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SF 1284

4th Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:19am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 4th Engrossment

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A bill for an act
relating to lawful gambling; modifying lawful purpose and other definitions;
establishing a rating system for annual lawful purpose expenditures and imposing
civil penalties; modifying provisions relating to licensing and permits and
providing for fees; regulating conduct of bingo and other games; modifying lease
requirements; regulating who may participate in lawful gambling; providing for
expenditures of gross profits; providing for local approval; changing annual
audit requirements; making clarifying, technical, and conforming changes
to lawful gambling provisions; amending Minnesota Statutes 2008, sections
297E.06, subdivision 4; 349.11; 349.12, subdivisions 3a, 7, 7a, 12a, 18, 19,
21, 25, 32a, 33; 349.15, subdivisions 1, 1a; 349.151, subdivision 4; 349.154,
subdivision 1; 349.155, subdivisions 3, 4a; 349.16, subdivisions 2, 3, 6, 8, 11, by
adding subdivisions; 349.162, subdivision 6; 349.1635, subdivision 3; 349.1641;
349.165, subdivisions 1, 2, 3, by adding a subdivision; 349.166, subdivision
2; 349.167, subdivision 2; 349.168, subdivision 8; 349.169, subdivisions 1,
3; 349.17, subdivisions 3, 5, 6, 7; 349.173; 349.18, subdivision 1; 349.19,
subdivisions 2, 2a, 3, 9, 10; 349.191, subdivisions 1, 1a, 1b, 2, 3, 4; 349.2127,
subdivision 7; 349.213, subdivisions 1, 2; proposing coding for new law in
Minnesota Statutes, chapter 349; repealing Minnesota Statutes 2008, sections
349.15, subdivisions 4, 5; 349.154, subdivision 2; 349.155, subdivision 7;
349.16, subdivisions 9, 10; 349.166, subdivision 3; 349.168, subdivisions 4, 6, 7,
10; 349.18, subdivisions 2, 3; 349.2127, subdivision 8.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 297E.06, subdivision 4, is amended to read:


Subd. 4.

Annual auditnew text begin , certified inventory, and cash countnew text end .

(a) An organization
licensed under chapter 349 with gross receipts from lawful gambling of more than
deleted text begin $300,000deleted text end new text begin $500,000new text end in any year must have an annual financial audit of its lawful gambling
activities and funds for that year. deleted text begin An organization licensed under chapter 349 with gross
receipts from lawful gambling of more than $150,000 but not more than $300,000 in any
year must have an annual financial review of its lawful gambling activities and funds for
that year.
deleted text end

new text begin (b) The commissioner may require a financial audit of the lawful gambling activities
and funds of an organization licensed under chapter 349, with gross receipts less than
$500,000 annually, when an organization has:
new text end

new text begin (1) failed to timely file required gambling tax returns;
new text end

new text begin (2) failed to timely pay the gambling tax or regulatory fee;
new text end

new text begin (3) filed fraudulent gambling tax returns;
new text end

new text begin (4) failed to take corrective actions required by the commissioner; or
new text end

new text begin (5) failed to otherwise comply with chapter 297E.
new text end

new text begin (c)new text end Audits deleted text begin and financial reviewsdeleted text end under this subdivision must be performed by an
independent accountant licensed by the state of Minnesota.

new text begin (d) An organization licensed under chapter 349 must perform an annual certified
inventory and cash count at the end of its fiscal year and submit the report to the
commissioner within 30 days after the end of its fiscal year. The report shall be on a form
prescribed by the commissioner.
new text end

deleted text begin (b)deleted text end new text begin (e) new text end The commissioner of revenue shall prescribe standards for new text begin the new text end audits deleted text begin and
financial review
deleted text end new text begin , certified inventory, and cash count reportsnew text end required under this subdivision.
The standards may vary based on the gross receipts of the organization. The standards
must incorporate and be consistent with standards prescribed by the American Institute
of Certified Public Accountants. A complete, true, and correct copy of the deleted text begin auditdeleted text end new text begin audits,
certified inventory, and cash count
new text end report must be filed as prescribed by the commissioner.

Sec. 2.

Minnesota Statutes 2008, section 349.11, is amended to read:


349.11 PURPOSE.

The purpose of sections 349.11 to 349.22 is to regulate lawful gambling deleted text begin to prevent
its commercialization
deleted text end , to insure integrity of operations, and to provide for the use of net
profits only for lawful purposes.

Sec. 3.

Minnesota Statutes 2008, section 349.12, subdivision 3a, is amended to read:


Subd. 3a.

Allowable expense.

"Allowable expense" means the percentage of the
total cost incurred by the organization in the purchase of any good, service, or other item
which corresponds to the proportion of the total actual use of the good, service, or other
item that is directly related to conduct of lawful gambling. deleted text begin Allowable expense includes
the advertising of the conduct of lawful gambling, provided that the amount expended
does not exceed five percent of the annual gross profits of the organization or $5,000 per
year per organization, whichever is less. The board may adopt rules to regulate the content
of the advertising to ensure that the content is consistent with the public welfare.
deleted text end

Sec. 4.

Minnesota Statutes 2008, section 349.12, subdivision 7, is amended to read:


Subd. 7.

Capital assets.

"Capital assets" means property, real or personal, except
gambling equipment, with an expected useful life of at least deleted text begin one yeardeleted text end new text begin two years and a
minimum value of $2,000
new text end .

Sec. 5.

Minnesota Statutes 2008, section 349.12, subdivision 7a, is amended to read:


Subd. 7a.

Charitable contribution.

"Charitable contribution" means one or more
of the lawful purposes expenditures under deleted text begin section deleted text end deleted text begin 349.12,deleted text end subdivision 25, paragraph (a),
clauses (1) to (7), deleted text begin (10), (11), (13) todeleted text end new text begin (10) to new text end (15), and (19).

Sec. 6.

Minnesota Statutes 2008, section 349.12, subdivision 12a, is amended to read:


Subd. 12a.

Electronic bingo device.

"Electronic bingo device" means an electronic
device used by a bingo player to monitor bingo paper sheets or new text begin a new text end facsimile of a bingo
paper sheet when purchased at the time and place of an organization's bingo occasion and
which (1) provides a means for bingo players to deleted text begin inputdeleted text end new text begin activatenew text end numbers announced by a
bingo caller; (2) compares the numbers entered by the player to the bingo faces previously
stored in the memory of the device; and (3) identifies a winning bingo pattern.

Electronic bingo device does not mean any device into which coin, currency, or tokens are
inserted to activate play.

Sec. 7.

Minnesota Statutes 2008, section 349.12, subdivision 18, is amended to read:


Subd. 18.

Gambling equipment.

"Gambling equipment" means: bingo hard cards
or paper sheets, linked bingo paper sheets, devices for selecting bingo numbers, electronic
bingo devices, pull-tabs, jar tickets, paddle wheels, paddle wheel tables, paddle tickets,
paddle ticket cards, tipboards, tipboard tickets, promotional tickets that mimic a pull-tab
or tipboard, deleted text begin anddeleted text end pull-tab dispensing devicesnew text begin , and programmable electronic devices that
have no effect on the outcome of a game and are used to provide a visual or auditory
enhancement of a game
new text end .

Sec. 8.

Minnesota Statutes 2008, section 349.12, subdivision 19, is amended to read:


Subd. 19.

Gambling manager.

"Gambling manager" means a person who has been
designated by the organization to supervise the lawful gambling conducted by it deleted text begin and who:deleted text end new text begin ,
new text end

deleted text begin (1) deleted text end has been an active member of the organization for at least deleted text begin two yearsdeleted text end new text begin the most
recent six months
new text end at the time of the deleted text begin organization's initialdeleted text end application for a new text begin gambling
manager
new text end licensedeleted text begin ;deleted text end new text begin , and
new text end

deleted text begin (2) has been an active member of the organization for at least the most recent six
months prior to the effective date of the organization's renewal license; or
deleted text end

deleted text begin (3)deleted text end meets other qualifications as prescribed by the board by rule.

Sec. 9.

Minnesota Statutes 2008, section 349.12, subdivision 21, is amended to read:


Subd. 21.

Gross receipts.

"Gross receipts" means all receipts derived from lawful
gambling activity including, but not limited to, the following items:

(1) gross sales of bingo hard cards, paper sheets, facsimiles of bingo paper sheets
when used in conjunction with an electronic bingo device, and rental of electronic bingo
devices before reduction for prizes, expenses, shortages, free plays, or any other charges
or offsets;

(2) the ideal gross of pull-tab and tipboard deals or games less the value of unsold
and defective tickets and before reduction for prizes, expenses, shortages, free plays,
or any other charges or offsets;

(3) gross sales of raffle tickets and paddle tickets before reduction for prizes,
expenses, shortages, free plays, or any other charges or offsets;

(4) admission, commission, cover, or other charges imposed on participants in
lawful gambling activity as a condition for or cost of participation; and

(5) interest, dividends, annuities, profit from transactions, or other income derived
from the accumulation or use of gambling proceeds.

Gross receipts does not include new text begin rental new text end proceeds from deleted text begin rental under section 349.18,
subdivision 3
deleted text end new text begin premises owned by an organization and leased to one or more other
organizations for the purposes of conducting lawful gambling
new text end .

Sec. 10.

Minnesota Statutes 2008, section 349.12, subdivision 25, is amended to read:


Subd. 25.

Lawful purpose.

(a) "Lawful purpose" means one or more of the
following:

(1) any expenditure by or contribution to a 501(c)(3) or festival organization, as
defined in subdivision 15a, provided that the organization and expenditure or contribution
are in conformity with standards prescribed by the board under section 349.154, which
standards must apply to both types of organizations in the same manner and to the same
extent;

(2) a contribution to or expenditure for goods and services for an individual or
family suffering from poverty, homelessness, or disability, which is used to relieve the
effects of that suffering;

(3) a contribution to a program recognized by the Minnesota Department of Human
Services for the education, prevention, or treatment of problem gambling;

(4) a contribution to or expenditure on a public or private nonprofit educational
institution registered with or accredited by this state or any other state;

(5) a contribution to an individual, public or private nonprofit educational institution
registered with or accredited by this state or any other state, or to a scholarship fund of a
nonprofit organization whose primary mission is to award scholarships, for defraying the
cost of education to individuals where the funds are awarded through an open and fair
selection process;

(6) activities by an organization or a government entity which recognize military
service to the United States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage reimbursements in the
computation of the per diem reimbursement limit and must impose no aggregate annual
limit on the amount of reasonable and necessary expenditures made to support:

(i) members of a military marching or color guard unit for activities conducted
within the state;

(ii) members of an organization solely for services performed by the members at
funeral services;

(iii) members of military marching, color guard, or honor guard units may be
reimbursed for participating in color guard, honor guard, or marching unit events within
the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or

(iv) active military personnel and their immediate family members in need of
support services;

(7) recreational, community, and athletic facilities and activities intended primarily
for persons under age 21, provided that such facilities and activities do not discriminate on
the basis of gender and the organization complies with section 349.154new text begin , subdivision 3anew text end ;

(8) payment of local taxes authorized under this chapter, taxes imposed by the
United States on receipts from lawful gambling, the taxes imposed by section 297E.02,
subdivisions 1, 4, 5, and 6, and the tax imposed on unrelated business income by section
290.05, subdivision 3;

(9) payment of real estate taxes and assessments on permitted gambling premises
owned by the licensed organization paying the taxes, or wholly leased by a licensed
veterans organization under a national charter recognized under section 501(c)(19) of the
Internal Revenue Code;

(10) a contribution to the United States, this state or any of its political subdivisions,
or any agency or instrumentality thereof other than a direct contribution to a law
enforcement or prosecutorial agency;

(11) a contribution to or expenditure by a nonprofit organization which is a church
or body of communicants gathered in common membership for mutual support and
edification in piety, worship, or religious observances;

deleted text begin (12) payment of the reasonable costs of an audit required in section 297E.06,
subdivision 4, provided the annual audit is filed in a timely manner with the Department of
Revenue and paid prior to June 30, 2006;
deleted text end

new text begin (12) an expenditure for citizen monitoring of surface water quality by individuals
or nongovernmental organizations that is consistent with section 115.06, subdivision 4,
and Minnesota Pollution Control Agency guidance on monitoring procedures, quality
assurance protocols, and data management, provided that the resulting data is submitted
to the Minnesota Pollution Control Agency for review and inclusion in the state water
quality database;
new text end

(13) a contribution to or expenditure on projects or activities approved by the
commissioner of natural resources for:

(i) wildlife management projects that benefit the public at large;

(ii) grant-in-aid trail maintenance and grooming established under sections 84.83
and 84.927, and other trails open to public use, including purchase or lease of equipment
for this purpose; and

(iii) supplies and materials for safety training and educational programs coordinated
by the Department of Natural Resources, including the Enforcement Division;

(14) conducting nutritional programs, food shelves, and congregate dining programs
primarily for persons who are age 62 or older or disabled;

(15) a contribution to a community arts organization, or an expenditure to sponsor
arts programs in the community, including but not limited to visual, literary, performing,
or musical arts;

(16) an expenditure by a licensed fraternal organization or a licensed veterans
organization for payment of water, fuel for heating, electricity, and sewer costs for a
building wholly owned or wholly leased by and used as the primary headquarters of the
licensed veterans organization or fraternal organization;

(17) expenditure by a licensed veterans organization of up to $5,000 in a calendar
year in net costs to the organization for meals and other membership events, limited to
members and spouses, held in recognition of military service. No more than $5,000 can be
expended in total per calendar year under this clause by all licensed veterans organizations
sharing the same veterans post home;

(18) payment of fees authorized under this chapter imposed by the state of Minnesota
to conduct lawful gambling in Minnesota; deleted text begin or
deleted text end

(19) a contribution or expenditure to honor an individual's humanitarian service as
demonstrated through philanthropy or volunteerism to the United States, this state, or
local communitydeleted text begin .deleted text end new text begin ;
new text end

new text begin (20) a contribution by a licensed organization to another licensed organization with
prior board approval, with the contribution designated to be used for one or more of the
following lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25);
new text end

new text begin (21) an expenditure that is a contribution to a parent organization, if the parent
organization: (i) has not provided to the contributing organization within one year of the
contribution any money, grants, property, or other thing of value, and (ii) has received
prior board approval for the contribution that will be used for a program that meets one or
more of the lawful purposes under subdivision 7a;
new text end

new text begin (22) an expenditure for the repair, maintenance, or improvement of real property
and capital assets owned by an organization, or for the replacement of a capital asset that
can no longer be repaired, with a fiscal year limit of five percent of gross profits from
the previous fiscal year, with no carryforward of unused allowances. The fiscal year is
July 1 through June 30. Total expenditures for the fiscal year may not exceed the limit
unless the board has specifically approved the expenditures that exceed the limit due to
extenuating circumstances beyond the organization's control. An expansion of a building
or bar-related expenditures are not allowed under this provision.
new text end

new text begin (i) The expenditure must be related to the portion of the real property or capital asset
that must be made available for use free of any charge to other nonprofit organizations,
community groups, service groups, or is used for the organization's primary mission or
headquarters.
new text end

new text begin (ii) An expenditure may be made to bring an existing building that the organization
owns into compliance with the Americans with Disabilities Act.
new text end

new text begin (iii) An organization may apply the amount that is allowed under item (ii) to the
erection or acquisition of a replacement building that is in compliance with the Americans
with Disabilities Act if the board has specifically approved the amount. The cost of
the erection or acquisition of a replacement building may not be made from gambling
proceeds, except for the portion allowed under this item;
new text end

new text begin (23) an expenditure for the acquisition or improvement of a capital asset with a cost
greater than $2,000, excluding real property, that will be used exclusively for lawful
purposes under this section if the board has specifically approved the amount;
new text end

new text begin (24) an expenditure for the acquisition, erection, improvement, or expansion of real
property, if the board has first specifically authorized the expenditure after finding that the
real property will be used exclusively for lawful purpose under this section; or
new text end

new text begin (25) an expenditure, including a mortgage payment or other debt service payment,
for the erection or acquisition of a comparable building to replace an organization-owned
building that was destroyed or made uninhabitable by fire or catastrophe or to replace an
organization-owned building that was taken or sold under an eminent domain proceeding.
The expenditure may be only for that part of the replacement cost not reimbursed by
insurance for the fire or catastrophe or compensation not received from a governmental
unit under the eminent domain proceeding, if the board has first specifically authorized
the expenditure.
new text end

new text begin (b) Expenditures authorized by the board under clauses (24) and (25) must be
51 percent completed within two years of the date of board approval; otherwise the
organization must reapply to the board for approval of the project. "Fifty-one percent
completed" means that the work completed must represent at least 51 percent of the value
of the project as documented by the contractor or vendor.
new text end

deleted text begin (b)deleted text end new text begin (c)new text end Notwithstanding paragraph (a), "lawful purpose" does not include:

(1) any expenditure made or incurred for the purpose of influencing the nomination
or election of a candidate for public office or for the purpose of promoting or defeating a
ballot question;

(2) any activity intended to influence an election or a governmental decision-making
process;

deleted text begin (3) the erection, acquisition, improvement, expansion, repair, or maintenance of real
property or capital assets owned or leased by an organization, unless the board has first
specifically authorized the expenditures after finding that (i) the real property or capital
assets will be used exclusively for one or more of the purposes in paragraph (a); (ii)
with respect to expenditures for repair or maintenance only, that the property is or will
be used extensively as a meeting place or event location by other nonprofit organizations
or community or service groups and that no rental fee is charged for the use; (iii) with
respect to expenditures, including a mortgage payment or other debt service payment,
for erection or acquisition only, that the erection or acquisition is necessary to replace
with a comparable building, a building owned by the organization and destroyed or
made uninhabitable by fire or catastrophe, provided that the expenditure may be only
for that part of the replacement cost not reimbursed by insurance; (iv) with respect to
expenditures, including a mortgage payment or other debt service payment, for erection or
acquisition only, that the erection or acquisition is necessary to replace with a comparable
building a building owned by the organization that was acquired from the organization by
eminent domain or sold by the organization to a purchaser that the organization reasonably
believed would otherwise have acquired the building by eminent domain, provided
that the expenditure may be only for that part of the replacement cost that exceeds the
compensation received by the organization for the building being replaced; or (v) with
respect to an expenditure to bring an existing building into compliance with the Americans
with Disabilities Act under item (ii), an organization has the option to apply the amount of
the board-approved expenditure to the erection or acquisition of a replacement building
that is in compliance with the Americans with Disabilities Act;
deleted text end

deleted text begin (4) an expenditure by an organization which is a contribution to a parent
organization, foundation, or affiliate of the contributing organization, if the parent
organization, foundation, or affiliate has provided to the contributing organization within
one year of the contribution any money, grants, property, or other thing of value;
deleted text end

deleted text begin (5) a contribution by a licensed organization to another licensed organization unless
the board has specifically authorized the contribution. The board must authorize such a
contribution when requested to do so by the contributing organization unless it makes an
affirmative finding that the contribution will not be used by the recipient organization for
one or more of the purposes in paragraph (a); or
deleted text end

deleted text begin (6)deleted text end new text begin (3)new text end a contribution to a statutory or home rule charter city, county, or town by a
licensed organization with the knowledge that the governmental unit intends to use the
contribution for a pension or retirement funddeleted text begin .deleted text end new text begin ; or
new text end

new text begin (4) a contribution to a 501(c)(3) organization or other entity with the intent or effect
of not complying with lawful purpose restrictions or requirements.
new text end

Sec. 11.

Minnesota Statutes 2008, section 349.12, subdivision 32a, is amended to read:


Subd. 32a.

Pull-tab dispensing device.

"Pull-tab dispensing device" means a
mechanical device that dispenses paper pull-tabs and has no additional function as an
amusement or gambling device.new text begin A pull-tab dispensing device may have as a component
an auditory or visual enhancement to promote or provide information about a game being
dispensed, provided the component does not affect the outcome of a game or display the
results of a game or an individual ticket.
new text end

Sec. 12.

Minnesota Statutes 2008, section 349.12, subdivision 33, is amended to read:


Subd. 33.

Raffle.

"Raffle" means a game in which a participant buys a ticket or
other certificate of participation in an event where the prize determination is based on a
method of random selection and all entries have an equal chance of selection. deleted text begin The ticket
or certificate of participation must include the location, date, and time of the selection of
the winning entries.
deleted text end

Sec. 13.

Minnesota Statutes 2008, section 349.15, subdivision 1, is amended to read:


Subdivision 1.

Expenditure restrictionsnew text begin , requirements, and civil penaltiesnew text end .

new text begin (a) new text end Gross profits from lawful gambling may be expended only for lawful purposes or
allowable expenses as authorized by the membership of the conducting organization at a
monthly meeting of the organization's membership.

new text begin (b) new text end Provided that no more than 70 percent of the gross profit from bingo, and no more
than 60 percent of the gross profit from other forms of lawful gambling, may be expended
biennially during the term of the license for allowable expenses related to lawful gambling,
except that for the period of July 1, 2008, to June 30, 2009, no more than 75 percent of the
gross profit from bingo, and no more than 65 percent of the gross profit from other forms
of lawful gambling, may be expended for allowable expenses related to lawful gambling.
deleted text begin For licenses issued after June 30, 2006, compliance with this subdivision will be measured
on a biennial basis that is concurrent with the term of the license. Compliance with this
subdivision is a condition for the renewal of any license beginning on July 1, 2008. For
licenses renewed with an effective date between July 1, 2006, and June 30, 2008, an
organization shall carry forward an amount equal to 15 percent of any positive allowable
expense carryover amount. This balance must be used to offset any future negative
expense balance at the time of license renewal.
deleted text end new text begin This provision expires June 30, 2009.
new text end

new text begin (c) For each 12-month period beginning July 1, 2009, a licensed organization will
be evaluated by the board to determine a rating based on the percentage of annual lawful
purpose expenditures when compared to available gross profits for the same period. The
rating will be used to determine the organization's profitability percent and is not a rating
of the organization's lawful gambling operation. An organization will be evaluated
according to the following criteria:
new text end

new text begin (1) an organization that expends 50 percent or more of gross profits on lawful
purposes will receive a five-star rating;
new text end

new text begin (2) an organization that expends 40 percent or more but less than 50 percent of gross
profits on lawful purposes will receive a four-star rating;
new text end

new text begin (3) an organization that expends 30 percent or more but less than 40 percent of gross
profits on lawful purposes will receive a three-star rating;
new text end

new text begin (4) an organization that expends 20 percent or more but less than 30 percent of gross
profits on lawful purposes will receive a two-star rating; and
new text end

new text begin (5) an organization the expends less than 20 percent of gross profits on lawful
purposes will receive a one-star rating.
new text end

new text begin (d) An organization that fails to expend a minimum of 30 percent annually of gross
profits on lawful purposes is automatically on probation effective July 1 for a period of
one year. The organization must increase their rating to a minimum of 30 percent or be
subject to sanctions by the board. If an organization fails to meet the minimum after a
one-year probation the board may suspend the organization's license or impose a civil
penalty as follows:
new text end

new text begin (1) in determining any suspension or penalty for a violation of this paragraph, the
board must consider any unique factors or extraordinary circumstances that caused the
organization to not meet the minimum rate of profitability. Unique factors or extraordinary
circumstances include, but are not limited to, the purchase of capital assets necessary to
conduct lawful gambling; road or other construction causing impaired access to the lawful
gambling premises; and flood, tornado, or other catastrophe that had a direct impact on the
continuing lawful gambling operation; and
new text end

new text begin (2) notwithstanding section 349.151, subdivision 4, paragraph (a), clause (10), the
board may impose a civil penalty under this subdivision up to $10,000.
new text end

Sec. 14.

Minnesota Statutes 2008, section 349.15, subdivision 1a, is amended to read:


Subd. 1a.

Disaster relief.

An organization may expend net profits from lawful
gambling to relieve the effects of a disaster as defined in section 12.03, subdivision 2,
without the prior approval of its membership if:

(1) the contribution is a lawful purpose under section 349.12, subdivision 25new text begin ,
paragraph (a)
new text end
;

(2) the contribution is authorized by the organization's chief executive officer and
gambling manager; and

(3) the contribution is approved by the membership of the organization at its next
regularly scheduled monthly meeting.

If the contribution is not approved by the membership of the organization at its next
regularly scheduled monthly meeting, the organization shall reimburse its gambling
account in the amount of the contribution.

Sec. 15.

Minnesota Statutes 2008, section 349.151, subdivision 4, is amended to read:


Subd. 4.

Powers and duties.

(a) The board has the following powers and duties:

(1) to regulate lawful gambling to ensure it is conducted in the public interest;

(2) to issue licenses to organizationsnew text begin and gambling managersnew text end ,new text begin and to issue licenses
and renewals to
new text end distributors, distributor salespersons, manufacturers,new text begin andnew text end linked bingo
game providersdeleted text begin , and gambling managersdeleted text end ;

(3) to collect and deposit deleted text begin license, permit, and registrationdeleted text end fees due under this chapter;

(4) to receive reports required by this chapter and inspect all premises, records,
books, and other documents of organizations, distributors, manufacturers, and linked
bingo game providers to insure compliance with all applicable laws and rules;

(5) to make rules authorized by this chapter;

(6) to register gambling equipment and issue registration stamps;

(7) to provide by rule for the mandatory posting by organizations conducting lawful
gambling of rules of play and the odds and/or house percentage on each form of lawful
gambling;

(8) to report annually to the governor and legislature on its activities and on
recommended changes in the laws governing gambling;

(9) to report annually to the governor and legislature a financial summary for each
licensed organization identifying the gross receipts, prizes paid, allowable expenses,
lawful purpose expenditures including charitable contributions and all taxes and fees as
per section 349.12, subdivision 25, paragraph (a), clauses (8) and (18), and the percentage
of annual gross profit used for lawful purposes;

(10) to impose civil penalties of not more than deleted text begin $500deleted text end new text begin $1,000new text end per violation on
organizations, distributors, distributor salespersons, manufacturers, linked bingo game
providers, and gambling managers for deleted text begin failuredeleted text end new text begin violating or failingnew text end to comply with any
provision of this chapternew text begin , chapter 297E,new text end or any rule or order of the board;

(11) to issue premises permits to organizations licensed to conduct lawful gambling;

(12) to delegate to the director the authority to issue or deny license and premises
permit applications and renewals under criteria established by the board;

(13) to delegate to the director the authority to approve or deny fund loss requests,
contribution of gambling funds to another licensed organization, and property expenditure
requests under criteria established by the board;

(14) to suspend or revoke licenses and premises permits of organizations,
distributors, distributor salespersons, manufacturers, linked bingo game providers, or
gambling managers as provided in this chapter;

(15) to approve or deny requests from licensees for:

(i) waivers from fee requirements as provided in section 349.16, subdivision 6; and

(ii) variances from Gambling Control Board rules under section 14.055; and

(16) to register employees of organizations licensed to conduct lawful gambling;

(17) to require fingerprints from persons determined by board rule to be subject to
fingerprinting;

(18) to delegate to a compliance review group of the board the authority to investigate
alleged violations, issue consent orders, and initiate contested cases on behalf of the board;

(19) to order organizations, distributors, distributor salespersons, manufacturers,
linked bingo game providers, and gambling managers to take corrective actions; and

(20) to take all necessary steps to ensure the integrity of and public confidence
in lawful gambling.

(b) The board, or director if authorized to act on behalf of the board, may by citation
assess any organization, distributor, distributor salesperson, manufacturer, linked bingo
game provider, or gambling manager a civil penalty of not more than deleted text begin $500deleted text end new text begin $1,000new text end per
violation for a failure to comply with any provision of this chapternew text begin , chapter 297E,new text end or
any rule adopted or order issued by the board. Any organization, distributor, distributor
salesperson, gambling manager, linked bingo game provider, or manufacturer assessed
a civil penalty under this paragraph may request a hearing before the board. Appeals of
citations imposing a civil penalty are not subject to the provisions of the Administrative
Procedure Act.

(c) All penalties received by the board must be deposited in the general fund.

(d) All fees imposed by the board under sections 349.16 to 349.167 must be
deposited in the state treasury and credited to a lawful gambling regulation account in the
special revenue fund. Receipts in this account are available for the operations of the board
up to the amount authorized in biennial appropriations from the legislature.

Sec. 16.

Minnesota Statutes 2008, section 349.154, subdivision 1, is amended to read:


Subdivision 1.

Standards for certain organizations.

The board shall by rule
prescribe standards that must be metnew text begin annuallynew text end by any licensed organization that is a
501(c)(3) new text begin or festival new text end organization. The standards must provide:

(1) operating standards for the organization, including a maximum percentage
or percentages of the organization's total expenditures that may be expended for the
organization's administration and operation; and

(2) standards for any expenditure by the organization of net profits from lawful
gambling, including a requirement that the expenditure be related to the primary purpose
of the organization.

Sec. 17.

Minnesota Statutes 2008, section 349.155, subdivision 3, is amended to read:


Subd. 3.

Mandatory disqualifications.

(a) In the case of licenses for manufacturers,
distributors, distributor salespersons, linked bingo game providers, and gambling
managers, the board may not issue or renew a license under this chapter, and shall revoke
a license under this chapter, if the applicant or licensee, or a director, officer, partner,
governor, or person in a supervisory or management position of the applicant or licensee:

(1) has ever been convicted of a felony or a crime involving gambling;

(2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use
of a firearm, or (iii) making terroristic threats;

(3) is or has ever been connected with or engaged in an illegal business;

(4) owes $500 or more in delinquent taxes as defined in section 270C.72;

(5) had a sales and use tax permit revoked by the commissioner of revenue within
the past two years; or

(6) after demand, has not filed tax returns required by the commissioner of revenue.
The board may deny or refuse to renew a license under this chapter, and may revoke a
license under this chapter, if any of the conditions in this paragraph are applicable to
an affiliate or direct or indirect holder of more than a five percent financial interest in
the applicant or licensee.

(b) In the case of licenses for organizations, the board may not issue deleted text begin or renewdeleted text end a
license under this chapter, and shall revoke a license under this chapter, if the organization,
or an officer or member of the governing body of the organization:

(1) has been convicted of a felony or gross misdemeanor involving theft or fraud;

(2) has ever been convicted of a crime involving gambling; or

(3) has had a license issued by the board or director permanently revoked for
violation of law or board rule.

Sec. 18.

Minnesota Statutes 2008, section 349.155, subdivision 4a, is amended to read:


Subd. 4a.

Illegal gambling.

(a) The board may not deny, suspend,new text begin ornew text end revokedeleted text begin , or
refuse to renew
deleted text end an organization's premises permit because illegal gambling occurred at the
site for which the premises permit was issued, unless the board determines that: (1) the
organization knowingly participated in the illegal gambling; or (2) the organization or any
of its agents knew of the illegal gambling and the organization did not notify the lessor of
the premises, in writing and with specificity, that illegal gambling was being conducted on
the premises and requesting that the lessor take appropriate action. For purposes of this
paragraph, "agent" means any person, compensated or otherwise, who participates in the
conduct of the organization's lawful gambling.

(b) The board may not deny, suspend,new text begin ornew text end revokedeleted text begin , or refuse to renewdeleted text end an organization's
license because illegal gambling occurred at a site for which a premises permit was issued
to the organization unless the board determines that the organization's chief executive
officer, gambling manager, or one or more of its assistant gambling managers participated
in or authorized the illegal gambling.

Sec. 19.

Minnesota Statutes 2008, section 349.16, subdivision 2, is amended to read:


Subd. 2.

Issuance of gambling licenses.

(a) Licenses authorizing organizations
to conduct lawful gambling may be issued by the board to organizations meeting the
qualifications in paragraphs (b) to deleted text begin (h)deleted text end new text begin (e)new text end if the board determines that the license is
consistent with the purpose of sections 349.11 to 349.22.

(b) The organization must have been in existence for the most recent three years
preceding the license application as a registered Minnesota nonprofit corporation or as
an organization designated as exempt from the payment of income taxes by the Internal
Revenue Code.

(c) The organization deleted text begin at the time of licensingdeleted text end must have at least 15 active membersnew text begin at
the time of its initial license application, and thereafter the organization must have at least
13 members eligible to vote on gambling matters
new text end .

(d) The organization must not be in existence solely for the purpose of conducting
gambling.

deleted text begin (e) The organization has identified in its license application the lawful purposes on
which it proposes to expend net profits from lawful gambling and has identified an annual
goal for charitable contributions, expressed as a percentage of gross profits.
deleted text end

deleted text begin (f)deleted text end new text begin (e)new text end The organization has identified on its license application a gambling manager
and certifies that the manager is qualified under this chapter.

deleted text begin (g) The organization must not, in the opinion of the board after consultation with the
commissioner of revenue, be seeking licensing primarily for the purpose of evading or
reducing the tax imposed by section 297E.02, subdivision 6.
deleted text end

deleted text begin (h) The organization has not exceeded the expenditure restrictions imposed under
section 349.15, subdivision 1, or if the organization has exceeded the expenditure
restrictions under section 349.15, subdivision 1, the organization has reimbursed any
excess expenses from a source of nongambling funds. Reimbursement of excess expenses
is a condition for license renewal. The board may by rule impose sanctions or penalties on
organizations that exceed the expenditure restrictions under section 349.15, subdivision 1.
deleted text end

Sec. 20.

Minnesota Statutes 2008, section 349.16, subdivision 3, is amended to read:


Subd. 3.

Term of license.

Licenses issued under this section arenew text begin perpetual andnew text end valid
deleted text begin for two yearsdeleted text end new text begin unless the board revokes or suspends the license, the organization terminates
the license, or the license lapses
new text end .

Sec. 21.

Minnesota Statutes 2008, section 349.16, is amended by adding a subdivision
to read:


new text begin Subd. 3a. new text end

new text begin Lapsed licenses. new text end

new text begin (a) An organization license is considered to be lapsed
if the organization:
new text end

new text begin (1) did not conduct and report any gambling sales activity within seven months
from the date of the last gambling activity;
new text end

new text begin (2) failed to have a gambling manager as required by section 349.167;
new text end

new text begin (3) failed to pay annual license and permit fees; or
new text end

new text begin (4) surrenders, withdraws, or otherwise terminates the license and files a termination
plan required under section 349.19.
new text end

new text begin (b) If the organization license is determined to be lapsed, the board may:
new text end

new text begin (1) institute a proceeding under section 349.155;
new text end

new text begin (2) require the organization to file a termination plan required under section 349.19;
new text end

new text begin (3) enter a revocation order as of the date on which the license was considered lapsed;
new text end

new text begin (4) impose a civil penalty as provided under section 349.151, subdivision 4;
new text end

new text begin (5) order corrective action as provided under section 349.151, subdivision 7; or
new text end

new text begin (6) summarily suspend the license as provided under section 349.1641.
new text end

Sec. 22.

Minnesota Statutes 2008, section 349.16, subdivision 6, is amended to read:


Subd. 6.

License fees.

The board shall impose an annual fee of $350 for an
organization's license deleted text begin applicationdeleted text end . Organizations that expect to receive less than $100,000
in gross annual receipts may request from the board a waiver of organization license fees.

Sec. 23.

Minnesota Statutes 2008, section 349.16, is amended by adding a subdivision
to read:


new text begin Subd. 6a. new text end

new text begin Monthly regulatory fee. new text end

new text begin An organization must pay a monthly regulatory
fee of 0.1 percent of the organization's gross receipts from lawful gambling conducted
each month. The fee must be reported and paid on a monthly basis in a format as
determined by the commissioner of revenue, and remitted to the commissioner of revenue
with the organization's monthly tax return. All monthly regulatory fees received by the
commissioner of revenue under this subdivision must be deposited in the lawful gambling
regulation account in the special revenue fund according to section 349.151. Failure to
pay the monthly regulatory fees in a timely manner may result in disciplinary action
by the board.
new text end

Sec. 24.

Minnesota Statutes 2008, section 349.16, subdivision 8, is amended to read:


Subd. 8.

Local investigation fee.

A statutory or home rule charter city or county
deleted text begin notified under section 349.213, subdivision 2,deleted text end may assess an new text begin annual new text end investigation fee on
organizations applying for deleted text begin or renewing adeleted text end new text begin an initialnew text end premises permitnew text begin or conducting lawful
gambling at a site within their jurisdiction under section 349.213, subdivision 2
new text end . An
investigation fee may not exceed the following limits:

(1) for cities of the first class, $500;

(2) for cities of the second class, $250;

(3) for all other cities, $100; and

(4) for counties, $375.

Sec. 25.

Minnesota Statutes 2008, section 349.16, subdivision 11, is amended to read:


Subd. 11.

Agreement to pay taxes.

An organization which is recognized by
federal law, regulation, or other ruling as a quasi-governmental organization that would
otherwise be exempt from one or more taxes under chapter 297E must agree to pay all
taxes under chapter 297E on lawful gambling conducted by the organization as a condition
of receiving deleted text begin or renewingdeleted text end a license or premises permit.

Sec. 26.

Minnesota Statutes 2008, section 349.16, is amended by adding a subdivision
to read:


new text begin Subd. 12. new text end

new text begin Organization license information. new text end

new text begin The organization must notify the
board within ten days when changes in the application information occur.
new text end

Sec. 27.

Minnesota Statutes 2008, section 349.162, subdivision 6, is amended to read:


Subd. 6.

Removal of equipment from inventory.

Authorized employees of the
board, the Division of Alcohol and Gambling Enforcement of the Department of Public
Safety, and the commissioner of revenue may remove gambling equipment from the
inventories of distributors and organizations and test that equipment to determine its
compliance with all applicable laws and rules. A distributor or organization may return to
the manufacturer thereof any gambling equipment which is determined to be in violation
of law or rule. The cost to an organization of gambling equipment removed from inventory
under this paragraph and found to be in compliance with all applicable law and rules is an
allowable expense under section deleted text begin 349.15deleted text end new text begin 349.12, subdivision 3anew text end .

Sec. 28.

Minnesota Statutes 2008, section 349.1635, subdivision 3, is amended to read:


Subd. 3.

Attachments to application.

An applicant for a linked bingo game
provider license must attach to its application:

(1) evidence of a bond in the principal amount of $100,000 payable to the state of
Minnesota conditioned on the payment of all linked bingo prizes and any other money due
and payable under this chapter;

(2) detailed plans and specifications for the operation of the linked bingo game and
the linked bingo systemnew text begin , along with a proposed fee schedule for the cost of providing
services and equipment to licensed organizations
new text end ; and

(3) any other information required by the board by rule.

Sec. 29.

Minnesota Statutes 2008, section 349.1641, is amended to read:


349.1641 LICENSES; SUMMARY SUSPENSION.

new text begin (a) new text end The board may (1) summarily suspend the license of an organization that is
more than deleted text begin three monthsdeleted text end new text begin 45 daysnew text end late in filing a tax return or in paying a tax required
under chapter 297E and may keep the suspension in effect until all required returns are
filed and required taxes are paid; (2) summarily suspend for not more than 90 days
any license issued by the board or director for what the board determines are actions
detrimental to the integrity of lawful gambling in Minnesota; deleted text begin anddeleted text end (3) summarily suspend
the license of a gambling manager who has failed to receive the training required under
section 349.167, subdivision 4, clause (2), and may keep the suspension in effect until
the gambling manager passes an examination prepared and administered by the board.
The examination does not qualify as continuing education credit for the next calendar
yearnew text begin ; and (4) summarily suspend the license of an organization that fails to pay the fees
required under section 349.16, 349.165, or 349.167, and may keep the suspension in effect
until all required fees are paid
new text end .

new text begin (b) new text end The board must notify the licensee at least 14 days before suspending the license
under this section. If a license is summarily suspended under this section, a contested
case hearing on the merits must be held within 20 days of the issuance of the order
of suspension, unless the parties agree to a later hearing date. The administrative law
judge's report must be issued within 20 days after the close of the hearing record. In all
cases involving summary suspension, the board must issue its final decision within 30
days after receipt of the report of the administrative law judge and subsequent exceptions
and argument under section 14.61. When an organization's license is suspended under
this section, the board shall within three days notify all municipalities in which the
organization's gambling premises are located and all licensed distributors in the state.

Sec. 30.

Minnesota Statutes 2008, section 349.165, subdivision 1, is amended to read:


Subdivision 1.

Premises permit required; application.

A licensed organization
may not conduct lawful gambling at any site unless it has first obtained from the board
a premises permit for the site. The board shall prescribe a form for permit applications,
and each application for a permit must be submitted on a separate form. The premises
permit issued by the board runs concurrentlynew text begin on a perpetual basisnew text end with the license of
the organization unless the premises permit is suspendeddeleted text begin ,deleted text end new text begin ornew text end revokednew text begin by the boardnew text end , or
voluntarily terminated by the organization. The board may by rule limit the number of
premises permits that may be issued to an organization.

Sec. 31.

Minnesota Statutes 2008, section 349.165, subdivision 2, is amended to read:


Subd. 2.

Contents of application.

An application for a premises permit must
contain:

(1) the name and address of the applying organization;

(2) a description of the site for which the permit is sought, including its address and,
where applicable, its placement within another premises or establishment;

(3) if the site is leased, the name and address of the lessor and information about the
lease the board requires, including all rents and other charges for the use of the sitenew text begin . The
lease term is concurrent with the term of the premises permit. The lease must contain a
30-day termination clause. No lease is required for the conduct of a raffle
new text end ; and

(4) other information the board deems necessary to carry out its purposes.

An organization holding a premises permit must notify the board in writing within
ten days whenever any material change is made in the above information.

Sec. 32.

Minnesota Statutes 2008, section 349.165, subdivision 3, is amended to read:


Subd. 3.

Fees.

deleted text begin (a)deleted text end The board may issue premises permits to organizations licensed
under section 349.16, subdivision 6. The annual fee for each premises permit is $150.

deleted text begin (b) In addition to the annual fee for a premises permit, an organization must pay
a monthly regulatory fee of 0.1 percent of the organization's gross receipts from lawful
gambling conducted at that site. The fee must be reported and paid on a monthly basis in a
format as determined by the commissioner of revenue, and remitted to the commissioner
of revenue along with the organization's monthly tax return for that premises. All premises
permit fees received by the commissioner of revenue under this subdivision must be
deposited in the lawful gambling regulation account in the special revenue fund according
to section 349.151. Failure to pay the monthly premises permit fees in a timely manner
may result in disciplinary action by the board.
deleted text end

Sec. 33.

Minnesota Statutes 2008, section 349.165, is amended by adding a subdivision
to read:


new text begin Subd. 5. new text end

new text begin Off-site permits. new text end

new text begin (a) A licensed organization may conduct lawful
gambling on a premises other than the organization's permitted premises if it has first
submitted to the board an application and lease on forms provided by the board, obtained
authorization required under section 349.213, and received a permit from the board for up
to four events in a calendar year in connection with a county fair, the state fair, a church
festival, or a civic celebration, not to exceed three days per event.
new text end

new text begin (b) No lease is required for the conduct of a raffle.
new text end

new text begin (c) No fee may be assessed for an off-site permit by the board or by local authority
under section 349.213.
new text end

Sec. 34.

Minnesota Statutes 2008, section 349.166, subdivision 2, is amended to read:


Subd. 2.

Exemptions.

(a) Lawful gambling, with the exception of linked bingo
games, may be conducted by an organization without a license and without complying
with sections 349.168, subdivisions 1 and 2; 349.17, deleted text begin subdivisionsdeleted text end new text begin subdivisionnew text end 4 deleted text begin and 5deleted text end ;
349.18, subdivision 1; and 349.19 if:

(1) the organization conducts lawful gambling on five or fewer days in a calendar
year;

(2) the organization does not award more than $50,000 in prizes for lawful gambling
in a calendar year;

(3) the organizationnew text begin submits a board-prescribed application andnew text end pays a fee of $50
to the boarddeleted text begin , notifies the board in writing not less than 30 days beforedeleted text end new text begin fornew text end each deleted text begin lawfuldeleted text end
gambling occasion deleted text begin ofdeleted text end new text begin , and receives an exempt permit number from the board. If the
application is postmarked or received less than 30 days before the gambling occasion the
fee is $100 for that application. The application must include
new text end the date and location of
the occasion, deleted text begin or 60 days for an occasion held in the case of a city of the first class,deleted text end the
types of lawful gambling to be conducted,new text begin andnew text end the prizes to be awardeddeleted text begin , and receives an
exemption identification number
deleted text end ;

(4) the organization notifies the local government unit 30 days before the lawful
gambling occasion, or 60 days for an occasion held in a city of the first class;

(5) the organization purchases all gambling equipment and supplies from a licensed
distributor; and

(6) the organization reports to the board, on a single-page form prescribed by the
board, within 30 days of each gambling occasion, the gross receipts, prizes, expenses,
expenditures of net profits from the occasion, and the identification of the licensed
distributor from whom all gambling equipment was purchased.

(b) If the organization fails to file a timely report as required by paragraph (a), clause
deleted text begin (3) ordeleted text end (6), the board shall not issue any authorization, license, or permit to the organization
to conduct lawful gambling on an exempt, excluded, or licensed basis until the report has
been filed and the organization may be subject to penalty as determined by the board. The
board may refuse to issue any authorization, license, or permit if a report or application is
determined to be incomplete or knowingly contains false or inaccurate information.

(c) Merchandise prizes must be valued at their fair market value.

(d) Organizations that qualify to conduct exempt raffles under paragraph (a), are
exempt from section 349.173, paragraph (b), clause (2), if the raffle tickets are sold
only in combination with an organization's membership or a ticket for an organization's
membership dinner and are not included with any other raffle conducted under the exempt
permit.

(e) Unused pull-tab and tipboard deals must be returned to the distributor within
seven working days after the end of the lawful gambling occasion. The distributor must
accept and pay a refund for all returns of unopened and undamaged deals returned under
this paragraph.

deleted text begin (f) An organization that is exempt from taxation on purchases of pull-tabs and
tipboards under section 297E.02, subdivision 4, paragraph (b), clause (4), must return to
the distributor any tipboard or pull-tab deal no part of which is used at the lawful gambling
occasion for which it was purchased by the organization.
deleted text end

deleted text begin (g)deleted text end new text begin (f)new text end The organization must maintain all required records of exempt gambling
activity for 3-1/2 years.

Sec. 35.

Minnesota Statutes 2008, section 349.167, subdivision 2, is amended to read:


Subd. 2.

Gambling managers; licenses.

new text begin (a) new text end A person may not serve as a gambling
manager for an organization unless the person possesses a valid gambling manager's
license issued by the boardnew text begin or otherwise meets the temporary requirements allowed under
paragraph (d)
new text end . In addition to the disqualifications in section 349.155, subdivision 3, the
board may not issue a gambling manager's license to a person applying for the license who:

(1) has not complied with subdivision 4, clauses (1) and (2);

(2) within the five years before the date of the license application, has committed
a violation of law or board rule that resulted in the revocation of a license issued by the
board;

(3) has ever been convicted of a criminal violation involving fraud, theft, tax
evasion, misrepresentation, or gambling; or

(4) has engaged in conduct the board determines is contrary to the public health,
welfare, or safety or the integrity of lawful gambling.

new text begin (b) new text end A gambling manager's license runs concurrent with the organization's license
unless the gambling manager's license is suspended or revokednew text begin by the board or otherwise
terminated by the organization or gambling manager
new text end .

new text begin (c)new text end The annual fee for a gambling manager's license is $100.

new text begin (d) At the time of the death, disability, or termination of a gambling manager, the
organization must:
new text end

new text begin (1) contact the board within one business day to establish a plan to replace the
gambling manager; and
new text end

new text begin (2) submit a complete application and fee within four business days.
new text end

new text begin (e) An organization that fails to meet the requirements of paragraph (d) must
discontinue its gambling operation until a gambling manager application and fee is
received by the board and a license has been issued by the board and received by the
gambling manager.
new text end

Sec. 36.

Minnesota Statutes 2008, section 349.168, subdivision 8, is amended to read:


Subd. 8.

deleted text begin Percentage of gross profitdeleted text end new text begin Compensationnew text end paid.

(a) A licensed
organization may pay a percentage of the gross profit from raffle ticket sales to a nonprofit
organization that sells raffle tickets for the licensed organization.

(b) A licensed organization may compensate an employee of the organization for
the sale of gambling equipment at a bar operation if the frequency of the activity is one
day or less per week and the games are limited to 32 chances or less per game. For
purposes of this paragraph, an employee must not be a lessor, employee of the lessor, or an
immediate family member of the lessor.

new text begin (c) An organization that leases a premises may not pay compensation to the lessor,
a member of the lessor's immediate family, or the lessor's employees, other than as a
seller of pull-tabs and tipboards within a booth operation on the premises. A member of
the lessor's immediate family may be compensated by an organization for the conduct of
gambling at other sites not owned by the lessor.
new text end

Sec. 37.

Minnesota Statutes 2008, section 349.169, subdivision 1, is amended to read:


Subdivision 1.

Filing required.

When required by the board, manufacturers deleted text begin anddeleted text end new text begin ,new text end
distributorsnew text begin , and linked bingo game providersnew text end must file with the director the prices
at which the manufacturer deleted text begin ordeleted text end new text begin ,new text end distributornew text begin , or linked bingo game providernew text end will sell all
gambling equipment currently offered for sale by that manufacturer deleted text begin ordeleted text end new text begin ,new text end distributornew text begin , or
linked bingo game provider
new text end . The filing must be in a format the director prescribes.

Sec. 38.

Minnesota Statutes 2008, section 349.169, subdivision 3, is amended to read:


Subd. 3.

Sales at filed prices.

When required to report under subdivision 1, no
manufacturer may sell to a distributornew text begin or linked bingo game providernew text end , and no distributornew text begin or
linked bingo game provider
new text end may sell to an organization, any gambling equipment for any
price other than a price the manufacturer deleted text begin ordeleted text end new text begin ,new text end distributornew text begin , or linked bingo game providernew text end has
filed with the director under subdivision 1, including volume discounts, and exclusive of
transportation costs.

Sec. 39.

Minnesota Statutes 2008, section 349.17, subdivision 3, is amended to read:


Subd. 3.

Winners.

Each bingo winner must be determined and every prize shall be
awarded and delivered the same day on which the bingo occasion is conducted, except
that deleted text begin prizes won indeleted text end new text begin payment for a progressive prize ornew text end a linked bingo deleted text begin gamedeleted text end new text begin prizenew text end must be
delivered within three business days of the day on which the occasion was conducted.

Sec. 40.

Minnesota Statutes 2008, section 349.17, subdivision 5, is amended to read:


Subd. 5.

Bingo cards and sheets.

(a) The board shall by rule require that all
licensed organizations: (1) conduct bingo only using a bingo paper sheet or facsimile of a
bingo face that bears an individual number recorded by the distributor or linked bingo
game provider; and (2) use each bingo paper sheet for no more than one bingo occasion.
In lieu of the requirements of clause (2), a licensed organization may electronically record
the sale of each bingo hard card or paper sheet at each bingo occasion using an electronic
recording system approved by the board.

(b) The requirements of paragraph (a) shall only apply to a licensed organization
that received gross receipts from bingo in excess of $150,000 in the organization's last
fiscal year.

new text begin (c) Each bingo hard card, bingo paper sheet, or a facsimile of a bingo paper sheet
must have five horizontal rows of spaces with each row except one having five numbers.
The center row must have four numbers and the center space marked "free." Each column
must have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also
have numbers that are not preprinted but are filled in by players.
new text end

Sec. 41.

Minnesota Statutes 2008, section 349.17, subdivision 6, is amended to read:


Subd. 6.

Conduct of bingo.

deleted text begin (a) Each bingo hard card and paper sheets must have
five horizontal rows of spaces with each row except one having five numbers. The center
row must have four numbers and the center space marked "free." Each column must
have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also have
numbers that are not preprinted but are filled in by players.
deleted text end

deleted text begin (b)deleted text end A game of bingo begins with the first letter and number called. Each player must
cover deleted text begin ordeleted text end new text begin ,new text end marknew text begin , or activatenew text end the numbers when bingo numbers are randomly selected,
announced, and displayed to the players, either manually or with a flashboard and monitor.
The game is won when a playernew text begin , using bingo paper, bingo hard card, or a facsimile of a
bingo paper sheet,
new text end has deleted text begin covered or markeddeleted text end new text begin completed, as described in the bingo program,new text end a
previously designated deleted text begin arrangement of numbers on the card or sheetdeleted text end new text begin pattern or previously
determined requirements of the game
new text end and declared bingo. The game is completed when a
winning card deleted text begin ordeleted text end new text begin ,new text end sheetnew text begin , or facsimilenew text end is verified and a prize awardeddeleted text begin , except that prizes won
in linked bingo games may be awarded
deleted text end pursuant to subdivision 3.

Sec. 42.

Minnesota Statutes 2008, section 349.17, subdivision 7, is amended to read:


Subd. 7.

Bar bingo.

An organization may conduct bar bingo subject to the
following restrictions:

(1) the bingo is conducted at a site the organization owns or leases and which has a
license for the sale of intoxicating beverages on the premises under chapter 340A;

(2) the bingo is conducted using only bingo paper sheetsnew text begin or facsimiles of bingo paper
sheets
new text end purchased from a licensed distributornew text begin or licensed linked bingo game providernew text end ; new text begin and
new text end

(3) no rent may be paid for a bar bingo occasiondeleted text begin ; anddeleted text end

deleted text begin (4) the lessor's immediate family and employees may participate if they are not
involved with the sale or operation of bar bingo
deleted text end .

Sec. 43.

Minnesota Statutes 2008, section 349.173, is amended to read:


349.173 CONDUCT OF RAFFLES.

(a) Raffle tickets or certificates of participation at a minimum must list the three
most expensive prizes to be awardednew text begin and include the location, date, and time of the
selection of the winning entries
new text end . If additional prizes will be awarded, a complete list of
additional prizes must be publicly posted at the event and copies of the complete prize list
made available upon request. deleted text begin Notwithstanding section 349.12, subdivision 33,deleted text end Raffles
conducted under the exemptions in section 349.166 may use tickets that contain only the
sequential number of the raffle ticket and no other information if the organization makes
a list of prizes and a statement of other relevant information required by rule available
to persons purchasing tickets and if tickets are only sold at the event and on the date
when the tickets are drawn.

(b) Raffles must be conducted in a manner that ensures:

(1) all entries in the raffle have an equal chance of selection;

(2) entry in the raffle is not conditioned upon any other purchase, except that a
certificate of participation may be a button with a nominal value of less than $5;

(3) the method of selection is conducted in a public forum;

(4) the method of selection cannot be manipulated or based on the outcome of an
event not under the control of the organization;

(5) physical presence at the raffle is not a requirement to win; and

(6) all sold and unsold tickets or certificates of participation are accounted for.

(c) Methods of selecting winning entries from a raffle other than prescribed in rule
may be used with the prior written approval of the board.

Sec. 44.

Minnesota Statutes 2008, section 349.18, subdivision 1, is amended to read:


Subdivision 1.

Lease or ownership required; rent limitations.

(a) An organization
may conduct lawful gambling only on premises it owns or leases. Leases must be on a
form prescribed by the board. The term of the lease deleted text begin may not begin before the effective
date of the premises permit and must expire on the same day that the premises permit
expires
deleted text end new text begin is concurrent with the premises permitnew text end . Leases approved by the board must
specify that the board may authorize an organization to withhold rent from a lessor for
a period of up to 90 days if the board determines that illegal gambling occurred on the
premises deleted text begin anddeleted text end new text begin ornew text end that the lessor or its employees participated in the illegal gambling or
knew of the gambling and did not take prompt action to stop the gambling. The lease must
authorize the continued tenancy of the organization without the payment of rent during
the time period determined by the board under this paragraph. Copies of all leases must
be made available to employees of the board and the Division of Alcohol and Gambling
Enforcement on request. deleted text begin The board may prescribe by rule limits on the amount of rent
which an organization may pay to a lessor for premises leased for bingo. Any rule adopted
by the board limiting the amount of rent to be paid may only be effective for leases entered
into, or renewed, after the effective date of the rule.
deleted text end

(b) Rent paid by an organization for leased premises for the conduct of pull-tabs,
tipboards, and paddle wheels is subject to the following limits:

(1) for booth operations, including booth operations where a pull-tab dispensing
device is located, booth operations where a bar operation is also conducted, and booth
operations where both a pull-tab dispensing device is located and a bar operation is also
conducted, the maximum rent is:

(i) in any month where the organization's gross profit at those premises does not
exceed $4,000, up to $400; and

(ii) in any month where the organization's gross profit at those premises exceeds
$4,000, up to $400 plus not more than ten percent of the gross profit for that month in
excess of $4,000;

(2) for bar operations, including bar operations where a pull-tab dispensing device
is located but not including bar operations subject to clause (1), and for locations where
only a pull-tab dispensing device is located:

(i) in any month where the organization's gross profit at those premises does not
exceed $1,000, up to $200; and

(ii) in any month where the organization's gross profit at those premises exceeds
$1,000, up to $200 plus not more than 20 percent of the gross profit for that month
in excess of $1,000;

(3) a lease not governed by clauses (1) and (2) must be approved by the board
before becoming effective;

(4) total rent paid to a lessor from all organizations from leases governed by clause
(1) may not exceed $1,750 per month. deleted text begin Total rent paid to a lessor from all organizations
from leases governed by clause (2) may not exceed $2,500 per month.
deleted text end

(c) Rent paid by an organization for leased premises for the conduct of bingo is
subject to either of the following limits at the option of the parties to the lease:

(1) not more than ten percent of the monthly gross profit from all lawful gambling
activities held during bingo occasions excluding bar bingo or at a rate based on a cost per
square foot not to exceed 110 percent of a comparable cost per square foot for leased space
as approved by the director; and

(2) no rent may be paid for bar bingo.

(d) Amounts paid as rent under leases are all-inclusive. No other services or
expenses provided or contracted by the lessor may be paid by the organization, including,
but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn
services, electricity, heat, security, security monitoring, storage, other utilities or services,
and, in the case of bar operations, cash shortages, unless approved by the director. Any
other expenditure made by an organization that is related to a leased premises must be
approved by the director. An organization may not provide any compensation or thing of
value to a lessor or the lessor's employees from any fund source other than its gambling
account. Rent payments may not be made to an individual.

(e) Notwithstanding paragraph (b), an organization may pay a lessor for food or
beverages or meeting room rental if the charge made is comparable to similar charges
made to other individuals or groups.

(f) No entity other than the licensed organization may conduct any activity within
a booth operation on a leased premises.

deleted text begin (g) Employees of a lessor not involved in the conduct of lawful gambling on the
premises or nongambling employees of an organization conducting lawful gambling on
the premises may participate in lawful gambling on the premises provided if pull-tabs or
tipboards are sold, the organization posts the major prizes awarded.
deleted text end

deleted text begin (h) A gambling employee may purchase pull-tabs or tipboards at the site of the
employee's place of employment provided:
deleted text end

deleted text begin (1) the organization posts the major prizes for pull-tab or tipboard games; and
deleted text end

deleted text begin (2) the employee is not involved in the sale of pull-tabs or tipboards at that site.
deleted text end

deleted text begin (i) At a leased site where an organization uses a paddle wheel consisting of 32
numbers or less or a tipboard consisting of 32 tickets or less, tickets may be sold
throughout the permitted premises, but winning tickets must be redeemed, the paddle
wheel must be located, and the tipboard seal must be opened within the leased premises.
deleted text end

Sec. 45.

new text begin [349.181] RESTRICTIONS ON WHO MAY PARTICIPATE IN LAWFUL
GAMBLING.
new text end

new text begin Subdivision 1. new text end

new text begin Minimum age. new text end

new text begin (a) A person under age 18 may not participate:
new text end

new text begin (1) as a player in games of pull-tabs, tipboards, paddlewheel, or raffles;
new text end

new text begin (2) as a player in a bingo game other than:
new text end

new text begin (i) a bingo game exempt or excluded from licensing; or
new text end

new text begin (ii) a bingo game conducted by an organization as part of an annual community
event if the person under age 18 is accompanied by a parent or guardian; and
new text end

new text begin (3) in the conduct of pull-tabs, tipboards, paddlewheels, bingo, or raffles, except that
a person under age 18 may sell raffle tickets.
new text end

new text begin Violation of this paragraph is a misdemeanor.
new text end

new text begin (b) A licensed organization or employee may not allow a person under age 18 to
participate in lawful gambling in violation of paragraph (a). Violation of this paragraph
is a misdemeanor.
new text end

new text begin (c) In a prosecution under paragraph (b), it is a defense for the defendant to prove by
a preponderance of the evidence that the defendant reasonably and in good faith relied
upon representations of proof of age authorized in section 340A.503, subdivision 6,
paragraph (a).
new text end

new text begin Subd. 2. new text end

new text begin Gambling manager. new text end

new text begin A gambling manager may not participate directly or
indirectly as a player in any lawful gambling conducted by the organization for which
the gambling manager is licensed.
new text end

new text begin Subd. 3. new text end

new text begin Organization and lessor employees and volunteers. new text end

new text begin (a) For purposes of
this section, "volunteer" means a person who is not compensated by an organization but
who performs activities in the conduct of lawful gambling for that organization.
new text end

new text begin (b) For purposes of this section, "conduct of pull-tabs, tipboards, and paddlewheels"
includes selling tickets, redeeming tickets, auditing games, making deposits, spinning the
paddlewheel, and conducting inventory.
new text end

new text begin (c) For purposes of this section, "conduct of bingo" includes selling bingo hard cards,
bingo paper sheets, or facsimiles of bingo paper sheets, completing bingo occasion records,
selecting or announcing bingo numbers, making deposits, and conducting inventory.
new text end

new text begin (d) An employee or volunteer who is involved in the conduct of pull-tabs, tipboards,
or paddlewheels at a permitted premises may not participate directly or indirectly as a
player in a pull-tab, tipboard, or paddlewheel game at that same premises. This restriction
is in effect until six weeks after the employee or volunteer is no longer involved in the
conduct of pull-tab, tipboard, or paddlewheel games at that same premises.
new text end

new text begin (e) An employee or volunteer who is involved in the conduct of any lawful gambling
during a bingo occasion may not participate directly or indirectly as a player in any lawful
gambling during that bingo occasion.
new text end

new text begin Subd. 4. new text end

new text begin Lessor. new text end

new text begin The lessor of a permitted premises may not participate directly or
indirectly as a player in any lawful gambling conducted at that premises.
new text end

new text begin Subd. 5. new text end

new text begin Lessor's immediate family. new text end

new text begin The lessor's immediate family may not
participate directly or indirectly as a player in a pull-tab, tipboard, or paddlewheel game
conducted at that premises.
new text end

Sec. 46.

Minnesota Statutes 2008, section 349.19, subdivision 2, is amended to read:


Subd. 2.

Accounts.

new text begin (a) new text end Gross receipts from lawful gambling by each organization
must be segregated from all other revenues of the conducting organization and placed in a
separatenew text begin gambling banknew text end account.

new text begin (b)new text end All expenditures fornew text begin allowablenew text end expenses, taxes, and lawful purposes must be
made from the separate account except (1) in the case of expenditures previously approved
by the organization's membership for emergencies as defined by board rule, (2) as provided
in subdivision 2a, or (3) when restricted to one electronic fund transaction for the payment
of taxes for the organization as a whole, the organization may transfer the amount of taxes
related to the conduct of gambling to the general account at the time when due and payable.

new text begin (c)new text end The name and address of the bank, the account number for the separate account,
and the names of organization members authorized as signatories on the separate account
must be provided to the board when the application is submitted. Changes in the
information must be submitted to the board at least ten days before the change is made.

new text begin (d)new text end Gambling receipts must be deposited into the gambling bank account within
four business days of completion of the bingo occasion, deal, or game from which they
are received. A deal of pull-tabs is considered complete when either the last pull-tab
of the deal is sold or the organization does not continue the play of the deal during
the next scheduled period of time in which the organization will conduct pull-tabs. A
tipboard game is considered complete when the seal on the game flare is uncoverednew text begin or
the organization does not continue the play of the deal during the next scheduled period
of time in which the organization will conduct tipboards
new text end .

new text begin (e)new text end Deposit records must be sufficient to allow determination of deposits made from
each bingo occasion, deal, or game at each permitted premises.

new text begin (f)new text end The person who accounts for gambling gross receipts and profits may not be the
same person who accounts for other revenues of the organization.

Sec. 47.

Minnesota Statutes 2008, section 349.19, subdivision 2a, is amended to read:


Subd. 2a.

Tax refund or credit.

(a) Each organization that receives a refund or
credit under section 297E.02, subdivision 4, paragraph (d), must within four business
days of receiving a refund under that paragraph deposit the refund in the organization's
gambling account.

(b) The organization may expend the tax refund or credit issued under section
297E.02, subdivision 4, paragraph (d), only for lawful purposes, other than lawful
purposes described in section 349.12, subdivision 25, paragraph (a), clauses (8)deleted text begin ,deleted text end new text begin andnew text end (9)deleted text begin ,
and (12)
deleted text end . Amounts subject to this paragraph must be spent for qualifying lawful purposes
no later than one year after the refund or credit is received.

Sec. 48.

Minnesota Statutes 2008, section 349.19, subdivision 3, is amended to read:


Subd. 3.

Expenditures.

(a) All expenditures of gross profits from lawful gambling
must be itemized as to payee, purpose, amount, and date of paymentdeleted text begin , and must be in
compliance with section 349.154
deleted text end .

new text begin (b) Each licensed organization must report monthly to the board on a form prescribed
by the board each expenditure or contribution of net profits from lawful gambling. The
reports must provide for each expenditure or contribution:
new text end

new text begin (1) the name of the recipient of the expenditure or contribution;
new text end

new text begin (2) the date the expenditure or contribution was approved by the organization;
new text end

new text begin (3) the date, amount, and check number or electronic transfer confirmation number
of the expenditure or contribution;
new text end

new text begin (4) a brief description of how the expenditure or contribution meets one or more of
the purposes in section 349.12, subdivision 25; and
new text end

new text begin (5) in the case of expenditures authorized under section 349.12, subdivision 25,
paragraph (a), clause (7), whether the expenditure is for a facility or activity that primarily
benefits male or female participants.
new text end

new text begin (c)new text end Authorization of the expenditures must be recorded in the monthly meeting
minutes of the licensed organization.

new text begin (d)new text end Checks or authorizations for electronic fund transfers for expenditures of gross
profits must be signed by at least two persons authorized by board rules to sign the
checksnew text begin or authorizationsnew text end .

new text begin (e)new text end Expenditures of gross profits from lawful gambling for local, state, and federal
taxes as identified in section 349.12, subdivision 25, paragraph (a), clause (8), may bedeleted text begin :
(1)
deleted text end transferred electronically from the organization's gambling account directly to bank
accounts identified by local, state, or federal agencies if the organization's gambling
account monthly bank statement specifically identifies the payee by name, the amount
transferred, and the date of the transactiondeleted text begin ; or (2) transferred electronically to and from
the account of a payroll processing firm that meets the criteria for such a firm established
under section 349.168, subdivision 6
deleted text end .

new text begin (f)new text end Expenditures of gross profits from lawful gambling deleted text begin as identified in section
349.12, subdivision 3a, and as authorized by section 349.15, subdivision 1,
deleted text end for payments
for deleted text begin taxesdeleted text end new text begin lawful purpose expendituresnew text end and allowable expenses may be transferred
electronically from the organization's gambling account directly to bank accounts
identified by the vendor if the organization's gambling account monthly bank statement
specifically identifies the payee by name, the amount transferred, the account number of
the account into which the funds were transferred, and the date of the transaction.

new text begin (g) Expenditures of gross profits from lawful gambling for payroll compensation
to an employee's account and for the payment of local, state, and federal withholding
taxes may be transferred electronically to and from the account of a payroll processing
firm provided that the firm:
new text end

new text begin (1) is currently registered with and meets the criteria of the Department of Revenue
as a third-party bulk filer under section 290.92, subdivision 30;
new text end

new text begin (2) is able to provide proof of a third-party audit and an annual report and statement
of financial condition;
new text end

new text begin (3) is able to provide evidence of a fidelity bond; and
new text end

new text begin (4) can provide proof of having been in business as a third-party bulk filer for the
most recent three years.
new text end

new text begin (h)new text end Electronic payments of taxesnew text begin , lawful purpose expenditures,new text end and allowable
expenses are permitted only if they have been authorized by the membership, the
organization maintains supporting documentation, and the expenditures can be verified.

deleted text begin (b) Expenditures authorized by the board according to section 349.12, subdivision
25
, paragraph (b), clause (3), must be 51 percent completed within two years of the date
of board approval. "Fifty-one percent completed" means that the work completed must
represent at least 51 percent of the value of the project as documented by the contractor
or vendor. An organization that fails to comply with this paragraph shall reapply to the
board for approval of the project.
deleted text end

Sec. 49.

Minnesota Statutes 2008, section 349.19, subdivision 9, is amended to read:


Subd. 9.

Annual new text begin financial new text end audit; filing requirement.

An organization licensed
under this chapter must have an annual financial audit deleted text begin or financial reviewdeleted text end when required
by section 297E.06, subdivision 4.

Sec. 50.

Minnesota Statutes 2008, section 349.19, subdivision 10, is amended to read:


Subd. 10.

Pull-tab records.

(a) The board shall by rule require a licensed
organization to require each winner of a pull-tab prize of $50 or more to present
identification in the form of a driver's license, Minnesota identification card, or other
identification the board deems sufficient to allow the identification and deleted text begin tracingdeleted text end new text begin trackingnew text end of
the winner. The rule must require the organization to retain winning pull-tabs of $50 or
more, and the identification of the winner of the pull-tab, for 3-1/2 years.

(b) An organization must maintain separate cash banks for each deal of pull-tabs
unless (1) the licensed organization uses a pull-tab dispensing device, or (2) the
organization uses a cash register, of a type approved by the board, which records all
sales of pull-tabs by separate deals.

(c) The board shall:

(1) by rule adopt minimum technical standards for cash registers that may be used
by organizations, and shall approve for use by organizations any cash register that meets
the standards; and

(2) before allowing an organization to use a cash register that commingles receipts
from several different pull-tab games in play, adopt rules that define how cash registers
may be used and that establish a procedure for organizations to reconcile all pull-tab
games in play at the end of each month.

Sec. 51.

Minnesota Statutes 2008, section 349.191, subdivision 1, is amended to read:


Subdivision 1.

Credit restriction.

A manufacturer may not offer or extend to a
distributornew text begin or linked bingo game providernew text end , a linked bingo game provider deleted text begin may not offer or
extend to an organization, and
deleted text end new text begin ornew text end a distributor may not offer or extend to an organization,
credit for a period of more than 30 days for the sale or lease of any gambling equipment.
No right of action exists for the collection of any claim based on credit prohibited by
this subdivision. The 30-day period allowed by this subdivision begins with the day
immediately following the day of invoice and includes all successive days, including
Sundays and holidays, to and including the 30th successive day.

Sec. 52.

Minnesota Statutes 2008, section 349.191, subdivision 1a, is amended to read:


Subd. 1a.

Credit and sales to delinquent organizations.

(a) If a distributor or
linked bingo game provider does not receive payment in full from an organization within
30 days of the day immediately following the date of the invoice, the distributor or
linked bingo game provider must notify the board in writing of the delinquency on the
next business day.

(b) If a distributor or linked bingo game provider who has notified the board under
paragraph (a) has not received payment in full from the organization within 60 days of the
notification under paragraph (a), the distributor or linked bingo game provider must notify
the board of the continuing delinquency.

(c) On receipt of a notice under paragraph (a), the board shall order all distributors
and linked bingo game providers that until further notice from the board, they may sellnew text begin
or lease
new text end gambling equipment to the delinquent organizations only on a cash basis with
no credit extended. On receipt of a notice under paragraph (b), the board shall order all
distributors and linked bingo game providers not to sellnew text begin or leasenew text end any gambling equipment
to the delinquent organization.

(d) No distributor or linked bingo game provider may extend credit or sellnew text begin or leasenew text end
gambling equipment to an organization in violation of an order under paragraph (c) until
the board has authorized such credit or salenew text begin or leasenew text end .

Sec. 53.

Minnesota Statutes 2008, section 349.191, subdivision 1b, is amended to read:


Subd. 1b.

Credit and sales to delinquent distributorsnew text begin or linked bingo game
providers
new text end .

(a) If a manufacturer does not receive payment in full from a distributornew text begin or
linked bingo game provider
new text end within 30 days of the day immediately following the date of
invoice, the manufacturer must notify the board in writing of the delinquency on the
next business day.

(b) If a manufacturer who has notified the board under paragraph (a) has not
received payment in full from the distributornew text begin or linked bingo game providernew text end within 60
days of the notification under paragraph (a), the manufacturer must notify the board of the
continuing delinquency.

(c) On receipt of a notice under paragraph (a), the board shall order all manufacturers
that until further notice from the board, they may sellnew text begin or leasenew text end gambling equipment to
the delinquent distributornew text begin or linked bingo game providernew text end only on a cash basis with no
credit extended. On receipt of a notice under paragraph (b), the board shall order all
manufacturers not to sell new text begin or lease new text end any gambling equipment to the delinquent distributornew text begin
or linked bingo game provider
new text end .

(d) No manufacturer may extend credit or sellnew text begin or leasenew text end gambling equipment to
a distributornew text begin or linked bingo game providernew text end in violation of an order under paragraph (c)
until the board has authorized such credit or salenew text begin or leasenew text end .

Sec. 54.

Minnesota Statutes 2008, section 349.191, subdivision 2, is amended to read:


Subd. 2.

Invoices.

All invoices prepared by a manufacturer deleted text begin ordeleted text end new text begin ,new text end distributornew text begin , or
linked bingo game provider
new text end and presented as part of a credit transaction for the purchase
of gambling equipment must clearly bear the words "Notice: State Law Prohibits the
Extension of Credit For This Sale new text begin or Lease new text end For More Than 30 Days."

Sec. 55.

Minnesota Statutes 2008, section 349.191, subdivision 3, is amended to read:


Subd. 3.

Rules.

Any rule of the board which requires a manufacturer to report to
the board any distributornew text begin or linked bingo game providernew text end who is delinquent in payment
for gambling equipment must provide that a distributornew text begin or linked bingo game providernew text end is
subject to the rule if the distributornew text begin or linked bingo game providernew text end is more than 30 days
delinquent in payment to a manufacturer.

Sec. 56.

Minnesota Statutes 2008, section 349.191, subdivision 4, is amended to read:


Subd. 4.

Credit; postdated checks.

For purposes of this section, "credit" includes
acceptance by a manufacturer deleted text begin ordeleted text end new text begin ,new text end distributornew text begin , or linked bingo game providernew text end of a postdated
check in payment for gambling equipment.

Sec. 57.

Minnesota Statutes 2008, section 349.2127, subdivision 7, is amended to read:


Subd. 7.

Checks for gambling purchases.

An organization may not accept checks
new text begin or debit cards new text end in payment for the purchase of any gambling equipment or for the chance to
participate in any form of lawful gambling except a raffle. If an organization accepts a
checknew text begin or debit cardnew text end , the payment of which is subsequently dishonored, the organization
shall reimburse its gambling account for the amount of the dishonored deleted text begin checkdeleted text end new text begin paymentnew text end
within 30 days of receiving notice of the dishonor. This subdivision does not apply to
gaming activities conducted pursuant to the Indian Gaming Regulatory Act, United States
Code, title 25, section 2701 et seq.

Sec. 58.

Minnesota Statutes 2008, section 349.213, subdivision 1, is amended to read:


Subdivision 1.

Local regulation.

(a) A statutory or home rule city or county has the
authority to adopt more stringent regulation of lawful gambling within its jurisdiction,
including the prohibition of lawful gamblingdeleted text begin , anddeleted text end new text begin .
new text end

new text begin (b) A statutory or home rule city or countynew text end may require a permit for the conduct
of gambling exempt from licensing under section 349.166. The fee for a permit issued
under section 349.166 may not exceed $100.

new text begin (c)new text end The authority granted by this subdivision does not include the authority to require
a license or fee for a license or permit to conduct gambling by organizations, gambling
managers, gambling employees, or sales by distributors or linked bingo game providers
licensed by or registered with the board.

new text begin (d)new text end The authority granted by this subdivision does not include the authority to require
an organization to make specific expenditures of more than ten percent per year from its
net profits derived from lawful gambling.

new text begin (e)new text end For the purposes of this subdivision, net profits are gross profits less amounts
expended for allowable expenses and paid in taxes assessed on lawful gambling.

new text begin (f)new text end A statutory or home rule charter city or a county may not require an organization
conducting lawful gambling within its jurisdiction to make an expenditure to the city or
county as a condition to operate within that city or county, exceptnew text begin :
new text end

new text begin (1)new text end as authorized under section 349.16, subdivision 8, or 297E.02; deleted text begin provided,
however, that
deleted text end new text begin or
new text end

new text begin (2) bynew text end an ordinance requirement that such organizations must contribute ten percent
per year of their net profits derived from lawful gambling conducted at premises within
the city's or county's jurisdiction to a fund administered and regulated by the responsible
local unit of government without cost to such funddeleted text begin , for disbursementdeleted text end new text begin . The funds must
be disbursed
new text end by the deleted text begin responsibledeleted text end local unit of government deleted text begin of the receiptsdeleted text end for (i) charitable
contributions as defined in section 349.12, subdivision 7a, or (ii) police, fire, and other
emergency or public safety-related services, equipment, and training, excluding pension
obligationsdeleted text begin ,deleted text end new text begin . A contribution made by an organizationnew text end is not considered an expenditure
to the city or county nor a tax under section 297E.02, and is valid and lawful. A city or
countynew text begin receiving andnew text end making expenditures authorized under this deleted text begin paragraphdeleted text end new text begin clausenew text end must by
March 15 of each year file a report with the board, on a form the board prescribes, that
lists all such revenues collectednew text begin , interest received on fund balances,new text end and expenditures for
the previous calendar year.

deleted text begin (b)deleted text end new text begin (g)new text end A statutory or home rule city or county may by ordinance require that a
licensed organization conducting lawful gambling within its jurisdiction expend all or a
portion of its expenditures for lawful purposes on lawful purposes conducted or located
within the city's or county's trade area. Such an ordinance must be limited to lawful
purpose expenditures of gross profits derived from lawful gambling conducted at premises
within the city's or county's jurisdiction, must define the city's or county's trade area, and
must specify the percentage of lawful purpose expenditures which must be expended
within the trade area. A trade area defined by a city under this subdivision must include
each city and township contiguous to the defining city.

deleted text begin (c)deleted text end new text begin (h)new text end A more stringent regulation or prohibition of lawful gambling adopted by
a political subdivision under this subdivision must apply equally to all forms of lawful
gambling within the jurisdiction of the political subdivision, except a political subdivision
may prohibit the use of paddlewheels.

Sec. 59.

Minnesota Statutes 2008, section 349.213, subdivision 2, is amended to read:


Subd. 2.

Local approval.

deleted text begin Before issuing or renewing a premises permit, the board
must notify the city council of the statutory or home rule city in which the organization's
premises is located or, if the premises is located outside a city, the county board of the
county and the town board of the town where the premises is located. The board may
require organizations to notify the appropriate local government at the time of application.
This required notification is sufficient to constitute the notice required by this subdivision.
The board may not issue or renew a premises permit unless the organization submits a
resolution from the city council or county board approving the premises permit. The
resolution must have been adopted within 90 days of the date of application for the new
or renewed permit or license.
deleted text end new text begin The board may not issue an initial premises permit unless
approval is received from:
new text end

new text begin (1) the city council of the statutory or home rule city in which the organization's
premises is located; or
new text end

new text begin (2) the county board of the county where the premises is located.
new text end

new text begin The organization must submit a resolution from the city council or county board
approving the premises permit. The resolution must have been adopted within 90 days of
the date of application for the new permit.
new text end

Sec. 60. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2008, sections 349.15, subdivision 4; 349.154, subdivision 2;
349.155, subdivision 7; 349.16, subdivisions 9 and 10; 349.166, subdivision 3; 349.168,
subdivisions 4, 6, 7, and 10; 349.18, subdivisions 2 and 3; and 349.2127, subdivision 8,
new text end new text begin
are repealed effective July 1, 2009.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2008, section 349.15, subdivision 5, new text end new text begin is repealed effective
December 31, 2009.
new text end

Sec. 61. new text begin EFFECTIVE DATE.
new text end

new text begin Except as otherwise provided, this act is effective July 1, 2009.
new text end