Session of 1999
         
Substitute for Senate Bill No. 329
         
By Committee on Federal and State Affairs
         
3-23
         
  9             AN  ACT concerning racing and gaming; concerning electronic gaming
10             machines; amending K.S.A. 74-8701, 74-8702, 74-8704, 74-8711 and
11             74-8721 and K.S.A. 1998 Supp. 19-101a, 74-8710, 74-8718, 74-8719,
12             74-8723, 74-8804, 74-8810 and 74-8837 and repealing the existing
13             sections.
14      
15       Be it enacted by the Legislature of the State of Kansas:
16             Section  1. K.S.A. 74-8701 is hereby amended to read as follows: 74-
17       8701. (a) K.S.A. 74-8701 through 74-8721 74-8723 and sections 8 through
18       20, and amendments thereto, shall be known as and may be cited as the
19       Kansas lottery act.
20             (b) If any provision of this act or the application thereof to any person
21       or circumstance is held invalid, the invalidity shall not affect other pro-
22       visions or application of the act which can be given effect without the
23       invalid provision or application, and to this end the provisions of this act
24       are severable.
25             Sec.  2. K.S.A. 74-8702 is hereby amended to read as follows: 74-
26       8702. As used in this act, unless the context otherwise requires:
27             (a) "Commission" means the Kansas lottery commission.
28             (b) "Electronic card" means a card purchased from a lottery gaming
29       machine operator for use on an electronic gaming machine.
30             (c) "Electronic gaming machine" means any electromechanical, elec-
31       trical, electronic, video or computerized device, contrivance or machine
32       authorized by the commission which, upon the insertion of cash, tokens
33       or electronic cards, is available to play, be operated or simulate the play
34       of, a game authorized by the commission, including but not limited to,
35       bingo, poker, black jack, keno and slot machines and which may deliver
36       or entitle the player operating the machine to receive cash, tokens, mer-
37       chandise or credits that may be redeemed for cash. Electronic gaming
38       machines may use bill validators and may be single position reel-type,
39       single position single game video and single position multigame video
40       electronic gaming, including but not limited to, poker, black jack and slot
41       machines. Electronic gaming machines shall be linked to a central com-
42       puter for purposes of security, monitoring and auditing.
43             "Electronic gaming machine" shall not include any casino table game,

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  1       such as craps, poker, black jack, roulette, keno, layout, numbers tickets,
  2       baccarat, klondike table, punchboard, punch cards, faro layout, ticket or
  3       pull tab.
  4             (b) (d) "Executive director" means the executive director of the Kan-
  5       sas lottery.
  6             (c) (e) "Gaming equipment" means any electric, electronic or me-
  7       chanical device computerized or electromechanical machine, mechanisms,
  8       supply or device or other equipment unique to the Kansas lottery used
  9       directly in the operation of any lottery and in the determination of winners
10       pursuant to this act or integral to the operation of an electronic gaming
11       machine or which affects the results of an electronic gaming machine by
12       determining win or loss.
13             (f) "Kansas education enhancement technology fund" means the fund
14       established by section 17, and amendments thereto.
15             (d) (g) "Kansas lottery" means the state agency created by this act
16       to operate a lottery or lotteries pursuant to this act.
17             (h) "Lottery" or "state lottery" means the lottery or lotteries operated
18       pursuant to this act.
19             (i) "Lottery gaming machine operator" means any parimutuel li-
20       censee with which the executive director has contracted for the placement
21       of an electronic gaming machine pursuant to this act.
22             (e) (j) "Lottery retailer" means any person with whom the Kansas
23       lottery has contracted to sell lottery tickets or shares, or both, to the
24       public.
25             (f) "Lottery" or "state lottery" means the lottery or lotteries operated
26       pursuant to this act.
27             (g) (k) "Major procurement" means any gaming product or service,
28       including but not limited to facilities, advertising and promotional serv-
29       ices, annuity contracts, prize payment agreements, consulting services,
30       equipment, tickets and other products and services unique to the Kansas
31       lottery, but not including.
32             "Major procurement" shall not include materials, supplies, equipment
33       and services common to the ordinary operations of state agencies.
34             (l) "Net machine income" means the total of all cash and the face
35       value of all tokens or electronic cards placed in an electronic gaming
36       machine less cash, merchandise or credits that may be redeemed for cash
37       paid to players as winnings.
38             (m) "Parimutuel licensee" means:
39             (1) A facility owner licensee or a facility manager licensee, as defined
40       by K.S.A. 74-8802, and amendments thereto; or
41             (2) an organization licensee, as defined by K.S.A. 74-8802, and
42       amendments thereto, which conducts races at a racetrack facility located
43       in Crawford county.

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  1             (n) "Parimutuel licensee location" means a racetrack facility located
  2       on or immediately adjacent to the real estate of a parimutuel licensee
  3       where live horse racing or live greyhound racing has been authorized
  4       prior to July 1, 1999, to be conducted pursuant to the Kansas parimutuel
  5       racing act. A parimutuel licensee location may include any of the existing
  6       structures located on the real estate where the live horse racing or live
  7       greyhound racing is authorized to be conducted prior to July 1, 1999, or
  8       any other structures that may be constructed on or immediately adjacent
  9       to such real estate. In order to qualify as a parimutuel licensee location,
10       a racetrack facility where live horse racing is conducted shall be approved
11       for at least 21 days each year on which live horse racing shall be
12       conducted.
13             (h) (o) "Person" means any natural person, association, corporation
14       or partnership.
15             (i) (p) "Prize" means any prize paid directly by the Kansas lottery
16       pursuant to its rules and regulations.
17             (q) "Returned ticket" means any ticket which was transferred to a
18       lottery retailer, which was not sold by the lottery retailer and which was
19       returned to the Kansas lottery for refund by issuance of a credit or
20       otherwise.
21             (j) (r) "Share" means any intangible manifestation authorized by the
22       Kansas lottery to prove participation in a lottery game.
23             (s) "Technology provider" means any person or entity other than a
24       lottery gaming machine operator that designs, manufactures, installs, op-
25       erates, distributes or supplies or replaces an electronic gaming machine
26       for sale, lease or use in accordance with this act.
27             (k) (t) "Ticket" means any tangible evidence issued by the Kansas
28       lottery to prove participation in a lottery game.
29             (u) "Token" means a metal representative of value, which is not legal
30       tender, redeemable for cash only by the issuing lottery gaming machine
31       operator at its parimutuel licensee location and issued and sold by a lot-
32       tery gaming machine operator for the sole purpose of playing an electronic
33       gaming machine.
34             (l) (v) "Vendor" means any person who has entered into a major
35       procurement contract with the Kansas lottery.
36             (m) "Returned ticket" means any ticket which was transferred to a
37       lottery retailer, which was not sold by the lottery retailer and which was
38       returned to the Kansas lottery for refund by issuance of a credit or
39       otherwise.
40             (n) (w) "Video lottery machine" means any electronic video game
41       machine that, upon insertion of cash, is available to play or simulate the
42       play of a video game authorized by the commission, including but not
43       limited to bingo, poker, black jack and keno, and which uses a video

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  1       display and microprocessors and in which, by chance, the player may
  2       receive free games or credits that can be redeemed for cash.
  3             Sec.  3. K.S.A. 74-8704 is hereby amended to read as follows: 74-
  4       8704. (a) The executive director shall have the power to:
  5             (1) Supervise and administer the operation of the state lottery in
  6       accordance with the provisions of this act and such rules and regulations
  7       as adopted hereunder.
  8             (2) Appoint, subject to the Kansas civil service act and within the
  9       limitations of appropriations therefor, all other employees of the Kansas
10       lottery, which employees shall be in the classified service unless otherwise
11       specifically provided by this act.
12             (3) Enter into contracts for: (A) Advertising and promotional serv-
13       ices, subject to the provisions of subsection (b); (B) annuities or other
14       methods deemed appropriate for the payment of prizes; (C) data proc-
15       essing and other technical products, equipment and services; and (D)
16       facilities as needed to operate the Kansas lottery, including. Such con-
17       tracts may include, but not be limited to, gaming equipment, tickets and
18       other services involved in major procurement contracts, in accordance
19       with K.S.A. 74-8705, and amendments thereto.
20             (4) Enter into contracts with: (A) Persons for the sale of lottery tick-
21       ets or shares to the public, as provided by this act and; and (B) parimutuel
22       licensees for placement and operation of electronic gaming machines at
23       parimutuel licensee locations. Such contracts shall be subject to rules and
24       regulations adopted pursuant to this act, which contracts but shall not be
25       subject to the provisions of K.S.A. 75-3738 through 75-3744, and amend-
26       ments thereto.
27             (5) Require lottery retailers to furnish proof of financial stability or
28       furnish surety in an amount based upon the expected volume of sales of
29       lottery tickets or shares.
30             (6) Examine, or cause to be examined by any agent or representative
31       designated by the executive director, any books, papers, records or mem-
32       oranda of any lottery retailer or lottery gaming machine operator for the
33       purpose of ascertaining compliance with the provisions of this act or rules
34       and regulations adopted hereunder.
35             (7) Issue subpoenas to compel access to or for the production of any
36       books, papers, records or memoranda in the custody or control of any
37       lottery retailer or lottery gaming machine operator, or to compel the
38       appearance of any lottery retailer or lottery gaming machine operator or
39       employee of any lottery retailer or lottery gaming machine operator, for
40       the purpose of ascertaining compliance with the provisions of this act or
41       rules and regulations adopted hereunder. Subpoenas issued under the
42       provisions of this subsection may be served upon natural persons and
43       corporations in the manner provided in K.S.A. 60-304, and amendments

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  1       thereto, for the service of process by any officer authorized to serve sub-
  2       poenas in civil actions or by the executive director or an agent or repre-
  3       sentative designated by the executive director. In the case of the refusal
  4       of any person to comply with any such subpoena, the executive director
  5       may make application to the district court of any county where such
  6       books, papers, records, memoranda or person is located for an order to
  7       comply.
  8             (8) Administer oaths and take depositions to the same extent and
  9       subject to the same limitations as would apply if the deposition were in
10       aid of a civil action in the district court.
11             (9) Require fingerprinting of employees and such other persons who
12       work in sensitive areas within the lottery as deemed appropriate by the
13       director. The director may submit such fingerprints to the Kansas bureau
14       of investigation and to the federal bureau of investigation for the purposes
15       of verifying the identity of such employees and persons and obtaining
16       records of their criminal arrests and convictions.
17             (b) The Kansas lottery shall not engage in on-site display advertising
18       or promotion of the lottery at any amateur athletic or sporting event
19       including, but not limited to, amateur athletic sporting events at institu-
20       tions under the jurisdiction and control of the state board of regents.
21             Sec.  4. K.S.A. 1998 Supp. 74-8710 is hereby amended to read as
22       follows: 74-8710. (a) The commission, upon the recommendation of the
23       executive director, shall adopt rules and regulations governing the estab-
24       lishment and operation of a state lottery as necessary to carry out the
25       purposes of this act K.S.A. 74-8701 through 74-8723 and sections 8
26       through 20, and amendments thereto. Temporary rules and regulations
27       may be adopted by the commission without being subject to the provi-
28       sions and requirements of K.S.A. 77-415 through 77-438, and amend-
29       ments thereto, but shall be subject to approval by the attorney general as
30       to legality and shall be filed with the secretary of state and published in
31       the Kansas register. Temporary and permanent rules and regulations may
32       include but shall not be limited to:
33             (1) Subject to the provisions of subsection (b), the types of lottery
34       games to be conducted, including but not limited to instant lottery, on-
35       line and traditional games and electronic gaming machines operated at
36       parimutuel licensee locations, but not including games on video lottery
37       machines.
38             (2) The manner of selecting the winning tickets or shares, except
39       that, if a lottery game utilizes a drawing of winning numbers, a drawing
40       among entries or a drawing among finalists, such drawings shall always
41       be open to the public and shall be recorded on both video and audio tape.
42             (3) The manner of payment of prizes to the holders of winning tickets
43       or shares.

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  1             (4) The frequency of the drawings or selections of winning tickets
  2       or shares.
  3             (5) The type or types of locations at which tickets or shares may be
  4       sold.
  5             (6) The method or methods to be used in selling tickets or shares.
  6             (7) Additional qualifications for the selection of lottery retailers and
  7       the amount of application fees to be paid by each.
  8             (8) The amount and method of compensation to be paid to lottery
  9       retailers, including special bonuses and incentives.
10             (9) Deadlines for claims for prizes by winners of each lottery game.
11             (10) Provisions for confidentiality of information submitted by ven-
12       dors pursuant to K.S.A. 74-8705, and amendments thereto.
13             (11) Information required to be submitted by vendors, in addition
14       to that required by K.S.A. 74-8705, and amendments thereto.
15             (12) The major procurement contracts or portions thereof to be
16       awarded to minority business enterprises pursuant to subsection (a) of
17       K.S.A. 74-8705, and amendments thereto, and procedures for the award
18       thereof.
19             (b) No new lottery game shall commence operation after the effec-
20       tive date of this act unless first approved by the governor or, in the gov-
21       ernor's absence or disability, the lieutenant governor.
22             Sec.  5. K.S.A. 1998 Supp. 74-8711 is hereby amended to read as
23       follows: 74-8711. (a) There is hereby established in the state treasury the
24       lottery operating fund and the electronic gaming fund.
25             (b) The executive director shall remit at least weekly to the state
26       treasurer all moneys collected from the sale of lottery tickets and shares
27       and any other moneys received by or on behalf of the Kansas lottery other
28       than funds to be deposited into the electronic gaming fund pursuant to
29       subsection (e). Upon receipt of any such remittance, the state treasurer
30       shall deposit the entire amount thereof in the state treasury and credit it
31       to the lottery operating fund. Moneys credited to the fund shall be ex-
32       pended or transferred only as provided by this act. Expenditures from
33       such fund shall be made in accordance with appropriations acts upon
34       warrants of the director of accounts and reports issued pursuant to vouch-
35       ers approved by the executive director or by a person designated by the
36       executive director.
37             (c) Moneys in the lottery operating fund shall be used for:
38             (1) Except as provided by this section, the payment of expenses of
39       the lottery, which shall include all costs incurred in the operation and
40       administration of the Kansas lottery; all costs resulting from contracts
41       entered into for the purchase or lease of goods and services needed for
42       operation of the lottery, including but not limited to supplies, materials,
43       tickets, independent studies and surveys, data transmission, advertising,

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  1       printing, promotion, incentives, public relations, communications, and
  2       distribution of tickets and shares; and reimbursement of costs of facilities
  3       and services provided by other state agencies. Expenses of the lottery and
  4       the racing and gaming commission attributable to the regulation and op-
  5       eration of electronic gaming machines shall be paid as provided by sub-
  6       section (e);
  7             (2) the payment of compensation to lottery retailers;
  8             (3) transfers of moneys to the lottery prize payment fund pursuant
  9       to K.S.A. 74-8712, and amendments thereto;
10             (4) transfers to the state general fund pursuant to K.S.A. 74-8713,
11       and amendments thereto;
12             (5) transfers to the state gaming revenues fund pursuant to subsec-
13       tion (d) of this section and as otherwise provided by law; and
14             (6) the transfers to the county reappraisal fund as prescribed by law.
15             (d) The director of accounts and reports shall transfer moneys in the
16       lottery operating fund to the state gaming revenues fund created by
17       K.S.A. 79-4801, and amendments thereto, on or before the 15th day of
18       each month, for fiscal years commencing on or after July 1, 1988 in an
19       amount certified monthly by the executive director and determined as
20       follows, whichever is greater:
21             (1) In an amount equal to the moneys in the lottery operating fund
22       in excess of those needed for the purposes described in subsections (c)(1)
23       through (c)(4); or
24             (2) an amount equal to not less than 30% of total monthly revenues
25       from the sales of lottery tickets and shares less estimated returned tickets.
26             (e) The executive director shall collect and remit to the state treasurer
27       not less than once each week all net machine income received from lottery
28       gaming machine operators to be credited to the electronic gaming machine
29       fund. Separate accounts shall be maintained in the electronic gaming ma-
30       chine fund for receipt of funds from each lottery gaming machine oper-
31       ator. Not less than once each week, the state treasurer shall distribute an
32       amount equal to 16% of the total receipts credited to each such account
33       of the electronic gaming machine fund as follows:
34             (1)  (A) Except as provided by paragraph (B), an amount equal to
35       1% of the amount credited to the electronic gaming machine fund shall
36       be distributed to the most populous city in the county in which the op-
37       erator is located;
38             (B) in Crawford county, such 1% shall be distributed equally be-
39       tween the county and the city of Frontenac;
40             (2) an amount equal to 1% of the amount credited to the electronic
41       gaming machine fund shall be paid to the holder of the organization li-
42       cense at the parimutuel licensee location, which shall not be in addition
43       to but in fulfillment of any contractual obligation owed by the parimutuel

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  1       licensee to the holder of the organization license;
  2             (3) an amount sufficient to reimburse the Kansas racing and gaming
  3       commission for all expenses attributable to the regulation and operation
  4       of electronic gaming machines;
  5             (4) an amount sufficient to reimburse the lottery commission for all
  6       expenses attributable to the regulation and operation of electronic gaming
  7       machines; and
  8             (5) of the balance remaining after the distribution of money pursuant
  9       to paragraphs(1) through (4) of this subsection, an amount equal to 50%
10       shall be credited to the Kansas education technology enhancement fund
11       and an amount equal to 50% shall be credited to the economic develop-
12       ment initiatives fund.
13             (f) After the distribution of moneys pursuant to subsection (e), the
14       state treasurer shall remit the balance in the account for each electronic
15       gaming machine operator to such electronic gaming machine operator not
16       less than once each week. In no event shall the amount of money remitted
17       pursuant to this subsection exceed 84% of the total amount of moneys
18       credited to the electronic gaming machine fund.
19             Sec.  6. K.S.A. 1998 Supp. 74-8718 is hereby amended to read as
20       follows: 74-8718. (a) It is unlawful for:
21             (1) Any person to sell a lottery ticket or share at a price other than
22       that fixed by rules and regulations adopted pursuant to this act;
23             (2) any person other than a lottery retailer authorized by the Kansas
24       lottery to sell or resell any lottery ticket or share; or
25             (3) any person to sell a lottery ticket or share to any person, knowing
26       such person to be under 18 years of age; or
27             (4) any parimutuel licensee to allow any person to play electronic
28       gaming machines knowing such person to be under 21 years of age.
29             (b)  (1) Violation of this section is a class A nonperson misdemeanor
30       upon conviction for a first offense; and
31             (2) violation of this section is a severity level 9, nonperson felony
32       upon conviction for a second or subsequent offense.
33             Sec.  7. K.S.A. 1998 Supp. 74-8719 is hereby amended to read as
34       follows: 74-8719. (a) Except as provided by subsection (c), it is unlawful
35       for any person to purchase a lottery ticket or share, to play an electronic
36       gaming machine or to share in the lottery winnings of a person, knowing
37       that such person is:
38             (1) The executive director, a member of the commission or an em-
39       ployee of the Kansas lottery;
40             (2) an officer or employee of a vendor contracting with the Kansas
41       lottery to supply gaming equipment or tickets to the Kansas lottery for
42       use in the operation of any lottery conducted pursuant to this act;
43             (3) a spouse, child, stepchild, brother, stepbrother, sister, stepsister,

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  1       parent or stepparent of a person described by subsection (a)(1) or (2); or
  2             (4) a person who resides in the same household as any person de-
  3       scribed by subsection (a)(1) or (2).
  4             (b)  (1) Violation of subsection (a) is a class A nonperson misde-
  5       meanor upon conviction for a first offense.
  6             (2) Violation of subsection (a) is a severity level 9, nonperson felony
  7       upon conviction for a second or subsequent offense.
  8             (c) Notwithstanding subsection (a), The executive director may au-
  9       thorize in writing any employee of the Kansas lottery and any employee
10       of a lottery vendor to: (1) Purchase a lottery ticket for the purposes of
11       verifying the proper operation of the state lottery with respect to security,
12       systems operation and lottery retailer contract compliance; or (2) play an
13       electronic gaming machine to verify the proper operation thereof with
14       respect to security and contract compliance. Any prize awarded as a result
15       of such ticket purchase shall become the property of the Kansas lottery
16       and be added to the prize pools of subsequent lottery games. No money
17       or merchandise shall be awarded to any employee playing an electronic
18       gaming machine pursuant to this subsection.
19             (d) Certain classes of persons who, because of the unique nature of
20       the supplies or services they provide for use directly in the operation of
21       a lottery pursuant to this act, may be prohibited, in accordance with rules
22       and regulations adopted by the commission, from participating in any
23       lottery in which such supplies or services are used.
24             (e) Nothing in this section shall prohibit lottery retailers or their
25       employees from purchasing lottery tickets and shares or from being paid
26       a prize of a winning ticket or share.
27             (f) Each person who purchases a lottery ticket or share thereby
28       agrees to be bound by rules and regulations adopted by the commission
29       and by the provisions of this act.
30             New Sec.  8. (a) Upon the commencement of the operation of elec-
31       tronic gaming machines lottery gaming machine operators shall supple-
32       ment purses from the balance of net machine income distributed by the
33       state treasurer to each electronic gaming machine operator pursuant to
34       subsection (e)(2) of K.S.A. 74-8711, and amendments thereto, as follows:
35             (1) On or before September 1 of each year, an aggregate sum of
36       $1,500,000 from all parimutuel licensees calculated prorata upon the
37       number of parimutuel licensees to be paid to the operators of live horse
38       racing to be used solely to supplement purses for any forthcoming sched-
39       uled live horse racing.
40             (2)  (A) At the parimutuel licensee location in Sedgwick county, the
41       lottery gaming machine operator at the parimutuel licensee location shall
42       pay such amounts as necessary to pay $100 per point awarded at the
43       parimutuel licensee location and an additional $75 per point awarded at

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  1       the parimutuel licensee location for races won by Kansas-whelped
  2       greyhounds;
  3             (B) at the parimutuel licensee location in Wyandotte county, the
  4       lottery gaming machine operator at the parimutuel licensee location shall
  5       pay such amounts as necessary to pay not less than $100 per point
  6       awarded at the parimutuel licensee location and an additional $75 per
  7       point awarded at the parimutuel licensee location for races won by Kan-
  8       sas-whelped greyhounds; and
  9             (C) at the parimutuel licensee location in Crawford county, the lot-
10       tery gaming machine operator at the parimutuel licensee location shall
11       pay such amounts as necessary to pay $80 per point awarded at the par-
12       imutuel licensee location and an additional $60 per point awarded at the
13       parimutuel licensee location for races won by Kansas-whelped
14       greyhounds.
15             (b) All purse supplements paid pursuant to this subsection (2) shall
16       be according to the point schedule in effect on January 1, 1999, at the
17       parimutuel licensee location in Sedgwick county. All purse supplements
18       paid pursuant to this section shall be in addition to purses and supple-
19       ments paid under K.S.A. 74-8801 et seq., and amendments thereto.
20             (c) No electronic gaming machine shall be operated pursuant to this
21       act unless the facility in which the electronic gaming machine is operated
22       displays live and simulcast parimutuel races on video terminals and has
23       installed parimutuel windows for wagering on all parimutuel races.
24             (d) Except as provided in subsection (e), no electronic gaming ma-
25       chine shall be operated pursuant to this act unless:
26             (1) During the first full calendar year and each year thereafter in
27       which electronic gaming machines are operated, the parimutuel licensee
28       shall conduct at the parimutuel licensee location in Sedgwick county at
29       least eight live racing programs each calendar week for the number of
30       weeks equal to or greater than the number of weeks raced during the
31       1998 calendar year with at least 12 live races conducted each program.
32             (2) During the first full calendar year and each year thereafter in
33       which electronic gaming machines are operated, the parimutuel licensee
34       shall conduct at the parimutuel licensee location in Wyandotte county at
35       least seven live racing programs each calendar week for the number of
36       weeks equal to or greater than the number of weeks raced during the
37       1998 calendar year with at least 12 live races conducted each program.
38             (3) During the first full calendar year and each year thereafter in
39       which electronic gaming machines are operated, the parimutuel licensee
40       shall conduct at the parimutuel licensee location in Crawford county live
41       racing for at least 150 days, comprised of at least seven live racing pro-
42       grams each calendar week with at least 12 live races conducted each
43       program.

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  1             (4) After the first full calendar year and each year thereafter, in the
  2       event the net machine income received at the Crawford county parimu-
  3       tuel licensee location is less than $30,000,000, the minimum number of
  4       live racing programs per calendar week may be reduced by the parimutuel
  5       licensee to five.
  6             (e) The commission may provide exceptions to the requirements of
  7       subsection (d) for a parimutuel licensee conducting live racing when
  8       events beyond the control of the licensee may render racing impossible
  9       or impractical. Such events shall include disaster, kennel sickness, state
10       imposed limitations on operations, weather aberrations or other acts of
11       nature.
12             New Sec.  9. (a) The executive director shall contract with parimu-
13       tuel licensees to permit the operation and management of electronic gam-
14       ing machines at parimutuel licensee locations by the state of Kansas, sub-
15       ject to the provisions of this act. The electronic gaming machine operator
16       shall purchase and transfer at its expense to the Kansas lottery who shall
17       be the owner or licensee of all software programs used by such parimutuel
18       licensees to operate electronic gaming machines and shall sublicense such
19       software programs to each parimutuel licensee. The use of progressive
20       electronic gaming machines is permitted. The executive director shall
21       contract only with parimutuel licensees in counties in which a proposition
22       submitted pursuant to section 19, and amendments thereto, of this act
23       has been approved by the voters of such county.
24             (b) Electronic gaming machines purchased or leased by the elec-
25       tronic gaming machine operator at its own expense may be installed,
26       operated or managed, owned or leased by parimutuel licensees or by a
27       technology provider under contract with the parimutuel licensee as pro-
28       vided by this act, and amendments thereto. Such machine shall be subject
29       to the ultimate control and operation of the Kansas lottery in accordance
30       with this act. At all times that electronic gaming machines are in operation
31       at a parimutuel licensee location, ownership or leasehold interest to such
32       machines shall be held by the Kansas lottery commission. Each specific
33       type of electronic gaming machine shall be approved by the Kansas lottery
34       in accordance with rules and regulations adopted by the commission.
35             (c) Each contract between the executive director and a lottery gam-
36       ing machine operator shall provide that the Kansas lottery receive all of
37       the net machine income derived from the operation of electronic gaming
38       machines at the parimutuel licensee location. The initial term of such
39       contract shall be not less than seven years. Such contract may be renewed
40       for terms of not less than seven years.
41             (d) The contracts authorized by this section may include the
42       following:
43             (1) Accounting procedures to determine the net machine income,

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  1       unclaimed merchandise and credits.
  2             (2) The location of electronic gaming machines within the parimu-
  3       tuel licensee location and other matters relating to the operation of elec-
  4       tronic gaming machines. The days and hours of operation of such elec-
  5       tronic gaming machines shall not be restricted.
  6             (3) Minimum requirements for an electronic gaming machine op-
  7       erator to provide qualified oversight, security and supervision of the op-
  8       eration of electronic gaming machines at the parimutuel licensee location,
  9       including the use of qualified personnel with experience in applicable
10       technology.
11             (e) No electronic gaming machine shall be operated pursuant to this
12       act unless the executive director of the Kansas racing and gaming com-
13       mission first issues a certificate for such machine authorizing its use at a
14       specified parimutuel licensee facility. Each machine shall have the cer-
15       tificate prominently displayed thereon. Any machine which does not dis-
16       play the certificate required by this section is contraband and a public
17       nuisance subject to confiscation by any law enforcement officer. A vio-
18       lation of this subsection is a severity level 8, nonperson felony.
19             (f) The Kansas lottery shall examine prototypes of electronic gaming
20       machines prior to certification pursuant to this section and shall notify
21       the Kansas racing and gaming commission which such types of electronic
22       gaming machines are approved for use by the Kansas lottery.
23             (g) Electronic gaming machines operated pursuant to this act shall:
24             (1) Pay out an average of not less than 80% of the amount wagered;
25             (2) be linked under a central communications system to provide au-
26       diting and other program information as approved by the commission.
27       The communications systems approved by the commission may not limit
28       participation to only one electronic gaming machines manufacturer by
29       either the cost of implementing the necessary program modifications to
30       communicate or the inability to communicate with the central commu-
31       nications system;
32             (3) be on-line and in constant communication with a central com-
33       puter located at a commission office located at the parimutuel licensee
34       location. The Kansas lottery shall be the owner of, or obtain the license
35       for, the operation of, such gaming equipment as is necessary to implement
36       such central communications and auditing functions.
37             (h) The executive director shall inspect and certify individual elec-
38       tronic gaming machines operated by lottery gaming machine operators
39       or other persons. The executive director shall require the person seeking
40       the examination and certification of electronic gaming machines to pay
41       the anticipated actual costs of the examination in advance. After the com-
42       pletion of the examination, the executive director shall refund any over-
43       payment or charge and collect amounts sufficient to reimburse the ex-

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  1       ecutive director for any underpayment of actual costs. The executive
  2       director may contract for the examination of electronic gaming machines
  3       as required by this subsection, and may rely upon testing done by or for
  4       other states regulating electronic gaming machines, if the executive di-
  5       rector deems such testing to be reliable and in the best interest of the
  6       state of Kansas.
  7             New Sec.  10. Except for persons acting in accordance with the rules
  8       and regulations of the Kansas lottery and the Kansas racing and gaming
  9       commission in performing installation, maintenance and repair services,
10       any person who, with the intent to manipulate the outcome, pay-off or
11       operation of an electronic gaming machine, manipulates the outcome,
12       pay-off or operation of an electronic gaming machine by physical, elec-
13       trical or mechanical means shall be guilty of a severity level 8, nonperson
14       felony.
15             New Sec.  11. Each lottery gaming machine operator shall hold the
16       executive director, the Kansas racing and gaming commission and the
17       state harmless from and defend and pay for the defense of any and all
18       claims which may be asserted against the executive director, the Kansas
19       racing and gaming commission, the state or the employees thereof, arising
20       from electronic gaming machines located at the parimutuel licensee lo-
21       cation of that lottery gaming machine operator. The provisions of this
22       section shall not apply to any claims arising from the negligence or willful
23       misconduct of the executive director, the Kansas racing and gaming com-
24       mission, the state or the employees thereof.
25             New Sec.  12. Each lottery gaming machine operator shall provide
26       access to all its records and the physical premises where the electronic
27       gaming machine activities occur for the purpose of monitoring or inspect-
28       ing the electronic gaming machines and gaming equipment. None of the
29       information disclosed pursuant to this subsection shall be subject to dis-
30       closure under the Kansas open records act, K.S.A. 45-216 et seq., and
31       amendments thereto.
32             New Sec.  13. A parimutuel licensee shall post one or more signs on
33       licensed premises at points of entry to the areas where electronic gaming
34       machines are located to inform patrons of the toll-free number available
35       to provide information and referral services regarding compulsive or
36       problem gaming. The text shall be determined by the secretary of the
37       department of health and environment. Failure by the parimutuel li-
38       censee to post and maintain such signs shall be cause for the imposition
39       of a fine not to exceed $500 per day.
40             New Sec.  14. (a) Wagers shall be received only from a person at a
41       parimutuel licensee location. No person present at a parimutuel licensee
42       location shall place or attempt to place a wager on behalf of another
43       person who is not present at a parimutuel licensee location.

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  1             (b) Violation of this section is a class A nonperson misdemeanor upon
  2       conviction for a first offense. Violation of this section is a severity level 9,
  3       nonperson felony upon conviction for a second or subsequent offense.
  4             New Sec.  15. A person under age 21 shall not be permitted in an
  5       area of a parimutuel licensee location where gaming is being conducted,
  6       except for a person at least 18 years of age who is an employee of the
  7       parimutuel licensee. No employee under age 21 shall perform any func-
  8       tion involved in gaming by the patrons. No person under age 21 shall be
  9       permitted to make a wager on an electronic gaming machine.
10             New Sec.  16. If a disagreement arises between the executive direc-
11       tor and the Kansas racing and gaming commission with regard to their
12       respective duties or responsibilities in carrying out the purposes of the
13       Kansas lottery act, such disagreement shall be resolved by the governor
14       in a manner not inconsistent with the provisions of such act.
15             New Sec.  17. There is hereby created in the state treasury the Kan-
16       sas education technology enhancement fund. Such fund shall be for the
17       sole purpose of improving access for Kansans to learning and information
18       through modern telecommunications and computer technologies. De-
19       posits to this fund shall derive exclusively from revenues of the Kansas
20       lottery deposited pursuant to subsection (e) of section 5, and amendments
21       thereto, and interest attributable to such funds. The director of accounts
22       and reports shall disburse funds in accordance with appropriations made
23       therefor to colleges and universities under the control of the Kansas board
24       of regents, community colleges under the control of the state board of
25       education, Washburn University, the state library for grants-in-aid to local
26       libraries and the board of education of any school district implementing
27       and maintaining a technology education fund pursuant to K.S.A. 72-3703,
28       and amendments thereto. The legislature may appropriate only those
29       funds in the Kansas education technology enhancement fund as are on
30       hand as of December 31 of each year preceding the legislative session in
31       which such appropriation is to be made. Such funds shall not be used to
32       replace property taxes or general fund support for activities, services,
33       supplies, maintenance, salaries, benefits, equipment, facilities or other
34       purposes existing and funded by federal, state or local moneys as of the
35       effective date of this act.
36             New Sec.  18. Pursuant to section 2 of the federal act entitled "An
37       Act to Prohibit Transportation of Gambling Devices in Interstate and
38       Foreign Commerce," 15 U.S.C. 1171 through 1777, the state of Kansas,
39       acting by and through the duly elected and qualified members of the
40       legislature, does hereby in this section, and in accordance with and in
41       compliance with the provisions of section 2 of such federal act, declare
42       and proclaim that it is exempt from the provision of section 2 of such
43       federal act to the extent that such gambling devices are being transported

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  1       to or from a parimutuel licensee location within the state of Kansas.
  2             New Sec.  19. (a) Electronic gaming machines shall be operated pur-
  3       suant to this act only in counties where, in accordance with this section,
  4       the qualified voters of the county have voted to permit operation of elec-
  5       tronic gaming machines at parimutuel racetracks within the county.
  6             (b) The board of county commissioners, by resolution, may submit
  7       and upon presentation of a petition filed in accordance with subsection
  8       (c), shall submit to the qualified voters of the county a proposition to (1)
  9       permit the operation of electronic gaming machines at parimutuel race-
10       tracks within the county; or (2) prohibit the operation of electronic gam-
11       ing machines at parimutuel racetracks within the county. The proposition
12       shall be submitted to the voters either in a countywide special election
13       called by the board of county commissioners for that purpose and held
14       not less than 90 days after the resolution is adopted or the petition is filed
15       or in the next general election as shall be specified by the board of county
16       commissioners or in the petition, as the case may be.
17             (c) A petition to submit a proposition to the qualified voters of a
18       county pursuant to this section shall be filed with the county election
19       officer. The petition shall be signed by qualified voters of the county equal
20       in number to not less than 10% of the voters of the county who voted for
21       the office of secretary of state at the last preceding general election at
22       which such office was elected. The appropriate version of the following
23       shall appear on the petition:
24             "We request an election to determine whether the operation of electronic gaming ma-
25       chines by the Kansas lottery shall be permitted at parimutuel racetracks in ____________
26       county."
27             (d) Upon the adoption of a resolution or the submission of a valid
28       petition calling for an election pursuant to this section, the county election
29       officer shall cause the appropriate version of the following proposition to
30       be placed on the ballot at the election called for that purpose:
31             "Shall the operation of electronic gaming machines by the Kansas lottery be permitted
32       at parimutuel racetracks in ____________ county?"
33             (e) If a majority of the votes cast and counted at such election is in
34       favor of permitting the operation of such games at such racetracks, the
35       Kansas lottery shall enter a contract with parimutuel licensees to operate
36       such games at the parimutuel racetracks located in the county. If a ma-
37       jority of the votes cast and counted at an election under this section is
38       against permitting the operation of electronic gaming machines at pari-
39       mutuel racetracks in the county, the Kansas lottery shall not operate such
40       games. The county election officer shall transmit a copy of the certifica-
41       tion of the results of the election to the executive director.
42             (f) The election provided for by this section shall be conducted, and
43       the votes counted and canvassed, in the manner provided by law for

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  1       question submitted elections of the county.
  2             (g) If in any election provided for by this section a majority of the
  3       votes cast and counted is against permitting the operation of electronic
  4       gaming machines in the county, another election submitting the issue of
  5       the operation of electronic gaming machines in the county shall not be
  6       held for at least two years from the date of such election.
  7             New Sec.  20. Nothing in this act shall restrict the jurisdiction of the
  8       Kansas racing and gaming commission to regulate activities conducted at
  9       parimutuel licensee facilities including the premises on which electronic
10       gaming machines are operated.
11             Sec.  21. K.S.A. 74-8721 is hereby amended to read as follows: 74-
12       8721. All sales of lottery tickets and shares and electronic gaming machine
13       games shall be exempt from retailers' sales taxes imposed pursuant to
14       K.S.A. 12-187 et seq., and amendments thereto, and from the tax imposed
15       by the Kansas retailers' sales tax act.
16             Sec.  22. K.S.A. 1998 Supp. 74-8723 is hereby amended to read as
17       follows: 74-8723. (a) The Kansas lottery and the office of executive di-
18       rector of the Kansas lottery, established by K.S.A. 74-8703, and amend-
19       ments thereto, and the Kansas lottery commission, created by K.S.A. 74-
20       8709, and amendments thereto, shall be and hereby are abolished on July
21       1, 2002 2007.
22             (b) This section shall be part of and supplemental to the Kansas
23       lottery act.
24             Sec.  23. K.S.A. 1998 Supp. 74-8804 is hereby amended to read as
25       follows: 74-8804. (a) During race meetings, the commission and its des-
26       ignated employees may observe and inspect all racetrack facilities oper-
27       ated by licensees and all racetracks simulcasting races to racetrack facil-
28       ities in Kansas, including but not limited to all machines, equipment and
29       facilities used for parimutuel wagering and electronic gaming.
30             (b) Commission members and hearing officers designated by the
31       commission may administer oaths and take depositions to the same extent
32       and subject to the same limitations as would apply if the deposition was
33       in aid of a civil action in the district court.
34             (c) The commission may examine, or cause to be examined by any
35       agent or representative designated by the commission, any books, papers,
36       records or memoranda of any licensee, or of any racetrack or business
37       involved in simulcasting races to racetrack facilities in Kansas, or of any
38       business or individual involved in electronic gaming for the purpose of
39       ascertaining compliance with any provision of this act or any rule and
40       regulation adopted hereunder.
41             (d) The commission may issue subpoenas to compel access to or for
42       the production of any books, papers, records or memoranda in the cus-
43       tody or control of any licensee or officer, member, employee or agent of

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  1       any licensee, or to compel the appearance of any licensee or officer, mem-
  2       ber, employee or agent of any licensee, or of any racetrack or business
  3       involved in simulcasting races to racetrack facilities in this state, for the
  4       purpose of ascertaining compliance with any of the provisions of this act
  5       or any rule and regulation adopted hereunder. Subpoenas issued pursuant
  6       to this subsection may be served upon individuals and corporations in the
  7       same manner provided in K.S.A. 60-304, and amendments thereto, for
  8       the service of process by any officer authorized to serve subpoenas in civil
  9       actions or by the commission or an agent or representative designated by
10       the commission. In the case of the refusal of any person to comply with
11       any such subpoena, the executive director may make application to the
12       district court of any county where such books, papers, records, memo-
13       randa or person is located for an order to comply.
14             (e) The commission shall allocate equitably race meeting dates, rac-
15       ing days and hours to all organization licensees and assign such dates and
16       hours so as to minimize conflicting dates and hours within the same ge-
17       ographic market area.
18             (f) The commission shall have the authority, after notice and an op-
19       portunity for hearing in accordance with rules and regulations adopted
20       by the commission, to exclude, or cause to be expelled, from any race
21       meeting or racetrack facility, or to prohibit a licensee from conducting
22       business with any person:
23             (1) Who has violated the provisions of this act or any rule and reg-
24       ulation or order of the commission;
25             (2) who has been convicted of a violation of the racing or gambling
26       laws of this or any other state or of the United States or has been adju-
27       dicated of committing as a juvenile an act which, if committed by an adult,
28       would constitute such a violation; or
29             (3) whose presence, in the opinion of the commission, reflects ad-
30       versely on the honesty and integrity of horse or greyhound racing or
31       interferes with the orderly conduct of a race meeting.
32             (g) The commission shall review and approve all proposed construc-
33       tion and major renovations to racetrack facilities owned or leased by li-
34       censees.
35             (h) The commission shall review and approve all proposed contracts
36       with racetracks or businesses involved in simulcasting races to racetrack
37       facilities in Kansas.
38             (i) The commission may suspend a horse or greyhound from partic-
39       ipation in races if such horse or greyhound has been involved in any
40       violation of the provisions of this act or any rule and regulation or order
41       of the commission.
42             (j) The commission, within 72 hours after any action taken by a stew-
43       ard or racing judge and upon appeal by any interested party or upon its

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  1       own initiative, may overrule any decision of a steward or racing judge,
  2       other than a decision regarding disqualifications for interference during
  3       the running of a race, if the preponderance of evidence indicates that:
  4             (1) The steward or racing judge mistakenly interpreted the law;
  5             (2) new evidence of a convincing nature is produced; or
  6             (3) the best interests of racing and the state may be better served.
  7             A decision of the commission to overrule any decision of a steward or
  8       racing judge shall not change the distribution of parimutuel pools to the
  9       holders of winning tickets. A decision of the commission which would
10       affect the distribution of purses in any race shall not result in a change
11       in that distribution unless a written claim is submitted to the commission
12       within 48 hours after completion of the contested race by one of the
13       owners or trainers of a horse or greyhound which participated in such
14       race and a preponderance of evidence clearly indicates to the commission
15       that one or more of the grounds for protest, as provided for in rules and
16       regulations of the commission, has been substantiated.
17             (k) The commission, after notice and a hearing in accordance with
18       rules and regulations adopted by the commission, may impose a civil fine
19       not exceeding $5,000 for each violation of any provision of this act, or any
20       rule and regulation of the commission, for which no other penalty is
21       provided.
22             (l) The commission shall adopt rules and regulations specifying and
23       regulating:
24             (1) Those drugs and medications which may be administered, and
25       possessed for administration, to a horse or greyhound within the confines
26       of a racetrack facility; and
27             (2) that equipment for administering drugs or medications to horses
28       or greyhounds which may be possessed within the confines of a racetrack
29       facility.
30             (m) The commission may adopt rules and regulations providing for
31       the testing of any licensees of the commission, and any officers, directors
32       and employees thereof, to determine whether they are users of any con-
33       trolled substances.
34             (n) The commission shall require fingerprinting of all persons nec-
35       essary to verify qualification for employment by the commission or to
36       verify qualification for any license, including a simulcasting license, issued
37       pursuant to this act. The commission shall submit such fingerprints to the
38       Kansas bureau of investigation and to the federal bureau of investigation
39       for the purposes of verifying the identity of such persons and obtaining
40       records of criminal arrests and convictions.
41             (o) The commission may receive from commission security person-
42       nel, the Kansas bureau of investigation or other criminal justice agencies,
43       including but not limited to the federal bureau of investigation and the

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  1       federal internal revenue service, such criminal history record information
  2       (including arrest and nonconviction data), criminal intelligence informa-
  3       tion and information relating to criminal and background investigations
  4       as necessary for the purpose of determining qualifications of licensees of
  5       the commission, employees of the commission, applicants for employ-
  6       ment by the commission, and applicants for licensure by the commission,
  7       including applicants for simulcasting licenses. Upon the written request
  8       of the chairperson of the commission, the commission may receive from
  9       the district courts such information relating to juvenile proceedings as
10       necessary for the purpose of determining qualifications of employees of
11       and applicants for employment by the commission and determining qual-
12       ifications of licensees of and applicants for licensure by the commission.
13       Such information, other than conviction data, shall be confidential and
14       shall not be disclosed except to members and employees of the commis-
15       sion as necessary to determine qualifications of such licensees, employees
16       and applicants. Any other disclosure of such confidential information is a
17       class A misdemeanor and shall constitute grounds for removal from office,
18       termination of employment or denial, revocation or suspension of any
19       license issued under this act.
20             (p) The commission, in accordance with K.S.A. 75-4319, and amend-
21       ments thereto, may recess for a closed or executive meeting to receive
22       and discuss information received by the commission pursuant to subsec-
23       tion (o) and to negotiate with licensees of or applicants for licensure by
24       the commission regarding any such information.
25             (q) The commission may enter into agreements with the federal bu-
26       reau of investigation, the federal internal revenue service, the Kansas
27       attorney general or any state, federal or local agency as necessary to carry
28       out the duties of the commission under this act.
29             (r) The commission shall adopt such rules and regulations as nec-
30       essary to implement and enforce the provisions of this act K.S.A. 74-8801
31       et. seq., and amendments thereto
32             (s) The commission may adopt rules and regulations with respect to
33       security, safety and honest conduct at all parimutuel licensee locations as
34       defined in section 2, and amendments thereto.
35             (t) The commission shall have the power to investigate alleged vio-
36       lations of sections 8 through 20 and K.S.A. 74-8801 et seq., and amend-
37       ments thereto, or commission rules and regulations, orders and final de-
38       cisions.
39             (u) The commission shall have the power to authorize security meas-
40       ures required in any areas where electronic gaming machines are located.
41             (v) The commission shall have the power to take any other action as
42       may be reasonable or appropriate to enforce the provisions of sections 8
43       through 20 and K.S.A. 74-8801 et seq., and amendments thereto, or com-

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  1       mission rules and regulations, orders and final decisions.
  2             Sec.  24. K.S.A. 1998 Supp. 74-8810 is hereby amended to read as
  3       follows: 74-8810. (a) It is a class A nonperson misdemeanor for any person
  4       to have a financial interest, directly or indirectly, in any racetrack facility
  5       within the state of Kansas or in any host facility for a simulcast race
  6       displayed in this state Kansas or any parimutuel licensee location in Kan-
  7       sas:
  8             (1) While such person is executive director or a member of the com-
  9       mission or during the five years immediately following such person's term
10       as executive director or member of the commission; or
11             (2) while such person is an officer, director or member of an organ-
12       ization licensee, other than a fair association or horsemen's nonprofit or-
13       ganization, or during the five years immediately following the time such
14       person is an officer, director or member of such an organization licensee.
15             (b) It is a class A nonperson misdemeanor for any member, employee
16       or appointee of the commission, including stewards and racing judges, to
17       knowingly:
18             (1) Participate in the operation of or have a financial interest in any
19       business which has been issued a concessionaire license, racing or wa-
20       gering or electronic gaming machine equipment or services license, fa-
21       cility owner license or facility manager license, or any business which sells
22       goods or services to an organization licensee;
23             (2) participate directly or indirectly as an owner, owner-trainer or
24       trainer of a horse or greyhound, or as a jockey of a horse, entered in a
25       race meeting conducted in this state or as an owner, operator, manager
26       or consultant in electronic gaming in Kansas;
27             (3) place a wager on an entry in a horse or greyhound race conducted
28       by an organization licensee or any parimutuel licensee location; or
29             (4) place a wager on or bet or play an electronic gaming machine at
30       a parimutuel licensee location in Kansas; or
31             (4) (5) accept any compensation, gift, loan, entertainment, favor or
32       service from any licensee, except such suitable facilities and services
33       within a racetrack facility operated by an organization licensee as may be
34       required to facilitate the performance of the member's, employee's or
35       appointee's official duties.
36             (c)  (1) Except as provided in paragraph (2), it is a class A nonperson
37       misdemeanor for any member, employee or appointee of the commission,
38       or any spouse, parent, grandparent, brother, sister, child, son-in-law,
39       daughter-in-law, grandchild, uncle, aunt, parent-in-law, brother-in-law or
40       sister-in-law thereof, to:
41             (A) Hold any license issued by the commission, except that a steward
42       or racing judge shall hold an occupation license to be such a steward or
43       judge; or

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  1             (B) enter into any business dealing, venture or contract with an
  2       owner or lessee of a racetrack facility in Kansas parimutuel licensee lo-
  3       cation in Kansas.
  4             (2) This subsection shall not apply to any racing judge holding an
  5       occupation license, if such racing judge is employed at a racetrack facility
  6       and such racing judge's relative, as listed above, is a licensed owner,
  7       owner-trainer or trainer of a greyhound that races at a different racetrack
  8       facility.
  9             (d) It is a class A nonperson misdemeanor for any officer, director
10       or member of an organization licensee, other than a fair association or
11       horsemen's nonprofit organization, to:
12             (1) Receive, for duties performed as an officer or director of such
13       licensee, any compensation or reimbursement or payment of expenses in
14       excess of the amounts provided by K.S.A. 75-3223, and amendments
15       thereto, for board members' compensation, mileage and expenses; or
16             (2) enter into any business dealing, venture or contract with the
17       organization licensee or, other than in the capacity of an officer or director
18       of the organization licensee, with a facility owner licensee, facility man-
19       ager licensee, racing or wagering equipment or services license or con-
20       cessionaire licensee, or with any host facility for a simulcast race displayed
21       in this state.
22             (e) It is a class A nonperson misdemeanor for any facility owner
23       licensee or facility manager licensee, other than a horsemen's association,
24       or any officer, director, employee, stockholder or shareholder thereof or
25       any person having an ownership interest therein, to participate directly
26       or indirectly as an owner, owner-trainer or trainer of a horse or grey-
27       hound, or as a jockey of a horse, entered in a live race conducted in this
28       state.
29             (f) It is a class A nonperson misdemeanor for any licensee of the
30       commission, or any person who is an officer, director, member or em-
31       ployee of a licensee, to place a wager at a racetrack facility located in
32       Kansas on an entry in a horse or greyhound race if:
33             (1) The commission has by rules and regulations designated such
34       person's position as a position which could influence the outcome of such
35       race or the parimutuel wagering thereon; and
36             (2) such race is conducted at or simulcast to the racetrack facility
37       where the licensee is authorized to engage in licensed activities.
38             (g) It is a class B nonperson misdemeanor for any person to use any
39       animal or fowl in the training or racing of racing greyhounds.
40             (h) It is a class A nonperson misdemeanor for any person to:
41             (1) Sell a parimutuel ticket or an interest in such a ticket to a person
42       knowing such person to be under 18 years of age, upon conviction of the
43       first offense;

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

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  1             (6) possess or conspire to possess, within the confines of a racetrack
  2       facility, any device, other than an ordinary whip for horses or a mechanical
  3       lure for greyhounds, designed or intended to affect the speed of a horse
  4       or greyhound;
  5             (7) administer or conspire to administer any drug or medication to
  6       a horse or greyhound within the confines of a racetrack facility in violation
  7       of rules and regulations of the commission, upon conviction of the second
  8       or a subsequent offense;
  9             (8) possess or conspire to possess, within the confines of a racetrack
10       facility, any drug or medication for administration to a horse or greyhound
11       in violation of rules and regulations of the commission, upon conviction
12       of the second or a subsequent offense;
13             (9) possess or conspire to possess, within the confines of a racetrack
14       facility, equipment for administering drugs or medications to horses or
15       greyhounds in violation of rules and regulations of the commission, upon
16       conviction of the second or a subsequent offense;
17             (10) sponge the nostrils or windpipe of a horse for the purpose of
18       stimulating or depressing such horse or affecting its speed at any time
19       during a race meeting conducted by an organization licensee;
20             (11) alter or attempt to alter the natural outcome of any race con-
21       ducted by, or any simulcast race displayed by, an organization licensee or
22       transmit or receive an altered race or delayed broadcast race if parimutuel
23       wagering is conducted or solicited after off time of the race;
24             (12) influence or attempt to influence, by the payment or promise
25       of payment of money or other valuable consideration, any person to alter
26       the natural outcome of any race conducted by, or any simulcast race
27       displayed by, an organization licensee;
28             (13) influence or attempt to influence any member, employee or
29       appointee of the commission, by the payment or promise of payment of
30       money or other valuable consideration, in the performance of any official
31       duty of that member, employee or appointee;
32             (14) fail to report to the commission or to one of its employees or
33       appointees knowledge of any violation of this act by another person for
34       the purpose of stimulating or depressing any horse or greyhound, or af-
35       fecting its speed, at any time during any race conducted by an organiza-
36       tion licensee;
37             (15) commit any of the following acts with respect to the prior racing
38       record, pedigree, identity or ownership of a registered horse or greyhound
39       in any matter related to the breeding, buying, selling or racing of the
40       animal: (A) Falsify, conceal or cover up, by any trick, scheme or device,
41       a material fact; (B) make any false, fictitious or fraudulent statement or
42       representation; or (C) make or use any false writing or document knowing
43       that it contains any false, fictitious or fraudulent statement or entry; or

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  1             (16) pass or attempt to pass, cash or attempt to cash any altered or
  2       forged parimutuel ticket knowing it to have been altered or forged.
  3             (j) It is a severity level 8, nonperson felony for any person playing
  4       or using any electronic gaming machine at a parimutuel licensee location
  5       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 as
  8       the coin intended to be used in an electronic gaming machine, except that
  9       in the playing of any electronic gaming machine or similar gaming device,
10       it shall be lawful for any person to use gaming billets, tokens or similar
11       objects 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 electronic gaming ma-
16       chine any money or contents thereof, except that a duly authorized em-
17       ployee of the commission or a parimutuel licensee location may possess
18       and use any of the foregoing only in furtherance of the employee's em-
19       ployment at the parimutuel licensee location; or
20             (3) to knowingly possess or use while on the premises of any pari-
21       mutuel licensee location any key or device designed for the purpose of or
22       suitable for opening or entering any electronic gaming machine or similar
23       gaming device or drop box, except that a duly authorized employee of the
24       commission or a parimutuel licensing location may possess and use any
25       of the foregoing only in furtherance of the employee's employment at the
26       parimutuel licensee location.
27             (j) (k) No person less than 18 years of age shall purchase a parimutuel
28       ticket or an interest in such a ticket. Any person violating this subsection
29       shall be subject to adjudication as a juvenile offender pursuant to the
30       Kansas juvenile justice code.
31             Sec.  25. K.S.A. 1998 Supp. 74-8837 is hereby amended to read as
32       follows: 74-8837. (a) No organization licensee or facility manager licensee
33       shall permit any business not owned and operated by the organization
34       licensee to provide integral racing or wagering or electronic gaming ma-
35       chine equipment or services, as designated by the commission, to an or-
36       ganization licensee unless such business has been issued a racing or wa-
37       gering or electronic gaming machine equipment or services license by the
38       commission. Such equipment and services include but are not limited to
39       totalisator, photo finish, video replay and, video reception and transmis-
40       sion, surveillance, electronic computer components, random number gen-
41       erator or cabinet thereof and token redemption equipment or services.
42             (b) Businesses required to be licensed pursuant to this section shall
43       apply for racing or wagering or electronic gaming machine equipment or

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  1       services licenses in a manner and upon forms prescribed and furnished
  2       by the commission. The commission shall require disclosure of informa-
  3       tion about the owners and officers of each applicant and may require such
  4       owners and officers to submit to fingerprinting. The commission also may
  5       require disclosure of information about and fingerprinting of such em-
  6       ployees of each applicant as the commission considers necessary. Racing
  7       or wagering or electronic gaming machine equipment or services licenses
  8       shall be issued for a period of time established by the commission but
  9       not to exceed 10 years. The commission shall establish a schedule of
10       application fees and license fees for racing or wagering or electronic gam-
11       ing machine equipment or services licenses based upon the type and size
12       of business. The application fee shall not be refundable if the business
13       fails to qualify for a license. If the application fee is insufficient to pay
14       the reasonable expenses of processing the application and investigating
15       the applicant's qualifications for licensure, the commission shall require
16       the applicant to pay to the commission, at such times and in such form
17       as required by the commission, any additional amounts necessary to pay
18       such expenses. No license shall be issued to an applicant until the appli-
19       cant has paid such additional amounts in full, and such amounts shall not
20       be refundable except to the extent that they exceed the actual expenses
21       of processing the application and investigating the applicant's qualifica-
22       tions for licensure.
23             (c) The commission may require applicants as a condition of licen-
24       sure to consent to allow agents of the Kansas bureau of investigation or
25       security personnel of the commission to search without warrant the li-
26       censee's premises and personal property and the persons of its owners,
27       officers and employees while engaged in the licensee's business within
28       the racetrack facility or adjacent facilities under the control of the organ-
29       ization licensee for the purpose of investigating criminal violations of this
30       act or violations of rules and regulations of the commission.
31             (d) Denial of a racing or wagering or electronic gaming machine
32       equipment or services license by the commission shall be in accordance
33       with the Kansas administrative procedure act. The commission may re-
34       fuse to issue a racing or wagering or electronic gaming machine equip-
35       ment or services license to any business if any person having an ownership
36       interest in such business, any person who is an officer of such business
37       or any person employed by such business within the racetrack facility:
38             (1) Has been convicted of a felony in a court of any state or of the
39       United States or has been adjudicated in the last five years, in any such
40       court of committing as a juvenile an act which, if committed by an adult,
41       would constitute a felony;
42             (2) has been convicted of a violation of any law of any state or of the
43       United States involving gambling or controlled substances or has been

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  1       adjudicated in the last five years in any such court of committing as a
  2       juvenile an act which, if committed by an adult, would constitute such a
  3       violation;
  4             (3) fails to disclose any material fact or provides information, know-
  5       ing such information to be false, in connection with the application for
  6       the license;
  7             (4) has been found by the commission to have violated any provision
  8       of this act or any rule and regulation of the commission; or
  9             (5) has failed to meet any monetary or tax obligation to the federal
10       government or to any state or local government, whether or not relating
11       to the conduct or operation of a race meet held in this state or any other
12       jurisdiction.
13             (e) The commission may suspend or revoke the racing or wagering
14       or electronic gaming machine equipment or services license of any busi-
15       ness for any reason which would justify refusal to issue such a license.
16       Proceedings to suspend or revoke such license shall be conducted by the
17       commission or its appointed hearing officer in accordance with the pro-
18       visions of the Kansas administrative procedure act.
19             (f) The commission may provide by rules and regulations for the
20       temporary suspension of a racing or wagering or electronic gaming ma-
21       chine equipment or services license by summary adjudicative proceedings
22       in accordance with the Kansas administrative procedure act upon finding
23       that there is probable cause to believe that grounds exist for a permanent
24       suspension or revocation of such license. Such suspension shall be for a
25       period not exceeding 30 days. Upon expiration of such suspension, the
26       license shall be restored unless the license has been suspended or revoked
27       as a result of proceedings conducted pursuant to subsection (e).
28             (g) This section shall be part of and supplemental to the Kansas
29       parimutuel racing act.
30             Sec.  26. K.S.A. 1998 Supp. 19-101a is hereby amended to read as
31       follows: 19-101a. (a) The board of county commissioners may transact all
32       county business and perform all powers of local legislation and adminis-
33       tration it deems appropriate, subject only to the following limitations,
34       restrictions or prohibitions:
35             (1) Counties shall be subject to all acts of the legislature which apply
36       uniformly to all counties.
37             (2) Counties may not consolidate or alter county boundaries.
38             (3) Counties may not affect the courts located therein.
39             (4) Counties shall be subject to acts of the legislature prescribing
40       limits of indebtedness.
41             (5) In the exercise of powers of local legislation and administration
42       authorized under provisions of this section, the home rule power con-
43       ferred on cities to determine their local affairs and government shall not

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  1       be superseded or impaired without the consent of the governing body of
  2       each city within a county which may be affected.
  3             (6) Counties may not legislate on social welfare administered under
  4       state law enacted pursuant to or in conformity with public law No. 271--
  5       74th congress, or amendments thereof.
  6             (7) Counties shall be subject to all acts of the legislature concerning
  7       elections, election commissioners and officers and their duties as such
  8       officers and the election of county officers.
  9             (8) Counties shall be subject to the limitations and prohibitions im-
10       posed under K.S.A. 12-187 to 12-195, inclusive, and amendments thereto,
11       prescribing limitations upon the levy of retailers' sales taxes by counties.
12             (9) Counties may not exempt from or effect changes in statutes made
13       nonuniform in application solely by reason of authorizing exceptions for
14       counties having adopted a charter for county government.
15             (10) No county may levy ad valorem taxes under the authority of this
16       section upon real property located within any redevelopment area estab-
17       lished under the authority of K.S.A. 12-1772, and amendments thereto,
18       unless the resolution authorizing the same specifically authorized a por-
19       tion of the proceeds of such levy to be used to pay the principal of and
20       interest upon bonds issued by a city under the authority of K.S.A. 12-
21       1774, and amendments thereto.
22             (11) Counties shall have no power under this section to exempt from
23       any statute authorizing or requiring the levy of taxes and providing sub-
24       stitute and additional provisions on the same subject, unless the resolution
25       authorizing the same specifically provides for a portion of the proceeds
26       of such levy to be used to pay a portion of the principal and interest on
27       bonds issued by cities under the authority of K.S.A. 12-1774, and amend-
28       ments thereto.
29             (12) Counties may not exempt from or effect changes in the provi-
30       sions of K.S.A. 19-4601 to 19-4625, inclusive, and amendments thereto.
31             (13) Except as otherwise specifically authorized by K.S.A. 12-1,101
32       to 12-1,109, inclusive, and amendments thereto, counties may not levy
33       and collect taxes on incomes from whatever source derived.
34             (14) Counties may not exempt from or effect changes in K.S.A. 19-
35       430, and amendments thereto. Any charter resolution adopted by a
36       county prior to July 1, 1983, exempting from or effecting changes in
37       K.S.A. 19-430, and amendments thereto, is null and void.
38             (15) Counties may not exempt from or effect changes in K.S.A. 19-
39       302, 19-502b, 19-503, 19-805 or 19-1202, and amendments thereto.
40             (16) Counties may not exempt from or effect changes in K.S.A. 13-
41       13a26, and amendments thereto. Any charter resolution adopted by a
42       county, prior to the effective date of this act, exempting from or effecting
43       changes in K.S.A. 13-13a26, and amendments thereto, is null and void.

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  1             (17) Counties may not exempt from or effect changes in K.S.A. 71-
  2       301, and amendments thereto. Any charter resolution adopted by a
  3       county, prior to the effective date of this act, exempting from or effecting
  4       changes in K.S.A. 71-301, and amendments thereto, is null and void.
  5             (18) Counties may not exempt from or effect changes in K.S.A. 19-
  6       15,139, 19-15,140 and 19-15,141, and amendments thereto. Any charter
  7       resolution adopted by a county prior to the effective date of this act,
  8       exempting from or effecting changes in such sections is null and void.
  9             (19) Counties may not exempt from or effect changes in the provi-
10       sions of K.S.A. 12-1223, 12-1225, 12-1225a, 12-1225b, 12-1225c and 12-
11       1226, and amendments thereto, or the provisions of K.S.A. 1998 Supp.
12       12-1260 to 12-1270, inclusive, and amendments thereto, and 12-1276,
13       and amendments thereto.
14             (20) Counties may not exempt from or effect changes in the provi-
15       sions of K.S.A. 19-211, and amendments thereto.
16             (21) Counties may not exempt from or effect changes in the provi-
17       sions of K.S.A. 19-4001 to 19-4015, inclusive, and amendments thereto.
18             (22) Counties may not regulate the production or drilling of any oil
19       or gas well in any manner which would result in the duplication of reg-
20       ulation by the state corporation commission and the Kansas department
21       of health and environment pursuant to chapter 55 and chapter 65 of the
22       Kansas Statutes Annotated and any rules and regulations adopted pur-
23       suant thereto. Counties may not require any license or permit for the
24       drilling or production of oil and gas wells. Counties may not impose any
25       fee or charge for the drilling or production of any oil or gas well.
26             (23) Counties may not exempt from or effect changes in K.S.A. 79-
27       41a04, and amendments thereto.
28             (24) Counties may not exempt from or effect changes in K.S.A. 79-
29       1611, and amendments thereto.
30             (25) Counties may not exempt from or effect changes in K.S.A. 79-
31       1494, and amendments thereto.
32             (26) Counties may not exempt from or effect changes in subsection
33       (b) of K.S.A. 19-202, and amendments thereto.
34             (27) Counties may not exempt from or effect changes in subsection
35       (b) of K.S.A. 19-204, and amendments thereto.
36             (28) Counties may not levy or impose an excise, severance or any
37       other tax in the nature of an excise tax upon the physical severance and
38       production of any mineral or other material from the earth or water. Any
39       resolution adopted by any county prior to the effective date of this act
40       imposing or levying any such tax is null and void.
41             (29) Counties may not exempt from or effect changes in K.S.A. 79-
42       2017 or 79-2101, and amendments thereto. Any charter resolution
43       adopted prior to the effective date of this act, which affected the provi-

Sub. for SB 329

29

  1       sions of K.S.A. 79-2017 or 79-2101, and amendments thereto, is hereby
  2       declared to be null and void.
  3             (30) Counties may not exempt from or effect changes in K.S.A. 74-
  4       8701 et seq., or K.S.A. 74-8801 et seq. or sections 8 through 20, and
  5       amendments thereto.
  6             (b) Counties shall apply the powers of local legislation granted in
  7       subsection (a) by resolution of the board of county commissioners. If no
  8       statutory authority exists for such local legislation other than that set forth
  9       in subsection (a) and the local legislation proposed under the authority
10       of such subsection is not contrary to any act of the legislature, such local
11       legislation shall become effective upon passage of a resolution of the
12       board and publication in the official county newspaper. If the legislation
13       proposed by the board under authority of subsection (a) is contrary to an
14       act of the legislature which is applicable to the particular county but not
15       uniformly applicable to all counties, such legislation shall become effec-
16       tive by passage of a charter resolution in the manner provided in K.S.A.
17       19-101b, and amendments thereto. 
18       Sec.  27. K.S.A. 74-8701, 74-8702, 74-8704, 74-8711 and 74-8721
19       and K.S.A. 1998 Supp. 19-101a, 74-8710, 74-8718, 74-8719, 74-8723, 74-
20       8804, 74-8810 and 74-8837 are hereby repealed.
21         Sec.  28. This act shall take effect and be in force from and after its
22       publication in the statute book.