1.1 	A bill for an act
1.2 	relating to gambling; clarifying the powers and duties
1.3 	of the Racing Commission to card clubs; establishing a
1.4 	director of card clubs; authorizing rulemaking;
1.5 	amending Minnesota Statutes 2004, sections 240.03;
1.6 	240.04, by adding a subdivision; 240.23; 240.30,
1.7 	subdivisions 2, 7.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 240.03, is
1.10 	amended to read:
1.11 	240.03 COMMISSION POWERS AND DUTIES.
1.12 	The commission has the following powers and duties:
1.13 	(1) to regulate horse racing and card club activities in
1.14 	Minnesota to ensure that ~~it is~~ they are conducted in the public
1.15 	interest;
1.16 	(2) to issue licenses as provided in this chapter;
1.17 	(3) to enforce all laws and rules governing horse
1.18 	racing and card club activities;
1.19 	(4) to collect and distribute all taxes provided for in
1.20 	this chapter;
1.21 	(5) to conduct necessary investigations and inquiries and
1.22 	compel the submission of information, documents, and records it
1.23 	deems necessary to carry out its duties;
1.24 	(6) to supervise the conduct of pari-mutuel betting on
1.25 	horse racing and card club wagering;
1.26 	(7) to employ and supervise personnel under this chapter;
2.1 	(8) to determine the number of racing days to be held in
2.2 	the state and at each licensed racetrack;
2.3 	(9) to take all necessary steps to ensure the integrity of
2.4 	racing and card club activities in Minnesota; and
2.5 	(10) to impose fees on the racing and card playing
2.6 	industries sufficient to recover the operating costs of the
2.7 	commission with the approval of the legislature according to
2.8 	section 16A.1283.  Notwithstanding section 16A.1283, when the
2.9 	legislature is not in session, the commissioner of finance may
2.10 	grant interim approval for any new fees or adjustments to
2.11 	existing fees that are not statutorily specified, until such
2.12 	time as the legislature reconvenes and acts upon the new fees or
2.13 	adjustments.  As part of its biennial budget request, the
2.14 	commission must propose changes to its fees that will be
2.15 	sufficient to recover the operating costs of the commission.

2.16 	Sec. 2. Minnesota Statutes 2004, section 240.04, is
2.17 	amended by adding a subdivision to read:
2.18 		Subd. 3a.Director of card clubs. The commission shall
2.19 	employ a director of card clubs who serves in the unclassified
2.20 	service at the commission's pleasure.  The director is
2.21 	responsible for providing independent surveillance and other
2.22 	daily oversight of card club operations, and shall have expert
2.23 	knowledge and training in matters relevant to the operation of
2.24 	card clubs.  The director shall perform the following duties:
2.25 	(1) conduct routine compliance checks of card club
2.26 	activities to ensure compliance with a card club's approved plan
2.27 	of operation and with all laws and commission rules relating to
2.28 	the security and integrity of card club activities;
2.29 	(2) oversee surveillance operations in card clubs,
2.30 	regularly review card club surveillance logs, and analyze on an
2.31 	annual basis the number and type of surveillance incidents
2.32 	occurring at card clubs; and 
2.33 	(3) regularly review card club finances, ensuring that card
2.34 	clubs are properly distributing revenue and expenses from the
2.35 	funds in the player pool.

2.36 	Sec. 3. Minnesota Statutes 2004, section 240.23, is
3.1 	amended to read:
3.2 	240.23 RULEMAKING AUTHORITY.
3.3 	The commission has the authority, in addition to all other
3.4 	rulemaking authority granted elsewhere in this chapter to
3.5 	promulgate rules governing:
3.6 	(a) the conduct of horse races held at licensed racetracks
3.7 	in Minnesota, including but not limited to the rules of racing,
3.8 	standards of entry, operation of claiming races, filing and
3.9 	handling of objections, carrying of weights, and declaration of
3.10 	official results;
3.11 	(b) wire communications between the premises of a licensed
3.12 	racetrack and any place outside the premises;
3.13 	(c) information on horse races which is sold on the
3.14 	premises of a licensed racetrack;
3.15 	(d) liability insurance which it may require of all class
3.16 	A, class B, and class D licensees;
3.17 	(e) the auditing of the books and records of a licensee by
3.18 	an auditor employed or appointed by the commission;
3.19 	(f) emergency action plans maintained by licensed
3.20 	racetracks and their periodic review;
3.21 	(g) safety, security, and sanitation of stabling facilities
3.22 	at licensed racetracks;
3.23 	(h) entry fees and other funds received by a licensee in
3.24 	the course of conducting racing which the commission determines
3.25 	must be placed in escrow accounts;
3.26 	(i) affirmative action in employment and contracting by
3.27 	class A, class B, and class D licensees; ~~and~~ 
3.28 	(j) any other aspect of horse racing or pari-mutuel betting
3.29 	which in its opinion affects the integrity of racing or the
3.30 	public health, welfare, or safety; and 
3.31 	(k) card club operations, including safety and security,
3.32 	surveillance, and finances.
3.33 	Rules of the commission are subject to chapter 14, the
3.34 	Administrative Procedure Act.

3.35 	Sec. 4. Minnesota Statutes 2004, section 240.30,
3.36 	subdivision 2, is amended to read:
4.1 		Subd. 2.Supervision.  The authorized licensee is
4.2 	responsible for conducting and supervising the card
4.3 	games, subject to the oversight of the director of card clubs,
4.4 	providing all necessary equipment, services, and personnel, and
4.5 	reimbursing the commission for costs related to card club
4.6 	regulation and enforcement.

4.7 	Sec. 5. Minnesota Statutes 2004, section 240.30,
4.8 	subdivision 7, is amended to read:
4.9 		Subd. 7.Amendments to plan; violations; relation to
4.10 	other laws.  (a) The licensee may amend the plan of operation
4.11 	only with the commission's approval.  The commission may
4.12 	withdraw its approval of a plan of operation.
4.13 	(b) Card club activities are deemed to be relevant to the
4.14 	integrity of horse racing activities in Minnesota for purposes
4.15 	of sections ~~240.03;~~240.06, subdivision 7; 240.08; and 240.27,
4.16 	subdivision 1.
4.17 	(c) A violation of a law or rule relating to card club
4.18 	operation or a violation of an approved plan of operation is
4.19 	deemed to be a violation of law or rule for purposes of section
4.20 	240.22.
4.21 	(d) A violation of an approved plan of operation is deemed
4.22 	to be a violation of a rule of the commission for purposes of
4.23 	section 240.26, subdivision 3.
4.24 	(e) Card playing at a card club is deemed to be a bet at a
4.25 	licensed racetrack for purposes of section 240.28, subdivision 2.