HF 3399

as introduced - 86th Legislature (2009 - 2010) Posted on 03/04/2010 09:56am

A bill for an act
relating to economic development; creating the jobs, family, and economic
development fund; providing a funding mechanism for agricultural, rural,
early childhood, bioscience, medical technology, and economic development;
providing a funding mechanism for athletic, recreational, and extracurricular
activities and capital improvements; providing for and regulating gaming
activities at racetracks and increasing purses; amending Minnesota Statutes 2008,
sections 240.07, subdivision 3; 240.35, subdivision 1; 299L.07, subdivisions 2,
2a; 340A.410, subdivision 5; 541.20; 541.21; proposing coding for new law in
Minnesota Statutes, chapters 3; 240.

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

Section 1.

new text begin [3.886] JOBS, FAMILY, AND ECONOMIC DEVELOPMENT FUND.
new text end

new text begin The jobs, family, and economic development fund is created as a separate fund in
the state treasury. The fund consists of money deposited in the fund pursuant to section
240.31, subdivision 5. Appropriations from the fund may be on an annual or biennial basis
and are dedicated for the following purposes.
new text end

new text begin (1) Twenty percent of the fund is dedicated and may be appropriated for agricultural
and rural development, including livestock and biofuel development grants and
investments to stimulate other businesses and employment opportunities.
new text end

new text begin (2) Twenty percent of the fund is dedicated and may be appropriated for early
childhood development and family education.
new text end

new text begin (3) Twenty percent of the fund is dedicated and may be appropriated for research
and development of bioscience and medical technology businesses and employment
opportunities. During the first two years, 50 percent of the grants authorized by this
paragraph shall be for attracting bioscience and high-technology jobs to the Elk Run Park
and the University of Minnesota Research Parks.
new text end

new text begin (4) Twenty percent of the fund is dedicated and may be appropriated for athletic,
recreational, and extracurricular facilities and programs and to stimulate capital
improvements and employment.
new text end

new text begin (5) Twenty percent of the fund is dedicated and may be appropriated for general
fund expenditures.
new text end

Sec. 2.

Minnesota Statutes 2008, section 240.07, subdivision 3, is amended to read:

Subd. 3.

License issuance.

(a) If after considering the information received from
the hearing and investigations, the commission determines that the applicant will conduct
horse racing in accordance with all applicable laws and rules, will not adversely affect the
public health, welfare, and safety, that the license will not create a competitive situation
that will adversely affect racing and the public interest and that the applicant is fit to
sponsor and manage racing, the commission may issue a class B license.

(b) If the commission determines that the licensee will operate a card club in
accordance with all applicable law and rules and the applicant's approved plan of operation
under section 240.30, subdivision 6, that the operation of a card club by the licensee will
not adversely affect the public health, welfare, and safety, and that the licensee is fit to
operate a card club, the commission may include with the class B license an authorization
to conduct a card club at the licensee's class A racetrack as provided in section 240.30.
The commission may give an interim authorization for the operation of a card club that
is effective until the expiration of the licensee's class B license and may charge for the
interim authorization a proportionate amount of the additional class B license fee under
section 240.10.

new text begin (c) If the commission determines that the licensee will operate additional gambling
activities under section 240.31 in accordance with applicable laws and rules and the
applicant's approved plan of operation, and that the operation of the activity will not
adversely affect the public health, welfare, and safety, and that the licensee is fit to conduct
the activity, the commission may include with the class B license an authorization to
conduct additional gambling activities at the licensee's class A racetrack as provided in
section 240.31. The commission may give an interim authorization for the operation of
the activity that is effective until the expiration of the licensee's class B license and may
charge a proportionate amount of the additional class B license fee under section 240.10
for the interim authorization. The commission shall not authorize a class B licensee to
conduct gambling activities, pursuant to section 240.31, unless the licensee has, within the
preceding 12 months, conducted 75 days of live racing, consisting of not less than eight
live races on each racing day, at the class A facility where the licensee conducts racing.
For licensees seeking approval for the first time, the 75-day racing requirement shall be
deemed to have been met if the licensee has applied for and been granted at least 75
days of live racing to be conducted in the next race meet. The live racing requirement
established by this paragraph may be adjusted by written agreement between a class B
licensee and the horsepersons' organization representing the majority of all owners and
trainers licensed by the commission. Any agreement entered into under this paragraph
must be filed with the commission.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end The license is for a period of one year.

Sec. 3.

new text begin [240.31] OTHER GAMES.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin The commission may authorize a class B operator
of a class A racetrack, which is specifically authorized to conduct gambling activities in
addition to pari-mutuel horse race wagering, to operate gaming machines and to conduct
banked card games. For the purposes of this subdivision, a "gaming machine" means any
device that may provide something of value to a person operating the device, the award of
which is based, in whole or in part, upon chance.
new text end

new text begin Subd. 2. new text end

new text begin Installation and operation permitted. new text end

new text begin A class B licensee authorized by
this section may own or lease, install, maintain, and operate gaming machines within
the licensed premises of the licensee's class A racetrack, as defined in the approved
class A license, if the commission has authorized the operation as provided in section
240.07, subdivision 3, paragraph (c). The commission may withdraw its authorization
for operation of gaming machines at any time for a violation of a law or rule governing
gaming machine operation.
new text end

new text begin Subd. 3. new text end

new text begin Supervision. new text end

new text begin (a) A class B licensee who operates gaming machines at
the licensee's class A racetrack is responsible for conducting and supervising gaming
machine play and operation, providing all necessary equipment, services, and personnel,
and reimbursing the commission for costs related to gaming machine regulation and
enforcement.
new text end

new text begin (b) The commission and its representatives, and the director of the division of
alcohol and gambling enforcement and the division's representatives, have the right, at any
time without prior notice and without a search warrant, to (1) inspect the licensee's books,
records, and other indicators of total plays on and gross receipts from gaming machines on
the licensed premises, (2) inspect any computer hardware or software that relate to the
operation of gaming machines on the licensed premises, and (3) have unrestricted access
to any part of any gaming machine on the licensed premises.
new text end

new text begin Subd. 4. new text end

new text begin Plan of operation. new text end

new text begin (a) The commission shall not authorize a class
B licensee to operate gaming machines unless the licensee has submitted, and the
commission has approved, a plan of operation for gaming machine operation. The plan
must set forth all necessary details for the operation of gaming machines, including but
not limited to:
new text end

new text begin (1) types of games to be offered;
new text end

new text begin (2) designation of the licensee's employees who will have access to the interior
and exterior of gaming machines;
new text end

new text begin (3) designation of the licensee's employees who will have access to cash inserted
and removed from gaming machines;
new text end

new text begin (4) security measures and internal control systems to be adopted and implemented
by the licensee to insure integrity of gaming machine play and security of all money
removed from gaming machines;
new text end

new text begin (5) measures to be adopted and implemented by the licensee to insure the security
and safety of patrons of that portion of the licensed premises where gaming machines
are operated;
new text end

new text begin (6) a description of the design, manufacture, and operation of gaming machines the
licensee will own or lease and operate; and
new text end

new text begin (7) a plan for the training of all personnel who work in that portion of the licensed
premises where gaming machines are operated in the identification of problem gamblers
and appropriate action to prevent or control problem gambling.
new text end

new text begin (b) Deviation from the standards in paragraph (a) requires prior approval of the
commission in the same manner as amendments to the plan of operation under this
subdivision.
new text end

new text begin Subd. 5. new text end

new text begin Amendments to plan. new text end

new text begin The licensee may amend the plan of operation and
implement those amendments only with the commission's prior approval.
new text end

new text begin Subd. 6. new text end

new text begin Violations of plan. new text end

new text begin (a) A violation of an approved plan of operation,
or implementation of an amendment to an approved plan of operation without the
commission's prior approval, is deemed to be a violation of a rule of the commission.
new text end

new text begin (b) Gaming machine play and operation are deemed to be relevant to the integrity of
horse racing activities in Minnesota for purposes of sections 240.03; 240.06, subdivision
7; 240.08; and 240.27, subdivision 1.
new text end

new text begin Subd. 7. new text end

new text begin Removal of nonconforming machines. new text end

new text begin The commission or its authorized
representatives, and the director of Alcohol and Gambling Enforcement and its authorized
representatives, may order a class B licensee to remove from use any gaming machine
that the commission or director determines to be out of compliance with the approved
plan of operation.
new text end

new text begin Subd. 8. new text end

new text begin Minimum age for play. new text end

new text begin A licensee may not permit a person under the age
of 18 to play a game on or win a prize from a gaming machine that the licensee operates.
Violation of this subdivision is a gross misdemeanor.
new text end

new text begin Subd. 9. new text end

new text begin Posting of notice. new text end

new text begin A class B licensee who has been authorized to
operate gaming machines must prominently post, in the portion of the licensed premises
where gaming machines are operated, the toll-free telephone number established by the
commissioner of human services in connection with the compulsive gambling program
established under section 245.98.
new text end

new text begin Subd. 10. new text end

new text begin Local regulation prohibited. new text end

new text begin Except as provided in section 240.17,
subdivision 4, a political subdivision may not prohibit or regulate gaming machines
authorized under this section, or impose a tax on the proceeds of gaming machines
authorized under this section.
new text end

new text begin Subd. 11. new text end

new text begin Purses. new text end

new text begin From the sum of all money received by the licensee from
gambling activities authorized under subdivision 1, less the amount paid out in prizes and
winnings and fees required, pursuant to subdivision 14, the licensee must set aside a
minimum of ten percent for purses for live horse races conducted at class A facilities in the
state. The minimum amount of purse set-aside is increased to 14 percent for any activities
conducted five years or more after the enactment of this section. Set-asides required by
this paragraph shall be transmitted to the commission which shall establish an account for
each breed racing in the state. The commission shall allocate these funds based on the
percentage of wagering handled on each breed for races conducted at a class A facility
during the previous calendar year. The commission shall transfer 15 percent of the amount
allocated to each breed to its breeder's fund. The commission shall routinely transfer the
remaining money in the accounts to the licensees conducting racing for each breed and
direct the licensee to augment the purses for that breed with the funds received from the
commission. Purse augmentations required pursuant to this subdivision are in addition to
purse payments otherwise established by law or contract.
new text end

new text begin Subd. 12. new text end

new text begin Reimbursement to commission. new text end

new text begin The commission shall require that
the licensee reimburse it for the commission's actual costs of regulating any additional
gambling activities under this section. Amounts received under this subdivision must be
deposited as provided in section 240.155, subdivision 1.
new text end

new text begin Subd. 13. new text end

new text begin Reporting. new text end

new text begin The class B licensee shall report all income generated by the
additional gambling activities in an annual report to the Racing Commission. The report
shall also account for all costs of operation, taxes paid, purses paid, and amounts paid to
the breeder's fund.
new text end

new text begin Subd. 14. new text end

new text begin Fee. new text end

new text begin The licensee must pay to the commission an annual gambling
activities fee equal to 32 percent of all money received by the licensee from gambling
activities authorized under this section, less the amount paid out in prizes and winnings.
The fee established by this subdivision shall be 42 percent on amounts received by a
licensee in excess of $125,000,000 in a calendar year, less the amount paid out in prizes
and winnings. The licensee must pay this fee on a quarterly basis. The commission shall
distribute the fee revenue it collects, on a quarterly basis, as follows:
new text end

new text begin (1) one percent of the amount paid by each licensee to the city in which the licensee
is conducting games authorized, pursuant to section 240.31, is located;
new text end

new text begin (2) one percent to the county in which the licensee is conducting games authorized,
pursuant to section 240.31, is located; and
new text end

new text begin (3) the remainder to the commissioner of revenue for deposit in the jobs, family, and
economic development fund established in section 3.886.
new text end

Sec. 4.

Minnesota Statutes 2008, section 240.35, subdivision 1, is amended to read:

Subdivision 1.

Generally.

A licensee of the commission may detain a person if
the licensee has probable cause to believe that the person detained has violated section
609.76 while at a card club authorized by section 240.30 new text begin , or participating in gambling
activities authorized by section 240.31 new text end . For purposes of this section, "licensee" means the
commission's director of racing security or a security officer licensed under Minnesota
Rules, chapter 7878.

Sec. 5.

Minnesota Statutes 2008, 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 begin and 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 gambling deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) may be possessed by a licensee authorized to conduct gambling activities
pursuant to section 240.31, subdivision 1.
new text end

Sec. 6.

Minnesota Statutes 2008, 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 begin or to a licensee authorized to conduct gambling activities
pursuant to section 240.31, subdivision 1 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 begin or
deleted text end

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

new text begin (5) to a licensee authorized to conduct gambling activities pursuant to section
240.31, subdivision 1.
new text end

Sec. 7.

Minnesota Statutes 2008, 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 on the premises of a licensed racetrack as
authorized by section 240.31, subdivision 1.
new text end

Sec. 8.

Minnesota Statutes 2008, 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 new text begin or other
new text end wagering new text begin activity new text end conducted under a license issued pursuant to chapter 240, purchase or
sale of tickets in the state lottery, or gambling authorized under chapters 349 and 349A.

Sec. 9.

Minnesota Statutes 2008, 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 new text begin or other
new text end wagering new text begin activity new text end conducted under a license issued pursuant to chapter 240; (2) purchase
of tickets in the state lottery under chapter 349A; (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.