HF 2100

1st Committee Engrossment - 86th Legislature (2009 - 2010) Posted on 03/19/2013 07:29pm

1.1A bill for an act

1.2relating to economic development; creating jobs, family, and economic
1.3development fund; modifying or adding provisions relating to gambling at
1.4racetracks; requiring reports on use of federal money for biomass; imposing
1.5gross misdemeanor penalty;amending Minnesota Statutes 2008, sections 240.07,
1.6subdivision 3; 240.35, subdivision 1; 299L.07, subdivisions 2, 2a; 340A.410,
1.7subdivision 5; 541.20; 541.21; proposing coding for new law in Minnesota
1.8Statutes, chapters 3; 240.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10    Section 1. [3.886] JOBS, FAMILY, AND ECONOMIC DEVELOPMENT FUND.
1.11The jobs, family, and economic development fund is created as a separate fund in
1.12the state treasury. The fund consists of money deposited in the fund pursuant to section
1.13240.31, subdivision 5. Appropriations from the fund may be on an annual or biennial basis
1.14and are dedicated for the following purposes.
1.15(a) Twenty percent of the fund is dedicated and may be appropriated for agricultural
1.16and rural development, including livestock and biomass-related development including
1.17biofuel development grants and investments to stimulate other businesses and employment
1.18opportunities.
1.19(b) Twenty percent of the fund is dedicated and may be appropriated for early
1.20childhood development and family education.
1.21(c) Twenty percent of the fund is dedicated and may be appropriated for research
1.22and development of bioscience and medical technology businesses and employment
1.23opportunities. During the first two years, 50 percent of the grants authorized by this
1.24paragraph shall be for attracting bioscience and high-technology jobs to the Elk Run Park
1.25and the University of Minnesota Research Parks.
2.1(d) Twenty percent of the fund is dedicated and may be appropriated for athletic,
2.2recreational, and extracurricular facilities and programs and to stimulate capital
2.3improvements and employment.
2.4(e) Twenty percent of the fund is dedicated and may be appropriated for general
2.5fund expenditures.

2.6    Sec. 2. Minnesota Statutes 2008, section 240.07, subdivision 3, is amended to read:
2.7    Subd. 3. License issuance. (a) If after considering the information received from
2.8the hearing and investigations, the commission determines that the applicant will conduct
2.9horse racing in accordance with all applicable laws and rules, will not adversely affect the
2.10public health, welfare, and safety, that the license will not create a competitive situation
2.11that will adversely affect racing and the public interest and that the applicant is fit to
2.12sponsor and manage racing, the commission may issue a class B license.
2.13(b) If the commission determines that the licensee will operate a card club in
2.14accordance with all applicable law and rules and the applicant's approved plan of operation
2.15under section 240.30, subdivision 6, that the operation of a card club by the licensee will
2.16not adversely affect the public health, welfare, and safety, and that the licensee is fit to
2.17operate a card club, the commission may include with the class B license an authorization
2.18to conduct a card club at the licensee's class A racetrack as provided in section 240.30.
2.19The commission may give an interim authorization for the operation of a card club that
2.20is effective until the expiration of the licensee's class B license and may charge for the
2.21interim authorization a proportionate amount of the additional class B license fee under
2.22section 240.10.
2.23(c) If the commission determines that the licensee will operate additional gambling
2.24activities under section 240.31 in accordance with applicable laws and rules and the
2.25applicant's approved plan of operation, and that the operation of the activity will not
2.26adversely affect the public health, welfare, and safety, and that the licensee is fit to conduct
2.27the activity, the commission may include with the class B license an authorization to
2.28conduct additional gambling activities at the licensee's class A racetrack as provided in
2.29section 240.31. The commission may give an interim authorization for the operation of
2.30the activity that is effective until the expiration of the licensee's class B license. The
2.31commission shall not authorize a class B licensee to conduct gambling activities, pursuant
2.32to section 240.31, unless the licensee has, within the preceding 12 months, conducted 75
2.33days of live racing, consisting of not less than eight live races on each racing day, at the
2.34class A facility where the licensee conducts racing. For licensees seeking approval for the
2.35first time, the 75-day racing requirement shall be deemed to have been met if the licensee
3.1has applied for and been granted at least 75 days of live racing to be conducted in the next
3.2race meet. The live racing requirement established by this paragraph may be adjusted
3.3by written agreement between a class B licensee and the horsepersons' organization
3.4representing the majority of all owners and trainers licensed by the commission. Any
3.5agreement entered into under this paragraph must be filed with the commission.
3.6(d) The license is for a period of one year.

3.7    Sec. 3. [240.31] OTHER GAMES.
3.8    Subdivision 1. Authorization. The commission may authorize a class B operator
3.9of a class A racetrack, which is specifically authorized to conduct gambling activities in
3.10addition to pari-mutuel horse race wagering, to operate gaming machines and to conduct
3.11banked card games. For the purposes of this subdivision, a "gaming machine" means any
3.12device that may provide something of value to a person operating the device, the award of
3.13which is based, in whole or in part, upon chance.
3.14    Subd. 2. Installation and operation permitted. A class B licensee authorized by
3.15this section may own or lease, install, maintain, and operate gaming machines within
3.16the licensed premises of the licensee's class A racetrack, as defined in the approved
3.17class A license, if the commission has authorized the operation as provided in section
3.18240.07, subdivision 3, paragraph (c). The commission may withdraw its authorization
3.19for operation of gaming machines at any time for a violation of a law or rule governing
3.20gaming machine operation.
3.21    Subd. 3. Supervision. (a) A class B licensee who operates gaming machines at
3.22the licensee's class A racetrack is responsible for conducting and supervising gaming
3.23machine play and operation; providing all necessary equipment, services, and personnel;
3.24and reimbursing the commission for costs related to gaming machine regulation and
3.25enforcement.
3.26(b) The commission and its representatives, and the director of the Division of
3.27Alcohol and Gambling Enforcement and the division's representatives, have the right, at
3.28any time without prior notice and without a search warrant, to (1) inspect the licensee's
3.29books, records, and other indicators of total plays on and gross receipts from gaming
3.30machines on the licensed premises, (2) inspect any computer hardware or software that
3.31relate to the operation of gaming machines on the licensed premises, and (3) have
3.32unrestricted access to any part of any gaming machine on the licensed premises.
3.33    Subd. 4. Plan of operation. (a) The commission shall not authorize a class
3.34B licensee to operate gaming machines unless the licensee has submitted, and the
3.35commission has approved, a plan of operation for gaming machine operation. The plan
4.1must set forth all necessary details for the operation of gaming machines, including but
4.2not limited to:
4.3(1) types of games to be offered;
4.4(2) designation of the licensee's employees who will have access to the interior
4.5and exterior of gaming machines;
4.6(3) designation of the licensee's employees who will have access to cash inserted
4.7and removed from gaming machines;
4.8(4) security measures and internal control systems to be adopted and implemented
4.9by the licensee to ensure integrity of gaming machine play and security of all money
4.10removed from gaming machines;
4.11(5) measures to be adopted and implemented by the licensee to ensure the security
4.12and safety of patrons of that portion of the licensed premises where gaming machines
4.13are operated;
4.14(6) a description of the design, manufacture, and operation of gaming machines the
4.15licensee will own or lease and operate; and
4.16(7) a plan for the training of all personnel who work in that portion of the licensed
4.17premises where gaming machines are operated in the identification of problem gamblers
4.18and appropriate action to prevent or control problem gambling.
4.19(b) Deviation from the standards in paragraph (a) requires prior approval of the
4.20commission in the same manner as amendments to the plan of operation under this
4.21subdivision.
4.22    Subd. 5. Amendments to plan. The licensee may amend the plan of operation and
4.23implement those amendments only with the commission's prior approval.
4.24    Subd. 6. Violations of plan. (a) A violation of an approved plan of operation,
4.25or implementation of an amendment to an approved plan of operation without the
4.26commission's prior approval, is deemed to be a violation of law or a rule of the commission.
4.27(b) Gaming machine play and operation are deemed to be relevant to the integrity of
4.28horse racing activities in Minnesota for purposes of sections 240.03; 240.06, subdivision
4.297; 240.08; and 240.27, subdivision 1.
4.30    Subd. 7. Removal of nonconforming machines. The commission or its authorized
4.31representatives, and the director of alcohol and gambling enforcement and the director's
4.32authorized representatives, may administratively order a class B licensee to remove
4.33from use any gaming machine that the commission or director determines to be out of
4.34compliance with the approved plan of operation.
5.1    Subd. 8. Minimum age for play. A licensee may not permit a person under the age
5.2of 18 to play a game on or win a prize from a gaming machine that the licensee operates.
5.3Violation of this subdivision is a gross misdemeanor.
5.4    Subd. 9. Posting of notice. A class B licensee who has been authorized to
5.5operate gaming machines must prominently post, in the portion of the licensed premises
5.6where gaming machines are operated, the toll-free telephone number established by the
5.7commissioner of human services in connection with the compulsive gambling program
5.8established under section 245.98.
5.9    Subd. 10. Local regulation prohibited. Except as provided in section 240.17, a
5.10political subdivision may not prohibit or regulate gaming machines authorized under this
5.11section, or impose a tax on the proceeds of gaming machines authorized under this section.
5.12    Subd. 11. Purses. From the sum of all money received by the licensee from
5.13gambling activities authorized under subdivision 1, less the amount paid out in prizes
5.14and winnings and fees required, pursuant to subdivision 14, the licensee must set aside
5.15a minimum of ten percent for purses for live horse races conducted at class A facilities
5.16in the state. The minimum amount of purse set-aside is increased to 14 percent for any
5.17activities conducted five years or more after the enactment of this section. Set-asides
5.18required by this paragraph shall be transmitted to the commission, which shall establish
5.19an account for each breed racing in the state. The commission shall allocate these funds
5.20based on the percentage of wagering handled on each breed for races conducted at class
5.21A facilities as compared to the total amount of wagering handled on races conducted at
5.22class A facilities during the previous calendar year. The commission shall transfer 15
5.23percent of the amount allocated to each breed to its breeder's fund to be distributed in the
5.24manner provided for money generated by full racing card simulcasting, pursuant to section
5.25240.15, subdivision 6. The commission shall routinely transfer the remaining money in
5.26the accounts to the licensees conducting racing for each breed and direct the licensee to
5.27augment the purses for that breed with the funds received from the commission. Purse
5.28augmentations required pursuant to this subdivision are in addition to purse payments
5.29otherwise established by law or contract.
5.30    Subd. 12. Reimbursement to commission. The commission shall require that
5.31the licensee reimburse it for the commission's actual costs of regulating any additional
5.32gambling activities under this section. Amounts received under this subdivision must be
5.33deposited as provided in section 240.155, subdivision 1.
5.34    Subd. 13. Reporting. The class B licensee shall report all income generated by the
5.35additional gambling activities in an annual report to the Racing Commission. The report
6.1shall also account for all costs of operation, taxes paid, purses paid, and amounts paid to
6.2the breeder's fund.
6.3    Subd. 14. Fee. The licensee must pay to the commission an annual gambling
6.4activities fee equal to 32 percent of all money received by the licensee from gambling
6.5activities authorized under this section, less the amount paid out in prizes and winnings.
6.6The fee established by this subdivision shall be 42 percent on amounts received by a
6.7licensee in excess of $125,000,000 in a calendar year, less the amount paid out in prizes
6.8and winnings. The licensee must pay this fee on a quarterly basis. The commission shall
6.9distribute the fee revenue it collects, on a quarterly basis, as follows:
6.10(1) one percent of the amount paid by each licensee to the city in which the licensee
6.11is conducting games authorized, pursuant to this section;
6.12(2) one percent to the county in which the licensee is conducting games authorized,
6.13pursuant to this section; and
6.14(3) the remainder to the commissioner of revenue for deposit in the jobs, family, and
6.15economic development fund established in section 3.886.

6.16    Sec. 4. Minnesota Statutes 2008, section 240.35, subdivision 1, is amended to read:
6.17    Subdivision 1. Generally. A licensee of the commission may detain a person if the
6.18licensee has probable cause to believe that the person detained has violated section 609.76
6.19while at a card club authorized by section 240.30, or while participating in gambling
6.20activities authorized by section 240.31. For purposes of this section, "licensee" means the
6.21commission's director of racing security or a security officer licensed under Minnesota
6.22Rules, chapter 7878.

6.23    Sec. 5. Minnesota Statutes 2008, section 299L.07, subdivision 2, is amended to read:
6.24    Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
6.25(1) may be sold by a person who is not licensed under this section, if the person (i) is
6.26not engaged in the trade or business of selling gambling devices, and (ii) does not sell
6.27more than one gambling device in any calendar year;
6.28(2) may be sold by the governing body of a federally recognized Indian tribe
6.29described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
6.30section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
6.31a distributor licensed under this section, and (iii) the licensed distributor notifies the
6.32commissioner of the purchase, in the same manner as is required when the licensed
6.33distributor ships a gambling device into Minnesota;
7.1(3) may be possessed by a person not licensed under this section if the person holds
7.2a permit issued under section 299L.08; and
7.3(4) may be possessed by a state agency, with the written authorization of the director,
7.4for display or evaluation purposes only and not for the conduct of gambling; and
7.5(5) may be possessed by a licensee authorized to conduct gambling activities
7.6pursuant to section 240.31, subdivision 1.

7.7    Sec. 6. Minnesota Statutes 2008, section 299L.07, subdivision 2a, is amended to read:
7.8    Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
7.9offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
7.10licensed under this section or to a licensee authorized to conduct gambling activities
7.11pursuant to section 240.31, subdivision 1.
7.12(b) A distributor licensed under this section may sell, offer to sell, market, rent,
7.13lease, or otherwise provide, in whole or in part, a gambling device only to:
7.14(1) the governing body of a federally recognized Indian tribe that is authorized
7.15to operate the gambling device under a tribal state compact under the Indian Gaming
7.16Regulatory Act, Public Law 100-497, and future amendments to it;
7.17(2) a person for use in the person's dwelling for display or amusement purposes in a
7.18manner that does not afford players an opportunity to obtain anything of value;
7.19(3) another distributor licensed under this section; or
7.20(4) a person in another state who is authorized under the laws of that state to possess
7.21the gambling device; or
7.22(5) to a licensee authorized to conduct gambling activities pursuant to section
7.23240.31, subdivision 1.

7.24    Sec. 7. Minnesota Statutes 2008, section 340A.410, subdivision 5, is amended to read:
7.25    Subd. 5. Gambling prohibited. (a) Except as otherwise provided in this
7.26subdivision, no retail establishment licensed to sell alcoholic beverages may keep, possess,
7.27or operate, or permit the keeping, possession, or operation on the licensed premises of dice
7.28or any gambling device as defined in section 349.30, or permit gambling therein.
7.29(b) Gambling equipment may be kept or operated and raffles conducted on licensed
7.30premises and adjoining rooms when the use of the gambling equipment is authorized by
7.31(1) chapter 349, (2) a tribal ordinance in conformity with the Indian Gaming Regulatory
7.32Act, Public Law 100-497, or (3) a tribal-state compact authorized under section 3.9221.
7.33(c) Lottery tickets may be purchased and sold within the licensed premises as
7.34authorized by the director of the lottery under chapter 349A.
8.1(d) Dice may be kept and used on licensed premises and adjoining rooms as
8.2authorized by section 609.761, subdivision 4.
8.3(e) Gambling devices may be operated on the premises of a licensed racetrack as
8.4authorized by section 240.31, subdivision 1.

8.5    Sec. 8. Minnesota Statutes 2008, section 541.20, is amended to read:
8.6541.20 RECOVERY OF MONEY LOST.
8.7Every person who, by playing at cards, dice, or other game, or by betting on the hands
8.8or sides of such as are gambling, shall lose to any person so playing or betting any sum of
8.9money or any goods, and pays or delivers the same, or any part thereof, to the winner,
8.10may sue for and recover such money by a civil action, before any court of competent
8.11jurisdiction. For purposes of this section, gambling shall not include pari-mutuel or other
8.12wagering activity conducted under a license issued pursuant to chapter 240, purchase or
8.13sale of tickets in the state lottery, or gambling authorized under chapters 349 and 349A.

8.14    Sec. 9. Minnesota Statutes 2008, section 541.21, is amended to read:
8.15541.21 COMMITMENTS FOR GAMBLING DEBT VOID.
8.16Every note, bill, bond, mortgage, or other security or conveyance in which the whole
8.17or any part of the consideration shall be for any money or goods won by gambling or
8.18playing at cards, dice, or any other game whatever, or by betting on the sides or hands
8.19of any person gambling, or for reimbursing or repaying any money knowingly lent or
8.20advanced at the time and place of such gambling or betting, or lent and advanced for any
8.21gambling or betting to any persons so gambling or betting, shall be void and of no effect
8.22as between the parties to the same, and as to all persons except such as hold or claim under
8.23them in good faith, without notice of the illegality of the consideration of such contract or
8.24conveyance. The provisions of this section shall not apply to: (1) pari-mutuel or other
8.25wagering activity conducted under a license issued pursuant to chapter 240; (2) purchase
8.26of tickets in the state lottery under chapter 349A; (3) gaming activities conducted pursuant
8.27to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.; or (4) lawful gambling
8.28activities permitted under chapter 349.

8.29    Sec. 10. REPORTS ON USE OF FEDERAL MONEY ON BIOMASS
8.30ESTABLISHMENT.
8.31The commissioner of agriculture shall study and report to the legislative committees
8.32with jurisdiction over agriculture and energy policy and finance on the use made of federal
8.33programming money authorized by title IX of the 2008 Farm Bill for biomass-related
9.1research, development, production, and establishment in Minnesota. The commissioner
9.2may make recommendations regarding additional, future utilization of biomass in
9.3Minnesota in any interim or final report. The commissioner shall submit interim reports
9.4by the first week of February annually through 2012 and submit the final report by the
9.5first week of January 2013.
9.6EFFECTIVE DATE.This section is effective the day following final enactment.