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Session of 2000
          HOUSE BILL No. 3047           By Committee on Appropriations           3-27          

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  9             AN  ACT concerning lotteries; relating to the powers and duties of the
10             Kansas lottery; providing for the consolidation of certain gaming op-
11             erations; amending K.S.A. 74-8701, 74-8702, 74-8704, 74-8708 and 74-
12             8711 and K.S.A. 1999 Supp. 19-101a, 74-8710, 74-8718, 74-8719, 74-
13             8723 and 74-8810 and repealing the existing sections; also repealing
14             K.S.A. 1999 Supp. 19-101j.
15      
16       Be it enacted by the Legislature of the State of Kansas:
17             Section  1. K.S.A. 74-8701 is hereby amended to read as follows: 74-
18       8701. (a) K.S.A. 74-8701 through 74-8721 74-8723 and sections 10
19       through 30, and amendments thereto, shall be known as and may be cited
20       as the Kansas lottery act.
21             (b) It is the intent of the legislature to limit class III gaming in the
22       state of Kansas. It is the public policy of this state to conduct or operate
23       all class III gaming at existing parimutuel racetrack facilities in the state.
24             Sec.  2. K.S.A. 74-8702 is hereby amended to read as follows: 74-
25       8702. As used in this act, unless the context otherwise requires the lottery
26       act:
27             (a) ``Commission'' means the Kansas lottery commission.
28             (b) ``Executive director'' means the executive director of the Kansas
29       lottery.
30             (c) ``Gaming equipment'' means any electric, electronic or mechani-
31       cal, computerized or electromechanical machine, mechanism, supply or
32       device or other equipment unique to the Kansas lottery used directly in,
33       or integral to, the operation of any lottery and in the determination of
34       winners pursuant to this the lottery act.
35             (d) ``Kansas lottery'' means the state agency created by this the lottery
36       act to operate a lottery or lotteries pursuant to this the lottery act.
37             (e) ``Lottery retailer'' means any person with whom the Kansas lottery
38       has contracted to sell lottery tickets or shares, or both,, shares or video
39       lottery games to the public.
40             (f) ``Lottery'' or ``state lottery'' means the lottery or lotteries operated
41       pursuant to this the lottery act.
42             (g) ``Major procurement'' means any gaming product or service, in-
43       cluding but not limited to facilities, advertising and promotional services,

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  1       annuity contracts, prize payment agreements, consulting services, equip-
  2       ment, tickets and other products and services unique to the Kansas lot-
  3       tery, but not including materials, supplies, equipment and services com-
  4       mon to the ordinary operations of state agencies.
  5             (h) ``Person'' means any natural person, association, corporation or
  6       partnership.
  7             (i) ``Prize'' means any prize paid directly by the Kansas lottery pur-
  8       suant to its rules and regulations adopted by the commission.
  9             (j) ``Share'' means any intangible manifestation authorized by the
10       Kansas lottery to prove participation in a lottery game.
11             (k) ``Ticket'' means any tangible evidence issued by the Kansas lottery
12       to prove participation in a lottery game.
13             (l) ``Vendor'' means any person who has entered into a major pro-
14       curement contract with the Kansas lottery.
15             (m) ``Returned ticket'' means any ticket which was transferred to a
16       lottery retailer, which was not sold by the lottery retailer and which was
17       returned to the Kansas lottery for refund by issuance of a credit or
18       otherwise.
19             (n) ``Video lottery machine'' means any electronic video game ma-
20       chine that, upon insertion of cash, is available to play or simulate the play
21       of a video game authorized by the commission, including but not limited
22       to bingo, poker, black jack and keno, and which uses a video display and
23       microprocessors and in which, by chance, the player may receive free
24       games or credits that can be redeemed for cash.
25             (n) ``Class III gaming'' means class III gaming as defined by 25 U.S.C.
26       2701 et seq.
27             (o) ``Gray area device'' means any mechanical, electromechanical or
28       electronic device or video lottery machine capable of being used for gam-
29       bling, that is not authorized by the commission and not connected to the
30       state video lottery central computer communication system, that is avail-
31       able to the public for play and capable of simulating a game played on a
32       licensed video lottery machine or any similar video lottery game.
33             (p) ``Native American Indian tribe'' means the following resident
34       Kansas Native American Indian tribes:
35             (1) The Iowa Tribe of Kansas and Nebraska.
36             (2) The Kickapoo Tribe in Kansas.
37             (3) The Prairie Band Potawatomi Nation of Kansas.
38             (4) The Sac and Fox Nation of Missouri in Kansas and Missouri.
39             (q) ``Net machine income'' means all cash or other consideration util-
40       ized to play a video lottery machine, less all cash or other consideration
41       paid out to winning players as prizes.
42             (r) ``Parimutuel licensee'' means a facility owner licensee or a facility
43       manager licensee, as defined by K.S.A. 74-8802, and amendments

3
  1       thereto.
  2             (s) ``Parimutuel licensee location'' means a racetrack facility and any
  3       real estate in which the parimutuel licensee has an interest which is ad-
  4       jacent to the real estate on which the racetrack facility is located. The
  5       parimutuel licensee location shall include any structures that may be con-
  6       structed at such location after January 1, 1995, if plans for such structures
  7       were in process on the effective date of this act.
  8             (t) ``Progressive game'' means any game in which the jackpot grows
  9       and accumulates as it is being played on a video lottery machine and the
10       results is randomly determined by the play of video lottery machines
11       linked to a computer network.
12             (u) ``Token'' means the coin, which is not legal tender, sold by a video
13       lottery sales agent in a face amount equal to the cash paid by a player for
14       the sole purpose of playing a video lottery machine at a parimutuel li-
15       censee location or paid to a player of a video lottery machine, which can
16       be exchanged for cash at the parimutuel licensee location where the video
17       lottery machine is located.
18             (v) ``Video lottery'' means any lottery conducted with a video lottery
19       machine or a network of linked video lottery machines with an aggregate
20       progression prize or prizes.
21             (w) ``Video lottery game'' means any electronically simulated game of
22       chance, including but not limited, to video poker, keno, line-up or black-
23       jack, displayed and played on a video gaming machine.
24             (w) ``Video lottery machine'' means any electronic machine in which
25       bills, coins or tokens are deposited in order to play in a game of chance
26       in which the results, including options available to the player, are ran-
27       domly and immediately determined by the machine. A machine may use
28       spinning reels or video displays or both, and may or may not dispense
29       coins or tokens directly to winning players. A machine shall be considered
30       a video lottery machine notwithstanding the use of an electronic credit
31       system making the deposit of bills, coins or tokens unnecessary.
32             (y) ``Video lottery machine equipment'' means any proprietary device,
33       machine or part used in the manufacture, operation or maintenance of a
34       video lottery machine.
35             (z) ``Video lottery machine manufacturer'' means any individual, firm,
36       corporation or other person licensed by the commission to assemble or
37       produce video lottery machines or video lottery machine associated
38       equipment for sale or use in this state.
39             (aa) ``Video lottery retailer'' means a parimutuel licensee who has
40       contracted with the lottery to be a retailer.
41             Sec.  3. K.S.A. 74-8704 is hereby amended to read as follows: 74-
42       8704. (a) The executive director shall have the power to:
43             (1) Supervise and administer the operation of the state lottery in ac-

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  1       cordance with the provisions of this act and such rules and regulations as
  2       adopted hereunder.
  3             (2) Appoint, subject to the Kansas civil service act and within the
  4       limitations of appropriations therefor, all other employees of the Kansas
  5       lottery, which employees shall be in the classified service unless otherwise
  6       specifically provided by this act.
  7             (3) Enter into contracts for: (A) Advertising and promotional services,
  8       subject to the provisions of subsection (b); (B) annuities or other methods
  9       deemed appropriate for the payment of prizes; (C) data processing and
10       other technical products, equipment and services; and (D) facilities as
11       needed to operate the Kansas lottery, including. Such contracts may in-
12       clude, but not be limited to, gaming equipment, tickets and other services
13       involved in major procurement contracts, in accordance with K.S.A. 74-
14       8705, and amendments thereto.
15             (4) Enter into contracts with: (A) Persons for the sale of lottery tickets
16       or shares to the public, as provided by this act and; and (B) parimutuel
17       licensees for video lottery machines at parimutuel licensee locations. Such
18       contracts shall be subject to rules and regulations adopted pursuant to
19       this act, which contracts but shall not be subject to the provisions of K.S.A.
20       75-3738 through 75-3744, and amendments thereto.
21             (5) Require lottery retailers to furnish proof of financial stability or
22       furnish surety in an amount based upon the expected volume of sales of
23       lottery tickets or shares or video lottery games.
24             (6) Examine, or cause to be examined by any agent or representative
25       designated by the executive director, any books, papers, records or mem-
26       oranda of any lottery retailer for the purpose of ascertaining compliance
27       with the provisions of this act or rules and regulations adopted hereunder.
28             (7) Issue subpoenas to compel access to or for the production of any
29       books, papers, records or memoranda in the custody or control of any
30       lottery retailer, or to compel the appearance of any lottery retailer or
31       employee of any lottery retailer, for the purpose of ascertaining compli-
32       ance with the provisions of this act or rules and regulations adopted here-
33       under. Subpoenas issued under the provisions of this subsection may be
34       served upon natural persons and corporations in the manner provided in
35       K.S.A. 60-304, and amendments thereto, for the service of process by any
36       officer authorized to serve subpoenas in civil actions or by the executive
37       director or an agent or representative designated by the executive direc-
38       tor. In the case of the refusal of any person to comply with any such
39       subpoena, the executive director may make application to the district
40       court of any county where such books, papers, records, memoranda or
41       person is located for an order to comply.
42             (8) Administer oaths and take depositions to the same extent and
43       subject to the same limitations as would apply if the deposition were in

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  1       aid of a civil action in the district court.
  2             (9) Require fingerprinting of employees and such other persons who
  3       work in sensitive areas within the lottery as deemed appropriate by the
  4       director. The director may submit such fingerprints to the Kansas bureau
  5       of investigation and to the federal bureau of investigation for the purposes
  6       of verifying the identity of such employees and persons and obtaining
  7       records of their criminal arrests and convictions.
  8             (b) The Kansas lottery shall not engage in on-site display advertising
  9       or promotion of the lottery at any amateur athletic or sporting event
10       including, but not limited to, amateur athletic sporting events at institu-
11       tions under the jurisdiction and control of the state board of regents.
12             Sec.  4. K.S.A. 74-8708 is hereby amended to read as follows: 74-
13       8708. (a) The executive director shall select as lottery retailers such per-
14       sons as deemed best able to serve the public convenience and promote
15       the sale of tickets or shares in accordance with marketing plans developed
16       by the Kansas lottery. In the selection of lottery retailers, the executive
17       director shall consider factors such as financial responsibility, security of
18       the applicant's place of business or activity, accessibility of the applicant's
19       place of business or activity, integrity, reputation, volume of expected
20       sales and such other factors as the executive director may deem appro-
21       priate. The executive director may select the state fair board as a lottery
22       retailer to sell lottery tickets or shares only on the state fairgrounds and
23       only during the time of the annual state fair. Other persons lawfully en-
24       gaged in nongovernmental business on state property may be selected as
25       lottery retailers.
26             (b) The executive director may charge an application fee to persons
27       applying to become lottery retailers.
28             (c) All lottery retailer contracts awarded by the Kansas lottery under
29       this act shall be renewable annually after issuance unless sooner canceled
30       or terminated.
31             A contract with a video lottery retailer contracts may be for a term in
32       excess of one year. Any such contract shall terminate on the date of the
33       expiration of the lottery.
34             (d) No lottery retailer contract awarded under this act shall be trans-
35       ferred or assignable.
36             (e) Each lottery retailer shall be issued a lottery retailer certificate
37       which shall be conspicuously displayed at the place where the lottery
38       retailer is authorized to sell lottery tickets or shares.
39             (f) Lottery tickets or shares shall only be sold by the lottery retailer
40       at the location stated on the lottery retailer certificate.
41             (g) To be selected as a lottery retailer, a natural person acting as a
42       sole proprietor must:
43             (1) Be at least 18 years of age;

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  1             (2) have sufficient financial resources to support the activities re-
  2       quired to sell lottery tickets or shares;
  3             (3) be current in payment of all taxes, interest and penalties owed to
  4       any taxing subdivision where the lottery retailer will sell lottery tickets or
  5       shares or video lottery games;
  6             (4) be current in filing all applicable tax returns and in payment of
  7       all taxes, interest and penalties owed to the state of Kansas, excluding
  8       items under formal appeal pursuant to applicable statutes; and
  9             (5) not be engaged exclusively in the sale of lottery tickets and shares
10       or video lottery games.
11             (h) No natural person shall be selected as a lottery retailer who:
12             (1) Has been convicted of a felony in this or any other jurisdiction,
13       unless at least 10 years have passed since satisfactory completion of the
14       sentence or probation imposed by the court for each such felony;
15             (2) has been convicted of an illegal gambling activity in this or any
16       other jurisdiction;
17             (3) has been found to have violated the provisions of this act or any
18       rule and regulation adopted hereunder;
19             (4) is a vendor or an employee or agent of any vendor doing business
20       with the Kansas lottery;
21             (5) resides in the same household of an employee of the Kansas lot-
22       tery or of a member of the commission; or
23             (6) has made a statement of material fact to the Kansas lottery, know-
24       ing such statement to be false.
25             (i) For a partnership to be selected as a lottery retailer, the partner-
26       ship must meet the requirements of subsections (g)(2), (g)(3), (g)(4) and
27       (g)(5) and each partner must meet the requirements of subsections (g)(1),
28       (g)(3), (g)(4) and (h)(1) through (h)(6).
29             (j) For a corporation to be selected as a lottery retailer, the corpo-
30       ration must meet the requirements of subsections (g)(2), (g)(3), (g)(4)
31       and (g)(5) and each officer or director and each stockholder who owns
32       5% or more of the stock of such corporation must meet the requirements
33       of subsections (g)(3), (g)(4) and (h)(1) through (h)(6).
34             (k) For an unincorporated association to be selected as a lottery re-
35       tailer, the association must meet the requirements of subsections (g)(2),
36       (g)(3), (g)(4) and (g)(5) and each officer or director must meet the
37       requirements of subsections (g)(1), (g)(3), (g)(4) and (h)(1) through (h)(6).
38             (l) The executive director may terminate the certificate of any lottery
39       retailer who fails to meet any of the applicable qualifying standards for
40       selection as a retailer provided in this section or on the grounds for ter-
41       mination provided in the contract pursuant to rules and regulations
42       adopted by the commission.
43             (m) If a lottery retailer's rental payments for the business premises

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  1       are contractually computed, in whole or in part, on the basis of a per-
  2       centage of retail sales, and such computation of retail sales is not explicitly
  3       defined to include sale of tickets or shares in a state-operated lottery, the
  4       compensation received by the lottery retailer from the lottery shall be
  5       considered the amount of the retail sale for purposes of computing the
  6       rental payment.
  7             Sec.  5. K.S.A. 1999 Supp. 74-8710 is hereby amended to read as
  8       follows: 74-8710. (a) The commission, upon the recommendation of the
  9       executive director, shall adopt rules and regulations governing the estab-
10       lishment and operation of a state lottery as necessary to carry out the
11       purposes of this the lottery act. Temporary rules and regulations may be
12       adopted by the commission without being subject to the provisions and
13       requirements of K.S.A. 77-415 through 77-438, and amendments thereto,
14       but shall be subject to approval by the attorney general as to legality and
15       shall be filed with the secretary of state and published in the Kansas
16       register. Temporary and permanent rules and regulations may include
17       but shall not be limited to:
18             (1) Subject to the provisions of subsection (b), the types of lottery
19       games to be conducted, including but not limited to instant lottery, on-
20       line and traditional games, but not including and games on video lottery
21       machines at parimutuel licensee locations.
22             (2) The manner of selecting the winning tickets or shares, except that,
23       if a lottery game utilizes a drawing of winning numbers, a drawing among
24       entries or a drawing among finalists, such drawings shall always be open
25       to the public and shall be recorded on both video and audio tape.
26             (3) The manner of payment of prizes to the holders of winning tickets
27       or shares.
28             (4) The frequency of the drawings or selections of winning tickets or
29       shares.
30             (5) The type or types of locations at which tickets or shares may be
31       sold.
32             (6) The method or methods to be used in selling tickets or shares.
33             (7) Additional qualifications for the selection of lottery retailers and
34       the amount of application fees to be paid by each.
35             (8) The amount and method of compensation to be paid to lottery
36       retailers, including special bonuses and incentives.
37             (9) Deadlines for claims for prizes by winners of each lottery game.
38             (10) Provisions for confidentiality of information submitted by ven-
39       dors pursuant to K.S.A. 74-8705, and amendments thereto.
40             (11) Information required to be submitted by vendors, in addition to
41       that required by K.S.A. 74-8705, and amendments thereto.
42             (12) The major procurement contracts or portions thereof to be
43       awarded to minority business enterprises pursuant to subsection (a) of

8
  1       K.S.A. 74-8705, and amendments thereto, and procedures for the award
  2       thereof.
  3             (b) No new lottery game shall commence operation after the effective
  4       date of this act unless first approved by the governor or, in the governor's
  5       absence or disability, the lieutenant governor.
  6             Sec.  6. K.S.A. 74-8711 is hereby amended to read as follows: 74-
  7       8711. (a) There is hereby established in the state treasury the lottery
  8       operating fund.
  9             (b) The executive director shall remit at least weekly to the state
10       treasurer all moneys collected from the sale of lottery tickets and shares
11       and any other moneys received by or on behalf of the Kansas lottery other
12       than funds to be deposited into the video lottery machine fund pursuant
13       to subsection (e). Upon receipt of any such remittance, the state treasurer
14       shall deposit the entire amount thereof in the state treasury and credit it
15       to the lottery operating fund. Moneys credited to the fund shall be ex-
16       pended or transferred only as provided by this act. Expenditures from
17       such fund shall be made in accordance with appropriations acts upon
18       warrants of the director of accounts and reports issued pursuant to vouch-
19       ers approved by the executive director or by a person designated by the
20       executive director.
21             (c) Moneys in the lottery operating fund shall be used for:
22             (1) Except as provided by this section, the payment of expenses of
23       the lottery, which shall include all costs incurred in the operation and
24       administration of the Kansas lottery; all costs resulting from contracts
25       entered into for the purchase or lease of goods and services needed for
26       operation of the lottery, including but not limited to supplies, materials,
27       tickets, independent studies and surveys, data transmission, advertising,
28       printing, promotion, incentives, public relations, communications, and
29       distribution of tickets and shares; and reimbursement of costs of facilities
30       and services provided by other state agencies. Expenses of the lottery
31       relating to the regulation and operation of video lottery machines shall be
32       paid as provided by subsection (e);
33             (2) the payment of compensation to lottery retailers;
34             (3) transfers of moneys to the lottery prize payment fund pursuant to
35       K.S.A. 74-8712, and amendments thereto;
36             (4) transfers to the state general fund pursuant to K.S.A. 74-8713,
37       and amendments thereto;
38             (5) transfers to the state gaming revenues fund pursuant to subsection
39       (d) of this section and as otherwise provided by law; and
40             (6) the transfers to the county reappraisal fund as prescribed by law.
41             (d) The director of accounts and reports shall transfer moneys in the
42       lottery operating fund to the state gaming revenues fund created by
43       K.S.A. 79-4801, and amendments thereto, on or before the 15th day of

9
  1       each month, for fiscal years commencing on or after July 1, 1988 in an
  2       amount certified monthly by the executive director and determined as
  3       follows, whichever is greater:
  4             (1) In an amount equal to the moneys in the lottery operating fund
  5       in excess of those needed for the purposes described in subsections (c)(1)
  6       through (c)(4); or
  7             (2) an amount equal to not less than 30% of total monthly revenues
  8       from the sales of lottery tickets and shares less estimated returned tickets.
  9             (e) There is hereby established in the state treasury the video lottery
10       machine fund. The executive director shall collect and remit to the state
11       treasurer not less than once each week all net machine income received
12       from video lottery retailers to be credited to the video lottery machine
13       fund. Separate accounts shall be maintained in the video lottery machine
14       fund for receipt of funds from each video lottery retailer. Not less than
15       once each week, the state treasurer shall distribute from the total receipts
16       credited to each such account an amount equal to:
17             (1)  (A) One half percent to the problem gambling grant fund estab-
18       lished by section 26, and amendments thereto.
19             (2) One and one-half percent to the organization licensee at the par-
20       imutuel licensee location.
21             (3) Two percent to the lottery operation fund established by K.S.A.
22       74-8712, and amendments thereto.
23             (4) Two percent to each county in which the parimutuel licensee lo-
24       cation is located. In Wyandotte county, such moneys shall be distributed
25       to the governing body of the unified government of Kansas City, Kansas.
26       In Sedgwick county, such moneys shall be distributed equally between
27       the county and the city of Wichita, Kansas. In Crawford county, such
28       moneys shall be distributed equally among the county and the cities of
29       Frontenac and Pittsburg, Kansas.
30             (5) Three percent to the live horse and greyhound racing purse en-
31       hancement fund.
32             (6) Four percent to the video lottery central computer communica-
33       tions system fund.
34             (7) Seventeen percent to the video lottery retailer.
35             (8) Twenty-seven percent to be split equally among Native American
36       Indian tribes who have entered agreements with the state pursuant to
37       section 30, and amendments thereto, and who do not own or operate any
38       class III gaming facility in the state of Kansas or who have ceased oper-
39       ations at any such facility in accordance with an agreement entered into
40       pursuant to section 30, and amendments thereto. If no tribes qualify for
41       such moneys, such money shall be deposited in the state general fund.
42             (9) The balance remaining after distributions pursuant to paragraphs
43       (1) through (8) to the state general fund.

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  1             Sec.  7. K.S.A. 1999 Supp. 74-8718 is hereby amended to read as
  2       follows: 74-8718. (a) It is unlawful for:
  3             (1) Any person to sell a lottery ticket or share at a price other than
  4       that fixed by rules and regulations adopted pursuant to this act;
  5             (2) any person other than a lottery retailer authorized by the Kansas
  6       lottery to sell or resell any lottery ticket or share; or
  7             (3) any person to sell a lottery ticket or share to any person, knowing
  8       such person to be under 18 years of age; or
  9             (4) any person to allow any person to play video lottery machines
10       knowing such person to be under 21 years of age.
11             (b)  (1) Violation of this section is a class A nonperson misdemeanor
12       upon conviction for a first offense; and
13             (2) violation of this section is a severity level 9, nonperson felony upon
14       conviction for a second or subsequent offense.
15             Sec.  8. K.S.A. 1999 Supp. 74-8719 is hereby amended to read as
16       follows: 74-8719. (a) Except as provided by subsection (c), it is unlawful
17       for any person to purchase a lottery ticket or share, or play a video lottery
18       machine or to share in the lottery winnings of a person, knowing that such
19       person is:
20             (1) The executive director, a member of the commission or an em-
21       ployee of the Kansas lottery;
22             (2) an officer or employee of a vendor contracting with the Kansas
23       lottery to supply gaming equipment or tickets to the Kansas lottery for
24       use in the operation of any lottery conducted pursuant to this act;
25             (3) a spouse, child, stepchild, brother, stepbrother, sister, stepsister,
26       parent or stepparent of a person described by subsection (a)(1) or (2); or
27             (4) a person who resides in the same household as any person de-
28       scribed by subsection (a)(1) or (2).
29             (b)  (1) Violation of subsection (a) is a class A nonperson misde-
30       meanor upon conviction for a first offense.
31             (2) Violation of subsection (a) is a severity level 9, nonperson felony
32       upon conviction for a second or subsequent offense.
33             (c) Notwithstanding subsection (a), The executive director may au-
34       thorize in writing any employee of the Kansas lottery and any employee
35       of a lottery vendor to: (1) Purchase a lottery ticket for the purposes of
36       verifying the proper operation of the state lottery with respect to security,
37       systems operation and lottery retailer contract compliance; or (2) play a
38       video lottery machine to verify the proper operation thereof with respect
39       to security and contract compliance. Any prize awarded as a result of such
40       ticket purchase shall become the property of the Kansas lottery and be
41       added to the prize pools of subsequent lottery games. No money or mer-
42       chandise shall be awarded to any employee playing a video lottery ma-
43       chine pursuant to this subsection.

11
  1             (d) Certain classes of persons who, because of the unique nature of
  2       the supplies or services they provide for use directly in the operation of
  3       a lottery pursuant to this act, may be prohibited, in accordance with rules
  4       and regulations adopted by the commission, from participating in any
  5       lottery in which such supplies or services are used.
  6             (e) Nothing in this section shall prohibit lottery retailers or their em-
  7       ployees from purchasing lottery tickets and shares or from being paid a
  8       prize of a winning ticket or share.
  9             (f) Each person who purchases a lottery ticket or share or video lot-
10       tery game thereby agrees to be bound by rules and regulations adopted
11       by the commission and by the provisions of this act.
12             Sec.  9. K.S.A. 1999 Supp. 74-8723 is hereby amended to read as
13       follows: 74-8723. (a) The Kansas lottery and the office of executive di-
14       rector of the Kansas lottery, established by K.S.A. 74-8703, and amend-
15       ments thereto, and the Kansas lottery commission, created by K.S.A. 74-
16       8709, and amendments thereto, shall be and hereby are abolished on July
17       1, 2002 2007.
18             (b) This section shall be part of and supplemental to the Kansas lot-
19       tery act.
20             New Sec.  10. (a) The executive director may contract with parimu-
21       tuel licensees to serve the public convenience as video lottery retailers
22       for the sale and promotion of the sale of video lottery games at parimutuel
23       licensee locations by the state of Kansas. The executive director shall
24       contract only with parimutuel licensees in counties in which a proposition
25       submitted pursuant to this act has been approved by the voters of such
26       county.
27             (b) The executive director shall purchase a license for all software
28       programs used to operate video lottery machines. Video lottery machines
29       located at parimutuel licensee locations shall be subject to the ultimate
30       control of the Kansas lottery. The use of progressive video lottery ma-
31       chines is expressly permitted.
32             (c) Each contract between the executive director and a video lottery
33       retailer shall provide that the Kansas lottery receive all net machine in-
34       come derived from the operation of video lottery machines at the pari-
35       mutuel licensee location.
36             (d) The initial term of such contract shall be not less than the re-
37       maining term of the Kansas lottery and may be renewed with each ex-
38       tension of the Kansas lottery as provided in K.S.A. 74-8723, and amend-
39       ments thereto.
40             (e) Contracts authorized by this section shall include:
41             (1) Accounting procedures to determine the net machine income,
42       unclaimed merchandise and credits.
43             (2) the location of video lottery machines at the parimutuel licensee

12
  1       location and such other matters as are necessary and reasonable for the
  2       operation of video lottery machines;
  3             (3) minimum requirements for a video lottery retailer to provide
  4       qualified oversight, security and supervision of the operation of video
  5       lottery machines at the parimutuel licensee location, including the use of
  6       qualified personnel with experience in applicable technology;
  7             (4) the eligibility and licensure requirements for employees of a video
  8       lottery retailer who will have responsibility for the handling of cash or
  9       tokens;
10             (5) provision for termination of the contract by either party for cause
11       or other reason specified in the contract; and
12             (6) any other provision deemed necessary.
13             (f) No video lottery machine shall be operated pursuant to this act
14       unless the executive director first issues a certificate for such machine
15       authorizing its use at a specified parimutuel licensee location. Each ma-
16       chine shall have the certificate prominently displayed thereon. Any ma-
17       chine which does not display the certificate required by this section is
18       contraband and a public nuisance subject to confiscation by any law en-
19       forcement officer.
20             (g) The executive director shall require any manufacturer, supplier,
21       provider, video lottery retailer or other person seeking the examination
22       and certification of video lottery machines to pay the anticipated actual
23       costs of the examination in advance. After the completion of the exami-
24       nation, the executive director shall refund any over-payment or charge
25       and collect amounts sufficient to reimburse the executive director for any
26       underpayment of actual costs. The executive director may contract for
27       the examination of video lottery machines as required by this subsection.
28       The executive director may rely upon testing done by or for other states
29       regulating video lottery machines, if the executive director deems such
30       testing to be reliable and in the best interest of the state of Kansas.
31             (h) Video lottery machines operated pursuant to this act shall:
32             (1) Pay out an average of not less than 87% of the amount wagered;
33             (2) be linked to the video lottery central computer communications
34       system to provide auditing and other program information as approved
35       by the executive director; and
36             (3) be on-line and in constant communication with the video lottery
37       central computer communications system located at the central office of
38       the lottery.
39             New Sec.  11. (a) Video lottery machines shall be operated only in
40       counties where the qualified voters of the county have voted to permit
41       operation of video lottery machines at parimutuel licensee locations
42       within the county.
43             (b) The board of county commissioners of any county in which a

13
  1       parimutuel licensee location is located, by resolution, may submit and
  2       upon presentation of a petition filed in accordance with subsection (c),
  3       shall submit to the qualified voters of the county a proposition to permit
  4       the operation of video lottery machines at parimutuel licensee locations
  5       within the county. The proposition shall be submitted to the voters either
  6       in a countywide special election called by the board of county commis-
  7       sioners for that purpose and held not less than 90 days after the resolution
  8       is adopted or the petition is filed or at the next general election as spec-
  9       ified by the board of county commissioners or in the petition, as the case
10       may be. The election shall be conducted, and the votes counted and
11       canvassed, in the manner provided by law for question submitted elec-
12       tions of the county.
13             (c) A petition to submit a proposition to the qualified voters of a
14       county pursuant to this section shall be filed with the county election
15       officer. The petition shall be signed by qualified voters of the county equal
16       in number to not less than 10% of the voters of the county who voted for
17       the office of secretary of state at the last preceding general election at
18       which such office was elected. The following shall appear on the petition:
19       ``We request an election to determine whether the operation of video
20       lottery machines by the Kansas lottery shall be permitted at parimutuel
21       racetracks in ________ county.''
22             (d) Upon the adoption of a resolution or the submission of a valid
23       petition calling for an election pursuant to this section, the county election
24       officer shall cause the following proposition to be placed on the ballot at
25       the election called for that purpose: ``Shall the operation of video lottery
26       machines by the Kansas lottery be permitted at parimutuel racetracks in
27       ________ county?''
28             (e) If a majority of the votes cast and counted at such election is in
29       favor of permitting the operation of such games at such racetracks, the
30       Kansas lottery may enter a contract authorized by section 3, and amend-
31       ments thereto, with qualified parimutuel licensees in such county. If a
32       majority of the votes cast and counted at an election under this section is
33       against permitting the operation of such machines at parimutuel race-
34       tracks in the county, the Kansas lottery shall not enter such contracts.
35       The county election officer shall transmit a copy of the certification of
36       the results of the election to the executive director.
37             (f) If at any election authorized by this section a majority of the votes
38       cast and counted is against permitting the operation of video lottery ma-
39       chines in the county, another election submitting the issue of the oper-
40       ation of video lottery machines in the county shall not be held for at least
41       two years from the date of such election.
42             New Sec.  12. (a) No video lottery machine shall be operated unless
43       the facility in which the video lottery machine is operated displays live

14
  1       and simulcast parimutuel races on video terminals and has installed par-
  2       imutuel windows for wagering on parimutuel races.
  3             (b) Except as provided in subsection (c) of this section, no video lot-
  4       tery machine shall be operated unless:
  5             (1) During the first full calendar year and each year thereafter in
  6       which video lottery machines are operated, the parimutuel licensee shall
  7       conduct at the parimutuel licensee location in Sedgwick county at least
  8       eight live racing programs each calendar week for the number of weeks
  9       equal to or greater than the number of weeks raced during the 1998
10       calendar year with at least 12 live races conducted each program.
11             (2) During the first full calendar year and each year thereafter in
12       which video lottery machines are operated, the parimutuel licensee shall
13       conduct at the parimutuel licensee location in Wyandotte county at least
14       seven live racing programs each calendar week for the number of weeks
15       equal to or greater than the number of weeks raced during the 1998
16       calendar year with at least 12 live races conducted each program.
17             (3) During the first full calendar year and each year thereafter in
18       which video lottery machines are operated, the parimutuel licensee shall
19       conduct at the parimutuel licensee location in Crawford county live racing
20       the number of days agreed upon by the organization licensee and the
21       parimutuel licensee but not less than 150 days, comprised of at least seven
22       live racing programs each calendar week with at least 12 live races con-
23       ducted each program.
24             (c) The commission may provide exceptions to the requirements of
25       subsection (b) for a parimutuel licensee conducting live racing when
26       events beyond the control of the licensee may render racing impossible
27       or impractical.
28             New Sec.  13. A video lottery retailer shall post one or more signs on
29       the premises of the parimutuel licensee location at points of entry to the
30       areas where video lottery machines are located to inform patrons of the
31       toll-free number available to provide information and referral services
32       regarding compulsive or problem gaming. The text shall be determined
33       by the secretary of the department of health and environment. Failure
34       by the video lottery retailer to post and maintain such signs shall be cause
35       for the imposition of a fine not to exceed $500 per day.
36             New Sec.  14. Each video lottery retailer shall provide access for the
37       executive director or the executive director's designee and its designated
38       employees to all records and the physical premises of the parimutuel
39       licensee location for the purpose of monitoring or inspecting video lottery
40       machines and equipment. None of the information disclosed pursuant to
41       this subsection shall be subject to disclosure under the open records act,
42       K.S.A. 45-216 et seq., and amendments thereto.
43             New Sec.  15. (a) Wagers shall be received only from a person at a

15
  1       parimutuel licensee location. No person present at a parimutuel licensee
  2       location shall place or attempt to place a wager on behalf of another
  3       person who is not present at a parimutuel licensee location.
  4             (b) Violation of this section is a class A nonperson misdemeanor upon
  5       a conviction for a first offense. Violation of this section is a severity level
  6       9, nonperson felony upon conviction for a second or subsequent offense.
  7             New Sec.  16. A person under age 21 shall not be permitted in an
  8       area of a parimutuel licensee location where gaming is being conducted,
  9       except for a person at least 18 years of age who is an employee of the
10       parimutuel licensee. No employee under age 21 shall perform any func-
11       tion involved in gaming by the patrons. No person under age 21 shall be
12       permitted to make a wager on a video lottery machine.
13             New Sec.  17. Pursuant to section 2 of the federal act entitled ``An
14       Act to Prohibit Transportation of Gambling Devices in Interstate and
15       Foreign Commerce,'' 15 U.S.C. 1171 through 1777, the state of Kansas,
16       acting by and through the duly elected and qualified members of the
17       legislature, does hereby in this section, and in accordance with and in
18       compliance with the provisions of section 2 of such federal act, declare
19       and proclaim that it is exempt from the provision of section 2 of such
20       federal act to the extent that such gambling devices are being transported
21       to or from a licensed gaming machine operator at a parimutuel licensee
22       location within the state of Kansas.
23             New Sec.  18. Except for persons acting in accordance with the rules
24       and regulations of the Kansas lottery in performing installation, mainte-
25       nance and repair services, any person who, with the intent to manipulate
26       the outcome, pay-off or operation of a video lottery machine, manipulates
27       the outcome, pay-off or operation of a video lottery machine by physical,
28       electrical or mechanical means shall be guilty of a severity level 8, non-
29       person felony.
30             New Sec.  19. Nothing in this act shall restrict the jurisdiction of the
31       Kansas racing and gaming commission to regulate activities conducted at
32       parimutuel licensee facilities relating to parimutuel racing and wagering.
33             New Sec.  20. All sales of video lottery machine games shall be ex-
34       empt from sales taxes imposed pursuant to K.S.A. 12-187 et seq. and 79-
35       3601 et seq., and amendments thereto.
36             New Sec.  21. (a) The executive director or the executive director's
37       designee may observe and inspect all electronic gaming facilities operated
38       by video lottery retailers.
39             (b) The executive director may examine, or cause to be examined by
40       any agent or representative designated by the executive director, any
41       books, papers, records or memoranda of any licensee, or of any racetrack
42       or business involved in video lottery gaming for the purpose of ascertain-
43       ing compliance with any provision of this act or any rule and regulation

16
  1       adopted hereunder.
  2             (c) The lottery commission shall have the power to authorize security
  3       measures required in any areas where video lottery machines are located.
  4             New Sec.  22. It is unlawful for any person playing or using any video
  5       lottery machine at a parimutuel licensee location in Kansas to:
  6             (1) Knowingly use other than a lawful coin or legal tender of the
  7       United States of America, or to use coin not of the same denomination
  8       as the coin intended to be used in a video lottery machine, except that in
  9       the playing of any video lottery machine or similar gaming device, it shall
10       be lawful for any person to use gaming billets, tokens or similar objects
11       therein which are approved by the lottery commission;
12             (2) to knowingly possess or use, while on the premises of a parimutuel
13       licensee location any cheating or thieving device, including but not limited
14       to, tools, wires, drills, coins attached to strings or wires or electronic or
15       magnetic devices to facilitate removing from any video lottery machine
16       any money or contents thereof, except that a duly authorized employee
17       of the lottery commission, Kansas racing and gaming commission or a
18       parimutuel licensee may possess and use any of the foregoing only in
19       furtherance of the employee's employment at the parimutuel licensee
20       location; or
21             (3) to knowingly possess or use while on the premises of any pari-
22       mutuel licensee location any key or device designed for the purpose of
23       or suitable for opening or entering any video lottery machine or similar
24       gaming device or drop box, except that a duly authorized employee of
25       the lottery commission, Kansas racing and gaming commission or a par-
26       imutuel licensee may possess and use any of the foregoing only in fur-
27       therance of the employee's employment at the parimutuel licensee
28       location.
29             (b) Violation of this section is a severity level 8, nonperson felony.
30             New Sec.  23. (a) No video lottery retailer shall permit any business
31       not owned and operated by the retailer to provide video lottery machine
32       equipment or services to such retailer unless such business has been is-
33       sued video lottery machine equipment or services license by the executive
34       director. Such equipment and services include, but are not limited, to
35       surveillance, electronic computer components, random number genera-
36       tor or cabinet thereof and token redemption equipment or services.
37             (b) Businesses required to be licensed pursuant to this section shall
38       apply for video lottery machine equipment or services licenses in a man-
39       ner and upon forms prescribed and furnished by the executive director.
40       The executive director shall require disclosure of information about the
41       owners and officers of each applicant and may require such owners and
42       officers to submit to fingerprinting. The executive director also may re-
43       quire disclosure of information about and fingerprinting of such employ-

17
  1       ees of each applicant as deemed necessary. Video lottery machine equip-
  2       ment or services licenses shall be issued for a period of time established
  3       by the executive director. The executive director shall establish a schedule
  4       of application fees and license fees for video lottery machine equipment
  5       or services licenses based upon the type and size of business. The appli-
  6       cation fee shall not be refundable if the business fails to qualify for a
  7       license. If the application fee is insufficient to pay the reasonable expenses
  8       of processing the application and investigating the applicant's qualifica-
  9       tions for licensure, the executive director shall require the applicant to
10       pay to the executive director, at such times and in such form as required
11       by the executive director, any additional amounts necessary to pay such
12       expenses. No license shall be issued to an applicant until the applicant
13       has paid such additional amounts in full, and such amounts shall not be
14       refundable except to the extent that they exceed the actual expenses of
15       processing the application and investigating the applicant's qualifications
16       for licensure.
17             (c) The executive director may require applicants as a condition of
18       licensure to consent to allow agents of the Kansas bureau of investigation
19       or security personnel of the lottery commission to search without warrant
20       the licensee's premises and personal property and the persons of its own-
21       ers, officers and employees while engaged in the licensee's business
22       within the racetrack facility or adjacent facilities under the control of the
23       organization licensee for the purpose of investigating criminal violations
24       of this act or violations of rules and regulations of the lottery commission.
25             (d) Denial of a video lottery machine equipment or services license
26       by the executive director shall be in accordance with the Kansas admin-
27       istrative procedure act. The executive director may refuse to issue a video
28       lottery machine equipment or services license to any business if any per-
29       son having an ownership interest in such business, any person who is an
30       officer of such business or any person employed by such business within
31       the racetrack facility:
32             (1) Has been convicted of a felony in a court of any state or of the
33       United States or has been adjudicated in the last five years, in any such
34       court of committing as a juvenile an act which, if committed by an adult,
35       would constitute a felony;
36             (2) has been convicted of a violation of any law of any state or of the
37       United States involving gambling or controlled substances or has been
38       adjudicated in the last five years in any such court of committing as a
39       juvenile an act which, if committed by an adult, would constitute such a
40       violation;
41             (3) fails to disclose any material fact or provides information, knowing
42       such information to be false, in connection with the application for the
43       license;

18
  1             (4) has been found by the executive director to have violated any
  2       provision of this act or any rule and regulation of the lottery commission;
  3       or
  4             (5) has failed to meet any monetary or tax obligation to the federal
  5       government or to any state or local government.
  6             (e) The executive director may suspend or revoke the electronic gam-
  7       ing machine equipment or services license of any business for any reason
  8       which would justify refusal to issue such a license. Proceedings to suspend
  9       or revoke such license shall be conducted by the executive director or an
10       appointed hearing officer in accordance with the provisions of the Kansas
11       administrative procedure act.
12             (f) The executive director may provide for the temporary suspension
13       of video lottery machine equipment or services license by summary ad-
14       judicative proceedings in accordance with the Kansas administrative pro-
15       cedure act upon finding that there is probable cause to believe that
16       grounds exist for a permanent suspension or revocation of such license.
17       Such suspension shall be for a period not exceeding 30 days. Upon ex-
18       piration of such suspension, the license shall be restored unless the license
19       has been suspended or revoked as a result of proceedings conducted
20       pursuant to subsection (e).
21             (g) The lottery commission may provide by rules and regulations for
22       the licensure of gaming employees designated by the commission which
23       rules and regulations may specify employment application forms, fees and
24       procedures for suspension or revocation of any gaming employee license.
25             New Sec.  24. No taxes, fees, charges, transfers or distributions, other
26       than those provided for in this act, shall be made or levied from or against
27       the net machine income of the Kansas lottery by any city, county or other
28       municipality.
29             New Sec.  25. Each lottery gaming machine operator shall hold the
30       executive director of the Kansas lottery, the Kansas lottery commission
31       and the state harmless from and defend and pay for the defense of any
32       and all claims which may be asserted against the executive director, the
33       commission, the state or the employees thereof, arising from video lottery
34       machines located at the parimutuel licensee location of that video lottery
35       retailer. The provisions of this section shall not apply to any claims arising
36       from the negligence or willful misconduct of the executive director, the
37       commission, the state or the employees thereof.
38             New Sec.  26. (a) There is hereby established in the state treasury the
39       problem gambling grant fund. All moneys credited to such fund shall be
40       used only for the awarding of grants under this section. Such fund shall
41       be administered in accordance with this section and the provisions of
42       appropriation acts.
43             (b) All expenditures from the problem gambling grant fund shall be

19
  1       made in accordance with appropriation acts upon warrants of the director
  2       of accounts and reports issued pursuant to vouchers approved in the man-
  3       ner prescribed by law.
  4             (c) On or before the 10th day of each month, the director of accounts
  5       and reports shall transfer from the state general fund to the problem
  6       gambling grant fund interest earnings based on (1) the average daily bal-
  7       ance of moneys in the problem gambling grant fund for the preceding
  8       month and (2) the net earnings rate of the pooled money investment
  9       portfolio for the preceding month.
10             (d) There is hereby established a state grant program to provide as-
11       sistance for the direct treatment of persons diagnosed as suffering from
12       pathological gambling and to provide funding for research regarding the
13       impact of gambling on residents of Kansas. Research grants awarded un-
14       der this section may include, but need not be limited to, grants for de-
15       termining the effectiveness of education and prevention efforts on the
16       prevalence of pathological gambling in Kansas. All grants shall be made
17       after open solicitation of proposals and evaluation of proposals against
18       criteria established in rules and regulations adopted by the secretary of
19       the department of social and rehabilitation services. Both public and pri-
20       vate entities shall be eligible to apply for and receive grants under the
21       provisions of this section.
22             (e) The secretary of the department of social and rehabilitation serv-
23       ices is hereby authorized to receive moneys from any grants, gifts, con-
24       tributions or bequests made for the purpose of funding grants under this
25       section and to expend such moneys for the purpose for which received.
26             (f) All grants made in accordance with this section shall be made from
27       the problem gambling grant fund. Of the total amount granted annually,
28       85% shall be allocated to an entity or entities that provide treatment to
29       pathological gamblers and 15% shall be allocated to an entity or entities
30       engaged in research designed in accordance with rules and regulations
31       adopted by the secretary. The secretary shall administer the provisions of
32       this section and the secretary shall adopt rules and regulations establishing
33       criteria for qualification to receive grants and such other matters deemed
34       necessary by the secretary for the administration of this section. Such
35       rules and regulations shall include, but need not be limited to, a require-
36       ment that each recipient of a grant to provide treatment for pathological
37       gamblers report at least annually to the secretary the grantee's measurable
38       achievement of specific outcome goals. The secretary shall transmit to
39       the legislature, no later than the first day of the legislative session begin-
40       ning in 2002 and every year thereafter, an objective evaluation of the
41       effectiveness of each treatment program and research effort by grants
42       made in accordance with this section.
43             (g) For the purpose of this section ``pathological gambling'' means

20
  1       the disorder by that name described in the most recent edition of the
  2       diagnostic and statistical manual.
  3             New Sec.  27. (a) There is hereby established in the state treasury the
  4       live horse and greyhound purse enhancement fund. Such fund shall be
  5       administered in accordance with this section and the provisions of appro-
  6       priation acts. All purse enhancements paid pursuant to this act shall be
  7       according to the point schedule in effect on January 1, 2000, at the par-
  8       imutuel licensee location in Sedgwick county. All purse supplements paid
  9       pursuant to this section shall be in addition to purses and supplements
10       paid under K.S.A. 74-8001 et seq., and amendments thereto.
11             (b) All expenditures from the problem gambling grant fund shall be
12       made in accordance with appropriation acts upon warrants of the director
13       of accounts and reports issued pursuant to vouchers approved in the man-
14       ner prescribed by law.
15             (c) On or before the 10th day of each month, the director of accounts
16       and reports shall transfer from the state general fund to the problem
17       gambling grant fund interest earnings based on (1) the average daily bal-
18       ance of moneys in the problem gambling grant fund for the preceding
19       month and (2) the net earnings of the pooled money investment portfolio
20       for the preceding month.
21             New Sec.  28. (a) There is hereby established in the state treasury the
22       video lottery central computer communications system fund. All moneys
23       credited to such fund shall be used for the acquisition, maintenance,
24       repair and replacement of the video lottery central communications sys-
25       tem. The video lottery central computer communications system shall be
26       used exclusively for the operation of the video lottery machine network
27       and shall incorporate electronic fund transfer procedures to facilitate the
28       collection of revenue, be capable of disabling any machine from play
29       which does not comply with the provisions of the lottery act, and be
30       capable of communicating with all video lottery machines approved by
31       the executive director. The executive director shall provide licensed man-
32       ufacturers with the protocol documentation and the audit information
33       and controls necessary to enable the manufacturers' machines to com-
34       municate with such central computer communication system. The video
35       lottery central computer communication system shall not limit partici-
36       pation only to one manufacturer of video lottery machines or video lottery
37       machine equipment by either the cost of implementing necessary pro-
38       gram modifications to communicate or the inability to communicate with
39       the system. Such fund shall be administered in accordance with this sec-
40       tion and the provisions of appropriation acts.
41             (b) All expenditures from the video lottery central computer com-
42       munications system fund shall be made in accordance with appropriation
43       acts upon warrants of the director of accounts and reports issued pursuant

21
  1       to vouchers approved in the manner prescribed by law.
  2             (c) On or before the 10th day of each month, the director of accounts
  3       and reports shall transfer from the state general fund to the video lottery
  4       central computer communications system fund interest earnings based
  5       on (1) the average daily balance of moneys in the problem gambling grant
  6       fund for the preceding month and (2) the net earnings rate of the pooled
  7       money investment portfolio for the preceding month.
  8             New Sec.  29. (a) There is hereby established in the state treasury the
  9       video lottery machine equipment fund. Such fund shall be administered
10       in accordance with this section and the provisions of appropriation acts.
11             (b) All expenditures from the video lottery machine equipment fund
12       shall be made in accordance with appropriation acts upon warrant of the
13       director of accounts and reports issued pursuant to vouchers approved in
14       the manner prescribed by law.
15             (c) On or before the 10th day of each month, the director of accounts
16       and reports shall transfer from the state general fund to the video lottery
17       machine equipment fund interest earnings based on (1) the average daily
18       balance of moneys in the problem gambling grant fund for the preceding
19       month and (2) the net earnings rate of the pooled money investment
20       portfolio for the preceding month.
21             New Sec.  30. (a) The governor shall enter into negotiations with any
22       Native American Indian tribe under which agreement, such tribe agrees
23       to cease all class III gaming operations and to close all class III gaming
24       facilities owned or operated by such tribe. Any tribe which enters into
25       such an agreement shall be paid its share of the net machine income as
26       provided by K.S.A. 74-8711, and amendments thereto. Such agreements
27       shall be for terms of five years and shall be renewable in each fourth year
28       of the agreement for an additional five years.
29             (b) Any such agreement shall not become effective unless approved
30       by the state finance council. Following approval of any such agreement
31       by the finance council, the governor shall notify the state treasurer that
32       such an agreement has been approved and that such tribe is entitled to
33       distributions of moneys under K.S.A. 74-8711, and amendments thereto.
34             (c) Following receipt of notice of approval of such agreement, the
35       state treasurer shall begin distributions the net machine income, as pro-
36       vided by K.S.A. 74-8711, and amendments thereto, to such tribe on or
37       before the 15th day of each month during the term of the agreement.
38             Sec.  31. K.S.A. 1999 Supp. 74-8810 is hereby amended to read as
39       follows: 74-8810. (a) It is a class A nonperson misdemeanor for any person
40       to have a financial interest, directly or indirectly, in any racetrack facility
41       within the state of Kansas or in any host facility for a simulcast race
42       displayed in this state Kansas or any parimutuel licensee location in
43       Kansas:

22
  1             (1) While such person is executive director or a member of the com-
  2       mission or during the five years immediately following such person's term
  3       as executive director or member of the commission; or
  4             (2) while such person is an officer, director or member of an organ-
  5       ization licensee, other than a fair association or horsemen's nonprofit or-
  6       ganization, or during the five years immediately following the time such
  7       person is an officer, director or member of such an organization licensee.
  8             (b) It is a class A nonperson misdemeanor for any member, employee
  9       or appointee of the commission, including stewards and racing judges, to
10       knowingly:
11             (1) Participate in the operation of or have a financial interest in any
12       business which has been issued a concessionaire license, racing or wa-
13       gering or video lottery machine equipment or services license, facility
14       owner license or facility manager license, or any business which sells
15       goods or services to an organization licensee;
16             (2) participate directly or indirectly as an owner, owner-trainer or
17       trainer of a horse or greyhound, or as a jockey of a horse, entered in a
18       race meeting conducted in this state or as an owner, operator, manager
19       or consultant in video lottery gaming in Kansas;
20             (3) place a wager on an entry in a horse or greyhound race conducted
21       by an organization licensee or any parimutuel licensee location; or
22             (4) place a wager on or bet or play a video lottery machine at a
23       parimutuel licensee location in Kansas; or
24             (4) (5) accept any compensation, gift, loan, entertainment, favor or
25       service from any licensee, except such suitable facilities and services
26       within a racetrack facility operated by an organization licensee as may be
27       required to facilitate the performance of the member's, employee's or
28       appointee's official duties.
29             (c)  (1) Except as provided in paragraph (2), it is a class A nonperson
30       misdemeanor for any member, employee or appointee of the commission,
31       or any spouse, parent, grandparent, brother, sister, child, son-in-law,
32       daughter-in-law, grandchild, uncle, aunt, parent-in-law, brother-in-law or
33       sister-in-law thereof, to:
34             (A) Hold any license issued by the commission, except that a steward
35       or racing judge shall hold an occupation license to be such a steward or
36       judge; or
37             (B) enter into any business dealing, venture or contract with an owner
38       or lessee of a racetrack facility in Kansas or a parimutuel licensee location
39       in Kansas.
40             (2) This subsection shall not apply to any racing judge holding an
41       occupation license, if such racing judge is employed at a racetrack facility
42       and such racing judge's relative, as listed above, is a licensed owner,
43       owner-trainer or trainer of a greyhound that races at a different racetrack

23
  1       facility.
  2             (d) It is a class A nonperson misdemeanor for any officer, director or
  3       member of an organization licensee, other than a fair association or horse-
  4       men's nonprofit organization, to:
  5             (1) Receive, for duties performed as an officer or director of such
  6       licensee, any compensation or reimbursement or payment of expenses in
  7       excess of the amounts provided by K.S.A. 75-3223, and amendments
  8       thereto, for board members' compensation, mileage and expenses; or
  9             (2) enter into any business dealing, venture or contract with the or-
10       ganization licensee or, other than in the capacity of an officer or director
11       of the organization licensee, with a facility owner licensee, facility man-
12       ager licensee, racing or wagering equipment or services license or con-
13       cessionaire licensee, or with any host facility for a simulcast race displayed
14       in this state.
15             (e) It is a class A nonperson misdemeanor for any facility owner li-
16       censee or facility manager licensee, other than a horsemen's association,
17       or any officer, director, employee, stockholder or shareholder thereof or
18       any person having an ownership interest therein, to participate directly
19       or indirectly as an owner, owner-trainer or trainer of a horse or grey-
20       hound, or as a jockey of a horse, entered in a live race conducted in this
21       state.
22             (f) It is a class A nonperson misdemeanor for any licensee of the
23       commission, or any person who is an officer, director, member or em-
24       ployee of a licensee, to place a wager at a racetrack facility located in
25       Kansas on an entry in a horse or greyhound race if:
26             (1) The commission has by rules and regulations designated such per-
27       son's position as a position which could influence the outcome of such
28       race or the parimutuel wagering thereon; and
29             (2) such race is conducted at or simulcast to the racetrack facility
30       where the licensee is authorized to engage in licensed activities.
31             (g) It is a class B nonperson misdemeanor for any person to use any
32       animal or fowl in the training or racing of racing greyhounds.
33             (h) It is a class A nonperson misdemeanor for any person to:
34             (1) Sell a parimutuel ticket or an interest in such a ticket to a person
35       knowing such person to be under 18 years of age, upon conviction of the
36       first offense;
37             (2) accept, transmit or deliver, from a person outside a racetrack fa-
38       cility, anything of value to be wagered in any parimutuel system of wa-
39       gering within a racetrack facility, upon conviction of the first offense;
40             (3) administer or conspire to administer any drug or medication to a
41       horse or greyhound within the confines of a racetrack facility in violation
42       of rules and regulations of the commission, upon conviction of the first
43       offense;

24
  1             (4) possess or conspire to possess, within the confines of a racetrack
  2       facility, any drug or medication for administration to a horse or greyhound
  3       in violation of rules and regulations of the commission, upon conviction
  4       of the first offense;
  5             (5) possess or conspire to possess, within the confines of a racetrack
  6       facility, equipment for administering drugs or medications to horses or
  7       greyhounds in violation of rules and regulations of the commission, upon
  8       conviction of the first offense;
  9             (6) enter any horse or greyhound in any race knowing such horse or
10       greyhound to be ineligible to compete in such race pursuant to K.S.A.
11       74-8812, and amendments thereto; or
12             (7) prepare or cause to be prepared an application for registration of
13       a horse pursuant to K.S.A. 74-8830, and amendments thereto, knowing
14       that such application contains false information.
15             (i) It is a severity level 8, nonperson felony for any person to:
16             (1) Sell a parimutuel ticket or an interest in such a ticket to a person
17       knowing such person to be under 18 years of age, upon conviction of the
18       second or a subsequent offense;
19             (2) accept, transmit or deliver, from any person outside a racetrack
20       facility, anything of value to be wagered in any parimutuel system of
21       wagering within a racetrack facility, upon the second or a subsequent
22       conviction;
23             (3) conduct or assist in the conduct of a horse or greyhound race, or
24       the display of a simulcast race, where the parimutuel system of wagering
25       is used or is intended to be used and where no license has been issued
26       to an organization to conduct or simulcast such race;
27             (4) enter any horse or greyhound in any race conducted by an organ-
28       ization licensee knowing that the class or grade in which such horse or
29       greyhound is entered is not the true class or grade or knowing that the
30       name under which such horse or greyhound is entered is not the name
31       under which such horse or greyhound has been registered and has pub-
32       licly performed;
33             (5) use or conspire to use any device, other than an ordinary whip for
34       horses or a mechanical lure for greyhounds, for the purpose of affecting
35       the speed of any horse or greyhound at any time during a race conducted
36       by an organization licensee;
37             (6) possess or conspire to possess, within the confines of a racetrack
38       facility, any device, other than an ordinary whip for horses or a mechanical
39       lure for greyhounds, designed or intended to affect the speed of a horse
40       or greyhound;
41             (7) administer or conspire to administer any drug or medication to a
42       horse or greyhound within the confines of a racetrack facility in violation
43       of rules and regulations of the commission, upon conviction of the second

25
  1       or a subsequent offense;
  2             (8) possess or conspire to possess, within the confines of a racetrack
  3       facility, any drug or medication for administration to a horse or greyhound
  4       in violation of rules and regulations of the commission, upon conviction
  5       of the second or a subsequent offense;
  6             (9) possess or conspire to possess, within the confines of a racetrack
  7       facility, equipment for administering drugs or medications to horses or
  8       greyhounds in violation of rules and regulations of the commission, upon
  9       conviction of the second or a subsequent offense;
10             (10) sponge the nostrils or windpipe of a horse for the purpose of
11       stimulating or depressing such horse or affecting its speed at any time
12       during a race meeting conducted by an organization licensee;
13             (11) alter or attempt to alter the natural outcome of any race con-
14       ducted by, or any simulcast race displayed by, an organization licensee or
15       transmit or receive an altered race or delayed broadcast race if parimutuel
16       wagering is conducted or solicited after off time of the race;
17             (12) influence or attempt to influence, by the payment or promise of
18       payment of money or other valuable consideration, any person to alter
19       the natural outcome of any race conducted by, or any simulcast race
20       displayed by, an organization licensee;
21             (13) influence or attempt to influence any member, employee or ap-
22       pointee of the commission, by the payment or promise of payment of
23       money or other valuable consideration, in the performance of any official
24       duty of that member, employee or appointee;
25             (14) fail to report to the commission or to one of its employees or
26       appointees knowledge of any violation of this act by another person for
27       the purpose of stimulating or depressing any horse or greyhound, or af-
28       fecting its speed, at any time during any race conducted by an organiza-
29       tion licensee;
30             (15) commit any of the following acts with respect to the prior racing
31       record, pedigree, identity or ownership of a registered horse or greyhound
32       in any matter related to the breeding, buying, selling or racing of the
33       animal: (A) Falsify, conceal or cover up, by any trick, scheme or device,
34       a material fact; (B) make any false, fictitious or fraudulent statement or
35       representation; or (C) make or use any false writing or document knowing
36       that it contains any false, fictitious or fraudulent statement or entry; or
37             (16) pass or attempt to pass, cash or attempt to cash any altered or
38       forged parimutuel ticket knowing it to have been altered or forged.
39             (j) No person less than 18 years of age shall purchase a parimutuel
40       ticket or an interest in such a ticket. Any person violating this subsection
41       shall be subject to adjudication as a juvenile offender pursuant to the
42       Kansas juvenile justice code.
43             Sec.  32. K.S.A. 1999 Supp. 19-101a is hereby amended to read as

26
  1       follows: 19-101a. (a) The board of county commissioners may transact all
  2       county business and perform all powers of local legislation and adminis-
  3       tration it deems appropriate, subject only to the following limitations,
  4       restrictions or prohibitions:
  5             (1) Counties shall be subject to all acts of the legislature which apply
  6       uniformly to all counties.
  7             (2) Counties may not consolidate or alter county boundaries.
  8             (3) Counties may not affect the courts located therein.
  9             (4) Counties shall be subject to acts of the legislature prescribing
10       limits of indebtedness.
11             (5) In the exercise of powers of local legislation and administration
12       authorized under provisions of this section, the home rule power con-
13       ferred on cities to determine their local affairs and government shall not
14       be superseded or impaired without the consent of the governing body of
15       each city within a county which may be affected.
16             (6) Counties may not legislate on social welfare administered under
17       state law enacted pursuant to or in conformity with public law No. 271--
18       74th congress, or amendments thereof.
19             (7) Counties shall be subject to all acts of the legislature concerning
20       elections, election commissioners and officers and their duties as such
21       officers and the election of county officers.
22             (8) Counties shall be subject to the limitations and prohibitions im-
23       posed under K.S.A. 12-187 to 12-195, inclusive, and amendments thereto,
24       prescribing limitations upon the levy of retailers' sales taxes by counties.
25             (9) Counties may not exempt from or effect changes in statutes made
26       nonuniform in application solely by reason of authorizing exceptions for
27       counties having adopted a charter for county government.
28             (10) No county may levy ad valorem taxes under the authority of this
29       section upon real property located within any redevelopment area estab-
30       lished under the authority of K.S.A. 12-1772, and amendments thereto,
31       unless the resolution authorizing the same specifically authorized a por-
32       tion of the proceeds of such levy to be used to pay the principal of and
33       interest upon bonds issued by a city under the authority of K.S.A. 12-
34       1774, and amendments thereto.
35             (11) Counties shall have no power under this section to exempt from
36       any statute authorizing or requiring the levy of taxes and providing sub-
37       stitute and additional provisions on the same subject, unless the resolution
38       authorizing the same specifically provides for a portion of the proceeds
39       of such levy to be used to pay a portion of the principal and interest on
40       bonds issued by cities under the authority of K.S.A. 12-1774, and amend-
41       ments thereto.
42             (12) Counties may not exempt from or effect changes in the provi-
43       sions of K.S.A. 19-4601 to 19-4625, inclusive through 19-4625, and

27
  1       amendments thereto.
  2             (13) Except as otherwise specifically authorized by K.S.A. 12-1,101
  3       to 12-1,109, inclusive through 12-1,109, and amendments thereto, coun-
  4       ties may not levy and collect taxes on incomes from whatever source
  5       derived.
  6             (14) Counties may not exempt from or effect changes in K.S.A. 19-
  7       430, and amendments thereto. Any charter resolution adopted by a
  8       county prior to July 1, 1983, exempting from or effecting changes in
  9       K.S.A. 19-430, and amendments thereto, is null and void.
10             (15) Counties may not exempt from or effect changes in K.S.A. 19-
11       302, 19-502b, 19-503, 19-805 or 19-1202, and amendments thereto.
12             (16)  (A) Counties may not exempt from or effect changes in K.S.A.
13       13-13a26, and amendments thereto. Any charter resolution adopted by a
14       county, prior to the effective date of this act, exempting from or effecting
15       changes in K.S.A. 13-13a26, and amendments thereto, is null and void.
16             (B) This provision shall expire on June 30, 2003.
17             (17)  (A) Counties may not exempt from or effect changes in K.S.A.
18       71-301, and amendments thereto. Any charter resolution adopted by a
19       county, prior to the effective date of this act, exempting from or effecting
20       changes in K.S.A. 71-301, and amendments thereto, is null and void.
21             (B) This provision shall expire on June 30, 2003.
22             (18) Counties may not exempt from or effect changes in K.S.A. 19-
23       15,139, 19-15,140 and 19-15,141, and amendments thereto. Any charter
24       resolution adopted by a county prior to the effective date of this act,
25       exempting from or effecting changes in such sections is null and void.
26             (19) Counties may not exempt from or effect changes in the provi-
27       sions of K.S.A. 12-1223, 12-1225, 12-1225a, 12-1225b, 12-1225c and 12-
28       1226, and amendments thereto, or the provisions of K.S.A. 1999 Supp.
29       12-1260 to 12-1270, inclusive through 12-1270 and 12-1276, and amend-
30       ments thereto, and 12-1276, and amendments thereto.
31             (20) Counties may not exempt from or effect changes in the provi-
32       sions of K.S.A. 19-211, and amendments thereto.
33             (21) Counties may not exempt from or effect changes in the provi-
34       sions of K.S.A. 19-4001 to 19-4015, inclusive through 19-4015, and
35       amendments thereto.
36             (22) Counties may not regulate the production or drilling of any oil
37       or gas well in any manner which would result in the duplication of reg-
38       ulation by the state corporation commission and the Kansas department
39       of health and environment pursuant to chapter 55 and chapter 65 of the
40       Kansas Statutes Annotated and any rules and regulations adopted pur-
41       suant thereto. Counties may not require any license or permit for the
42       drilling or production of oil and gas wells. Counties may not impose any
43       fee or charge for the drilling or production of any oil or gas well.

28
  1             (23) Counties may not exempt from or effect changes in K.S.A. 79-
  2       41a04, and amendments thereto.
  3             (24) Counties may not exempt from or effect changes in K.S.A. 79-
  4       1611, and amendments thereto.
  5             (25) Counties may not exempt from or effect changes in K.S.A. 79-
  6       1494, and amendments thereto.
  7             (26) Counties may not exempt from or effect changes in subsection
  8       (b) of K.S.A. 19-202, and amendments thereto.
  9             (27) Counties may not exempt from or effect changes in subsection
10       (b) of K.S.A. 19-204, and amendments thereto.
11             (28) Counties may not levy or impose an excise, severance or any
12       other tax in the nature of an excise tax upon the physical severance and
13       production of any mineral or other material from the earth or water. Any
14       resolution adopted by any county prior to the effective date of this act
15       imposing or levying any such tax is null and void.
16             (29) Counties may not exempt from or effect changes in K.S.A. 79-
17       2017 or 79-2101, and amendments thereto. Any charter resolution
18       adopted prior to the effective date of this act, which affected the provi-
19       sions of K.S.A. 79-2017 or 79-2101, and amendments thereto, is hereby
20       declared to be null and void.
21             (30) Counties may not exempt from or effect changes in K.S.A. 2-
22       3302, 2-3305, 2-3307, 17-5904, 17-5908, 47-1219 or 65-171d or K.S.A.
23       1999 Supp. 2-3318, 17-5909 or 65-1,178 through 65-1,199, and amend-
24       ments thereto.
25             (31) Counties may not exempt from or effect changes in K.S.A. 1999
26       Supp. 80-121, and amendments thereto.
27             (32) Counties may not exempt from or effect changes in the lottery
28       act or the Kansas parimutuel racing act.
29             (b) Counties shall apply the powers of local legislation granted in
30       subsection (a) by resolution of the board of county commissioners. If no
31       statutory authority exists for such local legislation other than that set forth
32       in subsection (a) and the local legislation proposed under the authority
33       of such subsection is not contrary to any act of the legislature, such local
34       legislation shall become effective upon passage of a resolution of the
35       board and publication in the official county newspaper. If the legislation
36       proposed by the board under authority of subsection (a) is contrary to an
37       act of the legislature which is applicable to the particular county but not
38       uniformly applicable to all counties, such legislation shall become effec-
39       tive by passage of a charter resolution in the manner provided in K.S.A.
40       19-101b, and amendments thereto.
41             (c) Any resolution adopted by a county which conflicts with the re-
42       strictions in subsection (a) is null and void. 
43       Sec.  33. K.S.A. 74-8701, 74-8702, 74-8704, 74-8708 and 74-8711 and

29
  1       K.S.A. 1999 Supp. 19-101a, 19-101j, 74-8710, 74-8718, 74-8719, 74-8723
  2       and 74-8810 are hereby repealed.
  3        Sec.  34. This act shall take effect and be in force from and after its
  4       publication in the statute book.
  5      
  6      

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Session of 2000
  7       HOUSE BILL No. 3047   8       By Committee on Appropriations   9       3-27 13      

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14             AN  ACT concerning lotteries; relating to the powers and duties of the
15             Kansas lottery; providing for the consolidation of certain gaming op-
16             erations; amending K.S.A. 74-8701, 74-8702, 74-8704, 74-8708 and 74-
17             8711 and K.S.A. 1999 Supp. 19-101a, 74-8710, 74-8718, 74-8719, 74-
18             8723 and 74-8810 and repealing the existing sections; also repealing
19             K.S.A. 1999 Supp. 19-101j.
20      
21       Be it enacted by the Legislature of the State of Kansas:
22             Section  1. K.S.A. 74-8701 is hereby amended to read as follows: 74-
23       8701. (a) K.S.A. 74-8701 through 74-8721 74-8723 and sections 10
24       through 30, and amendments thereto, shall be known as and may be cited
25       as the Kansas lottery act.
26             (b) It is the intent of the legislature to limit class III gaming in the
27       state of Kansas. It is the public policy of this state to conduct or operate
28       all class III gaming at existing parimutuel racetrack facilities in the state.
29             Sec.  2. K.S.A. 74-8702 is hereby amended to read as follows: 74-
30       8702. As used in this act, unless the context otherwise requires the lottery
31       act:
32             (a) ``Commission'' means the Kansas lottery commission.
33             (b) ``Executive director'' means the executive director of the Kansas
34       lottery.
35             (c) ``Gaming equipment'' means any electric, electronic or mechani-
36       cal, computerized or electromechanical machine, mechanism, supply or
37       device or other equipment unique to the Kansas lottery used directly in,
38       or integral to, the operation of any lottery and in the determination of
39       winners pursuant to this the lottery act.
40             (d) ``Kansas lottery'' means the state agency created by this the lottery
41       act to operate a lottery or lotteries pursuant to this the lottery act.
42             (e) ``Lottery retailer'' means any person with whom the Kansas lottery
43       has contracted to sell lottery tickets or shares, or both,, shares or video
44       lottery games to the public.
45             (f) ``Lottery'' or ``state lottery'' means the lottery or lotteries operated
46       pursuant to this the lottery act.
47             (g) ``Major procurement'' means any gaming product or service, in-
48       cluding but not limited to facilities, advertising and promotional services,
49       annuity contracts, prize payment agreements, consulting services, equip-
50       ment, tickets and other products and services unique to the Kansas lot-
51       tery, but not including materials, supplies, equipment and services com-
52       mon to the ordinary operations of state agencies.
53             (h) ``Person'' means any natural person, association, corporation or
54       partnership.
55             (i) ``Prize'' means any prize paid directly by the Kansas lottery pur-
56       suant to its rules and regulations adopted by the commission.
57             (j) ``Share'' means any intangible manifestation authorized by the
58       Kansas lottery to prove participation in a lottery game.
59             (k) ``Ticket'' means any tangible evidence issued by the Kansas lottery
60       to prove participation in a lottery game.
61             (l) ``Vendor'' means any person who has entered into a major pro-
62       curement contract with the Kansas lottery.
63             (m) ``Returned ticket'' means any ticket which was transferred to a
64       lottery retailer, which was not sold by the lottery retailer and which was
65       returned to the Kansas lottery for refund by issuance of a credit or
66       otherwise.
67             (n) ``Video lottery machine'' means any electronic video game ma-
68       chine that, upon insertion of cash, is available to play or simulate the play
69       of a video game authorized by the commission, including but not limited
70       to bingo, poker, black jack and keno, and which uses a video display and
71       microprocessors and in which, by chance, the player may receive free
72       games or credits that can be redeemed for cash.
73             (n) ``Class III gaming'' means class III gaming as defined by 25 U.S.C.
74       2701 et seq.
75             (o) ``Gray area device'' means any mechanical, electromechanical or
76       electronic device or video lottery machine capable of being used for gam-
77       bling, that is not authorized by the commission and not connected to the
78       state video lottery central computer communication system, that is avail-
79       able to the public for play and capable of simulating a game played on a
80       licensed video lottery machine or any similar video lottery game.
81             (p) ``Native American Indian tribe'' means the following resident Kan-
82       sas Native American Indian tribes:
83             (1) The Iowa Tribe of Kansas and Nebraska.
84             (2) The Kickapoo Tribe in Kansas.
85             (3) The Prairie Band Potawatomi Nation of Kansas.
86             (4) The Sac and Fox Nation of Missouri in Kansas and Missouri.
87             (q) ``Net machine income'' means all cash or other consideration util-
88       ized to play a video lottery machine, less all cash or other consideration
89       paid out to winning players as prizes.
90             (r) ``Parimutuel licensee'' means a facility owner licensee or a facility
91       manager licensee, as defined by K.S.A. 74-8802, and amendments thereto.
92             (s) ``Parimutuel licensee location'' means a racetrack facility and any
93       real estate in which the parimutuel licensee has an interest which is ad-
94       jacent to the real estate on which the racetrack facility is located. The
95       parimutuel licensee location shall include any structures that may be con-
96       structed at such location after January 1, 1995, if plans for such structures
97       were in process on the effective date of this act.
98             (t) ``Progressive game'' means any game in which the jackpot grows
99       and accumulates as it is being played on a video lottery machine and the
100       results are randomly determined by the play of video lottery machines
101       linked to a computer network.
102             (u) ``Token'' means the coin, which is not legal tender, sold by a video
103       lottery sales agent in a face amount equal to the cash paid by a player for
104       the sole purpose of playing a video lottery machine at a parimutuel li-
105       censee location or paid to a player of a video lottery machine, which can
106       be exchanged for cash at the parimutuel licensee location where the video
107       lottery machine is located.
108             (v) ``Video lottery'' means any lottery conducted with a video lottery
109       machine or a network of linked video lottery machines with an aggregate
110       progression prize or prizes.
111             (w) ``Video lottery game'' means any electronically simulated game of
112       chance, including but not limited to, video poker, keno, line-up or black-
113       jack, displayed and played on a video gaming machine.
114             (x) ``Video lottery machine'' means any electronic machine in which
115       bills, coins or tokens are deposited in order to play in a game of chance
116       in which the results, including options available to the player, are ran-
117       domly and immediately determined by the machine. A machine may use
118       spinning reels or video displays or both, and may or may not dispense
119       coins or tokens directly to winning players. A machine shall be considered
120       a video lottery machine notwithstanding the use of an electronic credit
121       system making the deposit of bills, coins or tokens unnecessary.
122             (y) ``Video lottery machine equipment'' means any proprietary device,
123       machine or part used in the manufacture, operation or maintenance of a
124       video lottery machine.
125             (z) ``Video lottery machine manufacturer'' means any individual,
126       firm, corporation or other person licensed by the commission to assemble
127       or produce video lottery machines or video lottery machine associated
128       equipment for sale or use in this state.
129             (aa) ``Video lottery retailer'' means a parimutuel licensee who has con-
130       tracted with the lottery to be a retailer.
131             Sec.  3. K.S.A. 74-8704 is hereby amended to read as follows: 74-
132       8704. (a) The executive director shall have the power to:
133             (1) Supervise and administer the operation of the state lottery in ac-
134       cordance with the provisions of this act and such rules and regulations as
135       adopted hereunder.
136             (2) Appoint, subject to the Kansas civil service act and within the
137       limitations of appropriations therefor, all other employees of the Kansas
138       lottery, which employees shall be in the classified service unless otherwise
139       specifically provided by this act.
140             (3) Enter into contracts for: (A) Advertising and promotional services,
141       subject to the provisions of subsection (b); (B) annuities or other methods
142       deemed appropriate for the payment of prizes; (C) data processing and
143       other technical products, equipment and services; and (D) facilities as
144       needed to operate the Kansas lottery, including. Such contracts may in-
145       clude, but not be limited to, gaming equipment, tickets and other services
146       involved in major procurement contracts, in accordance with K.S.A. 74-
147       8705, and amendments thereto.
148             (4) Enter into contracts with: (A) Persons for the sale of lottery tickets
149       or shares to the public, as provided by this act and; and (B) parimutuel
150       licensees for video lottery machines at parimutuel licensee locations. Such
151       contracts shall be subject to rules and regulations adopted pursuant to
152       this act, which contracts but shall not be subject to the provisions of K.S.A.
153       75-3738 through 75-3744, and amendments thereto.
154             (5) Require lottery retailers to furnish proof of financial stability or
155       furnish surety in an amount based upon the expected volume of sales of
156       lottery tickets or shares or video lottery games.
157             (6) Examine, or cause to be examined by any agent or representative
158       designated by the executive director, any books, papers, records or mem-
159       oranda of any lottery retailer for the purpose of ascertaining compliance
160       with the provisions of this act or rules and regulations adopted hereunder.
161             (7) Issue subpoenas to compel access to or for the production of any
162       books, papers, records or memoranda in the custody or control of any
163       lottery retailer, or to compel the appearance of any lottery retailer or
164       employee of any lottery retailer, for the purpose of ascertaining compli-
165       ance with the provisions of this act or rules and regulations adopted here-
166       under. Subpoenas issued under the provisions of this subsection may be
167       served upon natural persons and corporations in the manner provided in
168       K.S.A. 60-304, and amendments thereto, for the service of process by any
169       officer authorized to serve subpoenas in civil actions or by the executive
170       director or an agent or representative designated by the executive direc-
171       tor. In the case of the refusal of any person to comply with any such
172       subpoena, the executive director may make application to the district
173       court of any county where such books, papers, records, memoranda or
174       person is located for an order to comply.
175             (8) Administer oaths and take depositions to the same extent and
176       subject to the same limitations as would apply if the deposition were in
177       aid of a civil action in the district court.
178             (9) Require fingerprinting of employees and such other persons who
179       work in sensitive areas within the lottery as deemed appropriate by the
180       director. The director may submit such fingerprints to the Kansas bureau
181       of investigation and to the federal bureau of investigation for the purposes
182       of verifying the identity of such employees and persons and obtaining
183       records of their criminal arrests and convictions.
184             (b) The Kansas lottery shall not engage in on-site display advertising
185       or promotion of the lottery at any amateur athletic or sporting event
186       including, but not limited to, amateur athletic sporting events at institu-
187       tions under the jurisdiction and control of the state board of regents.
188             Sec.  4. K.S.A. 74-8708 is hereby amended to read as follows: 74-
189       8708. (a) The executive director shall select as lottery retailers such per-
190       sons as deemed best able to serve the public convenience and promote
191       the sale of tickets or shares in accordance with marketing plans developed
192       by the Kansas lottery. In the selection of lottery retailers, the executive
193       director shall consider factors such as financial responsibility, security of
194       the applicant's place of business or activity, accessibility of the applicant's
195       place of business or activity, integrity, reputation, volume of expected
196       sales and such other factors as the executive director may deem appro-
197       priate. The executive director may select the state fair board as a lottery
198       retailer to sell lottery tickets or shares only on the state fairgrounds and
199       only during the time of the annual state fair. Other persons lawfully en-
200       gaged in nongovernmental business on state property may be selected as
201       lottery retailers.
202             (b) The executive director may charge an application fee to persons
203       applying to become lottery retailers.
204             (c) All lottery retailer contracts awarded by the Kansas lottery under
205       this act shall be renewable annually after issuance unless sooner canceled
206       or terminated.
207             A contract with a video lottery retailer may be for a term in excess of
208       one year. Any such contract shall terminate on the date of the expiration
209       of the lottery.
210             (d) No lottery retailer contract awarded under this act shall be trans-
211       ferred or assignable.
212             (e) Each lottery retailer shall be issued a lottery retailer certificate
213       which shall be conspicuously displayed at the place where the lottery
214       retailer is authorized to sell lottery tickets or shares.
215             (f) Lottery tickets or shares shall only be sold by the lottery retailer
216       at the location stated on the lottery retailer certificate.
217             (g) To be selected as a lottery retailer, a natural person acting as a
218       sole proprietor must:
219             (1) Be at least 18 years of age;
220             (2) have sufficient financial resources to support the activities re-
221       quired to sell lottery tickets or shares;
222             (3) be current in payment of all taxes, interest and penalties owed to
223       any taxing subdivision where the lottery retailer will sell lottery tickets or
224       shares or video lottery games;
225             (4) be current in filing all applicable tax returns and in payment of
226       all taxes, interest and penalties owed to the state of Kansas, excluding
227       items under formal appeal pursuant to applicable statutes; and
228             (5) not be engaged exclusively in the sale of lottery tickets and shares
229       or video lottery games.
230             (h) No natural person shall be selected as a lottery retailer who:
231             (1) Has been convicted of a felony in this or any other jurisdiction,
232       unless at least 10 years have passed since satisfactory completion of the
233       sentence or probation imposed by the court for each such felony;
234             (2) has been convicted of an illegal gambling activity in this or any
235       other jurisdiction;
236             (3) has been found to have violated the provisions of this act or any
237       rule and regulation adopted hereunder;
238             (4) is a vendor or an employee or agent of any vendor doing business
239       with the Kansas lottery;
240             (5) resides in the same household of an employee of the Kansas lot-
241       tery or of a member of the commission; or
242             (6) has made a statement of material fact to the Kansas lottery, know-
243       ing such statement to be false.
244             (i) For a partnership to be selected as a lottery retailer, the partner-
245       ship must meet the requirements of subsections (g)(2), (g)(3), (g)(4) and
246       (g)(5) and each partner must meet the requirements of subsections (g)(1),
247       (g)(3), (g)(4) and (h)(1) through (h)(6).
248             (j) For a corporation to be selected as a lottery retailer, the corpo-
249       ration must meet the requirements of subsections (g)(2), (g)(3), (g)(4)
250       and (g)(5) and each officer or director and each stockholder who owns
251       5% or more of the stock of such corporation must meet the requirements
252       of subsections (g)(3), (g)(4) and (h)(1) through (h)(6).
253             (k) For an unincorporated association to be selected as a lottery re-
254       tailer, the association must meet the requirements of subsections (g)(2),
255       (g)(3), (g)(4) and (g)(5) and each officer or director must meet the
256       requirements of subsections (g)(1), (g)(3), (g)(4) and (h)(1) through (h)(6).
257             (l) The executive director may terminate the certificate of any lottery
258       retailer who fails to meet any of the applicable qualifying standards for
259       selection as a retailer provided in this section or on the grounds for ter-
260       mination provided in the contract pursuant to rules and regulations
261       adopted by the commission.
262             (m) If a lottery retailer's rental payments for the business premises
263       are contractually computed, in whole or in part, on the basis of a per-
264       centage of retail sales, and such computation of retail sales is not explicitly
265       defined to include sale of tickets or shares in a state-operated lottery, the
266       compensation received by the lottery retailer from the lottery shall be
267       considered the amount of the retail sale for purposes of computing the
268       rental payment.
269             Sec.  5. K.S.A. 1999 Supp. 74-8710 is hereby amended to read as
270       follows: 74-8710. (a) The commission, upon the recommendation of the
271       executive director, shall adopt rules and regulations governing the estab-
272       lishment and operation of a state lottery as necessary to carry out the
273       purposes of this the lottery act. Temporary rules and regulations may be
274       adopted by the commission without being subject to the provisions and
275       requirements of K.S.A. 77-415 through 77-438, and amendments thereto,
276       but shall be subject to approval by the attorney general as to legality and
277       shall be filed with the secretary of state and published in the Kansas
278       register. Temporary and permanent rules and regulations may include
279       but shall not be limited to:
280             (1) Subject to the provisions of subsection (b), the types of lottery
281       games to be conducted, including but not limited to instant lottery, on-
282       line and traditional games, but not including and games on video lottery
283       machines at parimutuel licensee locations.
284             (2) The manner of selecting the winning tickets or shares, except that,
285       if a lottery game utilizes a drawing of winning numbers, a drawing among
286       entries or a drawing among finalists, such drawings shall always be open
287       to the public and shall be recorded on both video and audio tape.
288             (3) The manner of payment of prizes to the holders of winning tickets
289       or shares.
290             (4) The frequency of the drawings or selections of winning tickets or
291       shares.
292             (5) The type or types of locations at which tickets or shares may be
293       sold.
294             (6) The method or methods to be used in selling tickets or shares.
295             (7) Additional qualifications for the selection of lottery retailers and
296       the amount of application fees to be paid by each.
297             (8) The amount and method of compensation to be paid to lottery
298       retailers, including special bonuses and incentives.
299             (9) Deadlines for claims for prizes by winners of each lottery game.
300             (10) Provisions for confidentiality of information submitted by ven-
301       dors pursuant to K.S.A. 74-8705, and amendments thereto.
302             (11) Information required to be submitted by vendors, in addition to
303       that required by K.S.A. 74-8705, and amendments thereto.
304             (12) The major procurement contracts or portions thereof to be
305       awarded to minority business enterprises pursuant to subsection (a) of
306       K.S.A. 74-8705, and amendments thereto, and procedures for the award
307       thereof.
308             (b) No new lottery game shall commence operation after the effective
309       date of this act unless first approved by the governor or, in the governor's
310       absence or disability, the lieutenant governor.
311             Sec.  6. K.S.A. 74-8711 is hereby amended to read as follows: 74-
312       8711. (a) There is hereby established in the state treasury the lottery
313       operating fund.
314             (b) The executive director shall remit at least weekly to the state
315       treasurer all moneys collected from the sale of lottery tickets and shares
316       and any other moneys received by or on behalf of the Kansas lottery other
317       than funds to be deposited into the video lottery machine fund pursuant
318       to subsection (e). Upon receipt of any such remittance, the state treasurer
319       shall deposit the entire amount thereof in the state treasury and credit it
320       to the lottery operating fund. Moneys credited to the fund shall be ex-
321       pended or transferred only as provided by this act. Expenditures from
322       such fund shall be made in accordance with appropriations acts upon
323       warrants of the director of accounts and reports issued pursuant to vouch-
324       ers approved by the executive director or by a person designated by the
325       executive director.
326             (c) Moneys in the lottery operating fund shall be used for:
327             (1) Except as provided by this section, the payment of expenses of
328       the lottery, which shall include all costs incurred in the operation and
329       administration of the Kansas lottery; all costs resulting from contracts
330       entered into for the purchase or lease of goods and services needed for
331       operation of the lottery, including but not limited to supplies, materials,
332       tickets, independent studies and surveys, data transmission, advertising,
333       printing, promotion, incentives, public relations, communications, and
334       distribution of tickets and shares; and reimbursement of costs of facilities
335       and services provided by other state agencies. Expenses of the lottery
336       relating to the regulation and operation of video lottery machines shall be
337       paid as provided by subsection (e);
338             (2) the payment of compensation to lottery retailers;
339             (3) transfers of moneys to the lottery prize payment fund pursuant to
340       K.S.A. 74-8712, and amendments thereto;
341             (4) transfers to the state general fund pursuant to K.S.A. 74-8713,
342       and amendments thereto;
343             (5) transfers to the state gaming revenues fund pursuant to subsection
344       (d) of this section and as otherwise provided by law; and
345             (6) the transfers to the county reappraisal fund as prescribed by law.
346             (d) The director of accounts and reports shall transfer moneys in the
347       lottery operating fund to the state gaming revenues fund created by
348       K.S.A. 79-4801, and amendments thereto, on or before the 15th day of
349       each month, for fiscal years commencing on or after July 1, 1988 in an
350       amount certified monthly by the executive director and determined as
351       follows, whichever is greater:
352             (1) In an amount equal to the moneys in the lottery operating fund
353       in excess of those needed for the purposes described in subsections (c)(1)
354       through (c)(4); or
355             (2) an amount equal to not less than 30% of total monthly revenues
356       from the sales of lottery tickets and shares less estimated returned tickets.
357             (e) There is hereby established in the state treasury the video lottery
358       machine fund. The executive director shall collect and remit to the state
359       treasurer not less than once each week all net machine income received
360       from video lottery retailers to be credited to the video lottery machine
361       fund. Separate accounts shall be maintained in the video lottery machine
362       fund for receipt of funds from each video lottery retailer. Not less than
363       once each week, the state treasurer shall distribute from the total receipts
364       credited to each such account of the video lottery retailer an amount equal
365       to:
366             (1) One-half percent to the problem gambling grant fund established
367       by section 26, and amendments thereto.
368             (2) One and one-half percent to the organization licensee at the par-
369       imutuel licensee location.
370             (3) Two percent to the lottery operation fund established by K.S.A.
371       74-8712, and amendments thereto.
372             (4) Two percent to each county in which the parimutuel licensee lo-
373       cation is located. In Wyandotte county, such moneys shall be distributed
374       to the governing body of the unified government of Kansas City, Kansas.
375       In Sedgwick county, such moneys shall be distributed equally between
376       the county and the city of Wichita, Kansas. In Crawford county, such
377       moneys shall be distributed equally among the county and the cities of
378       Frontenac and Pittsburg, Kansas.
379             (5) Three percent to the live horse and greyhound racing purse en-
380       hancement fund.
381             (6) Four percent to the video lottery central computer communica-
382       tions system fund.
383             (7) Twelve percent to the video lottery machine and equipment fund.
384             (8) Seventeen percent to the video lottery retailer.
385             (9) Twenty-seven percent to be split equally among Native American
386       Indian tribes who have entered into agreements pursuant to section 30,
387       and amendments thereto, and who do not own or operate any class III
388       gaming facility in the state of Kansas or who have ceased operations at
389       any such facility in accordance with an agreement entered into pursuant
390       to section 30, and amendments thereto. If no tribes qualify for such mon-
391       eys, such money shall be deposited in the state general fund.
392             (10) The balance remaining after the distributions under paragraphs
393       (1) through (8) to the state general fund.
394             Sec.  7. K.S.A. 1999 Supp. 74-8718 is hereby amended to read as
395       follows: 74-8718. (a) It is unlawful for:
396             (1) Any person to sell a lottery ticket or share at a price other than
397       that fixed by rules and regulations adopted pursuant to this act;
398             (2) any person other than a lottery retailer authorized by the Kansas
399       lottery to sell or resell any lottery ticket or share; or
400             (3) any person to sell a lottery ticket or share to any person, knowing
401       such person to be under 18 years of age; or
402             (4) any person to allow any person to play video lottery machines
403       knowing such person to be under 21 years of age.
404             (b)  (1) Violation of this section is a class A nonperson misdemeanor
405       upon conviction for a first offense; and
406             (2) violation of this section is a severity level 9, nonperson felony upon
407       conviction for a second or subsequent offense.
408             Sec.  8. K.S.A. 1999 Supp. 74-8719 is hereby amended to read as
409       follows: 74-8719. (a) Except as provided by subsection (c), it is unlawful
410       for any person to purchase a lottery ticket or share, or play a video lottery
411       machine or to share in the lottery winnings of a person, knowing that such
412       person is:
413             (1) The executive director, a member of the commission or an em-
414       ployee of the Kansas lottery;
415             (2) an officer or employee of a vendor contracting with the Kansas
416       lottery to supply gaming equipment or tickets to the Kansas lottery for
417       use in the operation of any lottery conducted pursuant to this act;
418             (3) a spouse, child, stepchild, brother, stepbrother, sister, stepsister,
419       parent or stepparent of a person described by subsection (a)(1) or (2); or
420             (4) a person who resides in the same household as any person de-
421       scribed by subsection (a)(1) or (2).
422             (b)  (1) Violation of subsection (a) is a class A nonperson misde-
423       meanor upon conviction for a first offense.
424             (2) Violation of subsection (a) is a severity level 9, nonperson felony
425       upon conviction for a second or subsequent offense.
426             (c) Notwithstanding subsection (a), The executive director may au-
427       thorize in writing any employee of the Kansas lottery and any employee
428       of a lottery vendor to: (1) Purchase a lottery ticket for the purposes of
429       verifying the proper operation of the state lottery with respect to security,
430       systems operation and lottery retailer contract compliance; or (2) play a
431       video lottery machine to verify the proper operation thereof with respect
432       to security and contract compliance. Any prize awarded as a result of such
433       ticket purchase shall become the property of the Kansas lottery and be
434       added to the prize pools of subsequent lottery games. No money or mer-
435       chandise shall be awarded to any employee playing a video lottery ma-
436       chine pursuant to this subsection.
437             (d) Certain classes of persons who, because of the unique nature of
438       the supplies or services they provide for use directly in the operation of
439       a lottery pursuant to this act, may be prohibited, in accordance with rules
440       and regulations adopted by the commission, from participating in any
441       lottery in which such supplies or services are used.
442             (e) Nothing in this section shall prohibit lottery retailers or their em-
443       ployees from purchasing lottery tickets and shares or from being paid a
444       prize of a winning ticket or share.
445             (f) Each person who purchases a lottery ticket or share or video lot-
446       tery game thereby agrees to be bound by rules and regulations adopted
447       by the commission and by the provisions of this act.
448             Sec.  9. K.S.A. 1999 Supp. 74-8723 is hereby amended to read as
449       follows: 74-8723. (a) The Kansas lottery and the office of executive di-
450       rector of the Kansas lottery, established by K.S.A. 74-8703, and amend-
451       ments thereto, and the Kansas lottery commission, created by K.S.A. 74-
452       8709, and amendments thereto, shall be and hereby are abolished on July
453       1, 2002 2007.
454             (b) This section shall be part of and supplemental to the Kansas lot-
455       tery act.
456             New Sec.  10. (a) The executive director may contract with parimu-
457       tuel licensees to serve the public convenience as video lottery retailers
458       for the sale and promotion of the sale of video lottery games at parimutuel
459       licensee locations by the state of Kansas. The executive director shall
460       contract only with parimutuel licensees in counties in which a proposition
461       submitted pursuant to this act has been approved by the voters of such
462       county.
463             (b) The executive director shall purchase a license for all software
464       programs used to operate video lottery machines. Video lottery machines
465       located at parimutuel licensee locations shall be subject to the ultimate
466       control of the Kansas lottery. The use of progressive video lottery ma-
467       chines is expressly permitted.
468             (c) Each contract between the executive director and a video lottery
469       retailer shall provide that the Kansas lottery receive all net machine in-
470       come derived from the operation of video lottery machines at the pari-
471       mutuel licensee location.
472             (d) The initial term of such contract shall be not less than the re-
473       maining term of the Kansas lottery and may be renewed with each ex-
474       tension of the Kansas lottery as provided in K.S.A. 74-8723, and amend-
475       ments thereto.
476             (e) Contracts authorized by this section shall include:
477             (1) Accounting procedures to determine the net machine income,
478       unclaimed merchandise and credits;
479             (2) the location of video lottery machines at the parimutuel licensee
480       location and such other matters as are necessary and reasonable for the
481       operation of video lottery machines;
482             (3) minimum requirements for a video lottery retailer to provide
483       qualified oversight, security and supervision of the operation of video
484       lottery machines at the parimutuel licensee location, including the use of
485       qualified personnel with experience in applicable technology;
486             (4) the eligibility and licensure requirements for employees of a video
487       lottery retailer who will have responsibility for the handling of cash or
488       tokens;
489             (5) provision for termination of the contract by either party for cause
490       or other reason specified in the contract; and
491             (6) any other provision deemed necessary.
492             (f) No video lottery machine shall be operated pursuant to this act
493       unless the executive director first issues a certificate for such machine
494       authorizing its use at a specified parimutuel licensee location. Each ma-
495       chine shall have the certificate prominently displayed thereon. Any ma-
496       chine which does not display the certificate required by this section is
497       contraband and a public nuisance subject to confiscation by any law en-
498       forcement officer.
499             (g) The executive director shall require any manufacturer, supplier,
500       provider, video lottery retailer or other person seeking the examination
501       and certification of video lottery machines to pay the anticipated actual
502       costs of the examination in advance. After the completion of the exami-
503       nation, the executive director shall refund any overpayment or charge and
504       collect amounts sufficient to reimburse the executive director for any
505       underpayment of actual costs. The executive director may contract for
506       the examination of video lottery machines as required by this subsection.
507       The executive director may rely upon testing done by or for other states
508       regulating video lottery machines, if the executive director deems such
509       testing to be reliable and in the best interest of the state of Kansas.
510             (h) Video lottery machines operated pursuant to this act shall:
511             (1) Pay out an average of not less than 87% of the amount wagered;
512             (2) be linked to the video lottery central computer communications
513       system to provide auditing and other program information as required by
514       the executive director; and
515             (3) be on-line and in constant communication with the video lottery
516       central computer communications system located at the central office of
517       the lottery.
518             New Sec.  11. (a) Video lottery machines shall be operated only in
519       counties where the qualified voters of the county have voted to permit
520       operation of video lottery machines at parimutuel licensee locations
521       within the county.
522             (b) The board of county commissioners of any county in which a
523       parimutuel licensee location is located, by resolution, may submit and
524       upon presentation of a petition filed in accordance with subsection (c),
525       shall submit to the qualified voters of the county a proposition to permit
526       the operation of video lottery machines at parimutuel licensee locations
527       within the county. The proposition shall be submitted to the voters either
528       in a countywide special election called by the board of county commis-
529       sioners for that purpose and held not less than 90 days after the resolution
530       is adopted or the petition is filed or at the next general election as spec-
531       ified by the board of county commissioners or in the petition, as the case
532       may be. The election shall be conducted, and the votes counted and
533       canvassed, in the manner provided by law for question submitted elec-
534       tions of the county.
535             (c) A petition to submit a proposition to the qualified voters of a
536       county pursuant to this section shall be filed with the county election
537       officer. The petition shall be signed by qualified voters of the county equal
538       in number to not less than 10% of the voters of the county who voted for
539       the office of secretary of state at the last preceding general election at
540       which such office was elected. The following shall appear on the petition:
541       ``We request an election to determine whether the operation of video
542       lottery machines by the Kansas lottery shall be permitted at parimutuel
543       racetracks in ____________ county.''
544             (d) Upon the adoption of a resolution or the submission of a valid
545       petition calling for an election pursuant to this section, the county election
546       officer shall cause the following proposition to be placed on the ballot at
547       the election called for that purpose: ``Shall the operation of video lottery
548       machines by the Kansas lottery be permitted at parimutuel racetracks in
549       ____________ county?''
550             (e) If a majority of the votes cast and counted at such election is in
551       favor of permitting the operation of such games at such racetracks, the
552       Kansas lottery may enter a contract authorized by section 3, and amend-
553       ments thereto, with qualified parimutuel licensees in such county. If a
554       majority of the votes cast and counted at an election under this section is
555       against permitting the operation of such machines at parimutuel race-
556       tracks in the county, the Kansas lottery shall not enter such contracts.
557       The county election officer shall transmit a copy of the certification of
558       the results of the election to the executive director.
559             (f) If at any election authorized by this section a majority of the votes
560       cast and counted is against permitting the operation of video lottery ma-
561       chines in the county, another election submitting the issue of the oper-
562       ation of video lottery machines in the county shall not be held for at least
563       two years from the date of such election.
564             New Sec.  12. (a) No video lottery machine shall be operated unless
565       the facility in which the video lottery machine is operated displays live
566       and simulcast parimutuel races on video terminals and has installed par-
567       imutuel windows for wagering on parimutuel races.
568             (b) Except as provided in subsection (c) of this section, no video lot-
569       tery machine shall be operated unless:
570             (1) During the first full calendar year and each year thereafter in
571       which video lottery machines are operated, the parimutuel licensee shall
572       conduct at the parimutuel licensee location in Sedgwick county at least
573       eight live racing programs each calendar week for the number of weeks
574       equal to or greater than the number of weeks raced during the 1999
575       calendar year with at least 12 live races conducted each program.
576             (2) During the first full calendar year and each year thereafter in
577       which video lottery machines are operated, the parimutuel licensee shall
578       conduct at the parimutuel licensee location in Wyandotte county at least
579       seven live racing programs each calendar week for the number of weeks
580       equal to or greater than the number of weeks raced during the 1999
581       calendar year with at least 12 live races conducted each program.
582             (3) During the first full calendar year and each year thereafter in
583       which video lottery machines are operated, the parimutuel licensee shall
584       conduct at the parimutuel licensee location in Crawford county live racing
585       for the number of days agreed upon by the organization licensee and the
586       parimutuel licensee but not less than 150 days, comprised of at least seven
587       live racing programs each calendar week with at least 12 live races con-
588       ducted each program.
589             (c) The commission may provide exceptions to the requirements of
590       subsection (b) for a parimutuel licensee conducting live racing when
591       events beyond the control of the licensee may render racing impossible
592       or impractical.
593             New Sec.  13. A video lottery retailer shall post one or more signs on
594       the premises of the parimutuel licensee location at points of entry to the
595       areas where video lottery machines are located to inform patrons of the
596       toll-free number available to provide information and referral services
597       regarding compulsive or problem gaming. The text shall be determined
598       by the secretary of the department of health and environment. Failure
599       by the video lottery retailer to post and maintain such signs shall be cause
600       for the imposition of a fine not to exceed $500 per day.
601             New Sec.  14. Each video lottery retailer shall provide access for the
602       executive director or the executive director's designee and designated
603       employees to all records and the physical premises of the parimutuel
604       licensee location for the purpose of monitoring or inspecting video lottery
605       machines and equipment. None of the information disclosed pursuant to
606       this subsection shall be subject to disclosure under the open records act,
607       K.S.A. 45-216 et seq., and amendments thereto.
608             New Sec.  15. (a) Wagers shall be received only from a person at a
609       parimutuel licensee location. No person present at a parimutuel licensee
610       location shall place or attempt to place a wager on behalf of another
611       person who is not present at a parimutuel licensee location.
612             (b) Violation of this section is a class A nonperson misdemeanor upon
613       a conviction for a first offense. Violation of this section is a severity level
614       9, nonperson felony upon conviction for a second or subsequent offense.
615             New Sec.  16. A person under age 21 shall not be permitted in an
616       area of a parimutuel licensee location where gaming is being conducted,
617       except for a person at least 18 years of age who is an employee of the
618       parimutuel licensee. No employee under age 21 shall perform any func-
619       tion involved in gaming by the patrons. No person under age 21 shall be
620       permitted to make a wager on a video lottery machine.
621             New Sec.  17. Pursuant to section 2 of the federal act entitled ``An
622       Act to Prohibit Transportation of Gambling Devices in Interstate and
623       Foreign Commerce,'' 15 U.S.C. 1171 through 1777, the state of Kansas,
624       acting by and through the duly elected and qualified members of the
625       legislature, does hereby in this section, and in accordance with and in
626       compliance with the provisions of section 2 of such federal act, declare
627       and proclaim that it is exempt from the provision of section 2 of such
628       federal act to the extent that such gambling devices are being transported
629       to or from a licensed gaming machine operator at a parimutuel licensee
630       location within the state of Kansas.
631             New Sec.  18. Except for persons acting in accordance with the rules
632       and regulations of the Kansas lottery in performing installation, mainte-
633       nance and repair services, any person who, with the intent to manipulate
634       the outcome, pay-off or operation of a video lottery machine, manipulates
635       the outcome, pay-off or operation of a video lottery machine by physical,
636       electrical or mechanical means shall be guilty of a severity level 8, non-
637       person felony.
638             New Sec.  19. Nothing in this act shall restrict the jurisdiction of the
639       Kansas racing and gaming commission to regulate activities conducted at
640       parimutuel licensee facilities relating to parimutuel racing and wagering.
641             New Sec.  20. All sales of video lottery machine games shall be ex-
642       empt from sales taxes imposed pursuant to K.S.A. 12-187 et seq. and 79-
643       3601 et seq., and amendments thereto.
644             New Sec.  21. (a) The executive director or the executive director's
645       designee may observe and inspect all electronic gaming facilities operated
646       by video lottery retailers.
647             (b) The executive director may examine, or cause to be examined by
648       any agent or representative designated by the executive director, any
649       books, papers, records or memoranda of any licensee, or of any racetrack
650       or business involved in video lottery gaming for the purpose of ascertain-
651       ing compliance with any provision of this act or any rule and regulation
652       adopted hereunder.
653             (c) The lottery commission shall have the power to authorize security
654       measures required in any areas where video lottery machines are located.
655             New Sec.  22. (a) It is unlawful for any person playing or using any
656       video lottery machine at a parimutuel licensee location in Kansas to:
657             (1) Knowingly use other than a lawful coin or legal tender of the
658       United States of America, or to use coin not of the same denomination
659       as the coin intended to be used in a video lottery machine, except that in
660       the playing of any video lottery machine or similar gaming device, it shall
661       be lawful for any person to use gaming billets, tokens or similar objects
662       therein which are approved by the lottery commission;
663             (2) to knowingly possess or use, while on the premises of a parimutuel
664       licensee location any cheating or thieving device, including but not limited
665       to, tools, wires, drills, coins attached to strings or wires or electronic or
666       magnetic devices to facilitate removing from any video lottery machine
667       any money or contents thereof, except that a duly authorized employee
668       of the lottery commission, Kansas racing and gaming commission or a
669       parimutuel licensee may possess and use any of the foregoing only in
670       furtherance of the employee's employment at the parimutuel licensee
671       location; or
672             (3) to knowingly possess or use while on the premises of any pari-
673       mutuel licensee location any key or device designed for the purpose of
674       or suitable for opening or entering any video lottery machine or similar
675       gaming device or drop box, except that a duly authorized employee of
676       the lottery commission, Kansas racing and gaming commission or a par-
677       imutuel licensee may possess and use any of the foregoing only in fur-
678       therance of the employee's employment at the parimutuel licensee
679       location.
680             (b) Violation of this section is a severity level 8, nonperson felony.
681             New Sec.  23. (a) No video lottery retailer shall permit any business
682       not owned and operated by the retailer to provide video lottery machine
683       equipment or services to such retailer unless such business has been is-
684       sued a video lottery machine equipment or services license by the exec-
685       utive director. Such equipment and services include, but are not limited,
686       to surveillance, electronic computer components, random number gen-
687       erator or cabinet thereof and token redemption equipment or services.
688             (b) Businesses required to be licensed pursuant to this section shall
689       apply for video lottery machine equipment or services licenses in a man-
690       ner and upon forms prescribed and furnished by the executive director.
691       The executive director shall require disclosure of information about the
692       owners and officers of each applicant and may require such owners and
693       officers to submit to fingerprinting. The executive director also may re-
694       quire disclosure of information about and fingerprinting of such employ-
695       ees of each applicant as deemed necessary. Video lottery machine equip-
696       ment or services licenses shall be issued for a period of time established
697       by the executive director. The executive director shall establish a schedule
698       of application fees and license fees for video lottery machine equipment
699       or services licenses based upon the type and size of business. The appli-
700       cation fee shall not be refundable if the business fails to qualify for a
701       license. If the application fee is insufficient to pay the reasonable expenses
702       of processing the application and investigating the applicant's qualifica-
703       tions for licensure, the executive director shall require the applicant to
704       pay to the executive director, at such times and in such form as required
705       by the executive director, any additional amounts necessary to pay such
706       expenses. No license shall be issued to an applicant until the applicant
707       has paid such additional amounts in full, and such amounts shall not be
708       refundable except to the extent that they exceed the actual expenses of
709       processing the application and investigating the applicant's qualifications
710       for licensure.
711             (c) The executive director may require applicants as a condition of
712       licensure to consent to allow agents of the Kansas bureau of investigation
713       or security personnel of the lottery commission to search without warrant
714       the licensee's premises and personal property and the persons of its own-
715       ers, officers and employees while engaged in the licensee's business
716       within the racetrack facility or adjacent facilities under the control of the
717       organization licensee for the purpose of investigating criminal violations
718       of this act or violations of rules and regulations of the lottery commission.
719             (d) Denial of a video lottery machine equipment or services license
720       by the executive director shall be in accordance with the Kansas admin-
721       istrative procedure act. The executive director may refuse to issue a video
722       lottery machine equipment or services license to any business if any per-
723       son having an ownership interest in such business, any person who is an
724       officer of such business or any person employed by such business within
725       the racetrack facility:
726             (1) Has been convicted of a felony in a court of any state or of the
727       United States or has been adjudicated in the last five years, in any such
728       court of committing as a juvenile an act which, if committed by an adult,
729       would constitute a felony;
730             (2) has been convicted of a violation of any law of any state or of the
731       United States involving gambling or controlled substances or has been
732       adjudicated in the last five years in any such court of committing as a
733       juvenile an act which, if committed by an adult, would constitute such a
734       violation;
735             (3) fails to disclose any material fact or provides information, knowing
736       such information to be false, in connection with the application for the
737       license;
738             (4) has been found by the executive director to have violated any
739       provision of this act or any rule and regulation of the lottery commission;
740       or
741             (5) has failed to meet any monetary or tax obligation to the federal
742       government or to any state or local government.
743             (e) The executive director may suspend or revoke the electronic gam-
744       ing machine equipment or services license of any business for any reason
745       which would justify refusal to issue such a license. Proceedings to suspend
746       or revoke such license shall be conducted by the executive director or an
747       appointed hearing officer in accordance with the provisions of the Kansas
748       administrative procedure act.
749             (f) The executive director may provide for the temporary suspension
750       of video lottery machine equipment or services license by summary ad-
751       judicative proceedings in accordance with the Kansas administrative pro-
752       cedure act upon finding that there is probable cause to believe that
753       grounds exist for a permanent suspension or revocation of such license.
754       Such suspension shall be for a period not exceeding 30 days. Upon ex-
755       piration of such suspension, the license shall be restored unless the license
756       has been suspended or revoked as a result of proceedings conducted
757       pursuant to subsection (e).
758             (g) The lottery commission may provide by rules and regulations for
759       the licensure of gaming employees designated by the commission which
760       rules and regulations may specify employment application forms, fees and
761       procedures for suspension or revocation of any gaming employee license.
762             New Sec.  24. No taxes, fees, charges, transfers or distributions, other
763       than those provided for in this act, shall be made or levied from or against
764       the net machine income of the Kansas lottery by any city, county or other
765       municipality.
766             New Sec.  25. Each lottery gaming machine operator shall hold the
767       executive director of the Kansas lottery, the Kansas lottery commission
768       and the state harmless from and defend and pay for the defense of any
769       and all claims which may be asserted against the executive director, the
770       commission, the state or the employees thereof, arising from video lottery
771       machines located at the parimutuel licensee location of that video lottery
772       retailer. The provisions of this section shall not apply to any claims arising
773       from the negligence or willful misconduct of the executive director, the
774       commission, the state or the employees thereof.
775             New Sec.  26. (a) There is hereby established in the state treasury the
776       problem gambling grant fund. All moneys credited to such fund shall be
777       used only for the awarding of grants under this section. Such fund shall
778       be administered in accordance with this section and the provisions of
779       appropriation acts.
780             (b) All expenditures from the problem gambling grant fund shall be
781       made in accordance with appropriation acts upon warrants of the director
782       of accounts and reports issued pursuant to vouchers approved in the man-
783       ner prescribed by law.
784             (c) On or before the 10th day of each month, the director of accounts
785       and reports shall transfer from the state general fund to the problem
786       gambling grant fund interest earnings based on (1) the average daily bal-
787       ance of moneys in the problem gambling grant fund for the preceding
788       month and (2) the net earnings rate of the pooled money investment
789       portfolio for the preceding month.
790             (d) There is hereby established a state grant program to provide as-
791       sistance for the direct treatment of persons diagnosed as suffering from
792       pathological gambling and to provide funding for research regarding the
793       impact of gambling on residents of Kansas. Research grants awarded un-
794       der this section may include, but need not be limited to, grants for de-
795       termining the effectiveness of education and prevention efforts on the
796       prevalence of pathological gambling in Kansas. All grants shall be made
797       after open solicitation of proposals and evaluation of proposals against
798       criteria established in rules and regulations adopted by the secretary of
799       the department of social and rehabilitation services. Both public and pri-
800       vate entities shall be eligible to apply for and receive grants under the
801       provisions of this section.
802             (e) The secretary of the department of social and rehabilitation serv-
803       ices is hereby authorized to receive moneys from any grants, gifts, con-
804       tributions or bequests made for the purpose of funding grants under this
805       section and to expend such moneys for the purpose for which received.
806             (f) All grants made in accordance with this section shall be made from
807       the problem gambling grant fund. Of the total amount granted annually,
808       85% shall be allocated to an entity or entities that provide treatment to
809       pathological gamblers and 15% shall be allocated to an entity or entities
810       engaged in research designed in accordance with rules and regulations
811       adopted by the secretary. The secretary shall administer the provisions of
812       this section and the secretary shall adopt rules and regulations establishing
813       criteria for qualification to receive grants and such other matters deemed
814       necessary by the secretary for the administration of this section. Such
815       rules and regulations shall include, but need not be limited to, a require-
816       ment that each recipient of a grant to provide treatment for pathological
817       gamblers report at least annually to the secretary the grantee's measurable
818       achievement of specific outcome goals. The secretary shall transmit to
819       the legislature, no later than the first day of the legislative session begin-
820       ning in 2002 and every year thereafter, an objective evaluation of the
821       effectiveness of each treatment program and research effort by grants
822       made in accordance with this section.
823             (g) For the purpose of this section ``pathological gambling'' means
824       the disorder by that name described in the most recent edition of the
825       diagnostic and statistical manual.
826             New Sec.  27. (a) There is hereby established in the state treasury the
827       live horse and greyhound purse enhancement fund. Such fund shall be
828       administered in accordance with this section and the provisions of appro-
829       priation acts. All purse enhancements paid pursuant to this act shall be
830       according to the point schedule in effect on January 1, 2000, at the par-
831       imutuel licensee location in Sedgwick county. All purse supplements paid
832       pursuant to this section shall be in addition to purses and supplements
833       paid under K.S.A. 74-8801 et seq., and amendments thereto.
834             (b) All expenditures from the problem gambling grant fund shall be
835       made in accordance with appropriation acts upon warrants of the director
836       of accounts and reports issued pursuant to vouchers approved in the man-
837       ner prescribed by law.
838             (c) On or before the 10th day of each month, the director of accounts
839       and reports shall transfer from the state general fund to the problem
840       gambling grant fund interest earnings based on (1) the average daily bal-
841       ance of moneys in the problem gambling grant fund for the preceding
842       month and (2) the net earnings rate of the pooled money investment
843       portfolio for the preceding month.
844             New Sec.  28. (a) There is hereby established in the state treasury the
845       video lottery central computer communications system fund. All moneys
846       credited to such fund shall be used for the acquisition, maintenance,
847       repair and replacement of the video lottery central communications sys-
848       tem. The video lottery central computer communications system shall be
849       used exclusively for the operation of the video lottery machine network
850       and shall incorporate electronic fund transfer procedures to facilitate the
851       collection of revenue, be capable of disabling any machine from play
852       which does not comply with the provisions of the lottery act, and be
853       capable of communicating with all video lottery machines approved by
854       the executive director. The executive director shall provide licensed man-
855       ufacturers with the protocol documentation and the audit information
856       and controls necessary to enable the manufacturers' machines to com-
857       municate with such central computer communication system. The video
858       lottery central computer communication system shall not limit partici-
859       pation only to one manufacturer of video lottery machines or video lottery
860       machine equipment by either the cost of implementing necessary pro-
861       gram modifications to communicate or the inability to communicate with
862       the system. Such fund shall be administered in accordance with this sec-
863       tion and the provisions of appropriation acts.
864             (b) All expenditures from the video lottery central computer com-
865       munications system fund shall be made in accordance with appropriation
866       acts upon warrants of the director of accounts and reports issued pursuant
867       to vouchers approved in the manner prescribed by law.
868             (c) On or before the 10th day of each month, the director of accounts
869       and reports shall transfer from the state general fund to the video lottery
870       central computer communications system fund interest earnings based
871       on (1) the average daily balance of moneys in the problem gambling grant
872       fund for the preceding month and (2) the net earnings rate of the pooled
873       money investment portfolio for the preceding month.
874             New Sec.  29. (a) There is hereby established in the state treasury the
875       video lottery machine equipment fund. Such fund shall be administered
876       in accordance with this section and the provisions of appropriation acts.
877             (b) All expenditures from the video lottery machine equipment fund
878       shall be made in accordance with appropriation acts upon warrant of the
879       director of accounts and reports issued pursuant to vouchers approved in
880       the manner prescribed by law.
881             (c) On or before the 10th day of each month, the director of accounts
882       and reports shall transfer from the state general fund to the video lottery
883       machine equipment fund interest earnings based on (1) the average daily
884       balance of moneys in the problem gambling grant fund for the preceding
885       month and (2) the net earnings rate of the pooled money investment
886       portfolio for the preceding month.
887             New Sec.  30. (a) The governor shall enter into negotiations for an
888       agreement with any Native American Indian tribe under which agree-
889       ment, such tribe agrees to cease all class III gaming operations and to
890       close all class III gaming facilities owned or operated by such tribe. Any
891       tribe which enters into such an agreement shall be paid its share of the
892       net machine income as provided by K.S.A. 74-8711, and amendments
893       thereto. Such agreements shall be for terms of five years and shall be
894       renewable in each fourth year of the agreement for an additional five
895       years.
896             (b) Any such agreement shall not become effective unless approved
897       by the state finance council. Following approval of any such agreement
898       by the finance council, the governor shall notify the state treasurer that
899       such an agreement has been approved and that such tribe is entitled to
900       distributions of moneys under K.S.A. 74-8711, and amendments thereto.
901             (c) Following receipt of the notice of approval of such agreement,
902       the state treasurer shall begin distributions of the net machine income,
903       as provided by K.S.A. 74-8711, and amendments thereto, to such tribe
904       on or before the 15th day of each month during the term of the
905       agreement.
906             Sec.  31. K.S.A. 1999 Supp. 74-8810 is hereby amended to read as
907       follows: 74-8810. (a) It is a class A nonperson misdemeanor for any person
908       to have a financial interest, directly or indirectly, in any racetrack facility
909       within the state of Kansas or in any host facility for a simulcast race
910       displayed in this state Kansas or any parimutuel licensee location in
911       Kansas:
912             (1) While such person is executive director or a member of the com-
913       mission or during the five years immediately following such person's term
914       as executive director or member of the commission; or
915             (2) while such person is an officer, director or member of an organ-
916       ization licensee, other than a fair association or horsemen's nonprofit or-
917       ganization, or during the five years immediately following the time such
918       person is an officer, director or member of such an organization licensee.
919             (b) It is a class A nonperson misdemeanor for any member, employee
920       or appointee of the commission, including stewards and racing judges, to
921       knowingly:
922             (1) Participate in the operation of or have a financial interest in any
923       business which has been issued a concessionaire license, racing or wa-
924       gering or video lottery machine equipment or services license, facility
925       owner license or facility manager license, or any business which sells
926       goods or services to an organization licensee;
927             (2) participate directly or indirectly as an owner, owner-trainer or
928       trainer of a horse or greyhound, or as a jockey of a horse, entered in a
929       race meeting conducted in this state or as an owner, operator, manager
930       or consultant in video lottery gaming in Kansas;
931             (3) place a wager on an entry in a horse or greyhound race conducted
932       by an organization licensee or any parimutuel licensee location; or
933             (4) place a wager on or bet or play a video lottery machine at a
934       parimutuel licensee location in Kansas; or
935             (4) (5) accept any compensation, gift, loan, entertainment, favor or
936       service from any licensee, except such suitable facilities and services
937       within a racetrack facility operated by an organization licensee as may be
938       required to facilitate the performance of the member's, employee's or
939       appointee's official duties.
940             (c)  (1) Except as provided in paragraph (2), it is a class A nonperson
941       misdemeanor for any member, employee or appointee of the commission,
942       or any spouse, parent, grandparent, brother, sister, child, son-in-law,
943       daughter-in-law, grandchild, uncle, aunt, parent-in-law, brother-in-law or
944       sister-in-law thereof, to:
945             (A) Hold any license issued by the commission, except that a steward
946       or racing judge shall hold an occupation license to be such a steward or
947       judge; or
948             (B) enter into any business dealing, venture or contract with an owner
949       or lessee of a racetrack facility in Kansas or a parimutuel licensee location
950       in Kansas.
951             (2) This subsection shall not apply to any racing judge holding an
952       occupation license, if such racing judge is employed at a racetrack facility
953       and such racing judge's relative, as listed above, is a licensed owner,
954       owner-trainer or trainer of a greyhound that races at a different racetrack
955       facility.
956             (d) It is a class A nonperson misdemeanor for any officer, director or
957       member of an organization licensee, other than a fair association or horse-
958       men's nonprofit organization, to:
959             (1) Receive, for duties performed as an officer or director of such
960       licensee, any compensation or reimbursement or payment of expenses in
961       excess of the amounts provided by K.S.A. 75-3223, and amendments
962       thereto, for board members' compensation, mileage and expenses; or
963             (2) enter into any business dealing, venture or contract with the or-
964       ganization licensee or, other than in the capacity of an officer or director
965       of the organization licensee, with a facility owner licensee, facility man-
966       ager licensee, racing or wagering equipment or services license or con-
967       cessionaire licensee, or with any host facility for a simulcast race displayed
968       in this state.
969             (e) It is a class A nonperson misdemeanor for any facility owner li-
970       censee or facility manager licensee, other than a horsemen's association,
971       or any officer, director, employee, stockholder or shareholder thereof or
972       any person having an ownership interest therein, to participate directly
973       or indirectly as an owner, owner-trainer or trainer of a horse or grey-
974       hound, or as a jockey of a horse, entered in a live race conducted in this
975       state.
976             (f) It is a class A nonperson misdemeanor for any licensee of the
977       commission, or any person who is an officer, director, member or em-
978       ployee of a licensee, to place a wager at a racetrack facility located in
979       Kansas on an entry in a horse or greyhound race if:
980             (1) The commission has by rules and regulations designated such per-
981       son's position as a position which could influence the outcome of such
982       race or the parimutuel wagering thereon; and
983             (2) such race is conducted at or simulcast to the racetrack facility
984       where the licensee is authorized to engage in licensed activities.
985             (g) It is a class B nonperson misdemeanor for any person to use any
986       animal or fowl in the training or racing of racing greyhounds.
987             (h) It is a class A nonperson misdemeanor for any person to:
988             (1) Sell a parimutuel ticket or an interest in such a ticket to a person
989       knowing such person to be under 18 years of age, upon conviction of the
990       first offense;
991             (2) accept, transmit or deliver, from a person outside a racetrack fa-
992       cility, anything of value to be wagered in any parimutuel system of wa-
993       gering within a racetrack facility, upon conviction of the first offense;
994             (3) administer or conspire to administer any drug or medication to a
995       horse or greyhound within the confines of a racetrack facility in violation
996       of rules and regulations of the commission, upon conviction of the first
997       offense;
998             (4) possess or conspire to possess, within the confines of a racetrack
999       facility, any drug or medication for administration to a horse or greyhound
1000       in violation of rules and regulations of the commission, upon conviction
1001       of the first offense;
1002             (5) possess or conspire to possess, within the confines of a racetrack
1003       facility, equipment for administering drugs or medications to horses or
1004       greyhounds in violation of rules and regulations of the commission, upon
1005       conviction of the first offense;
1006             (6) enter any horse or greyhound in any race knowing such horse or
1007       greyhound to be ineligible to compete in such race pursuant to K.S.A.
1008       74-8812, and amendments thereto; or
1009             (7) prepare or cause to be prepared an application for registration of
1010       a horse pursuant to K.S.A. 74-8830, and amendments thereto, knowing
1011       that such application contains false information.
1012             (i) It is a severity level 8, nonperson felony for any person to:
1013             (1) Sell a parimutuel ticket or an interest in such a ticket to a person
1014       knowing such person to be under 18 years of age, upon conviction of the
1015       second or a subsequent offense;
1016             (2) accept, transmit or deliver, from any person outside a racetrack
1017       facility, anything of value to be wagered in any parimutuel system of
1018       wagering within a racetrack facility, upon the second or a subsequent
1019       conviction;
1020             (3) conduct or assist in the conduct of a horse or greyhound race, or
1021       the display of a simulcast race, where the parimutuel system of wagering
1022       is used or is intended to be used and where no license has been issued
1023       to an organization to conduct or simulcast such race;
1024             (4) enter any horse or greyhound in any race conducted by an organ-
1025       ization licensee knowing that the class or grade in which such horse or
1026       greyhound is entered is not the true class or grade or knowing that the
1027       name under which such horse or greyhound is entered is not the name
1028       under which such horse or greyhound has been registered and has pub-
1029       licly performed;
1030             (5) use or conspire to use any device, other than an ordinary whip for
1031       horses or a mechanical lure for greyhounds, for the purpose of affecting
1032       the speed of any horse or greyhound at any time during a race conducted
1033       by an organization licensee;
1034             (6) possess or conspire to possess, within the confines of a racetrack
1035       facility, any device, other than an ordinary whip for horses or a mechanical
1036       lure for greyhounds, designed or intended to affect the speed of a horse
1037       or greyhound;
1038             (7) administer or conspire to administer any drug or medication to a
1039       horse or greyhound within the confines of a racetrack facility in violation
1040       of rules and regulations of the commission, upon conviction of the second
1041       or a subsequent offense;
1042             (8) possess or conspire to possess, within the confines of a racetrack
1043       facility, any drug or medication for administration to a horse or greyhound
1044       in violation of rules and regulations of the commission, upon conviction
1045       of the second or a subsequent offense;
1046             (9) possess or conspire to possess, within the confines of a racetrack
1047       facility, equipment for administering drugs or medications to horses or
1048       greyhounds in violation of rules and regulations of the commission, upon
1049       conviction of the second or a subsequent offense;
1050             (10) sponge the nostrils or windpipe of a horse for the purpose of
1051       stimulating or depressing such horse or affecting its speed at any time
1052       during a race meeting conducted by an organization licensee;
1053             (11) alter or attempt to alter the natural outcome of any race con-
1054       ducted by, or any simulcast race displayed by, an organization licensee or
1055       transmit or receive an altered race or delayed broadcast race if parimutuel
1056       wagering is conducted or solicited after off time of the race;
1057             (12) influence or attempt to influence, by the payment or promise of
1058       payment of money or other valuable consideration, any person to alter
1059       the natural outcome of any race conducted by, or any simulcast race
1060       displayed by, an organization licensee;
1061             (13) influence or attempt to influence any member, employee or ap-
1062       pointee of the commission, by the payment or promise of payment of
1063       money or other valuable consideration, in the performance of any official
1064       duty of that member, employee or appointee;
1065             (14) fail to report to the commission or to one of its employees or
1066       appointees knowledge of any violation of this act by another person for
1067       the purpose of stimulating or depressing any horse or greyhound, or af-
1068       fecting its speed, at any time during any race conducted by an organiza-
1069       tion licensee;
1070             (15) commit any of the following acts with respect to the prior racing
1071       record, pedigree, identity or ownership of a registered horse or greyhound
1072       in any matter related to the breeding, buying, selling or racing of the
1073       animal: (A) Falsify, conceal or cover up, by any trick, scheme or device,
1074       a material fact; (B) make any false, fictitious or fraudulent statement or
1075       representation; or (C) make or use any false writing or document knowing
1076       that it contains any false, fictitious or fraudulent statement or entry; or
1077             (16) pass or attempt to pass, cash or attempt to cash any altered or
1078       forged parimutuel ticket knowing it to have been altered or forged.
1079             (j) No person less than 18 years of age shall purchase a parimutuel
1080       ticket or an interest in such a ticket. Any person violating this subsection
1081       shall be subject to adjudication as a juvenile offender pursuant to the
1082       Kansas juvenile justice code.
1083             Sec.  32. K.S.A. 1999 Supp. 19-101a is hereby amended to read as
1084       follows: 19-101a. (a) The board of county commissioners may transact all
1085       county business and perform all powers of local legislation and adminis-
1086       tration it deems appropriate, subject only to the following limitations,
1087       restrictions or prohibitions:
1088             (1) Counties shall be subject to all acts of the legislature which apply
1089       uniformly to all counties.
1090             (2) Counties may not consolidate or alter county boundaries.
1091             (3) Counties may not affect the courts located therein.
1092             (4) Counties shall be subject to acts of the legislature prescribing
1093       limits of indebtedness.
1094             (5) In the exercise of powers of local legislation and administration
1095       authorized under provisions of this section, the home rule power con-
1096       ferred on cities to determine their local affairs and government shall not
1097       be superseded or impaired without the consent of the governing body of
1098       each city within a county which may be affected.
1099             (6) Counties may not legislate on social welfare administered under
1100       state law enacted pursuant to or in conformity with public law No. 271--
1101       74th congress, or amendments thereof.
1102             (7) Counties shall be subject to all acts of the legislature concerning
1103       elections, election commissioners and officers and their duties as such
1104       officers and the election of county officers.
1105             (8) Counties shall be subject to the limitations and prohibitions im-
1106       posed under K.S.A. 12-187 to 12-195, inclusive, and amendments thereto,
1107       prescribing limitations upon the levy of retailers' sales taxes by counties.
1108             (9) Counties may not exempt from or effect changes in statutes made
1109       nonuniform in application solely by reason of authorizing exceptions for
1110       counties having adopted a charter for county government.
1111             (10) No county may levy ad valorem taxes under the authority of this
1112       section upon real property located within any redevelopment area estab-
1113       lished under the authority of K.S.A. 12-1772, and amendments thereto,
1114       unless the resolution authorizing the same specifically authorized a por-
1115       tion of the proceeds of such levy to be used to pay the principal of and
1116       interest upon bonds issued by a city under the authority of K.S.A. 12-
1117       1774, and amendments thereto.
1118             (11) Counties shall have no power under this section to exempt from
1119       any statute authorizing or requiring the levy of taxes and providing sub-
1120       stitute and additional provisions on the same subject, unless the resolution
1121       authorizing the same specifically provides for a portion of the proceeds
1122       of such levy to be used to pay a portion of the principal and interest on
1123       bonds issued by cities under the authority of K.S.A. 12-1774, and amend-
1124       ments thereto.
1125             (12) Counties may not exempt from or effect changes in the provi-
1126       sions of K.S.A. 19-4601 to 19-4625, inclusive through 19-4625, and
1127       amendments thereto.
1128             (13) Except as otherwise specifically authorized by K.S.A. 12-1,101
1129       to 12-1,109, inclusive through 12-1,109, and amendments thereto, coun-
1130       ties may not levy and collect taxes on incomes from whatever source
1131       derived.
1132             (14) Counties may not exempt from or effect changes in K.S.A. 19-
1133       430, and amendments thereto. Any charter resolution adopted by a
1134       county prior to July 1, 1983, exempting from or effecting changes in
1135       K.S.A. 19-430, and amendments thereto, is null and void.
1136             (15) Counties may not exempt from or effect changes in K.S.A. 19-
1137       302, 19-502b, 19-503, 19-805 or 19-1202, and amendments thereto.
1138             (16)  (A) Counties may not exempt from or effect changes in K.S.A.
1139       13-13a26, and amendments thereto. Any charter resolution adopted by a
1140       county, prior to the effective date of this act, exempting from or effecting
1141       changes in K.S.A. 13-13a26, and amendments thereto, is null and void.
1142             (B) This provision shall expire on June 30, 2003.
1143             (17)  (A) Counties may not exempt from or effect changes in K.S.A.
1144       71-301, and amendments thereto. Any charter resolution adopted by a
1145       county, prior to the effective date of this act, exempting from or effecting
1146       changes in K.S.A. 71-301, and amendments thereto, is null and void.
1147             (B) This provision shall expire on June 30, 2003.
1148             (18) Counties may not exempt from or effect changes in K.S.A. 19-
1149       15,139, 19-15,140 and 19-15,141, and amendments thereto. Any charter
1150       resolution adopted by a county prior to the effective date of this act,
1151       exempting from or effecting changes in such sections is null and void.
1152             (19) Counties may not exempt from or effect changes in the provi-
1153       sions of K.S.A. 12-1223, 12-1225, 12-1225a, 12-1225b, 12-1225c and 12-
1154       1226, and amendments thereto, or the provisions of K.S.A. 1999 Supp.
1155       12-1260 to 12-1270, inclusive through 12-1270 and 12-1276, and amend-
1156       ments thereto, and 12-1276, and amendments thereto.
1157             (20) Counties may not exempt from or effect changes in the provi-
1158       sions of K.S.A. 19-211, and amendments thereto.
1159             (21) Counties may not exempt from or effect changes in the provi-
1160       sions of K.S.A. 19-4001 to 19-4015, inclusive through 19-4015, and
1161       amendments thereto.
1162             (22) Counties may not regulate the production or drilling of any oil
1163       or gas well in any manner which would result in the duplication of reg-
1164       ulation by the state corporation commission and the Kansas department
1165       of health and environment pursuant to chapter 55 and chapter 65 of the
1166       Kansas Statutes Annotated and any rules and regulations adopted pur-
1167       suant thereto. Counties may not require any license or permit for the
1168       drilling or production of oil and gas wells. Counties may not impose any
1169       fee or charge for the drilling or production of any oil or gas well.
1170             (23) Counties may not exempt from or effect changes in K.S.A. 79-
1171       41a04, and amendments thereto.
1172             (24) Counties may not exempt from or effect changes in K.S.A. 79-
1173       1611, and amendments thereto.
1174             (25) Counties may not exempt from or effect changes in K.S.A. 79-
1175       1494, and amendments thereto.
1176             (26) Counties may not exempt from or effect changes in subsection
1177       (b) of K.S.A. 19-202, and amendments thereto.
1178             (27) Counties may not exempt from or effect changes in subsection
1179       (b) of K.S.A. 19-204, and amendments thereto.
1180             (28) Counties may not levy or impose an excise, severance or any
1181       other tax in the nature of an excise tax upon the physical severance and
1182       production of any mineral or other material from the earth or water. Any
1183       resolution adopted by any county prior to the effective date of this act
1184       imposing or levying any such tax is null and void.
1185             (29) Counties may not exempt from or effect changes in K.S.A. 79-
1186       2017 or 79-2101, and amendments thereto. Any charter resolution
1187       adopted prior to the effective date of this act, which affected the provi-
1188       sions of K.S.A. 79-2017 or 79-2101, and amendments thereto, is hereby
1189       declared to be null and void.
1190             (30) Counties may not exempt from or effect changes in K.S.A. 2-
1191       3302, 2-3305, 2-3307, 17-5904, 17-5908, 47-1219 or 65-171d or K.S.A.
1192       1999 Supp. 2-3318, 17-5909 or 65-1,178 through 65-1,199, and amend-
1193       ments thereto.
1194             (31) Counties may not exempt from or effect changes in K.S.A. 1999
1195       Supp. 80-121, and amendments thereto.
1196             (32) Counties may not exempt from or effect changes in the lottery
1197       act or the Kansas parimutuel racing act.
1198             (b) Counties shall apply the powers of local legislation granted in
1199       subsection (a) by resolution of the board of county commissioners. If no
1200       statutory authority exists for such local legislation other than that set forth
1201       in subsection (a) and the local legislation proposed under the authority
1202       of such subsection is not contrary to any act of the legislature, such local
1203       legislation shall become effective upon passage of a resolution of the
1204       board and publication in the official county newspaper. If the legislation
1205       proposed by the board under authority of subsection (a) is contrary to an
1206       act of the legislature which is applicable to the particular county but not
1207       uniformly applicable to all counties, such legislation shall become effec-
1208       tive by passage of a charter resolution in the manner provided in K.S.A.
1209       19-101b, and amendments thereto.
1210             (c) Any resolution adopted by a county which conflicts with the re-
1211       strictions in subsection (a) is null and void. 
1212       Sec.  33. K.S.A. 74-8701, 74-8702, 74-8704, 74-8708 and 74-8711 and
1213       K.S.A. 1999 Supp. 19-101a, 19-101j, 74-8710, 74-8718, 74-8719, 74-8723
1214       and 74-8810 are hereby repealed.
1215        Sec.  34. This act shall take effect and be in force from and after its
1216       publication in the statute book.