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 duties and powers to the director 
  1.5             of the state lottery; providing for the use of gaming 
  1.6             facility revenues; appropriating money; amending 
  1.7             Minnesota Statutes 2000, section 297A.65; proposing 
  1.8             coding for new law in Minnesota Statutes, chapter 349A.
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2000, section 297A.65, is 
  1.11  amended to read: 
  1.12     297A.65 [LOTTERY TICKETS; IN-LIEU TAX.] 
  1.13     (a) Sales of state lottery tickets are exempt from the tax 
  1.14  imposed under section 297A.62. 
  1.15     (b) The state lottery must on or before the 20th day of 
  1.16  each month transmit to the commissioner of revenue an amount 
  1.17  equal to the gross receipts from the sale of lottery tickets for 
  1.18  the previous month multiplied by the tax rate under section 
  1.19  297A.62, subdivision 1.  The resulting payment is in lieu of the 
  1.20  sales tax that otherwise would be imposed by this chapter.  The 
  1.21  commissioner shall deposit the money transmitted under this 
  1.22  paragraph as provided by section 297A.94 and the money must be 
  1.23  treated as other proceeds of the sales tax.  For purposes of 
  1.24  this section paragraph, "gross receipts" means the proceeds of 
  1.25  the sale of tickets before deduction of a commission or other 
  1.26  compensation paid to the vendor or retailer for selling tickets. 
  1.27     (c) The state lottery must on or before the 20th day of 
  2.1   each month transmit to the commissioner of finance an amount 
  2.2   equal to 50 percent of the adjusted gross revenue from the 
  2.3   operation of a gaming facility under section 349A.20 for the 
  2.4   previous month.  The commissioner of finance shall deposit the 
  2.5   money transmitted under this paragraph in the state treasury to 
  2.6   be credited as provided in section 349A.20, subdivision 9.  The 
  2.7   resulting payment is in lieu of the sales tax that otherwise 
  2.8   would be imposed by this chapter.  The adjusted gross revenue 
  2.9   from the operation of a gaming facility under section 349A.20 
  2.10  means the revenue derived from that operation after the 
  2.11  deduction of prizes paid for games conducted at the facility and 
  2.12  before the deduction of any other expenses. 
  2.13     Sec. 2.  [349A.20] [STATE GAMING FACILITY.] 
  2.14     Subdivision 1.  [AUTHORIZATION; AGREEMENT.] The director 
  2.15  shall establish and operate a gaming facility at a site located 
  2.16  in the metropolitan area defined in section 473.121, subdivision 
  2.17  2, that is determined by the casino commission, in consultation 
  2.18  with the director, to maximize state revenues from the gaming 
  2.19  facility operations.  If a home rule charter or statutory city 
  2.20  notifies the casino commission by August 1, 2001, that it does 
  2.21  not consent to being considered as a site for the state gaming 
  2.22  facility, the casino commission will not consider that city as a 
  2.23  site for the facility.  The casino commission will select and 
  2.24  the lottery director shall contract with a facilities manager 
  2.25  for day-to-day management duties. 
  2.26     Subd. 2.  [CASINO COMMISSION.] A commission is established 
  2.27  to oversee the establishment and initial operations of a 
  2.28  state-owned casino.  The majority and largest minority caucus of 
  2.29  the senate and the majority and largest minority caucus of the 
  2.30  house shall each appoint two persons to the casino commission.  
  2.31  The governor shall appoint three persons, including the chair of 
  2.32  the commission.  The commission shall select the site within the 
  2.33  metropolitan area where a state-owned casino shall be 
  2.34  constructed and shall select the manager of the casino.  The 
  2.35  director of the state lottery shall provide all staff and other 
  2.36  assistance necessary to the operations of the casino 
  3.1   commission.  This commission shall select construction and 
  3.2   infrastructure projects to be recommended for funding on a 
  3.3   one-time basis as specified in subdivision 9, clause (3). 
  3.4      Subd. 3.  [OPERATION.] The director shall construct, 
  3.5   purchase, or lease necessary equipment and facilities for the 
  3.6   operation of the casino.  Contracts entered into under this 
  3.7   section are not subject to chapter 16B.  The director shall 
  3.8   contract with the manager selected by the casino commission for 
  3.9   the day-to-day management of a state-owned casino.  The 
  3.10  director, as instructed by the casino commission, shall 
  3.11  establish standards for such a contract, including compensation 
  3.12  requirements, security and employee standards, and any other 
  3.13  requirements deemed necessary by the director or the casino 
  3.14  commission.  A management contract shall run for not less than 
  3.15  ten years, but shall be revocable for causes as listed in the 
  3.16  contract. 
  3.17     Subd. 4.  [EMPLOYEES.] The director may appoint personnel 
  3.18  as necessary to operate the casino in accordance with chapter 
  3.19  43A, except that all employees will be in the unclassified 
  3.20  service.  Section 349A.02, subdivision 6, applies to all 
  3.21  employees hired under this section. 
  3.22     Subd. 5.  [GAMES.] Games to be offered at the facility are 
  3.23  limited to blackjack, video games, pull-tabs, and bingo.  The 
  3.24  director shall determine the rules for the games as provided 
  3.25  under section 349A.04.  Gaming machines in which a coin, token, 
  3.26  or currency is deposited in order to play a game, which use a 
  3.27  video display and a microprocessor or an electromagnetic device 
  3.28  with a spinning reel, must be provided at the facility.  
  3.29  Notwithstanding section 349A.13, clause (2), the director may 
  3.30  authorize a game or install a device that when operated by coin 
  3.31  or currency determines the winner of a game.  The casino must 
  3.32  have a minimum of 2,000 gaming machines. 
  3.33     Subd. 6.  [PRIZES.] A person who plays a game at the gaming 
  3.34  facility agrees to be bound by the game procedures applicable to 
  3.35  that particular game.  The player acknowledges that the 
  3.36  determination of whether the player has won a prize is subject 
  4.1   to the rules of the director, game procedures established for 
  4.2   that game, claim procedures established for that game, and any 
  4.3   confidential or public validation procedures established by the 
  4.4   director for that game.  Any prize won at the gaming facility is 
  4.5   not subject to section 349A.08, subdivision 8. 
  4.6      Subd. 7.  [AGE RESTRICTION.] No person under the age of 18 
  4.7   may play any game or win a prize from any game at the gaming 
  4.8   facility. 
  4.9      Subd. 8.  [CONFLICT OF INTEREST.] The director or any 
  4.10  employee of the lottery, or a member of the immediate family of 
  4.11  the director or employee residing in the same household, may not 
  4.12  play any game or win a prize from any game at the gaming 
  4.13  facility or have any interest in any contract entered into by 
  4.14  the director for the management of the facility.  These 
  4.15  restrictions also apply to persons serving on the casino 
  4.16  commission or immediate members of their families. 
  4.17     Subd. 9.  [USE OF PROCEEDS IN LIEU OF SALES TAX.] Within 30 
  4.18  days after the end of each month, the director shall deposit in 
  4.19  the state treasury the proceeds in lieu of sales tax from gaming 
  4.20  conducted at the gaming facility after payment of all expenses, 
  4.21  including prizes and payout of winnings, relating to the 
  4.22  construction, maintenance, and operation of the facility.  The 
  4.23  remainder of the proceeds in lieu of sales tax must be credited 
  4.24  as follows in the order provided: 
  4.25     (1) initial profits are to be entirely dedicated to 
  4.26  start-up costs, retiring construction loans, and other 
  4.27  construction-related costs, thereafter; 
  4.28     (2) each year, 50 percent of funds remaining must be 
  4.29  deposited in the highway user tax distribution fund; and 
  4.30     (3) each year, the remaining 50 percent of funds must be 
  4.31  deposited in an account within the general fund to be reserved 
  4.32  for one-time facilities construction projects, as recommended by 
  4.33  the casino commission and appropriated by the legislature. 
  4.34     Sec. 3.  [APPROPRIATION; CONSTRUCTION LOAN.] 
  4.35     Up to $150,000,000, in an amount determined by the casino 
  4.36  commission, is appropriated from the general fund to the state 
  5.1   lottery, as a loan for the construction of a state-owned 
  5.2   casino.  The loan shall be repaid by the state lottery from 
  5.3   initial proceeds of the state-owned casino with five percent 
  5.4   interest to be accrued annually.