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3 <br />Kennedy <br />C.]L <br />Graven <br />CHARTERED <br />470 U.S. Bank Plaza <br />200 South Sixth Street <br />Minneapolis MN 55402 <br />(612) 337-9300 telephone <br />(612) 337-9310 fax <br />www. kennedy-graven. corn <br />MEMORANDUM <br />TO: City Council Members <br />Jim Ericson, City Administrator -Clerk <br />FROM: Scott .Riggs, City Attorney <br />Melissa Mandersehied, Assistant City Attorney <br />DATE: August 28, 2009 <br />RE: Proposed Gambling Ordinance <br />The City Administrator asked us to review and comment on the existing ordinances related to <br />lawful gambling (City Code, Ch. 502 and 503) and to add a provision about donating funds to the <br />City. Based on our review, a new Chapter 518 is proposed for your review and possible adoption <br />along with some changes to Chapters 502 and 503 to simplify and streamline the existing <br />ordinances. In consultation with the City Administrator, we decided to provide the Council with a <br />comprehensive ordinance that largely reflects existing practices at the City as well as some <br />additional optional provisions. <br />One such additional provision is a $100 investigation fee at Section 518,06, subd. 4. The City may <br />assess this fee on an organization applying for or renewing the state -issued premises permit. if the <br />City charges this investigative fee, it may not impose a local (up to) three percent gambling tax. If a <br />City collects a gambling tax it must file an annual report with the state. The proposed gambling <br />ordinance does not provide for the three percent tax. <br />The City may also require a local permit when lawful gambling that is otherwise exempt from state <br />licensing requirements is conducted within the City. This local permit requirement is provided at <br />Section 518,07. It is important to note that state law does not mandate that a city require a local <br />permit; state law simply allows a city to require a local permit. <br />Another notable new provision is in Section 518.11. This provision requires each organization <br />licensed to conduct lawful gambling within the City to contribute ten percent of its net profits <br />derived from lawful gambling in the City to a fund administered and regulated by the City. In turn, <br />the City disperses these funds as charitable contributions. <br />As indicated above, the ordinance provided for your review and consideration is comprehensive. <br />However, every provision is not required by state <br />comments in brackets to assist in your discussion. <br />an ordinance that meets the needs of the City. <br />356753vI MJM MU125-65 <br />law. In several instances, we have provided <br />We look forward to working with you to adopt <br />