1.1                          A bill for an act 
  1.2             relating to gambling; repealing authorization for 
  1.3             certain forms of gambling; abolishing the Minnesota 
  1.4             racing commission and the Minnesota state lottery and 
  1.5             transferring their functions to the commissioner of 
  1.6             public safety; declaring legislative findings and 
  1.7             intent with respect to gambling on Indian land; 
  1.8             providing penalties; amending Minnesota Statutes 1994, 
  1.9             sections 10A.01, subdivision 18; 10A.09, subdivision 
  1.10            1; 16B.54, subdivision 2; 43A.08, subdivision 1a; 
  1.11            245.98, subdivision 4; 290.17, subdivision 2; 299L.02, 
  1.12            subdivision 5; 299L.03, subdivisions 1, 2, 4, 5, and 
  1.13            7; 299L.05; 299L.07, subdivision 2a; 340A.410, 
  1.14            subdivision 5; 541.20; 541.21; 609.75, subdivisions 3 
  1.15            and 8; 609.755; 609.76, subdivision 1; and 609.761, 
  1.16            subdivision 1; proposing coding for new law in 
  1.17            Minnesota Statutes, chapters 240; and 349A; repealing 
  1.18            Minnesota Statutes 1994, sections 3.9221; 240.01; 
  1.19            240.011; 240.02; 240.03; 240.04; 240.05; 240.06; 
  1.20            240.07; 240.08; 240.09; 240.10; 240.11; 240.12; 
  1.21            240.13; 240.14; 240.15; 240.155; 240.16; 240.17; 
  1.22            240.18; 240.19; 240.20; 240.21; 240.22; 240.23; 
  1.23            240.24; 240.25; 240.26; 240.27; 240.28; 240.29; 
  1.24            270B.14, subdivision 7; 290.92, subdivisions 27, 28, 
  1.25            and 29; 297A.259; 299L.02, subdivisions 1, 3, and 7; 
  1.26            349.61; 349A.01; 349A.02; 349A.03; 349A.04; 349A.05; 
  1.27            349A.06; 349A.07; 349A.08; 349A.09; 349A.10; 349A.11; 
  1.28            349A.12; 349A.13; 349A.14; 349A.15; 609.651; and 
  1.29            609.761, subdivision 2. 
  1.30  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.31     Section 1.  [LEGISLATIVE FINDINGS AND INTENT.] 
  1.32     Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
  1.33  finds that: 
  1.34     (1) gaming defined as class III gaming under the Indian 
  1.35  Gaming Regulatory Act, Public Law Number 100-497, has had 
  1.36  adverse social and economic consequences in Minnesota that 
  1.37  outweigh any benefit that it may provide; and 
  2.1      (2) class III gaming should be prohibited for all purposes 
  2.2   as against public policy and as a matter of criminal law in the 
  2.3   state. 
  2.4      Subd. 2.  [LEGISLATIVE INTENT.] It is the intent of the 
  2.5   legislature that the provisions of this act constitute the 
  2.6   elimination of any legal basis on which class III gaming may be 
  2.7   conducted on Indian land in Minnesota under the provisions of 
  2.8   the Indian Gaming Regulatory Act and that on and after January 
  2.9   1, 2000, such gaming is no longer permitted in Minnesota under 
  2.10  that law on Indian land or anywhere else in the state. 
  2.11     Sec. 2.  Minnesota Statutes 1994, section 10A.01, 
  2.12  subdivision 18, is amended to read: 
  2.13     Subd. 18.  "Public official" means any: 
  2.14     (a) member of the legislature; 
  2.15     (b) constitutional officer in the executive branch and the 
  2.16  officer's chief administrative deputy; 
  2.17     (c) member, chief administrative officer or deputy chief 
  2.18  administrative officer of a state board or commission which has 
  2.19  at least one of the following powers:  (i) the power to adopt, 
  2.20  amend or repeal rules, or (ii) the power to adjudicate contested 
  2.21  cases or appeals; 
  2.22     (d) commissioner, deputy commissioner, or assistant 
  2.23  commissioner of any state department as designated pursuant to 
  2.24  section 15.01; 
  2.25     (e) individual employed in the executive branch who is 
  2.26  authorized to adopt, amend or repeal rules or adjudicate 
  2.27  contested cases; 
  2.28     (f) executive director of the state board of investment; 
  2.29     (g) executive director of the Indian affairs intertribal 
  2.30  board; 
  2.31     (h) commissioner of the iron range resources and 
  2.32  rehabilitation board; 
  2.33     (i) commissioner of mediation services; 
  2.34     (j) deputy of any official listed in clauses (e) to (i); 
  2.35     (k) judge of the workers' compensation court of appeals; 
  2.36     (l) administrative law judge or compensation judge in the 
  3.1   state office of administrative hearings or referee in the 
  3.2   department of economic security; 
  3.3      (m) solicitor general or deputy, assistant or special 
  3.4   assistant attorney general; 
  3.5      (n) individual employed by the legislature as secretary of 
  3.6   the senate, legislative auditor, chief clerk of the house, 
  3.7   revisor of statutes, or researcher, legislative analyst, or 
  3.8   attorney in the office of senate counsel and research or house 
  3.9   research; 
  3.10     (o) member, regional administrator, division director, 
  3.11  general counsel, or operations manager of the metropolitan 
  3.12  council; 
  3.13     (p) the director of the racing commission, the director of 
  3.14  the gambling control board, the director of the state lottery, 
  3.15  and the deputy director of the state lottery; 
  3.16     (q) director of the division of gambling enforcement in the 
  3.17  department of public safety; 
  3.18     (r) member or executive director of the higher education 
  3.19  facilities authority; 
  3.20     (s) member of the board of directors or president of the 
  3.21  Minnesota world trade center corporation; or 
  3.22     (t) member or chief administrator of a metropolitan agency. 
  3.23     Sec. 3.  Minnesota Statutes 1994, section 10A.09, 
  3.24  subdivision 1, is amended to read: 
  3.25     Subdivision 1.  [TIME FOR FILING.] Except for a candidate 
  3.26  for elective office in the judicial branch, an individual shall 
  3.27  file a statement of economic interest with the board: 
  3.28     (1) within 60 days of accepting employment as a public 
  3.29  official or a local official in a metropolitan governmental 
  3.30  unit; 
  3.31     (2) within 14 days after filing an affidavit of candidacy 
  3.32  or petition to appear on the ballot for an elective public 
  3.33  office or an elective local office in a metropolitan 
  3.34  governmental unit; or 
  3.35     (3) in the case of a public official requiring the advice 
  3.36  and consent of the senate, within 14 days after undertaking the 
  4.1   duties of office; or 
  4.2      (4) in the case of members of the Minnesota racing 
  4.3   commission, the director of the Minnesota racing commission, 
  4.4   chief of security, medical officer, inspector of pari-mutuels, 
  4.5   and stewards employed or approved by the commission or persons 
  4.6   who fulfill those duties under contract, within 60 days of 
  4.7   accepting or assuming duties. 
  4.8      Sec. 4.  Minnesota Statutes 1994, section 16B.54, 
  4.9   subdivision 2, is amended to read: 
  4.10     Subd. 2.  [VEHICLES.] (a)  [ACQUISITION FROM AGENCY; 
  4.11  APPROPRIATION.] The commissioner may direct an agency to make a 
  4.12  transfer of a passenger motor vehicle or truck currently 
  4.13  assigned to it.  The transfer must be made to the commissioner 
  4.14  for use in the central motor pool.  The commissioner shall 
  4.15  reimburse an agency whose motor vehicles have been paid for with 
  4.16  funds dedicated by the constitution for a special purpose and 
  4.17  which are assigned to the central motor pool.  The amount of 
  4.18  reimbursement for a motor vehicle is its average wholesale price 
  4.19  as determined from the midwest edition of the National 
  4.20  Automobile Dealers Association official used car guide. 
  4.21     (b)  [PURCHASE.] To the extent that funds are available for 
  4.22  the purpose, the commissioner may purchase or otherwise acquire 
  4.23  additional passenger motor vehicles and trucks necessary for the 
  4.24  central motor pool.  The title to all motor vehicles assigned to 
  4.25  or purchased or acquired for the central motor pool is in the 
  4.26  name of the department of administration.  
  4.27     (c)  [TRANSFER AT AGENCY REQUEST.] On the request of an 
  4.28  agency, the commissioner may transfer to the central motor pool 
  4.29  any passenger motor vehicle or truck for the purpose of 
  4.30  disposing of it.  The department or agency transferring the 
  4.31  vehicle or truck must be paid for it from the motor pool 
  4.32  revolving account established by this section in an amount equal 
  4.33  to two-thirds of the average wholesale price of the vehicle or 
  4.34  truck as determined from the midwest edition of the National 
  4.35  Automobile Dealers Association official used car guide. 
  4.36     (d)  [VEHICLES; MARKING.] The commissioner shall provide 
  5.1   for the uniform marking of all motor vehicles.  Motor vehicle 
  5.2   colors must be selected from the regular color chart provided by 
  5.3   the manufacturer each year.  The commissioner may further 
  5.4   provide for the use of motor vehicles without marking by the 
  5.5   governor, the lieutenant governor, the division of criminal 
  5.6   apprehension, division of liquor control, division of gambling 
  5.7   enforcement, arson investigators of the division of fire marshal 
  5.8   in the department of public safety, financial institutions 
  5.9   division of the department of commerce, state lottery, criminal 
  5.10  investigators of the department of revenue, state-owned 
  5.11  community service facilities in the department of human 
  5.12  services, the investigative staff of the department of economic 
  5.13  security, and the office of the attorney general.  
  5.14     Sec. 5.  Minnesota Statutes 1994, section 43A.08, 
  5.15  subdivision 1a, is amended to read: 
  5.16     Subd. 1a.  [ADDITIONAL UNCLASSIFIED POSITIONS.] Appointing 
  5.17  authorities for the following agencies may designate additional 
  5.18  unclassified positions according to this subdivision:  the 
  5.19  departments of administration; agriculture; commerce; 
  5.20  corrections; economic security; education; employee relations; 
  5.21  trade and economic development; finance; health; human rights; 
  5.22  labor and industry; natural resources; public safety; public 
  5.23  service; human services; revenue; transportation; and veterans 
  5.24  affairs; the housing finance and pollution control agencies; the 
  5.25  state lottery; the state board of investment; the office of 
  5.26  administrative hearings; the office of waste management; the 
  5.27  offices of the attorney general, secretary of state, state 
  5.28  auditor, and state treasurer; the state board of technical 
  5.29  colleges; the higher education board; the higher education 
  5.30  coordinating board; the Minnesota center for arts education; and 
  5.31  the Minnesota zoological board. 
  5.32     A position designated by an appointing authority according 
  5.33  to this subdivision must meet the following standards and 
  5.34  criteria:  
  5.35     (1) the designation of the position would not be contrary 
  5.36  to other law relating specifically to that agency; 
  6.1      (2) the person occupying the position would report directly 
  6.2   to the agency head or deputy agency head and would be designated 
  6.3   as part of the agency head's management team; 
  6.4      (3) the duties of the position would involve significant 
  6.5   discretion and substantial involvement in the development, 
  6.6   interpretation, and implementation of agency policy; 
  6.7      (4) the duties of the position would not require primarily 
  6.8   personnel, accounting, or other technical expertise where 
  6.9   continuity in the position would be important; 
  6.10     (5) there would be a need for the person occupying the 
  6.11  position to be accountable to, loyal to, and compatible with, 
  6.12  the governor and the agency head, the employing statutory board 
  6.13  or commission, or the employing constitutional officer; 
  6.14     (6) the position would be at the level of division or 
  6.15  bureau director or assistant to the agency head; and 
  6.16     (7) the commissioner has approved the designation as being 
  6.17  consistent with the standards and criteria in this subdivision. 
  6.18     Sec. 6.  [240.30] [COMMISSION ABOLISHED.] 
  6.19     Subdivision 1.  [ABOLITION; SUCCESSOR AGENCY.] The 
  6.20  commission, the offices created under section 240.04, and all 
  6.21  positions established by the commission, are abolished.  The 
  6.22  commissioner of public safety is the successor of the commission 
  6.23  and the director for purposes of completing any proceeding, 
  6.24  court action, prosecution, or other business undertaken by the 
  6.25  commission or any of its employees before January 1, 2000.  The 
  6.26  commissioner may exercise the powers assigned to the commission 
  6.27  under this chapter for the limited purpose of completing those 
  6.28  actions.  
  6.29     Subd. 2.  [LICENSES.] The commission may not issue or renew 
  6.30  any class A, B, C, or D license that will expire on or after 
  6.31  January 1, 2000.  
  6.32     Subd. 3.  [FUNDS TRANSFERRED.] All unexpended funds 
  6.33  appropriated to the commission are transferred and 
  6.34  reappropriated to the commissioner of public safety.  The 
  6.35  commissioner may spend the funds for the purposes of this 
  6.36  section.  When the commissioner has completed all 
  7.1   responsibilities assigned under this section, the commissioner 
  7.2   shall return to the general fund the funds transferred under 
  7.3   this subdivision. 
  7.4      Sec. 7.  Minnesota Statutes 1994, section 245.98, 
  7.5   subdivision 4, is amended to read: 
  7.6      Subd. 4.  [CONTRIBUTION BY TRIBAL GAMING.] The commissioner 
  7.7   of human services is authorized to enter into an agreement with 
  7.8   the governing body of any Indian tribe located within the 
  7.9   boundaries of the state of Minnesota that conducts either class 
  7.10  II or class III gambling gaming, as defined in section 4 of the 
  7.11  Indian Gaming Regulatory Act, Public Law Number 100-497, and 
  7.12  future amendments to it, for the purpose of obtaining funding 
  7.13  for compulsive gambling programs from the Indian tribe.  Prior 
  7.14  to entering into any agreement with an Indian tribe under this 
  7.15  section, the commissioner shall consult with and obtain the 
  7.16  approval of the governor or governor's designated 
  7.17  representatives authorized to negotiate a tribal-state compact 
  7.18  regulating the conduct of class III gambling on Indian lands of 
  7.19  a tribe requesting negotiations.  Contributions collected under 
  7.20  this subdivision are appropriated to the commissioner of human 
  7.21  services for the compulsive gambling treatment program under 
  7.22  this section. 
  7.23     Sec. 8.  Minnesota Statutes 1994, section 290.17, 
  7.24  subdivision 2, is amended to read: 
  7.25     Subd. 2.  [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 
  7.26  BUSINESS.] The income of a taxpayer subject to the allocation 
  7.27  rules that is not derived from the conduct of a trade or 
  7.28  business must be assigned in accordance with paragraphs (a) to 
  7.29  (f):  
  7.30     (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 
  7.31  labor or personal or professional services is assigned to this 
  7.32  state if, and to the extent that, the labor or services are 
  7.33  performed within it; all other income from such sources is 
  7.34  treated as income from sources without this state.  
  7.35     Severance pay shall be considered income from labor or 
  7.36  personal or professional services. 
  8.1      (2) In the case of an individual who is a nonresident of 
  8.2   Minnesota and who is an athlete or entertainer, income from 
  8.3   compensation for labor or personal services performed within 
  8.4   this state shall be determined in the following manner:  
  8.5      (i) The amount of income to be assigned to Minnesota for an 
  8.6   individual who is a nonresident salaried athletic team employee 
  8.7   shall be determined by using a fraction in which the denominator 
  8.8   contains the total number of days in which the individual is 
  8.9   under a duty to perform for the employer, and the numerator is 
  8.10  the total number of those days spent in Minnesota; and 
  8.11     (ii) The amount of income to be assigned to Minnesota for 
  8.12  an individual who is a nonresident, and who is an athlete or 
  8.13  entertainer not listed in clause (i), for that person's athletic 
  8.14  or entertainment performance in Minnesota shall be determined by 
  8.15  assigning to this state all income from performances or athletic 
  8.16  contests in this state.  
  8.17     (3) For purposes of this section, amounts received by a 
  8.18  nonresident from the United States, its agencies or 
  8.19  instrumentalities, the Federal Reserve Bank, the state of 
  8.20  Minnesota or any of its political or governmental subdivisions, 
  8.21  or a Minnesota volunteer firefighters' relief association, by 
  8.22  way of payment as a pension, public employee retirement benefit, 
  8.23  or any combination of these, or as a retirement or survivor's 
  8.24  benefit made from a plan qualifying under section 401, 403, 408, 
  8.25  or 409, or as defined in section 403(b) or 457 of the Internal 
  8.26  Revenue Code, are not considered income derived from carrying on 
  8.27  a trade or business or from performing personal or professional 
  8.28  services in Minnesota, and are not taxable under this chapter.  
  8.29     (b) Income or gains from tangible property located in this 
  8.30  state that is not employed in the business of the recipient of 
  8.31  the income or gains must be assigned to this state. 
  8.32     (c) Income or gains from intangible personal property not 
  8.33  employed in the business of the recipient of the income or gains 
  8.34  must be assigned to this state if the recipient of the income or 
  8.35  gains is a resident of this state or is a resident trust or 
  8.36  estate.  
  9.1      Gain on the sale of a partnership interest is allocable to 
  9.2   this state in the ratio of the original cost of partnership 
  9.3   tangible property in this state to the original cost of 
  9.4   partnership tangible property everywhere, determined at the time 
  9.5   of the sale.  If more than 50 percent of the value of the 
  9.6   partnership's assets consists of intangibles, gain or loss from 
  9.7   the sale of the partnership interest is allocated to this state 
  9.8   in accordance with the sales factor of the partnership for its 
  9.9   first full tax period immediately preceding the tax period of 
  9.10  the partnership during which the partnership interest was sold. 
  9.11     Gain on the sale of goodwill or income from a covenant not 
  9.12  to compete that is connected with a business operating all or 
  9.13  partially in Minnesota is allocated to this state to the extent 
  9.14  that the income from the business in the year preceding the year 
  9.15  of sale was assignable to Minnesota under subdivision 3.  
  9.16     (d) Income from the operation of a farm shall be assigned 
  9.17  to this state if the farm is located within this state and to 
  9.18  other states only if the farm is not located in this state.  
  9.19     (e) Income from winnings on Minnesota pari-mutuel betting 
  9.20  tickets, the Minnesota state lottery, and lawful gambling as 
  9.21  defined in section 349.12, subdivision 24, conducted within the 
  9.22  boundaries of the state of Minnesota shall be assigned to this 
  9.23  state.  
  9.24     (f) All items of gross income not covered in paragraphs (a) 
  9.25  to (e) and not part of the taxpayer's income from a trade or 
  9.26  business shall be assigned to the taxpayer's domicile. 
  9.27     Sec. 9.  Minnesota Statutes 1994, section 299L.02, 
  9.28  subdivision 5, is amended to read: 
  9.29     Subd. 5.  [BACKGROUND CHECKS.] In any background check 
  9.30  required to be conducted by the division of gambling enforcement 
  9.31  under this chapter, or chapter 240, 349, 349A, or section 
  9.32  3.9221, the director may, or shall when required by law, require 
  9.33  that fingerprints be taken and the director may forward the 
  9.34  fingerprints to the Federal Bureau of Investigation for the 
  9.35  conducting of a national criminal history check.  The director 
  9.36  may charge a fee for fingerprint recording and investigation 
 10.1   under section 3.9221. 
 10.2      Sec. 10.  Minnesota Statutes 1994, section 299L.03, 
 10.3   subdivision 1, is amended to read: 
 10.4      Subdivision 1.  [INSPECTIONS; ACCESS.] In conducting any 
 10.5   inspection authorized under this chapter or chapter 240, 349, or 
 10.6   349A, the employees of the division of gambling enforcement have 
 10.7   free and open access to all parts of the regulated business 
 10.8   premises, and may conduct the inspection at any reasonable time 
 10.9   without notice and without a search warrant.  For purposes of 
 10.10  this subdivision, "regulated business premises" means premises 
 10.11  where: 
 10.12     (1) lawful gambling is conducted by an organization 
 10.13  licensed under chapter 349 or by an organization exempt from 
 10.14  licensing under section 349.166; 
 10.15     (2) gambling equipment is manufactured, sold, distributed, 
 10.16  or serviced by a manufacturer or distributor licensed under 
 10.17  chapter 349; 
 10.18     (3) records required to be maintained under chapter 240, 
 10.19  297E, or 349, or 349A are prepared or retained; 
 10.20     (4) lottery tickets are sold by a lottery retailer under 
 10.21  chapter 340A; 
 10.22     (5) races are conducted by a person licensed under chapter 
 10.23  240; or 
 10.24     (6) (4) gambling devices are manufactured or distributed, 
 10.25  including places of storage under section 299L.07. 
 10.26     Sec. 11.  Minnesota Statutes 1994, section 299L.03, 
 10.27  subdivision 2, is amended to read: 
 10.28     Subd. 2.  [ITEMS REQUIRED TO BE PRODUCED.] In conducting an 
 10.29  audit or inspection authorized under this chapter or chapter 
 10.30  240, 349 or 349A, the director may inspect any book, record, or 
 10.31  other document the licensee, retailer, or vendor is required to 
 10.32  keep. 
 10.33     Sec. 12.  Minnesota Statutes 1994, section 299L.03, 
 10.34  subdivision 4, is amended to read: 
 10.35     Subd. 4.  [ACCESS TO CRIMINAL HISTORY.] The director has 
 10.36  access to all criminal history data compiled by the bureau of 
 11.1   criminal apprehension on any person licensed or under contract 
 11.2   with the state lottery, racing commission, or the gambling 
 11.3   control board, or any applicant for licensing or a person who 
 11.4   has submitted a bid on a lottery contractor or any employee and 
 11.5   finalist for employment with the state lottery. 
 11.6      Sec. 13.  Minnesota Statutes 1994, section 299L.03, 
 11.7   subdivision 5, is amended to read: 
 11.8      Subd. 5.  [ARREST POWERS.] The director may designate 
 11.9   certain employees within the division of gambling enforcement 
 11.10  who are authorized to arrest or investigate any person who is 
 11.11  suspected of violating any provision of chapter 240, 349, or 
 11.12  349A, or is suspected of committing any crime involving 
 11.13  gambling, and to conduct searches and seizures to enforce any of 
 11.14  those laws.  Any employee authorized by this subdivision to make 
 11.15  an arrest must be licensed under sections 626.84 to 626.863.  
 11.16     Sec. 14.  Minnesota Statutes 1994, section 299L.03, 
 11.17  subdivision 7, is amended to read: 
 11.18     Subd. 7.  [OTHER POWERS.] Nothing in this chapter limits 
 11.19  the authority of the division of gambling enforcement to 
 11.20  exercise any other power specified under chapter 240, 349, or 
 11.21  349A.  
 11.22     Sec. 15.  Minnesota Statutes 1994, section 299L.05, is 
 11.23  amended to read: 
 11.24     299L.05 [GAMBLING VIOLATIONS; RESTRICTIONS ON FURTHER 
 11.25  ACTIVITY.] 
 11.26     An owner of an establishment is prohibited from having 
 11.27  lawful gambling under chapter 349 conducted on the premises, 
 11.28  selling any lottery tickets under chapter 349A, or having a 
 11.29  video game of chance as defined under section 349.50 located on 
 11.30  the premises, if a person was convicted of violating section 
 11.31  609.76, subdivision 1, clause (7), or 609.76, subdivision (2), 
 11.32  for an activity occurring on the owner's premises. 
 11.33     Sec. 16.  Minnesota Statutes 1994, section 299L.07, 
 11.34  subdivision 2a, is amended to read: 
 11.35     Subd. 2a.  [RESTRICTIONS.] (a) A manufacturer licensed 
 11.36  under this section may sell, offer to sell, lease, or rent, in 
 12.1   whole or in part, a gambling device only to a distributor 
 12.2   licensed under this section. 
 12.3      (b) A distributor licensed under this section may sell, 
 12.4   offer to sell, market, rent, lease, or other provide, in whole 
 12.5   or in part, a gambling device only to: 
 12.6      (1) the governing body of a federally recognized Indian 
 12.7   tribe that is authorized to operate the gambling device under a 
 12.8   tribal state compact under the Indian Gaming Regulatory Act, 
 12.9   Public Law Number 100-497, and future amendments to it; 
 12.10     (2) a person for use in the person's dwelling for display 
 12.11  or amusement purposes in a manner that does not afford players 
 12.12  an opportunity to obtain anything of value. 
 12.13     Sec. 17.  Minnesota Statutes 1994, section 340A.410, 
 12.14  subdivision 5, is amended to read: 
 12.15     Subd. 5.  [GAMBLING PROHIBITED.] (a) No retail 
 12.16  establishment licensed to sell alcoholic beverages may keep, 
 12.17  possess, or operate, or permit the keeping, possession, or 
 12.18  operation on the licensed premises of dice or any gambling 
 12.19  device as defined in section 349.30, or permit gambling therein 
 12.20  except as provided in this subdivision.  
 12.21     (b) Gambling equipment may be kept or operated and raffles 
 12.22  conducted on licensed premises and adjoining rooms when the use 
 12.23  of the gambling equipment is authorized by (1) chapter 349, (2) 
 12.24  a tribal ordinance in conformity with the Indian Gaming 
 12.25  Regulatory Act, Public Law Number 100-497, or (3) a tribal-state 
 12.26  compact authorized under section 3.9221. 
 12.27     (c) Lottery tickets may be purchased and sold within the 
 12.28  licensed premises as authorized by the director of the lottery 
 12.29  under chapter 349A.  
 12.30     Sec. 18.  [349A.16] [LOTTERY ABOLISHED.] 
 12.31     The lottery, the state lottery board, the office of 
 12.32  director, and all other positions created under section 349A.02, 
 12.33  are abolished.  The commissioner of public safety is the 
 12.34  successor of the director for purposes of completing any 
 12.35  proceeding, court action, prosecution, or other business 
 12.36  undertaken by the director before January 1, 2000.  The 
 13.1   commissioner may exercise the powers assigned to the director 
 13.2   under this chapter for the limited purpose of completing those 
 13.3   actions.  The commissioner shall assume the authority of the 
 13.4   director over all funds established under section 349A.10 and 
 13.5   shall make payments from those funds until all obligations of 
 13.6   the state under this chapter have been satisfied.  When all 
 13.7   obligations of the state under this chapter have been satisfied, 
 13.8   the commissioner shall pay all remaining money in all funds 
 13.9   established under section 349A.10 to the state treasury for 
 13.10  deposit. 
 13.11     Sec. 19.  Minnesota Statutes 1994, section 541.20, is 
 13.12  amended to read: 
 13.13     541.20 [RECOVERY OF MONEY LOST.] 
 13.14     Every person who, by playing at cards, dice, or other game, 
 13.15  or by betting on the hands or sides of such as are gambling, 
 13.16  shall lose to any person so playing or betting any sum of money 
 13.17  or any goods, and pays or delivers the same, or any part 
 13.18  thereof, to the winner, may sue for and recover such money by a 
 13.19  civil action, before any court of competent jurisdiction.  For 
 13.20  purposes of this section, gambling shall not include pari-mutuel 
 13.21  wagering conducted under a license issued pursuant to chapter 
 13.22  240, purchase or sale of tickets in the state lottery, or 
 13.23  gambling authorized under chapters chapter 349 and 349A. 
 13.24     Sec. 20.  Minnesota Statutes 1994, section 541.21, is 
 13.25  amended to read: 
 13.26     541.21 [COMMITMENTS FOR GAMBLING DEBT VOID.] 
 13.27     Every note, bill, bond, mortgage, or other security or 
 13.28  conveyance in which the whole or any part of the consideration 
 13.29  shall be for any money or goods won by gambling or playing at 
 13.30  cards, dice, or any other game whatever, or by betting on the 
 13.31  sides or hands of any person gambling, or for reimbursing or 
 13.32  repaying any money knowingly lent or advanced at the time and 
 13.33  place of such gambling or betting, or lent and advanced for any 
 13.34  gambling or betting to any persons so gambling or betting, shall 
 13.35  be void and of no effect as between the parties to the same, and 
 13.36  as to all persons except such as hold or claim under them in 
 14.1   good faith, without notice of the illegality of the 
 14.2   consideration of such contract or conveyance.  The provisions of 
 14.3   this section shall not apply to:  (1) pari-mutuel wagering 
 14.4   conducted under a license issued pursuant to chapter 240; (2) 
 14.5   purchase of tickets in the state lottery under chapter 349A; (3) 
 14.6   gaming activities conducted pursuant to the Indian Gaming 
 14.7   Regulatory Act, 25 U.S.C. 2701 et seq.; or (4) lawful gambling 
 14.8   activities permitted under chapter 349. 
 14.9      Sec. 21.  Minnesota Statutes 1994, section 609.75, 
 14.10  subdivision 3, is amended to read: 
 14.11     Subd. 3.  [WHAT ARE NOT BETS.] The following are not bets: 
 14.12     (1) A contract to insure, indemnify, guarantee or otherwise 
 14.13  compensate another for a harm or loss sustained, even though the 
 14.14  loss depends upon chance. 
 14.15     (2) A contract for the purchase or sale at a future date of 
 14.16  securities or other commodities. 
 14.17     (3) Offers of purses, prizes or premiums to the actual 
 14.18  contestants in any bona fide contest for the determination of 
 14.19  skill, speed, strength, endurance, or quality or to the bona 
 14.20  fide owners of animals or other property entered in such a 
 14.21  contest. 
 14.22     (4) The game of bingo when conducted in compliance with 
 14.23  sections 349.11 to 349.23. 
 14.24     (5) A private social bet not part of or incidental to 
 14.25  organized, commercialized, or systematic gambling. 
 14.26     (6) The operation of equipment or the conduct of a raffle 
 14.27  under sections 349.11 to 349.22, by an organization licensed by 
 14.28  the gambling control board or an organization exempt from 
 14.29  licensing under section 349.166.  
 14.30     (7) Pari-mutuel betting on horse racing when the betting is 
 14.31  conducted under chapter 240.  
 14.32     (8) The purchase and sale of state lottery tickets under 
 14.33  chapter 349A.  
 14.34     Sec. 22.  Minnesota Statutes 1994, section 609.75, 
 14.35  subdivision 8, is amended to read: 
 14.36     Subd. 8.  [VIDEO GAME OF CHANCE.] A video game of chance is 
 15.1   a game or device that simulates one or more games commonly 
 15.2   referred to as poker, blackjack, craps, hi-lo, roulette, or 
 15.3   other common gambling forms, though not offering any type of 
 15.4   pecuniary award or gain to players.  The term also includes any 
 15.5   video game having one or more of the following characteristics: 
 15.6      (1) it is primarily a game of chance, and has no 
 15.7   substantial elements of skill involved; 
 15.8      (2) it awards game credits or replays and contains a meter 
 15.9   or device that records unplayed credits or replays. 
 15.10     Sec. 23.  Minnesota Statutes 1994, section 609.755, is 
 15.11  amended to read: 
 15.12     609.755 [ACTS OF OR RELATING TO GAMBLING.] 
 15.13     Whoever does any of the following is guilty of a 
 15.14  misdemeanor: 
 15.15     (1) makes a bet for an amount of $1,000 or less; 
 15.16     (2) sells or transfers a chance to participate in a 
 15.17  lottery; 
 15.18     (3) disseminates information about a lottery, except a 
 15.19  lottery conducted by an adjoining state, with intent to 
 15.20  encourage participation therein; 
 15.21     (4) permits a structure or location owned or occupied by 
 15.22  the actor or under the actor's control to be used as a gambling 
 15.23  place; or 
 15.24     (5) except where authorized by statute, possesses a 
 15.25  gambling device.  
 15.26     The punishment for bets made for an amount of $100 or less 
 15.27  shall be a sentence of imprisonment for not more than one day or 
 15.28  the payment of a fine of not more than $200, or both.  Clause (5)
 15.29  does not prohibit possession of a gambling device in a person's 
 15.30  dwelling for amusement purposes in a manner that does not afford 
 15.31  players an opportunity to obtain anything of value. 
 15.32     Sec. 24.  Minnesota Statutes 1994, section 609.76, 
 15.33  subdivision 1, is amended to read: 
 15.34     Subdivision 1.  [GROSS MISDEMEANORS.] Whoever does any of 
 15.35  the following may be sentenced to imprisonment for not more than 
 15.36  one year or to payment of a fine of not more than $3,000, or 
 16.1   both: 
 16.2      (1) maintains or operates a gambling place or operates a 
 16.3   bucket shop; 
 16.4      (2) intentionally participates in the income of a gambling 
 16.5   place or bucket shop; 
 16.6      (3) conducts a lottery, or, with intent to conduct a 
 16.7   lottery, possesses facilities for doing so; 
 16.8      (4) sets up for use for the purpose of gambling, or 
 16.9   collects the proceeds of, any gambling device or bucket shop; 
 16.10     (5) except as provided in section 299L.07, manufactures, 
 16.11  sells, offers for sale, or otherwise provides, in whole or any 
 16.12  part thereof, any gambling device including those defined in 
 16.13  section 349.30, subdivision 2; 
 16.14     (6) with intent that it be so used, manufactures, sells, or 
 16.15  offers for sale any facility for conducting a lottery, except as 
 16.16  provided by section 349.40; or 
 16.17     (7) receives, records, or forwards bets or offers to bet 
 16.18  or, with intent to receive, record, or forward bets or offers to 
 16.19  bet, possesses facilities to do so; or 
 16.20     (8) makes a bet for an amount greater than $1,000. 
 16.21     Sec. 25.  Minnesota Statutes 1994, section 609.761, 
 16.22  subdivision 1, is amended to read: 
 16.23     Subdivision 1.  [LAWFUL GAMBLING.] Notwithstanding sections 
 16.24  609.755 and 609.76, an organization may conduct lawful gambling 
 16.25  as defined in section 349.12, if authorized under chapter 349, 
 16.26  and a person may manufacture, sell, or offer for sale a gambling 
 16.27  device to an organization authorized under chapter 349 to 
 16.28  conduct lawful gambling, and pari-mutuel betting on horse racing 
 16.29  may be conducted under chapter 240. 
 16.30     Sec. 26.  [REPEALER.] 
 16.31     (a) Minnesota Statutes 1994, sections 3.9221; 270B.14, 
 16.32  subdivision 7; 290.92, subdivisions 27, 28, and 29; 297A.259; 
 16.33  299L.02, subdivisions 1, 3, and 7; 349.61; 609.651; and 609.761, 
 16.34  subdivision 2, are repealed. 
 16.35     (b) Minnesota Statutes 1994, sections 240.01; 240.011; 
 16.36  240.02; 240.03; 240.04; 240.05; 240.06; 240.07; 240.08; 240.09; 
 17.1   240.10; 240.11; 240.12; 240.13; 240.14; 240.15; 240.155; 240.16; 
 17.2   240.17; 240.18; 240.19; 240.20; 240.21; 240.22; 240.23; 240.24; 
 17.3   240.25; 240.26; 240.27; 240.28; 240.29; 349A.01; 349A.02; 
 17.4   349A.03; 349A.04; 349A.05; 349A.06; 349A.07; 349A.08; 349A.09; 
 17.5   349A.10; 349A.11; 349A.12; 349A.13; 349A.14; and 349A.15, are 
 17.6   repealed, except to the extent that those sections contain 
 17.7   powers and duties that are transferred to the commissioner of 
 17.8   public safety for the limited purposes described in sections 6 
 17.9   and 18.  
 17.10     Sec. 27.  [ATTORNEY GENERAL ACTION.] 
 17.11     The attorney general shall bring an action in the name of 
 17.12  the state in the appropriate federal court to establish that 
 17.13  enactment of this act eliminates the legal basis of class III 
 17.14  gaming on Indian land within the state under the Indian Gaming 
 17.15  Regulatory Act.  The attorney general shall take all steps 
 17.16  necessary to obtain a decision thereon, including a decision by 
 17.17  the Supreme Court of the United States. 
 17.18     Sec. 28.  [EFFECTIVE DATE.] 
 17.19     Sections 2 to 26 are effective January 1, 2000.  Sections 1 
 17.20  and 27 are effective the day following final enactment.