01-24-1990 Council Agenda - Laserfiche WebLink

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Ms. Annette Freeman November 22, 1989 Page Three Little Canada might be challenged on the grounds that in using the term "trade area ", the Legislature must have meant something different than the city. However, based upon the legislative history, we believe that the statute arguably supports a definition of trade area as the City of Little Canada. Representatives Schreiber and Kostohryz infoLmed us, however, that the legislation was not intended to preclude such a definition. Although not specifically required by the statute, we recommend that the Council make specific findings of fact prior to enacting an ordinance defining the City's trade area. Minnesota Statutes §349.213, Subdivision 1 grants cities the authority to require charitable gambling organizations to make specific expenditures of up to ten percent of the organization's net profits. The authority under this provision allows cities to require expenditures to specific organizations rather than merely to require expenditures in a given geographical area. The ten percent limit on requiring specific expenditures was not changed by the 1989 Legislature. In a separate amendment, however, the Legislature gave cities additional authority to administer proceeds from charitable gambling. Specifically, Chapter 335, Section 220 of the 1989 legislature added the following language to Minnesota Statutes §349.213, Subd. 1: "provided, however, that an ordinance requirement that such organizations must contribute ten percent of their net profits derived from lawful gambling to a fund administered and regulated by the responsible local unit of government without cost to such fund, for disbursement by the responsible local unit of government of the receipts for lawful purposes, is not considered an expenditure to the city or county nor a tax under Section §349.212, and is valid and lawful." We have determined that the amendment in Chapter 335 was in response to the decision in the case of Rice Street V.F.W., Post #3877 vs. City of St. Paul, dated March 28, 1989. In that case, Judge Thomas J. Mott held that St. Paul City Ordinance Section 404.10 (17), requiring lawful gambling licensees to pay either twenty or ten percent of their net profits to the Parks and Recreation Department of the City of St. Paul, was "unlawful, void and unenforceable." In a memorandum to its decision, the court concluded that the required payments constituted an unlawful tax. The primary reason for the Court's decision was that the payments were received, distributed, and administered by the City. It was not the requirement that specific Page 89