the licensee's plan of
operation under subdivision 6. The commission may withdraw its
authorization for operation of a card club at any time for a
violation of a law or rule governing card club operation.

ARTICLE 4

GAMING TRANSACTION FEE

Section 1.

new text begin [16A.901] GAMING FACILITY.
new text end

new text begin Subdivision 1. new text end

new text begin State lottery. new text end

new text begin (a) The State Lottery
must, on or before the 20th day of each month, transmit to the
commissioner, an amount equal to the adjusted gross gaming
machine revenue and other lottery games' adjusted gross revenue,
as defined in section 349A.01, for revenue derived from a gaming
facility operated by an entity other than a tribal entity as
defined in section 349A.17, for the previous month multiplied by
26 percent. Provided that if the lottery pays an adjustment to
the racetrack pursuant to section 349A.17, subdivision 2,
paragraph (g), clause (2), the lottery must deduct from its next
payment to the commissioner the amount paid by the lottery to
the racetrack as an adjustment.
new text end

new text begin (b) The State Lottery must, on or before the 20th day of
each month, transmit to the commissioner, an amount equal to the
adjusted gross gaming machine revenue and other lottery games'
adjusted gross revenue as defined in section 349A.01, for
revenue derived from a gaming facility operated by a tribal
entity as defined in section 349A.17, for the previous month
multiplied by 20 percent. Provided that if the lottery pays an
adjustment to the tribal entity pursuant to section 349A.17,
subdivision 2, paragraph (f), clause (5), the lottery must
deduct from its next payment to the commissioner the amount paid
by the lottery to the tribal entity as an adjustment.
new text end

new text begin (c) The payments imposed by this section are in lieu of the
tax imposed by section 297A.62 relating to wagering at the
gaming facility and any local taxes relating to wagering at the
gaming facility.
new text end

new text begin Subd. 2. new text end

new text begin Gaming facility licensee. new text end

new text begin A racetrack
authorized to conduct nonlottery casino games at a gaming
facility under section 299L.094, shall pay a gaming transaction
fee at the rate of 14 percent of nonlottery casino games'
adjusted gross revenue, as defined in section 299L.094. A
tribal entity authorized to conduct nonlottery casino games at a
gaming facility under section 299L.094 shall pay a gaming
transaction fee at the rate of ten percent of nonlottery casino
games' adjusted gross revenue, as defined in section 299L.094.
The racetrack and tribal entity authorized to conduct nonlottery
casino games at the gaming facility must make the payments due
under this subdivision to the commissioner on or before the 20th
day of each month for the adjusted gross revenue received for
the previous month.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of receipts. new text end

new text begin The commissioner shall
deposit the money transmitted under this section in the state
treasury to be credited as provided in section 2.
new text end

Sec. 2.

new text begin [16A.902] GAMING FACILITY PROCEEDS FUND.
new text end

new text begin A gaming facility proceeds fund is established in the state
treasury, consisting of money deposited in the fund under
section 16A.901, and any other money credited to the fund by law.
Money in the fund is appropriated as follows:
new text end

new text begin (1) ten percent of the receipts is annually appropriated to
the community assets account; and
new text end

new text begin (2) the remaining 90 percent of the receipts shall be
transferred to the general fund.
new text end

Sec. 3.

new text begin [16A.903] COMMUNITY ASSETS ACCOUNT.
new text end

new text begin A community assets account is established in the state
treasury, consisting of money deposited in the account under
section 16A.902, and interest earned thereon. Money in the
account may be spent, as appropriated by law, to help finance
capital projects that provide for facilities which provide a
public benefit to the state and local communities. Projects
that may be financed through an appropriation from this account
include, but are not limited to, the following: stadiums and
other athletic facilities for professional, college, and amateur
sports; museums, theaters, and other facilities for the arts;
recreational facilities; planetariums; and zoos.
new text end

Sec. 4. new text beginEFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

ARTICLE 5

MISCELLANEOUS PROVISIONS

Section 1.

Minnesota Statutes 2004, section 299L.07,
subdivision 2, is amended to read:


Subd. 2.

Exclusions.

Notwithstanding subdivision 1, a
gambling device:

(1) may be sold by a person who is not licensed under this
section, if the person (i) is not engaged in the trade or
business of selling gambling devices, and (ii) does not sell
more than one gambling device in any calendar year;

(2) may be sold by the governing body of a federally
recognized Indian tribe described in subdivision 2a, paragraph
(b), clause (1), which is not licensed under this section, if
(i) the gambling device was operated by the Indian tribe, (ii)
the sale is to a distributor licensed under this section, and
(iii) the licensed distributor notifies the commissioner of the
purchase, in the same manner as is required when the licensed
distributor ships a gambling device into Minnesota;

(3) may be possessed by a person not licensed under this
section if the person holds a permit issued under section
299L.08; deleted text beginand
deleted text end

(4) may be possessed by a state agency, with the written
authorization of the director, for display or evaluation
purposes only and not for the conduct of gamblingnew text begin; and
new text end

new text begin (5) may be possessed by the State Lottery as authorized
under chapter 349A
new text end.

Sec. 2.

Minnesota Statutes 2004, section 299L.07,
subdivision 2a, is amended to read:


Subd. 2a.

Restrictions.

(a) A manufacturer licensed
under this section may sell, offer to sell, lease, or rent, in
whole or in part, a gambling device only to a distributor
licensed under this section new text beginor to the State Lottery as
authorized under chapter 349A
new text end.

(b) A distributor licensed under this section may sell,
offer to sell, market, rent, lease, or otherwise provide, in
whole or in part, a gambling device only to:

(1) the governing body of a federally recognized Indian
tribe that is authorized to operate the gambling device under a
tribal state compact under the Indian Gaming Regulatory Act,
Public Law 100-497, and future amendments to it;

(2) a person for use in the person's dwelling for display
or amusement purposes in a manner that does not afford players
an opportunity to obtain anything of value;

(3) another distributor licensed under this section; deleted text beginor
deleted text end

(4) a person in another state who is authorized under the
laws of that state to possess the gambling devicenew text begin; or
new text end

new text begin (5) the State Lottery as authorized under chapter 349Anew text end.

Sec. 3.

Minnesota Statutes 2004, section 340A.410,
subdivision 5, is amended to read:


Subd. 5.

Gambling prohibited.

(a) Except as otherwise
provided in this subdivision, no retail establishment licensed
to sell alcoholic beverages may keep, possess, or operate, or
permit the keeping, possession, or operation on the licensed
premises of dice or any gambling device as defined in section
349.30, or permit gambling therein.

(b) Gambling equipment may be kept or operated and raffles
conducted on licensed premises and adjoining rooms when the use
of the gambling equipment is authorized by (1) chapter 349, (2)
a tribal ordinance in conformity with the Indian Gaming
Regulatory Act, Public Law 100-497, or (3) a tribal-state
compact authorized under section 3.9221.

(c) Lottery tickets may be purchased and sold within the
licensed premises as authorized by the director of the lottery
under chapter 349A.

(d) Dice may be kept and used on licensed premises and
adjoining rooms as authorized by section 609.761, subdivision 4.

new text begin (e) Gambling devices may be operated and gambling permitted
at a gaming facility as authorized by chapters 299L and 349A.
new text end

Sec. 4.

Minnesota Statutes 2004, section 541.20, is
amended to read:


541.20 RECOVERY OF MONEY LOST.

Every person who, by playing at cards, dice, or other game,
or by betting on the hands or sides of such as are gambling,
shall lose to any person so playing or betting any sum of money
or any goods, and pays or delivers the same, or any part
thereof, to the winner, may sue for and recover such money by a
civil action, before any court of competent jurisdiction. For
purposes of this section, gambling shall not include pari-mutuel
wagering conducted under a license issued pursuant to chapter
240, purchase or sale of tickets in the state lottery, new text beginpurchase
of gaming machine plays as authorized under chapter 349A,
conduct of any lottery or nonlottery casino games at a gaming
facility as authorized under chapters 299L and 349A,
new text endor gambling
authorized under chapters 349 and 349A.

Sec. 5.

Minnesota Statutes 2004, section 541.21, is
amended to read:


541.21 COMMITMENTS FOR GAMBLING DEBT VOID.

Every note, bill, bond, mortgage, or other security or
conveyance in which the whole or any part of the consideration
shall be for any money or goods won by gambling or playing at
cards, dice, or any other game whatever, or by betting on the
sides or hands of any person gambling, or for reimbursing or
repaying any money knowingly lent or advanced at the time and
place of such gambling or betting, or lent and advanced for any
gambling or betting to any persons so gambling or betting, shall
be void and of no effect as between the parties to the same, and
as to all persons except such as hold or claim under them in
good faith, without notice of the illegality of the
consideration of such contract or conveyance. The provisions of
this section shall not apply to: (1) pari-mutuel wagering
conducted under a license issued pursuant to chapter 240; (2)
purchase of tickets in the state lottery new text beginor other wagering
authorized
new text endunder chapter new text begin299L or new text end349A; (3) gaming activities
conducted pursuant to the Indian Gaming Regulatory Act, 25
U.S.C. 2701 et seq.; or (4) lawful gambling activities permitted
under chapter 349.

Sec. 6.

Minnesota Statutes 2004, section 609.75,
subdivision 3, is amended to read:


Subd. 3.

What are not bets.

The following are not bets:

(1) A contract to insure, indemnify, guarantee or otherwise
compensate another for a harm or loss sustained, even though the
loss depends upon chance.

(2) A contract for the purchase or sale at a future date of
securities or other commodities.

(3) Offers of purses, prizes or premiums to the actual
contestants in any bona fide contest for the determination of
skill, speed, strength, endurance, or quality or to the bona
fide owners of animals or other property entered in such a
contest.

(4) The game of bingo when conducted in compliance with
sections 349.11 to 349.23.

(5) A private social bet not part of or incidental to
organized, commercialized, or systematic gambling.

(6) The operation of equipment or the conduct of a raffle
under sections 349.11 to 349.22, by an organization licensed by
the Gambling Control Board or an organization exempt from
licensing under section 349.166.

(7) Pari-mutuel betting on horse racing when the betting is
conducted under chapter 240.

(8) The purchase and sale of state lottery tickets under
chapter 349A.

new text begin (9) Plays on a gaming machine, or purchase or participating
in any lottery or nonlottery casino game at a gaming facility
authorized under chapter 299L or 349A.
new text end

Sec. 7.

Minnesota Statutes 2004, section 609.761, is
amended by adding a subdivision to read:


new text begin Subd. 6. new text end

new text begin Gaming facility. new text end

new text beginSections 609.755 and 609.76 do
not prohibit the manufacture, possession, sale, or operation of
a gaming machine at a gaming facility under chapter 349A, or the
conduct of any other lottery or nonlottery casino game at a
gaming facility under chapters 299L and 349A
new text end.

Sec. 8. new text beginSEVERABILITY; SAVINGS.
new text end

new text begin If any part of this act is found to be invalid because it
is in conflict with a provision of the Constitution of the State
of Minnesota or the Constitution of the United States, or for
any other reason, all other provisions of this act shall remain
valid and any rights, remedies, and privileges that have been
otherwise accrued by this act, shall remain in effect and may be
proceeded with and concluded under the provisions of this act.
new text end

Sec. 9. new text beginEFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

ARTICLE 6

APPROPRIATIONS

Section 1. new text beginAPPROPRIATIONS.
new text end

new text begin Revenue raised by this act is appropriated from the general
fund in fiscal years 2006 and 2007 as specified in this article.
new text end

Sec. 2. new text beginEDUCATION.
new text end

new text begin $134,000,000 is appropriated to offset the reduction in
spending in H.F. No. 872, article 5, that would become effective
if H.F. No. 1664 is not passed by the house of representatives.
Reductions in appropriations under H.F. No. 872, article 5,
section 13, are negated by the appropriation in this section.
new text end

Sec. 3. new text beginHIGHER EDUCATION.
new text end

new text begin $25,450,000 is appropriated to the agencies and for the
purposes indicated in H.F. No. 1385, article 5. This
appropriation replaces the appropriations in H.F. No. 1385,
article 5, that otherwise would only become effective if H.F. No.
1664 is passed by the house of representatives.
new text end

Sec. 4. new text beginHEALTH.
new text end

new text begin $20,000,000 is appropriated to the agencies and for the
purposes indicated in H.F. No. 1422, article 11. This
appropriation replaces the appropriations in of H.F. No. 1422,
article 11, that otherwise would only become effective if H.F.
No. 1664 is passed by the house of representatives.
new text end

Sec. 5. new text beginJOBS AND ECONOMIC OPPORTUNITY.
new text end

new text begin $15,000,000 is appropriated to the agencies and for the
purposes indicated in H.F. No. 1976, article 7. This
appropriation replaces the appropriations in of H.F. No. 1976,
article 7, that otherwise would only become effective if H.F. No.
1664 is passed by the house of representatives.
new text end

Sec. 6. new text beginENVIRONMENT AND NATURAL RESOURCES.
new text end

new text begin $11,400,000 is appropriated to the agencies and for the
purposes that would otherwise be reduced in H.F. No. 902,
article 2, if H.F. No. 1664 is not passed by the house of
representatives. Reductions in appropriations under H.F. No.
902, article 2, are negated by the appropriation in this section.
new text end

Sec. 7. new text beginPUBLIC SAFETY.
new text end

new text begin $4,500,000 is appropriated to the agencies and for the
purposes indicated in H.F. No. 1, article 19. This
appropriation replaces the appropriation in H.F. No. 1, article
19, that otherwise would only become effective if H.F. No. 1664
is passed by the house of representatives.
new text end