as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to gambling; authorizing the director of the 1.3 state lottery to establish a state-run gaming 1.4 facility; providing a process to allow tribal 1.5 governments to receive a share of net profits; 1.6 providing duties and powers to the director of the 1.7 state lottery; providing for the use of gaming 1.8 facility revenues; amending Minnesota Statutes 2000, 1.9 sections 297A.65; 349A.01, by adding a subdivision; 1.10 541.20; 541.21; 609.75, subdivision 3; 609.761, 1.11 subdivision 2; Minnesota Statutes 2001 Supplement, 1.12 section 297A.94; proposing coding for new law in 1.13 Minnesota Statutes, chapter 349A. 1.14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.15 Section 1. Minnesota Statutes 2000, section 297A.65, is 1.16 amended to read: 1.17 297A.65 [LOTTERY TICKETS; IN-LIEU TAX.] 1.18 (a) Sales of state lottery tickets are exempt from the tax 1.19 imposed under section 297A.62. 1.20 (b) The state lottery must on or before the 20th day of 1.21 each month transmit to the commissioner of revenue an amount 1.22 equal to the gross receipts from the sale of lottery tickets for 1.23 the previous month multiplied by the tax rate under section 1.24 297A.62, subdivision 1. The resulting payment is in lieu of the 1.25 sales tax that otherwise would be imposed by this chapter. The 1.26 commissioner shall deposit the money transmitted under this 1.27 paragraph as provided by section 297A.94 and the money must be 1.28 treated as other proceeds of the sales tax. For purposes of 1.29 this
sectionparagraph, "gross receipts" means the proceeds of 2.1 the sale of tickets before deduction of a commission or other 2.2 compensation paid to the vendor or retailer for selling tickets. 2.3 (c) The state lottery must on or before the 20th day of 2.4 each month transmit to the commissioner of finance an amount 2.5 equal to 40 percent of the adjusted gross revenue from the 2.6 operation of a gaming facility under section 349A.20 for the 2.7 previous month. The commissioner of finance shall deposit the 2.8 money transmitted under this paragraph in the state treasury to 2.9 be credited as provided in section 349A.20, subdivision 10. The 2.10 resulting payment is in lieu of the sales tax that otherwise 2.11 would be imposed by this chapter. The adjusted gross revenue 2.12 from the operation of a gaming facility under section 349A.20 2.13 means the revenue derived from that operation after the 2.14 deduction of prizes paid for games conducted at the facility and 2.15 before the deduction of any other expenses. 2.16 Sec. 2. Minnesota Statutes 2001 Supplement, section 2.17 297A.94, is amended to read: 2.18 297A.94 [DEPOSIT OF REVENUES.] 2.19 (a) Except as provided in this section, the commissioner 2.20 shall deposit the revenues, including interest and penalties, 2.21 derived from the taxes imposed by this chapter in the state 2.22 treasury and credit them to the general fund. 2.23 (b) The commissioner shall deposit taxes in the Minnesota 2.24 agricultural and economic account in the special revenue fund if: 2.25 (1) the taxes are derived from sales and use of property 2.26 and services purchased for the construction and operation of an 2.27 agricultural resource project; and 2.28 (2) the purchase was made on or after the date on which a 2.29 conditional commitment was made for a loan guaranty for the 2.30 project under section 41A.04, subdivision 3. 2.31 The commissioner of finance shall certify to the commissioner 2.32 the date on which the project received the conditional 2.33 commitment. The amount deposited in the loan guaranty account 2.34 must be reduced by any refunds and by the costs incurred by the 2.35 department of revenue to administer and enforce the assessment 2.36 and collection of the taxes. 3.1 (c) The commissioner shall deposit the revenues, including 3.2 interest and penalties, derived from the taxes imposed on sales 3.3 and purchases included in section 297A.61, subdivision 3, 3.4 paragraph (g), clauses (1) and (4), in the state treasury, and 3.5 credit them as follows: 3.6 (1) first to the general obligation special tax bond debt 3.7 service account in each fiscal year the amount required by 3.8 section 16A.661, subdivision 3, paragraph (b); and 3.9 (2) after the requirements of clause (1) have been met, the 3.10 balance to the general fund. 3.11 (d) The commissioner shall deposit the revenues, including 3.12 interest and penalties, collected under section 297A.64, 3.13 subdivision 5, in the state treasury and credit them to the 3.14 general fund. By July 15 of each year the commissioner shall 3.15 transfer to the highway user tax distribution fund an amount 3.16 equal to the excess fees collected under section 297A.64, 3.17 subdivision 5, for the previous calendar year. 3.18 (e) For fiscal year 2001, 97 percent; for fiscal years 2002 3.19 and 2003, 87 percent; and for fiscal year 2004 and thereafter, 3.20 88.5 percent of the revenues, including interest and penalties, 3.21 transmitted to the commissioner under section 297A.65, paragraph 3.22 (b), must be deposited by the commissioner in the state treasury 3.23 as follows: 3.24 (1) 50 percent of the receipts must be deposited in the 3.25 heritage enhancement account in the game and fish fund, and may 3.26 be spent only on activities that improve, enhance, or protect 3.27 fish and wildlife resources, including conservation, 3.28 restoration, and enhancement of land, water, and other natural 3.29 resources of the state; 3.30 (2) 22.5 percent of the receipts must be deposited in the 3.31 natural resources fund, and may be spent only for state parks 3.32 and trails; 3.33 (3) 22.5 percent of the receipts must be deposited in the 3.34 natural resources fund, and may be spent only on metropolitan 3.35 park and trail grants; 3.36 (4) three percent of the receipts must be deposited in the 4.1 natural resources fund, and may be spent only on local trail 4.2 grants; and 4.3 (5) two percent of the receipts must be deposited in the 4.4 natural resources fund, and may be spent only for the Minnesota 4.5 zoological garden, the Como park zoo and conservatory, and the 4.6 Duluth zoo. 4.7 (f) The revenue dedicated under paragraph (e) may not be 4.8 used as a substitute for traditional sources of funding for the 4.9 purposes specified, but the dedicated revenue shall supplement 4.10 traditional sources of funding for those purposes. Land 4.11 acquired with money deposited in the game and fish fund under 4.12 paragraph (e) must be open to public hunting and fishing during 4.13 the open season, except that in aquatic management areas or on 4.14 lands where angling easements have been acquired, fishing may be 4.15 prohibited during certain times of the year and hunting may be 4.16 prohibited. At least 87 percent of the money deposited in the 4.17 game and fish fund for improvement, enhancement, or protection 4.18 of fish and wildlife resources under paragraph (e) must be 4.19 allocated for field operations. 4.20 Sec. 3. Minnesota Statutes 2000, section 349A.01, is 4.21 amended by adding a subdivision to read: 4.22 Subd. 8a. [NET PROFITS.] "Net profits" means total 4.23 revenues received by the director from the operation of a state 4.24 gaming facility under section 349A.20, less prizes and winnings 4.25 paid out and the capital and operating costs of the facility. 4.26 Sec. 4. [349A.20] [STATE GAMING FACILITY.] 4.27 Subdivision 1. [AUTHORIZATION.] The director shall 4.28 establish and operate a gaming facility at a site located in the 4.29 metropolitan area defined in section 473.121, subdivision 2, 4.30 that is determined by the director to maximize revenues from the 4.31 gaming facility operations, or a city of the second class that 4.32 is designated as an economically depressed area by the United 4.33 States Department of Commerce. If a home rule charter or 4.34 statutory city notifies the director by September 1, 2002, that 4.35 it does not consent to being considered as a site for the state 4.36 gaming facility, the director will not consider that city as a 5.1 site for the facility. The director may choose to solicit bids 5.2 from interested cities, and must publish standards for such bids 5.3 30 days in advance. The lottery director may contract with a 5.4 facilities manager for day-to-day management duties. 5.5 Subd. 2. [TRIBAL AGREEMENT.] The director shall execute a 5.6 written contract on behalf of the state to construct and divide 5.7 net profits from a state-run gaming facility with any Minnesota 5.8 tribal government choosing to be a party to the contract. This 5.9 agreement shall have no legal effect on any existing 5.10 tribal-state compact. Tribal governments must choose to be a 5.11 party to this contract by October 1, 2002. Any tribal 5.12 government that does not choose to sign an agreement in 5.13 principle by October 1, 2002, shall be deemed to have refused to 5.14 enter into this agreement. Tribal governments may enter into 5.15 this agreement via any wholly owned affiliate, chartered 5.16 corporation, or other legal entity. This agreement must 5.17 include, at a minimum, the following provisions: 5.18 (1) an agreement to share the costs of site selection, 5.19 casino construction, and start-up on a 50/50 basis between all 5.20 involved tribal governments and the state; and 5.21 (2) a revenue sharing agreement which apportions 50 percent 5.22 of net profits to the tribal governments, to be split on the 5.23 basis of tribal enrollment, and 50 percent to the state. 5.24 If the lottery director chooses to use a loan to construct a 5.25 gaming facility, tribal governments may choose to participate in 5.26 the loan through a carried interest, to be repaid from the 5.27 tribal share of net profits. The director may only choose one 5.28 site and operate one gaming facility under this act, and shall 5.29 provide for injunctive relief in contracts with tribal 5.30 governments should the state attempt to establish and operate a 5.31 second casino. Contracts signed with tribal governments or 5.32 their representatives under this act shall run for not more than 5.33 15 years, and shall be negotiable and renewable every 15 years 5.34 thereafter. Tribal governments may opt into or out of this 5.35 arrangement as a part of the renewal process. 5.36 Subd. 3. [OPERATION.] The director shall construct, 6.1 purchase, or lease necessary equipment and facilities for the 6.2 operation of the gaming facility. Contracts entered into under 6.3 this section are not subject to chapter 16B. The director shall 6.4 establish standards for any management or service contracts, 6.5 including compensation requirements, security and employee 6.6 standards, and any other requirements deemed necessary by the 6.7 director. The director may choose to lease a temporary facility 6.8 for casino operation pending construction of a new facility. 6.9 Subd. 4. [LOCAL GOVERNMENT SERVICES.] The director shall 6.10 negotiate a contract with the city and county where the gaming 6.11 facility is sited, to reimburse the city and county for actual 6.12 costs for services to the gaming facility. These reimbursements 6.13 shall be made as an operating cost of the gaming facility, and 6.14 shall cover law enforcement, fire services, and any other 6.15 legitimate government services arising out of the existence of 6.16 the state-owned gaming facility. The director may negotiate a 6.17 fixed payment in lieu of property taxes. 6.18 Subd. 5. [EMPLOYEES.] The director may appoint personnel 6.19 as necessary to operate the gaming facility in accordance with 6.20 chapter 43A, except that all employees will be in the 6.21 unclassified service. Section 349A.02, subdivision 6, applies 6.22 to all employees hired under this section, and to all employees 6.23 of contractors who work in the gaming facility. 6.24 The director shall contract with an employment assistance 6.25 firm to create an employment program for native Americans 6.26 seeking employment at the gaming facility. This outreach 6.27 program will attempt to train, hire, and retain employees from 6.28 native American backgrounds. 6.29 Subd. 6. [GAMES.] Games to be offered at the facility are 6.30 limited to blackjack, video games, pull-tabs, and bingo. The 6.31 director shall determine the rules for the games as provided 6.32 under section 349A.04. Gaming machines in which a coin, token, 6.33 or currency is deposited in order to play a game, which use a 6.34 video display and a microprocessor or an electromagnetic device 6.35 with a spinning reel, must be provided at the facility. 6.36 Notwithstanding section 349A.13, clause (2), the director may 7.1 authorize a game or install a device that when operated by coin 7.2 or currency determines the winner of a game. The gaming 7.3 facility must have a minimum of 2,000 gaming machines. 7.4 Subd. 7. [PRIZES.] A person who plays a game at the gaming 7.5 facility agrees to be bound by the game procedures applicable to 7.6 that particular game. The player acknowledges that the 7.7 determination of whether the player has won a prize is subject 7.8 to the rules of the director, game procedures established for 7.9 that game, claim procedures established for that game, and any 7.10 confidential or public validation procedures established by the 7.11 director for that game. Any prize won at the gaming facility is 7.12 not subject to section 349A.08, subdivision 8. 7.13 Subd. 8. [AGE RESTRICTION.] No person under the age of 18 7.14 may play any game or win a prize from any game at the gaming 7.15 facility. 7.16 Subd. 9. [CONFLICT OF INTEREST.] The director or any 7.17 employee of the lottery, or a member of the immediate family of 7.18 the director or employee residing in the same household, may not 7.19 play any game or win a prize from any game at the gaming 7.20 facility or have any interest in any contract entered into by 7.21 the director for the management of the facility. 7.22 Subd. 10. [USE OF PROCEEDS IN LIEU OF SALES TAX.] Within 7.23 30 days after the end of each month, the director shall deposit 7.24 in the state treasury the proceeds in lieu of sales tax from 7.25 gaming conducted at the gaming facility after payment of all 7.26 expenses, including prizes and payout of winnings, relating to 7.27 the construction, maintenance, and operation of the facility, 7.28 and after payment of the share due to tribal governments. 7.29 Subd. 11. [LIABILITY.] The state and tribal governments 7.30 are immune from civil liability arising from their activities 7.31 under this section, except for: 7.32 (1) liability specifically provided for under a contractual 7.33 agreement; 7.34 (2) liability imposed by statute; or 7.35 (3) liability for personal injury. 7.36 Sec. 5. Minnesota Statutes 2000, section 541.20, is 8.1 amended to read: 8.2 541.20 [RECOVERY OF MONEY LOST.] 8.3 Every person who, by playing at cards, dice, or other game, 8.4 or by betting on the hands or sides of such as are gambling, 8.5 shall lose to any person so playing or betting any sum of money 8.6 or any goods, and pays or delivers the same, or any part 8.7 thereof, to the winner, may sue for and recover such money by a 8.8 civil action, before any court of competent jurisdiction. For 8.9 purposes of this section, gambling shall not include pari-mutuel 8.10 wagering conducted under a license issued pursuant to chapter 8.11 240, purchase or sale of tickets in the state lottery, gambling 8.12 at a state-owned gaming facility, or gambling authorized under 8.13 chapters 349 and 349A. 8.14 Sec. 6. Minnesota Statutes 2000, section 541.21, is 8.15 amended to read: 8.16 541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 8.17 Every note, bill, bond, mortgage, or other security or 8.18 conveyance in which the whole or any part of the consideration 8.19 shall be for any money or goods won by gambling or playing at 8.20 cards, dice, or any other game whatever, or by betting on the 8.21 sides or hands of any person gambling, or for reimbursing or 8.22 repaying any money knowingly lent or advanced at the time and 8.23 place of such gambling or betting, or lent and advanced for any 8.24 gambling or betting to any persons so gambling or betting, shall 8.25 be void and of no effect as between the parties to the same, and 8.26 as to all persons except such as hold or claim under them in 8.27 good faith, without notice of the illegality of the 8.28 consideration of such contract or conveyance. The provisions of 8.29 this section shall not apply to: (1) pari-mutuel wagering 8.30 conducted under a license issued pursuant to chapter 240; (2) 8.31 purchase of tickets in the state lottery and gaming facility 8.32 activities under chapter 349A; (3) gaming activities conducted 8.33 pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et 8.34 seq.; or (4) lawful gambling activities permitted under chapter 8.35 349. 8.36 Sec. 7. Minnesota Statutes 2000, section 609.75, 9.1 subdivision 3, is amended to read: 9.2 Subd. 3. [WHAT ARE NOT BETS.] The following are not bets: 9.3 (1) A contract to insure, indemnify, guarantee or otherwise 9.4 compensate another for a harm or loss sustained, even though the 9.5 loss depends upon chance. 9.6 (2) A contract for the purchase or sale at a future date of 9.7 securities or other commodities. 9.8 (3) Offers of purses, prizes or premiums to the actual 9.9 contestants in any bona fide contest for the determination of 9.10 skill, speed, strength, endurance, or quality or to the bona 9.11 fide owners of animals or other property entered in such a 9.12 contest. 9.13 (4) The game of bingo when conducted in compliance with 9.14 sections 349.11 to 349.23. 9.15 (5) A private social bet not part of or incidental to 9.16 organized, commercialized, or systematic gambling. 9.17 (6) The operation of equipment or the conduct of a raffle 9.18 under sections 349.11 to 349.22, by an organization licensed by 9.19 the gambling control board or an organization exempt from 9.20 licensing under section 349.166. 9.21 (7) Pari-mutuel betting on horse racing when the betting is 9.22 conducted under chapter 240. 9.23 (8) The purchase and sale of state lottery tickets and 9.24 participation in the state-operated gaming facility under 9.25 chapter 349A. 9.26 Sec. 8. Minnesota Statutes 2000, section 609.761, 9.27 subdivision 2, is amended to read: 9.28 Subd. 2. [STATE LOTTERY.] Sections 609.755 and 609.76 do 9.29 not prohibit the operation of the state lottery or the sale, 9.30 possession, or purchase of tickets for the state lottery or 9.31 gaming facility activities under chapter 349A. 9.32 Sec. 9. [EFFECTIVE DATE.] 9.33 Sections 1 to 8 are effective the day after final enactment.