1.1 	A bill for an act
1.2 	relating to gambling; amending various provisions
1.3 	relating to lawful gambling; amending and providing
1.4 	definitions; making technical, clarifying, and
1.5 	conforming changes; amending Minnesota Statutes 2004,
1.6 	sections 349.12, subdivisions 5, 25, 33, by adding
1.7 	subdivisions; 349.15, subdivision 1; 349.151,
1.8 	subdivisions 4, 4b; 349.152, subdivision 2; 349.153;
1.9 	349.155, subdivision 3; 349.16, subdivisions 2, 8;
1.10 	349.161, subdivision 5; 349.162, subdivisions 1, 4, 5;
1.11 	349.163, subdivision 3; 349.1635, subdivision 4;
1.12 	349.166, subdivisions 1, 2; 349.167, subdivision 1;
1.13 	349.168, subdivision 8; 349.17, subdivisions 5, 7;
1.14 	349.1711, subdivision 1; 349.173; 349.18, subdivision
1.15 	1; 349.19, subdivisions 4, 5, 10; 349.211, subdivision
1.16 	2c; 349.2125, subdivision 1; 349.213; 609.75,
1.17 	subdivision 1; repealing Minnesota Statutes 2004,
1.18 	sections 349.162, subdivision 3; 349.164; 349.17,
1.19 	subdivision 1.
1.20 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.21 	Section 1. Minnesota Statutes 2004, section 349.12, is
1.22 	amended by adding a subdivision to read:
1.23 		Subd. 3c.Bar bingo. "Bar bingo" is a bingo occasion
1.24 	conducted at a permitted premises in an area where intoxicating
1.25 	liquor or 3.2 percent malt beverages are sold and where the
1.26 	licensed organization conducts another form of lawful gambling.

1.27 	Sec. 2. Minnesota Statutes 2004, section 349.12,
1.28 	subdivision 5, is amended to read:
1.29 		Subd. 5.Bingo occasion.  "Bingo occasion" means a single
1.30 	gathering or session at which a series of one or more successive
1.31 	bingo games is played. There is no limit on the number of games
1.32 	conducted during a bingo occasion but a bingo occasion must not
2.1 	last longer than eight consecutive hours.

2.2 	Sec. 3. Minnesota Statutes 2004, section 349.12, is
2.3 	amended by adding a subdivision to read:
2.4 		Subd. 7a.Charitable contribution. "Charitable
2.5 	contribution" means one or more of the lawful purposes
2.6 	expenditures under section 349.12, subdivision 25, paragraph
2.7 	(a), clauses (1) to (5), (6), (7), (10), (11), (13) to (15), and
2.8 	(19).

2.9 	Sec. 4. Minnesota Statutes 2004, section 349.12,
2.10 	subdivision 25, is amended to read:
2.11 		Subd. 25.Lawful purpose.  (a) "Lawful purpose" means one
2.12 	or more of the following:
2.13 	(1) any expenditure by or contribution to a 501(c)(3) or
2.14 	festival organization, as defined in subdivision 15a, provided
2.15 	that the organization and expenditure or contribution are in
2.16 	conformity with standards prescribed by the board under section
2.17 	349.154, which standards must apply to both types of
2.18 	organizations in the same manner and to the same extent;
2.19 	(2) a contribution to or expenditure for goods and services
2.20 	for an individual or family suffering from poverty,
2.21 	homelessness, or physical or mental disability, which is used to
2.22 	relieve the effects of that poverty, homelessness, or disability 
2.23 	suffering;
2.24 	(3) a contribution to an individual for treatment for
2.25 	delayed posttraumatic stress syndrome or a contribution to a
2.26 	program recognized by the Minnesota Department of Human Services
2.27 	for the education, prevention, or treatment of compulsive 
2.28 	problem gambling;
2.29 	(4) a contribution to or expenditure on a public or private
2.30 	nonprofit educational institution registered with or accredited
2.31 	by this state or any other state;
2.32 	(5) a contribution to a scholarship fund for defraying the
2.33 	cost of education to individuals where the funds are awarded
2.34 	through an open and fair selection process;
2.35 	(6) activities by an organization or a government entity
2.36 	which recognize humanitarian or military service to the United
3.1 	States, the state of Minnesota, or a community, subject to rules
3.2 	of the board, provided that the rules must not include mileage
3.3 	reimbursements in the computation of the per diem reimbursement
3.4 	limit and must impose no aggregate annual limit on the amount of
3.5 	reasonable and necessary expenditures made to support:
3.6 	(i) members of a military marching or color guard unit for
3.7 	activities conducted within the state;
3.8 	(ii) members of an organization solely for services
3.9 	performed by the members at funeral services; or 
3.10 	(iii) members of military marching, color guard, or honor
3.11 	guard units may be reimbursed for participating in color guard,
3.12 	honor guard, or marching unit events within the state or states
3.13 	contiguous to Minnesota at a per participant rate of up to $35
3.14 	per diem; or 
3.15 	(iv) active military personnel and their immediate family
3.16 	members in need of support services;
3.17 	(7) recreational, community, and athletic facilities and
3.18 	activities intended primarily for persons under age 21, provided
3.19 	that such facilities and activities do not discriminate on the
3.20 	basis of gender and the organization complies with section
3.21 	349.154;
3.22 	(8) payment of local taxes authorized under this chapter,
3.23 	taxes imposed by the United States on receipts from lawful
3.24 	gambling, the taxes imposed by section 297E.02, subdivisions 1,
3.25 	4, 5, and 6, and the tax imposed on unrelated business income by
3.26 	section 290.05, subdivision 3;
3.27 	(9) payment of real estate taxes and assessments on
3.28 	permitted gambling premises wholly owned by the licensed
3.29 	organization paying the taxes, or wholly leased by a licensed
3.30 	veterans organization under a national charter recognized under
3.31 	section 501(c)(19) of the Internal Revenue Code, not to exceed:
3.32 	(i) for premises used for bingo, the amount that an
3.33 	organization may expend under board rules on rent for bingo; and 
3.34 	(ii) $35,000 per year for premises used for other forms of
3.35 	lawful gambling;
3.36 	(10) a contribution to the United States, this state or any
4.1 	of its political subdivisions, or any agency or instrumentality
4.2 	thereof other than a direct contribution to a law enforcement or
4.3 	prosecutorial agency;
4.4 	(11) a contribution to or expenditure by a nonprofit
4.5 	organization which is a church or body of communicants gathered
4.6 	in common membership for mutual support and edification in
4.7 	piety, worship, or religious observances;
4.8 	(12) payment of the reasonable costs of an audit required
4.9 	in section 297E.06, subdivision 4, provided the annual audit is
4.10 	filed in a timely manner with the Department of Revenue and paid
4.11 	prior to June 30, 2006;
4.12 	(13) a contribution to or expenditure on a wildlife
4.13 	management project that benefits the public at-large, provided
4.14 	that the state agency with authority over that wildlife
4.15 	management project approves the project before the contribution
4.16 	or expenditure is made;
4.17 	(14) expenditures, approved by the commissioner of natural
4.18 	resources, by an organization for grooming and maintaining
4.19 	snowmobile trails and all-terrain vehicle trails that are (1)
4.20 	grant-in-aid trails established under section 85.019, or (2)
4.21 	other trails open to public use, including purchase or lease of
4.22 	equipment for this purpose;
4.23 	(13) a contribution to or expenditure on projects or
4.24 	activities approved by the commissioner of natural resources for:
4.25 	(i) wildlife management projects that benefit the public at
4.26 	large;
4.27 	(ii) grant-in-aid trail maintenance and grooming
4.28 	established under sections 84.83 and 84.927 and other trails
4.29 	open to public use, including purchase or lease of equipment for
4.30 	this purpose; and 
4.31 	(iii) supplies and materials for safety training and
4.32 	educational programs coordinated by the Department of Natural
4.33 	Resources including the Enforcement Division;
4.34 	(15) (14) conducting nutritional programs, food shelves,
4.35 	and congregate dining programs primarily for persons who are age
4.36 	62 or older or disabled;
5.1 	(16) (15) a contribution to a community arts organization,
5.2 	or an expenditure to sponsor arts programs in the community,
5.3 	including but not limited to visual, literary, performing, or
5.4 	musical arts;
5.5 	(17) (16) an expenditure by a licensed veterans
5.6 	organization for payment of water, fuel for heating,
5.7 	electricity, and sewer costs for a building wholly owned or
5.8 	wholly leased by and used as the primary headquarters of the
5.9 	licensed veterans organization;
5.10 	(18) (17) expenditure by a licensed veterans organization
5.11 	of up to $5,000 in a calendar year in net costs to the
5.12 	organization for meals and other membership events, limited to
5.13 	members and spouses, held in recognition of military service.
5.14 	No more than $5,000 can be expended in total per calendar year
5.15 	under this clause by all licensed veterans organizations sharing
5.16 	the same veterans post home; or 
5.17 	(19) (18) payment of fees authorized under this chapter
5.18 	imposed by the state of Minnesota to conduct lawful gambling in
5.19 	Minnesota; or 
5.20 	(19) a contribution or expenditure to honor an individual's
5.21 	humanitarian service as demonstrated through philanthropy or
5.22 	volunteerism to the United States, this state, or local
5.23 	community.
5.24 	(b) Notwithstanding paragraph (a), "lawful purpose" does
5.25 	not include:
5.26 	(1) any expenditure made or incurred for the purpose of
5.27 	influencing the nomination or election of a candidate for public
5.28 	office or for the purpose of promoting or defeating a ballot
5.29 	question;
5.30 	(2) any activity intended to influence an election or a
5.31 	governmental decision-making process;
5.32 	(3) the erection, acquisition, improvement, expansion,
5.33 	repair, or maintenance of real property or capital assets owned
5.34 	or leased by an organization, unless the board has first
5.35 	specifically authorized the expenditures after finding that (i)
5.36 	the real property or capital assets will be used exclusively for
6.1 	one or more of the purposes in paragraph (a); (ii) with respect
6.2 	to expenditures for repair or maintenance only, that the
6.3 	property is or will be used extensively as a meeting place or
6.4 	event location by other nonprofit organizations or community or
6.5 	service groups and that no rental fee is charged for the use;
6.6 	(iii) with respect to expenditures, including a mortgage payment
6.7 	or other debt service payment, for erection or acquisition only,
6.8 	that the erection or acquisition is necessary to replace with a
6.9 	comparable building, a building owned by the organization and
6.10 	destroyed or made uninhabitable by fire or natural
6.11 	disaster catastrophe, provided that the expenditure may be only
6.12 	for that part of the replacement cost not reimbursed by
6.13 	insurance; (iv) with respect to expenditures, including a
6.14 	mortgage payment or other debt service payment, for erection or
6.15 	acquisition only, that the erection or acquisition is necessary
6.16 	to replace with a comparable building a building owned by the
6.17 	organization that was acquired from the organization by eminent
6.18 	domain or sold by the organization to a purchaser that the
6.19 	organization reasonably believed would otherwise have acquired
6.20 	the building by eminent domain, provided that the expenditure
6.21 	may be only for that part of the replacement cost that exceeds
6.22 	the compensation received by the organization for the building
6.23 	being replaced; or (v) with respect to an expenditure to bring
6.24 	an existing building into compliance with the Americans with
6.25 	Disabilities Act under item (ii), an organization has the option
6.26 	to apply the amount of the board-approved expenditure to the
6.27 	erection or acquisition of a replacement building that is in
6.28 	compliance with the Americans with Disabilities Act;
6.29 	(4) an expenditure by an organization which is a
6.30 	contribution to a parent organization, foundation, or affiliate
6.31 	of the contributing organization, if the parent organization,
6.32 	foundation, or affiliate has provided to the contributing
6.33 	organization within one year of the contribution any money,
6.34 	grants, property, or other thing of value;
6.35 	(5) a contribution by a licensed organization to another
6.36 	licensed organization unless the board has specifically
7.1 	authorized the contribution.  The board must authorize such a
7.2 	contribution when requested to do so by the contributing
7.3 	organization unless it makes an affirmative finding that the
7.4 	contribution will not be used by the recipient organization for
7.5 	one or more of the purposes in paragraph (a); or
7.6 	(6) a contribution to a statutory or home rule charter
7.7 	city, county, or town by a licensed organization with the
7.8 	knowledge that the governmental unit intends to use the
7.9 	contribution for a pension or retirement fund.
7.10 	
EFFECTIVE DATE. The effective date for paragraph (a),
7.11 	clause (9), is January 1, 2006.  All other changes in section 4
7.12 	are effective the day following final enactment.

7.13 	Sec. 5. Minnesota Statutes 2004, section 349.12,
7.14 	subdivision 33, is amended to read:
7.15 		Subd. 33.Raffle.  "Raffle" means a game in which a
7.16 	participant buys a ticket for a chance at a prize with the
7.17 	winner determined by a random drawing to take place at a
7.18 	location and date printed upon the ticket or other certificate
7.19 	of participation in an event where the prize determination is
7.20 	based on a method of random selection and all entries have an
7.21 	equal chance of selection.  The ticket or certificate of
7.22 	participation must include the location, date, and time of the
7.23 	selection of the winning entries.
7.24 	
EFFECTIVE DATE. This section is effective the day
7.25 	following final enactment.

7.26 	Sec. 6. Minnesota Statutes 2004, section 349.15,
7.27 	subdivision 1, is amended to read:
7.28 		Subdivision 1.Expenditure restrictions.  Gross profits
7.29 	from lawful gambling may be expended only for lawful purposes or
7.30 	allowable expenses as authorized by the membership of the
7.31 	conducting organization at a monthly meeting of the
7.32 	organization's membership.  Provided that no more than 70
7.33 	percent of the gross profit less the tax imposed under section
7.34 	297E.02, subdivision 1, from bingo, and no more than 55 60 
7.35 	percent of the gross profit from other forms of lawful gambling,
7.36 	may be expended biennially during the term of the license for
8.1 	allowable expenses related to lawful gambling. For licenses
8.2 	issued after June 30, 2006, compliance with this subdivision
8.3 	will be measured on a biennial basis that is concurrent with the
8.4 	term of the license.  Compliance with this subdivision is a
8.5 	condition for the renewal of any license beginning on July 1,
8.6 	2008.
8.7 	
EFFECTIVE DATE. This section is effective July 1, 2006.

8.8 	Sec. 7. Minnesota Statutes 2004, section 349.151,
8.9 	subdivision 4, is amended to read:
8.10 		Subd. 4.Powers and duties.  (a) The board has the
8.11 	following powers and duties:
8.12 	(1) to regulate lawful gambling to ensure it is conducted
8.13 	in the public interest;
8.14 	(2) to issue licenses to organizations, distributors,
8.15 	distributor salespersons, bingo halls,manufacturers, linked
8.16 	bingo game providers, and gambling managers;
8.17 	(3) to collect and deposit license, permit, and
8.18 	registration fees due under this chapter;
8.19 	(4) to receive reports required by this chapter and inspect
8.20 	all premises, records, books, and other documents of
8.21 	organizations, distributors, manufacturers, and linked bingo
8.22 	game providers, and bingo halls to insure compliance with all
8.23 	applicable laws and rules;
8.24 	(5) to make rules authorized by this chapter;
8.25 	(6) to register gambling equipment and issue registration
8.26 	stamps;
8.27 	(7) to provide by rule for the mandatory posting by
8.28 	organizations conducting lawful gambling of rules of play and
8.29 	the odds and/or house percentage on each form of lawful
8.30 	gambling;
8.31 	(8) to report annually to the governor and legislature on
8.32 	its activities and on recommended changes in the laws governing
8.33 	gambling;
8.34 	(9) to report annually to the governor and legislature a
8.35 	financial summary for each licensed organization identifying the
8.36 	gross receipts, prizes paid, operating expenses, lawful purpose
9.1 	expenditures including charitable contributions, and the
9.2 	percentage of annual gross profit used for lawful purposes;
9.3 	(10) to impose civil penalties of not more than $500 per
9.4 	violation on organizations, distributors, distributor
9.5 	salespersons, manufacturers, bingo halls,linked bingo game
9.6 	providers, and gambling managers for failure to comply with any
9.7 	provision of this chapter or any rule or order of the board;
9.8 	(10) (11) to issue premises permits to organizations
9.9 	licensed to conduct lawful gambling;
9.10 	(11) (12) to delegate to the director the authority to
9.11 	issue or deny license and premises permit applications and
9.12 	renewals under criteria established by the board;
9.13 	(12) (13) to delegate to the director the authority to
9.14 	approve or deny fund loss requests, contribution of gambling
9.15 	funds to another licensed organization, and property expenditure
9.16 	requests under criteria established by the board;
9.17 	(14) to suspend or revoke licenses and premises permits of
9.18 	organizations, distributors, distributor salespersons,
9.19 	manufacturers, bingo halls,linked bingo game providers, or
9.20 	gambling managers as provided in this chapter;
9.21 	(15) to approve or deny requests from licensees for:
9.22 	(i) waivers from fee requirements as provided in section
9.23 	349.16, subdivision 6; and 
9.24 	(ii) variances from Gambling Control Board rules under
9.25 	section 14.055; and 
9.26 	(13) (16) to register employees of organizations licensed
9.27 	to conduct lawful gambling;
9.28 	(14) (17) to require fingerprints from persons determined
9.29 	by board rule to be subject to fingerprinting;
9.30 	(15) (18) to delegate to a compliance review group of the
9.31 	board the authority to investigate alleged violations, issue
9.32 	consent orders, and initiate contested cases on behalf of the
9.33 	board;
9.34 	(16) (19) to order organizations, distributors, distributor
9.35 	salespersons, manufacturers, bingo halls,linked bingo game
9.36 	providers, and gambling managers to take corrective actions; and
10.1 	(17) (20) to take all necessary steps to ensure the
10.2 	integrity of and public confidence in lawful gambling.
10.3 	(b) The board, or director if authorized to act on behalf
10.4 	of the board, may by citation assess any organization,
10.5 	distributor, employee eligible to make sales on behalf of a 
10.6 	distributor salesperson, manufacturer, bingo hall licensee,
10.7 	linked bingo game provider, or gambling manager a civil penalty
10.8 	of not more than $500 per violation for a failure to comply with
10.9 	any provision of this chapter or any rule adopted or order
10.10 	issued by the board.  Any organization, distributor, bingo hall
10.11 	licensee distributor salesperson, gambling manager, linked bingo
10.12 	game provider, or manufacturer assessed a civil penalty under
10.13 	this paragraph may request a hearing before the board.  Appeals
10.14 	of citations imposing a civil penalty are not subject to the
10.15 	provisions of the Administrative Procedure Act.
10.16 	(c) All penalties received by the board must be deposited
10.17 	in the general fund.
10.18 	(d) All fees imposed by the board under sections 349.16 to
10.19 	349.167 must be deposited in the state treasury and credited to
10.20 	a lawful gambling regulation account in the special revenue
10.21 	fund.  Receipts in this account are available for the operations
10.22 	of the board up to the amount authorized in biennial
10.23 	appropriations from the legislature.

10.24 	Sec. 8. Minnesota Statutes 2004, section 349.151,
10.25 	subdivision 4b, is amended to read:
10.26 		Subd. 4b.Pull-tab sales from dispensing devices.  (a)
10.27 	The board may by rule authorize but not require the use of
10.28 	pull-tab dispensing devices.
10.29 	(b) Rules adopted under paragraph (a):
10.30 	(1) must limit the number of pull-tab dispensing devices on
10.31 	any permitted premises to three; and
10.32 	(2) must limit the use of pull-tab dispensing devices to a
10.33 	permitted premises which is (i) a licensed premises for on-sales
10.34 	of intoxicating liquor or 3.2 percent malt beverages; or (ii) a
10.35 	licensed bingo hall that allows gambling only by premises where
10.36 	bingo is conducted and admission is restricted to persons 18
11.1 	years or older.
11.2 	(c) Notwithstanding rules adopted under paragraph (b),
11.3 	pull-tab dispensing devices may be used in establishments
11.4 	licensed for the off-sale of intoxicating liquor, other than
11.5 	drugstores and general food stores licensed under section
11.6 	340A.405, subdivision 1.

11.7 	Sec. 9. Minnesota Statutes 2004, section 349.152,
11.8 	subdivision 2, is amended to read:
11.9 		Subd. 2.Duties of director.  The director has the
11.10 	following duties:
11.11 	(1) to carry out gambling policy established by the board;
11.12 	(2) to employ and supervise personnel of the board;
11.13 	(3) to advise and make recommendations to the board on
11.14 	rules, policy, and legislative initiatives;
11.15 	(4) to approve or deny operational requests from licensees
11.16 	as delegated by the board;
11.17 	(5) to issue licenses and premises permits as authorized by
11.18 	the board;
11.19 	(5) (6) to issue cease and desist orders;
11.20 	(6) (7) to make recommendations to the board on license
11.21 	issuance, denial, censure, suspension and revocation, civil
11.22 	penalties, and corrective action the board imposes;
11.23 	(7) (8) to ensure that board rules, policy, and decisions
11.24 	are adequately and accurately conveyed to the board's licensees;
11.25 	(8) (9) to conduct investigations, inspections, compliance
11.26 	reviews, and audits under this chapter; and
11.27 	(9) (10) to issue subpoenas to compel the attendance of
11.28 	witnesses and the production of documents, books, records, and
11.29 	other evidence relating to an investigation, compliance review,
11.30 	or audit the director is authorized to conduct.

11.31 	Sec. 10. Minnesota Statutes 2004, section 349.153, is
11.32 	amended to read:
11.33 	349.153 CONFLICT OF INTEREST.
11.34 	(a) A person may not serve on the board, be the director,
11.35 	or be an employee of the board who has an interest in any
11.36 	corporation, association, limited liability company, or
12.1 	partnership that is licensed by the board as a distributor,
12.2 	manufacturer, or linked bingo game provider, or bingo hall under
12.3 	section 349.164.
12.4 	(b) A member of the board, the director, or an employee of
12.5 	the board may not accept employment with, receive compensation
12.6 	directly or indirectly from, or enter into a contractual
12.7 	relationship with an organization that conducts lawful gambling,
12.8 	a distributor, a linked bingo game provider, a bingo hall,or a
12.9 	manufacturer while employed with or a member of the board or
12.10 	within one year after terminating employment with or leaving the
12.11 	board.
12.12 	(c) A distributor, bingo hall,manufacturer, linked bingo
12.13 	game provider, or organization licensed to conduct lawful
12.14 	gambling may not hire a former employee, director, or member of
12.15 	the Gambling Control Board for one year after the employee,
12.16 	director, or member has terminated employment with or left the
12.17 	Gambling Control Board.

12.18 	Sec. 11. Minnesota Statutes 2004, section 349.155,
12.19 	subdivision 3, is amended to read:
12.20 		Subd. 3.Mandatory disqualifications.  (a) In the case of
12.21 	licenses for manufacturers, distributors, distributor
12.22 	salespersons, bingo halls,linked bingo game providers, and
12.23 	gambling managers, the board may not issue or renew a license
12.24 	under this chapter, and shall revoke a license under this
12.25 	chapter, if the applicant or licensee, or a director, officer,
12.26 	partner, governor, or person in a supervisory or management
12.27 	position of the applicant or licensee:
12.28 	(1) has ever been convicted of a felony or a crime
12.29 	involving gambling;
12.30 	(2) has ever been convicted of (i) assault, (ii) a criminal
12.31 	violation involving the use of a firearm, or (iii) making
12.32 	terroristic threats;
12.33 	(3) is or has ever been connected with or engaged in an
12.34 	illegal business;
12.35 	(4) owes $500 or more in delinquent taxes as defined in
12.36 	section 270.72;
13.1 	(5) had a sales and use tax permit revoked by the
13.2 	commissioner of revenue within the past two years; or
13.3 	(6) after demand, has not filed tax returns required by the
13.4 	commissioner of revenue.  The board may deny or refuse to renew
13.5 	a license under this chapter, and may revoke a license under
13.6 	this chapter, if any of the conditions in this paragraph are
13.7 	applicable to an affiliate or direct or indirect holder of more
13.8 	than a five percent financial interest in the applicant or
13.9 	licensee.
13.10 	(b) In the case of licenses for organizations, the board
13.11 	may not issue or renew a license under this chapter, and shall
13.12 	revoke a license under this chapter, if the organization, or an
13.13 	officer or member of the governing body of the organization:
13.14 	(1) has been convicted of a felony or gross misdemeanor
13.15 	within the five years before the issuance or renewal of the
13.16 	license involving theft or fraud;
13.17 	(2) has ever been convicted of a crime involving gambling;
13.18 	or
13.19 	(3) has had a license issued by the board or director
13.20 	permanently revoked for violation of law or board rule.

13.21 	Sec. 12. Minnesota Statutes 2004, section 349.16,
13.22 	subdivision 2, is amended to read:
13.23 		Subd. 2.Issuance of gambling licenses.  (a) Licenses
13.24 	authorizing organizations to conduct lawful gambling may be
13.25 	issued by the board to organizations meeting the qualifications
13.26 	in paragraphs (b) to (h) if the board determines that the
13.27 	license is consistent with the purpose of sections 349.11 to
13.28 	349.22.
13.29 	(b) The organization must have been in existence for the
13.30 	most recent three years preceding the license application as a
13.31 	registered Minnesota nonprofit corporation or as an organization
13.32 	designated as exempt from the payment of income taxes by the
13.33 	Internal Revenue Code.
13.34 	(c) The organization at the time of licensing must have at
13.35 	least 15 active members.
13.36 	(d) The organization must not be in existence solely for
14.1 	the purpose of conducting gambling.
14.2 	(e) The organization has identified in its license
14.3 	application the lawful purposes on which it proposes to expend
14.4 	net profits from lawful gambling and has identified an annual
14.5 	goal for charitable contributions, expressed as a percentage of
14.6 	gross profits.
14.7 	(f) The organization has identified on its license
14.8 	application a gambling manager and certifies that the manager is
14.9 	qualified under this chapter.
14.10 	(g) The organization must not, in the opinion of the board
14.11 	after consultation with the commissioner of revenue, be seeking
14.12 	licensing primarily for the purpose of evading or reducing the
14.13 	tax imposed by section 297E.02, subdivision 6.
14.14 	(h) The organization has not exceeded the expenditure
14.15 	restrictions imposed under section 349.15, subdivision 1, or if
14.16 	the organization has exceeded the expenditure restrictions under
14.17 	section 349.15, subdivision 1, the organization has reimbursed
14.18 	any excess expenses from nongambling funds.

14.19 	Sec. 13. Minnesota Statutes 2004, section 349.16,
14.20 	subdivision 8, is amended to read:
14.21 		Subd. 8.Local investigation fee.  A statutory or home
14.22 	rule charter city or county notified under section 349.213,
14.23 	subdivision 2, may assess an investigation fee on organizations
14.24 	or bingo halls applying for or renewing a premises permit or a
14.25 	bingo hall license.  An investigation fee may not exceed the
14.26 	following limits:
14.27 	(1) for cities of the first class, $500;
14.28 	(2) for cities of the second class, $250;
14.29 	(3) for all other cities, $100; and
14.30 	(4) for counties, $375.

14.31 	Sec. 14. Minnesota Statutes 2004, section 349.161,
14.32 	subdivision 5, is amended to read:
14.33 		Subd. 5.Prohibition.  (a) No distributor, distributor
14.34 	salesperson, or other employee of a distributor, may also be a
14.35 	wholesale distributor of alcoholic beverages or an employee of a
14.36 	wholesale distributor of alcoholic beverages.
15.1 	(b) No distributor, distributor salesperson, or any
15.2 	representative, agent, affiliate, or other employee of a
15.3 	distributor, may:  (1) be involved in the conduct of lawful
15.4 	gambling by an organization; (2) keep or assist in the keeping
15.5 	of an organization's financial records, accounts, and
15.6 	inventories; or (3) prepare or assist in the preparation of tax
15.7 	forms and other reporting forms required to be submitted to the
15.8 	state by an organization.
15.9 	(c) No distributor, distributor salesperson, or any
15.10 	representative, agent, affiliate, or other employee of a
15.11 	distributor may provide a lessor of gambling premises any
15.12 	compensation, gift, gratuity, premium, or other thing of value.
15.13 	(d) No distributor, distributor salesperson, or any
15.14 	representative, agent, affiliate, or other employee of a
15.15 	distributor may provide an employee or agent of the organization
15.16 	any compensation, gift, gratuity, premium, or other thing of
15.17 	value greater than $25 per organization in a calendar year.
15.18 	(e) No distributor, distributor salesperson, or any
15.19 	representative, agent, affiliate, or other employee of a
15.20 	distributor may participate in any gambling activity at any
15.21 	gambling site or premises where gambling equipment purchased
15.22 	from that distributor or distributor salesperson is being used
15.23 	in the conduct of lawful gambling.
15.24 	(e) (f) No distributor, distributor salesperson, or any
15.25 	representative, agent, affiliate, or other employee of a
15.26 	distributor may alter or modify any gambling equipment, except
15.27 	to add a "last ticket sold" prize sticker.
15.28 	(f) (g) No distributor, distributor salesperson, or any
15.29 	representative, agent, affiliate, or other employee of a
15.30 	distributor may:  (1) recruit a person to become a gambling
15.31 	manager of an organization or identify to an organization a
15.32 	person as a candidate to become gambling manager for the
15.33 	organization; or (2) identify for an organization a potential
15.34 	gambling location.
15.35 	(g) (h) No distributor or distributor salesperson may
15.36 	purchase gambling equipment for resale to a person for use
16.1 	within the state from any person not licensed as a manufacturer
16.2 	under section 349.163, except for gambling equipment returned
16.3 	from an organization licensed under section 349.16, or exempt or
16.4 	excluded from licensing under section 349.166.
16.5 	(h) (i) No distributor or distributor salesperson may sell
16.6 	gambling equipment to any person for use in Minnesota other than
16.7 	(i) a licensed organization or organization excluded or exempt
16.8 	from licensing, or (ii) the governing body of an Indian tribe.
16.9 	(i) (j) No distributor or distributor salesperson may sell
16.10 	or otherwise provide a pull-tab or tipboard deal with the symbol
16.11 	required by section 349.163, subdivision 5, paragraph (h) (d),
16.12 	visible on the flare to any person other than in Minnesota to a
16.13 	licensed organization or organization exempt from licensing.

16.14 	Sec. 15. Minnesota Statutes 2004, section 349.162,
16.15 	subdivision 1, is amended to read:
16.16 		Subdivision 1.stamp registration required. (a) A
16.17 	distributor may not sell, transfer, furnish, or otherwise
16.18 	provide to a person, and no person may purchase, borrow, accept,
16.19 	or acquire from a distributor gambling equipment for use within
16.20 	the state unless the equipment has been registered with the
16.21 	board and has a registration stamp affixed, except for gambling
16.22 	equipment not stamped by the manufacturer pursuant to section
16.23 	349.163, subdivision 5 or 8.  Each stamp must bear a
16.24 	registration number assigned by the board.
16.25 	(b) A manufacturer must return all unused registration
16.26 	stamps in its possession to the board by February 1, 1995.  No
16.27 	manufacturer may possess unaffixed registration stamps after
16.28 	February 1, 1995.
16.29 	(c) After February 1, 1996, no person may possess any
16.30 	unplayed pull-tab or tipboard deals with a registration stamp
16.31 	affixed to the flare or any unplayed paddleticket cards with a
16.32 	registration stamp affixed to the master flare.  This paragraph
16.33 	does not apply to unplayed pull-tab or tipboard deals with a
16.34 	registration stamp affixed to the flare, or to unplayed
16.35 	paddleticket cards with a registration stamp affixed to the
16.36 	master flare, if the deals or cards are identified on a list of
17.1 	existing inventory submitted by a licensed organization or a
17.2 	licensed distributor, in a format prescribed by the commissioner
17.3 	of revenue, to the commissioner of revenue on or before February
17.4 	1, 1996 or the Department of Revenue in a manner prescribed by
17.5 	the board or the Department of Revenue.  Gambling equipment kept
17.6 	in violation of this paragraph subdivision is contraband under
17.7 	section 349.2125.

17.8 	Sec. 16. Minnesota Statutes 2004, section 349.162,
17.9 	subdivision 4, is amended to read:
17.10 		Subd. 4.Prohibition.  (a) No person other than a
17.11 	licensed distributor or licensed manufacturer may possess
17.12 	unaffixed registration stamps issued by the board for the
17.13 	purpose of registering gambling equipment.
17.14 	(b) Unless otherwise provided in this chapter, no person
17.15 	may possess gambling equipment that has not been stamped and 
17.16 	registered.
17.17 	(c) On and after January 1, 1991, no distributor may:
17.18 	(1) sell a bingo hard card or paper sheet that does not
17.19 	bear an individual number; or
17.20 	(2) sell a package of bingo paper sheets that does not
17.21 	contain bingo paper sheets in numerical order.

17.22 	Sec. 17. Minnesota Statutes 2004, section 349.162,
17.23 	subdivision 5, is amended to read:
17.24 		Subd. 5.Sales from facilities.  (a) All gambling
17.25 	equipment purchased or possessed by a licensed distributor for
17.26 	resale to any person for use in Minnesota must, prior to the
17.27 	equipment's resale, be unloaded into a storage facility located
17.28 	in Minnesota which the distributor owns or leases; and which has
17.29 	been registered, in advance and in writing, with the Division of
17.30 	Alcohol and Gambling Enforcement as a storage facility of the
17.31 	distributor.  All unregistered gambling equipment and all
17.32 	unaffixed registration stamps owned by, or in the possession of,
17.33 	a licensed distributor in the state of Minnesota shall be stored
17.34 	at a storage facility which has been registered with the
17.35 	Division of Alcohol and Gambling Enforcement.  No gambling
17.36 	equipment may be moved from the facility unless the gambling
18.1 	equipment has been first registered with the board, except for
18.2 	gambling equipment not stamped by the manufacturer pursuant to
18.3 	section 349.163, subdivision 5 or 8 or the Department of Revenue.
18.4 	(b) Notwithstanding section 349.163, subdivisions 5, 6, and
18.5 	8, a licensed manufacturer may ship into Minnesota approved or
18.6 	unapproved gambling equipment if the licensed manufacturer ships
18.7 	the gambling equipment to a Minnesota storage facility that is:
18.8 	(1) owned or leased by the licensed manufacturer; and (2)
18.9 	registered, in advance and in writing, with the Division of
18.10 	Alcohol and Gambling Enforcement as a manufacturer's storage
18.11 	facility.  No gambling equipment may be shipped into Minnesota
18.12 	to the manufacturer's registered storage facility unless the
18.13 	shipment of the gambling equipment is reported to the Department
18.14 	of Revenue in a manner prescribed by the department.  No
18.15 	gambling equipment may be moved from the storage facility unless
18.16 	the gambling equipment is sold to a licensed distributor and is
18.17 	otherwise in conformity with this chapter, is shipped to an
18.18 	out-of-state site and the shipment is reported to the Department
18.19 	of Revenue in a manner prescribed by the department, or is
18.20 	otherwise sold and shipped as permitted by board rule.
18.21 	(c) All storage facilities owned, leased, used, or operated
18.22 	by a licensed distributor or manufacturer may be entered upon
18.23 	and inspected by the employees of the Division of Alcohol and
18.24 	Gambling Enforcement, the Division of Alcohol and Gambling
18.25 	Enforcement director's authorized representatives, employees of
18.26 	the Gambling Control Board or its authorized representatives,
18.27 	employees of the Department of Revenue, or authorized
18.28 	representatives of the director of the Division of Special Taxes
18.29 	of the Department of Revenue during reasonable and regular
18.30 	business hours.  Obstruction of, or failure to permit, entry and
18.31 	inspection is cause for revocation or suspension of a
18.32 	manufacturer's or distributor's licenses and permits issued
18.33 	under this chapter.
18.34 	(d) Unregistered gambling equipment and unaffixed
18.35 	registration stamps found at any location in Minnesota other
18.36 	than the manufacturing plant of a licensed manufacturer or a
19.1 	registered storage facility are contraband under section
19.2 	349.2125.  This paragraph does not apply:
19.3 	(1) to unregistered gambling equipment being transported in
19.4 	interstate commerce between locations outside this state, if the
19.5 	interstate shipment is verified by a bill of lading or other
19.6 	valid shipping document; and
19.7 	(2) to gambling equipment not stamped by the manufacturer
19.8 	pursuant to section 349.163, subdivision 5 or 8 registered with
19.9 	the Department of Revenue for distribution to the tribal casinos.

19.10 	Sec. 18. Minnesota Statutes 2004, section 349.163,
19.11 	subdivision 3, is amended to read:
19.12 		Subd. 3.Prohibited sales.  (a) A manufacturer may not:
19.13 	(1) sell gambling equipment for use or resale within the
19.14 	state to any person not licensed as a distributor, except that
19.15 	gambling equipment used exclusively in a linked bingo game may
19.16 	be sold to a licensed linked bingo provider; or
19.17 	(2) sell gambling equipment to a distributor in this state
19.18 	that has the same serial number as another item of gambling
19.19 	equipment of the same type that is sold by that manufacturer for
19.20 	use or resale in this state.
19.21 	(b) A manufacturer, affiliate of a manufacturer, or person
19.22 	acting as a representative or agent of a manufacturer may not
19.23 	provide a lessor of gambling premises or an appointed official
19.24 	any compensation, gift, gratuity, premium, contribution, or
19.25 	other thing of value.
19.26 	(c) A manufacturer may not sell or otherwise provide a
19.27 	pull-tab or tipboard deal with the symbol required by
19.28 	subdivision 5, paragraph (h) (d), imprinted on the flare to any
19.29 	person other than a licensed distributor unless the manufacturer
19.30 	first renders the symbol permanently invisible.

19.31 	Sec. 19. Minnesota Statutes 2004, section 349.1635,
19.32 	subdivision 4, is amended to read:
19.33 		Subd. 4.Prohibition.  (a) Except for services associated
19.34 	exclusively with a linked bingo game, a linked bingo game
19.35 	provider may not participate or assist in the conduct of lawful
19.36 	gambling by an organization.  No linked bingo game provider may:
20.1 	(1) also be licensed as a bingo hall or hold any financial
20.2 	or managerial interest in a premises leased for the conduct of 
20.3 	bingo hall;
20.4 	(2) also be licensed as a distributor or hold any financial
20.5 	or managerial interest in a distributor;
20.6 	(3) sell or lease linked bingo game equipment to any person
20.7 	not licensed as an organization;
20.8 	(4) purchase gambling equipment to be used exclusively in a
20.9 	linked bingo game from any person not licensed as a manufacturer
20.10 	under section 349.163; and
20.11 	(5) provide an organization, a lessor of gambling premises,
20.12 	or an appointed official any compensation, gift, gratuity,
20.13 	premium, or contribution.
20.14 	(b) Employees of the board and the Division of Alcohol and
20.15 	Gambling Enforcement may inspect the books, records, inventory,
20.16 	and business premises of a licensed linked bingo game provider
20.17 	without notice during the normal business hours of the linked
20.18 	bingo game provider.  The board may charge a linked bingo game
20.19 	provider for the actual cost of conducting scheduled or
20.20 	unscheduled inspections of the licensee's facilities.

20.21 	Sec. 20. Minnesota Statutes 2004, section 349.166,
20.22 	subdivision 1, is amended to read:
20.23 		Subdivision 1.Exclusions.  (a) Bingo, with the exception
20.24 	of linked bingo games, may be conducted without a license and
20.25 	without complying with sections 349.168, subdivisions 1 and 2;
20.26 	349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and
20.27 	349.19, if it is conducted:
20.28 	(1) by an organization in connection with a county fair,
20.29 	the state fair, or a civic celebration and is not conducted for
20.30 	more than 12 consecutive days and is limited to no more than
20.31 	four separate applications for activities applied for and
20.32 	approved in a calendar year; or
20.33 	(2) by an organization that conducts four or fewer bingo
20.34 	occasions in a calendar year.
20.35 	An organization that holds a license to conduct lawful
20.36 	gambling under this chapter may not conduct bingo under this
21.1 	subdivision.
21.2 	(b) Bingo may be conducted within a nursing home or a
21.3 	senior citizen housing project or by a senior citizen
21.4 	organization if the prizes for a single bingo game do not exceed
21.5 	$10, total prizes awarded at a single bingo occasion do not
21.6 	exceed $200, no more than two bingo occasions are held by the
21.7 	organization or at the facility each week, only members of the
21.8 	organization or residents of the nursing home or housing project
21.9 	are allowed to play in a bingo game, no compensation is paid for
21.10 	any persons who conduct the bingo, and a manager is appointed to
21.11 	supervise the bingo.  Bingo conducted under this paragraph is
21.12 	exempt from sections 349.11 to 349.23, and the board may not
21.13 	require an organization that conducts bingo under this
21.14 	paragraph, or the manager who supervises the bingo, to register
21.15 	or file a report with the board.  The gross receipts from bingo
21.16 	conducted under the limitations of this subdivision are exempt
21.17 	from taxation under chapter 297A.
21.18 	(c) Raffles may be conducted by an organization without a
21.19 	license and without complying with sections 349.154 to 349.165
21.20 	and 349.167 to 349.213registering with the board if the value
21.21 	of all raffle prizes awarded by the organization in a calendar
21.22 	year does not exceed $1,500.
21.23 	(d) Except as provided in paragraph (b), the organization
21.24 	must maintain all required records of excluded gambling activity
21.25 	for 3-1/2 years.

21.26 	Sec. 21. Minnesota Statutes 2004, section 349.166,
21.27 	subdivision 2, is amended to read:
21.28 		Subd. 2.Exemptions.  (a) Lawful gambling, with the
21.29 	exception of linked bingo games, may be conducted by an
21.30 	organization without a license and without complying with
21.31 	sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4
21.32 	and 5; 349.18, subdivision 1; and 349.19 if:
21.33 	(1) the organization conducts lawful gambling on five or
21.34 	fewer days in a calendar year;
21.35 	(2) the organization does not award more than $50,000 in
21.36 	prizes for lawful gambling in a calendar year;
22.1 	(3) the organization pays a fee of $50 to the board,
22.2 	notifies the board in writing not less than 30 days before each
22.3 	lawful gambling occasion of the date and location of the
22.4 	occasion, or 60 days for an occasion held in the case of a city
22.5 	of the first class, the types of lawful gambling to be
22.6 	conducted, the prizes to be awarded, and receives an exemption
22.7 	identification number;
22.8 	(4) the organization notifies the local government unit 30
22.9 	days before the lawful gambling occasion, or 60 days for an
22.10 	occasion held in a city of the first class;
22.11 	(5) the organization purchases all gambling equipment and
22.12 	supplies from a licensed distributor; and
22.13 	(6) the organization reports to the board, on a single-page
22.14 	form prescribed by the board, within 30 days of each gambling
22.15 	occasion, the gross receipts, prizes, expenses, expenditures of
22.16 	net profits from the occasion, and the identification of the
22.17 	licensed distributor from whom all gambling equipment was
22.18 	purchased.
22.19 	(b) If the organization fails to file a timely report as
22.20 	required by paragraph (a), clause (3) or (6), the board shall
22.21 	not issue any authorization, license, or permit to the
22.22 	organization to conduct lawful gambling on an exempt, excluded,
22.23 	or licensed basis until the report has been filed and the
22.24 	organization may be subject to penalty as determined by the
22.25 	board.
22.26 	(c) Merchandise prizes must be valued at their fair market
22.27 	value.
22.28 	(d) Organizations that qualify to conduct exempt raffles
22.29 	under paragraph (a) are exempt from section 349.173, paragraph
22.30 	(b), clause (2), if the raffle tickets are sold only in
22.31 	combination with an organization's membership or a ticket for an
22.32 	organization's membership dinner is not included with any other
22.33 	raffle conducted under the exempt permit.
22.34 	(e) Unused pull-tab and tipboard deals must be returned to
22.35 	the distributor within seven working days after the end of the
22.36 	lawful gambling occasion.  The distributor must accept and pay a
23.1 	refund for all returns of unopened and undamaged deals returned
23.2 	under this paragraph.
23.3 	(e) (f) An organization that is exempt from taxation on
23.4 	purchases of pull-tabs and tipboards under section 297E.02,
23.5 	subdivision 4, paragraph (b), clause (4), must return to the
23.6 	distributor any tipboard or pull-tab deal no part of which is
23.7 	used at the lawful gambling occasion for which it was purchased
23.8 	by the organization.
23.9 	(f) (g) The organization must maintain all required records
23.10 	of exempt gambling activity for 3-1/2 years.

23.11 	Sec. 22. Minnesota Statutes 2004, section 349.167,
23.12 	subdivision 1, is amended to read:
23.13 		Subdivision 1.Gambling manager required.  (a) All lawful
23.14 	gambling conducted by a licensed organization must be under the
23.15 	supervision of a gambling manager.  A gambling manager
23.16 	designated by an organization to supervise lawful gambling is
23.17 	responsible for the gross receipts of the organization and for
23.18 	its conduct in compliance with all laws and rules.  A person
23.19 	designated as a gambling manager shall maintain a fidelity 
23.20 	dishonesty bond in the sum of $10,000 in favor of the
23.21 	organization conditioned on the faithful performance of the
23.22 	manager's duties.  The terms of the bond must provide that
23.23 	notice be given to the board in writing not less than 30 days
23.24 	before its cancellation.
23.25 	(b) A person may not act as a gambling manager for more
23.26 	than one organization.
23.27 	(c) An organization may not conduct lawful gambling without
23.28 	having a gambling manager.
23.29 	(d) An organization may not have more than one gambling
23.30 	manager at any time.

23.31 	Sec. 23. Minnesota Statutes 2004, section 349.168,
23.32 	subdivision 8, is amended to read:
23.33 		Subd. 8.Percentage of gross profit paid. (a) A licensed
23.34 	organization may pay a percentage of the gross profit from
23.35 	raffle ticket sales to a nonprofit organization that sells
23.36 	raffle tickets for the licensed organization.
24.1 	(b) A licensed organization may compensate an employee of
24.2 	the organization for the sale of gambling equipment at a bar
24.3 	operation if the frequency of the activity is one day or less
24.4 	per week and the games are limited to 32 chances or less per
24.5 	game.  For purposes of this paragraph, an employee shall not be
24.6 	a lessor, employee of the lessor, or an immediate family member
24.7 	of the lessor.

24.8 	Sec. 24. Minnesota Statutes 2004, section 349.17,
24.9 	subdivision 5, is amended to read:
24.10 		Subd. 5.Bingo cards and sheets.  (a) The board shall by
24.11 	rule require that all licensed organizations:  (1) conduct bingo
24.12 	only using liquid daubers on bingo paper sheets that bear an
24.13 	individual number recorded by the distributor or linked bingo
24.14 	game provider; and (2) use each bingo paper sheet for no more
24.15 	than one bingo occasion.  In lieu of the requirements of clause
24.16 	(2), a licensed organization may electronically record the sale
24.17 	of each bingo hard card or paper sheet at each bingo occasion
24.18 	using an electronic recording system approved by the board.
24.19 	(b) The requirements of paragraph (a) shall only apply to a
24.20 	licensed organization that received gross receipts from bingo in
24.21 	excess of $150,000 in the organization's last fiscal year.

24.22 	Sec. 25. Minnesota Statutes 2004, section 349.17,
24.23 	subdivision 7, is amended to read:
24.24 		Subd. 7.noon hour bar bingo. Notwithstanding
24.25 	subdivisions 1 and 3,An organization may conduct bar bingo
24.26 	subject to the following restrictions:
24.27 	(1) the bingo is conducted only between the hours of 11:00
24.28 	a.m. and 2:00 p.m.;
24.29 	(2) the bingo is conducted at a site the organization owns
24.30 	or leases and which has a license for the sale of intoxicating
24.31 	beverages on the premises under chapter 340A;
24.32 	(3) the bingo is limited to one progressive bingo game per
24.33 	site as defined by section 349.211, subdivision 2;
24.34 	(4) (2) the bingo is conducted using only bingo paper
24.35 	sheets purchased from a licensed distributor;
24.36 	(5) if the premises are leased, the (3) no rent may not
25.1 	exceed $25 per day for each day bingo is conducted be paid for a
25.2 	bar bingo occasion; and
25.3 	(6) (4) linked bingo games may not be conducted at a noon
25.4 	hour bar bingo occasion.

25.5 	Sec. 26. Minnesota Statutes 2004, section 349.1711,
25.6 	subdivision 1, is amended to read:
25.7 		Subdivision 1.Sale of tickets.  Tipboard games must be
25.8 	played using only tipboard tickets that are either (1) attached
25.9 	to a placard and arranged in columns or rows, or (2) separate
25.10 	from the placard and contained in a receptacle while the game is
25.11 	in play.  The placard serves as the game flare.  The placard
25.12 	must contain a seal that conceals the winning number or symbol.
25.13 	When a tipboard ticket is purchased and opened from a game
25.14 	containing more than 32 tickets, each player having a tipboard
25.15 	ticket with one or more predesignated numbers or symbols must
25.16 	sign the placard at the line indicated by the number or symbol
25.17 	on the tipboard ticket.

25.18 	Sec. 27. Minnesota Statutes 2004, section 349.173, is
25.19 	amended to read:
25.20 	349.173 CONDUCT OF RAFFLES.
25.21 	(a) Raffle tickets or certificates of participation at a
25.22 	minimum must list the three most expensive prizes to be
25.23 	awarded.  If additional prizes will be awarded that are not
25.24 	contained on the raffle ticket, the raffle ticket must contain
25.25 	the statement "A complete list of additional prizes is available
25.26 	upon request." , a complete list of additional prizes must be
25.27 	publicly posted at the event and copies of the complete prize
25.28 	list made available upon request.Notwithstanding section
25.29 	349.12, subdivision 33, raffles conducted under the exemptions
25.30 	in section 349.166 may use tickets that contain only the
25.31 	sequential number of the raffle ticket and no other information
25.32 	if the organization makes a list of prizes and a statement of
25.33 	other relevant information required by rule available to persons
25.34 	purchasing tickets and if tickets are only sold at the event and
25.35 	on the date when the tickets are drawn.
25.36 	(b) Raffles must be conducted in a manner that ensures:
26.1 	(1) all entries in the raffle have an equal chance of
26.2 	selection;
26.3 	(2) entry in the raffle is not conditioned upon any other
26.4 	purchase;
26.5 	(3) the method of selection is conducted in a public forum;
26.6 	(4) the method of selection cannot be manipulated or based
26.7 	on the outcome of an event not under the control of the
26.8 	organization;
26.9 	(5) physical presence at the raffle is not a requirement to
26.10 	win; and 
26.11 	(6) all sold and unsold tickets or certificates of
26.12 	participation are accounted for.
26.13 	(c) Methods of selecting winning entries from a raffle
26.14 	other than prescribed in rule may be used with the prior written
26.15 	approval of the board.

26.16 	EFFECTIVE DATE. This section is effective the day
26.17 	following final enactment.

26.18 	Sec. 28. Minnesota Statutes 2004, section 349.18,
26.19 	subdivision 1, is amended to read:
26.20 		Subdivision 1.Lease or ownership required; rent
26.21 	limitations.  (a) An organization may conduct lawful gambling
26.22 	only on premises it owns or leases.  Leases must be on a form
26.23 	prescribed by the board.  Except for leases entered into before
26.24 	August 1, 1994, the term of the lease may not begin before the
26.25 	effective date of the premises permit and must expire on the
26.26 	same day that the premises permit expires. Leases approved by
26.27 	the board must specify that the board may authorize an
26.28 	organization to withhold rent from a lessor for a period of up
26.29 	to 90 days if the board determines that illegal gambling
26.30 	occurred on the premises and that the lessor or its employees
26.31 	participated in the illegal gambling or knew of the gambling and
26.32 	did not take prompt action to stop the gambling.  The lease must
26.33 	authorize the continued tenancy of the organization without the
26.34 	payment of rent during the time period determined by the board
26.35 	under this paragraph.Copies of all leases must be made
26.36 	available to employees of the board and the Division of Alcohol
27.1 	and Gambling Enforcement on request.  The board may prescribe by
27.2 	rule limits on the amount of rent which an organization may pay
27.3 	to a lessor for premises leased for bingo.  Any rule adopted by
27.4 	the board limiting the amount of rent to be paid may only be
27.5 	effective for leases entered into, or renewed, after the
27.6 	effective date of the rule.
27.7 	(b) Rent paid by an organization for leased premises for
27.8 	the conduct of pull-tabs, tipboards, and paddlewheels is subject
27.9 	to the following limits:
27.10 	(1) for booth operations, including booth operations where
27.11 	a pull-tab dispensing device is located, booth operations where
27.12 	a bar operation is also conducted, and booth operations where
27.13 	both a pull-tab dispensing device is located and a bar operation
27.14 	is also conducted, the maximum rent is:
27.15 	(i) in any month where the organization's gross profit at
27.16 	those premises does not exceed $4,000, up to $400; and
27.17 	(ii) in any month where the organization's gross profit at
27.18 	those premises exceeds $4,000, up to $400 plus not more than ten
27.19 	percent of the gross profit for that month in excess of $4,000;
27.20 	(2) for bar operations, including bar operations where a
27.21 	pull-tab dispensing device is located but not including bar
27.22 	operations subject to clause (1), and for locations where only a
27.23 	pull-tab dispensing device is located:
27.24 	(i) in any month where the organization's gross profit at
27.25 	those premises does not exceed $1,000, up to $200; and
27.26 	(ii) in any month where the organization's gross profit at
27.27 	those premises exceeds $1,000, up to $200 plus not more than 20
27.28 	percent of the gross profit for that month in excess of $1,000;
27.29 	(3) a lease not governed by clauses (1) and (2) must be
27.30 	approved by the board before becoming effective;
27.31 	(4) total rent paid to a lessor from all organizations from
27.32 	leases governed by clause (1) may not exceed $1,750 per month.
27.33 	Total rent paid to a lessor from all organizations from leases
27.34 	governed by clause (2) may not exceed $2,500 per month.
27.35 	(c) Rent paid by an organization for leased premises for
27.36 	the conduct of bingo is subject to the following limits:
28.1 	(1) not more than ten percent of the monthly gross profit
28.2 	from all lawful gambling activities held during bingo occasions
28.3 	excluding bar bingo, or a rate based on a cost per square foot
28.4 	not to exceed 110 percent of a comparable cost per square foot
28.5 	for leased space as approved by the director; and 
28.6 	(2) no rent may be paid for bar bingo.
28.7 	(d) Amounts paid as rent under leases are all-inclusive.
28.8 	No other services or expenses provided or contracted by the
28.9 	lessor may be paid by the organization, including, but not
28.10 	limited to, trash removal, janitorial and cleaning services,
28.11 	snow removal, lawn services, electricity, heat, security,
28.12 	security monitoring, storage, other utilities or services, and,
28.13 	in the case of bar operations, cash shortages, unless approved
28.14 	by the director.  Any other expenditure made by an organization
28.15 	that is related to a leased premises must be approved by the
28.16 	director.  An organization may not provide any compensation or
28.17 	thing of value to a lessor or the lessor's employees from any
28.18 	fund source other than its gambling account.  Rent payments may
28.19 	not be made to an individual.
28.20 	(d) (e) Notwithstanding paragraph (b), an organization may
28.21 	pay a lessor for food or beverages or meeting room rental if the
28.22 	charge made is comparable to similar charges made to other
28.23 	individuals or groups.
28.24 	(e) (f) No person, distributor, manufacturer, lessor,
28.25 	linked bingo game provider, or organization other than the
28.26 	licensed organization leasing the space may conduct any activity
28.27 	other than the sale or serving of food and beverages on the
28.28 	leased premises during times when lawful gambling is being
28.29 	conducted on the premises.
28.30 	(f) (g) At a site where the leased premises consists of an
28.31 	area on or behind a bar at which alcoholic beverages are sold
28.32 	and employees of the lessor are employed by the organization as
28.33 	pull-tab sellers at the site, pull-tabs and tipboard tickets may
28.34 	be sold and redeemed by those employees at any place on or
28.35 	behind the bar, but the tipboards and receptacles for pull-tabs
28.36 	and cash drawers for lawful gambling receipts must be maintained
29.1 	only within the leased premises.
29.2 	(g) (h) Employees of a lessor or employees of an
29.3 	organization may participate in lawful gambling on the premises
29.4 	provided (1) if pull-tabs or tipboards are sold, the
29.5 	organization voluntarily posts, or is required to post, the
29.6 	major prizes as specified in section 349.172; and (2) any
29.7 	employee of the lessor participating in lawful gambling is not a
29.8 	gambling employee for the organization conducting lawful
29.9 	gambling on the premises.
29.10 	(h) (i) A gambling employee may purchase pull-tabs or
29.11 	tipboards at the site of the employee's place of employment
29.12 	provided:
29.13 	(1) the organization voluntarily posts, or is required to
29.14 	post, the major prizes for pull-tab or tipboard games as
29.15 	specified in section 349.172; and
29.16 	(2) the employee is not involved in the sale of pull-tabs
29.17 	or tipboards at that site.
29.18 	(i) (j) At a leased site where an organization uses a
29.19 	paddlewheel consisting of 30 numbers or less or a tipboard
29.20 	consisting of 30 tickets or less, tickets may be sold throughout
29.21 	the permitted premises, but winning tickets must be redeemed,
29.22 	the paddlewheel must be located, and the tipboard seal must be
29.23 	opened within the leased premises.
29.24 	(j) (k) A member of the lessor's immediate family may not
29.25 	be a compensated employee of an organization leasing space at
29.26 	the premises.  For purposes of this paragraph, a "member of the
29.27 	immediate family" is a spouse, parent, child, or sibling.

29.28 	Sec. 29. Minnesota Statutes 2004, section 349.19,
29.29 	subdivision 4, is amended to read:
29.30 		Subd. 4.Discrepancies.  If at a bingo occasion a
29.31 	discrepancy of more than $20 $50 is found between the gross
29.32 	receipts as reported by the checkers and the gross receipts
29.33 	determined by adding the cash receipts, the discrepancy must be
29.34 	reported to the board within five days of the bingo occasion.

29.35 	Sec. 30. Minnesota Statutes 2004, section 349.19,
29.36 	subdivision 5, is amended to read:
30.1 		Subd. 5.Reports.  A licensed organization must report to
30.2 	the Department of Revenue and to its membership monthly, or
30.3 	quarterly in the case of a licensed organization which does not
30.4 	report more than $1,000 in gross receipts from lawful gambling
30.5 	in any calendar quarter, on its gross receipts, expenses,
30.6 	profits, and expenditure of profits from lawful gambling.  The
30.7 	report must include a reconciliation of the organization's
30.8 	profit carryover with its cash balance on hand.  If the
30.9 	organization conducts both bingo and other forms of lawful
30.10 	gambling, the figures for both must be reported separately. The
30.11 	organization must report annually to its membership and annually
30.12 	file with the board a financial summary report in a format
30.13 	prescribed by the board that identifies the organization's
30.14 	receipt and use of lawful gambling proceeds, including:
30.15 	(1) gross receipts;
30.16 	(2) prizes paid;
30.17 	(3) operating expenses;
30.18 	(4) lawful purpose expenditures, including annual totals
30.19 	for types of charitable contributions; and 
30.20 	(5) the percentage of annual gross profits used for
30.21 	charitable contributions.

30.22 	Sec. 31. Minnesota Statutes 2004, section 349.19,
30.23 	subdivision 10, is amended to read:
30.24 		Subd. 10.Pull-tab records.  (a) The board shall by rule
30.25 	require a licensed organization to require each winner of a
30.26 	pull-tab prize of $50 or more to present identification in the
30.27 	form of a driver's license, Minnesota identification card, or
30.28 	other identification the board deems sufficient to allow the
30.29 	identification and tracing of the winner.  The rule must require
30.30 	the organization to retain winning pull-tabs of $50 or more, and
30.31 	the identification of the winner of the pull-tab, for 3-1/2
30.32 	years.
30.33 	(b) An organization must maintain separate cash banks for
30.34 	each deal of pull-tabs unless (1) two or more deals are
30.35 	commingled in a single receptacle pull-tab dispensing device, or
30.36 	(2) the organization uses a cash register, of a type approved by
31.1 	the board, which records all sales of pull-tabs by separate
31.2 	deals.
31.3 	(c) The board shall:
31.4 	(1) by rule adopt minimum technical standards for cash
31.5 	registers that may be used by organizations, and shall approve
31.6 	for use by organizations any cash register that meets the
31.7 	standards,;and
31.8 	(2) before allowing an organization to use a cash register
31.9 	that commingles receipts from several different pull-tab games
31.10 	in play, adopt rules that define how cash registers may be used
31.11 	and that establish a procedure for organizations to reconcile
31.12 	all pull-tab games in play at the end of each month.

31.13 	Sec. 32. Minnesota Statutes 2004, section 349.211,
31.14 	subdivision 2c, is amended to read:
31.15 		Subd. 2c.Tipboard prizes.  The maximum prize which may
31.16 	be awarded for a tipboard ticket is $500 $599, not including any
31.17 	cumulative or carryover prizes.  Cumulative or carryover prizes
31.18 	in tipboard games shall not exceed $2,500.

31.19 	Sec. 33. Minnesota Statutes 2004, section 349.2125,
31.20 	subdivision 1, is amended to read:
31.21 		Subdivision 1.Contraband defined.  The following are
31.22 	contraband:
31.23 	(1) all pull-tab or tipboard deals or paddleticket cards
31.24 	not stamped or bar coded in accordance with this chapter or
31.25 	chapter 297E;
31.26 	(2) all pull-tab or tipboard deals in the possession of any
31.27 	unlicensed person, firm, or organization, whether stamped or
31.28 	unstamped;
31.29 	(3) any container used for the storage and display of any
31.30 	contraband pull-tab or tipboard deals as defined in clauses (1)
31.31 	and (2);
31.32 	(4) all currency, checks, and other things of value used
31.33 	for pull-tab or tipboard transactions not expressly permitted
31.34 	under this chapter, and any cash drawer, cash register, or any
31.35 	other container used for illegal pull-tab or tipboard
31.36 	transactions including its contents;
32.1 	(5) any device including, but not limited to, motor
32.2 	vehicles, trailers, snowmobiles, airplanes, and boats used, with
32.3 	the knowledge of the owner or of a person operating with the
32.4 	consent of the owner, for the storage or transportation of more
32.5 	than five pull-tab or tipboard deals that are contraband under
32.6 	this subdivision.  When pull-tabs and tipboards are being
32.7 	transported in the course of interstate commerce between
32.8 	locations outside this state, the pull-tab and tipboard deals
32.9 	are not contraband, notwithstanding the provisions of clauses
32.10 	(1) and (12);
32.11 	(6) any unaffixed registration stamps except as provided in
32.12 	section 349.162, subdivision 4;
32.13 	(7) any prize used or offered in a game utilizing
32.14 	contraband as defined in this subdivision;
32.15 	(8) any altered, modified, or counterfeit pull-tab or
32.16 	tipboard ticket;
32.17 	(9) any unregistered gambling equipment except as permitted
32.18 	by this chapter;
32.19 	(10) any gambling equipment kept in violation of section
32.20 	349.18;
32.21 	(11) any gambling equipment not in conformity with law or
32.22 	board rule;
32.23 	(12) any pull-tab or tipboard deal in the possession of a
32.24 	person other than a licensed distributor or licensed
32.25 	manufacturer for which the person, upon demand of a licensed
32.26 	peace officer or authorized agent of the commissioner of revenue
32.27 	or director of alcohol and gambling enforcement, does not
32.28 	immediately produce for inspection the invoice or a true and
32.29 	correct copy of the invoice for the acquisition of the deal from
32.30 	a licensed distributor;
32.31 	(13) any pull-tab or tipboard deals or portions of deals on
32.32 	which the tax imposed under chapter 297E has not been paid; and
32.33 	(14) any device prohibited by section 609.76, subdivisions
32.34 	4 to 6.

32.35 	Sec. 34. Minnesota Statutes 2004, section 349.213, is
32.36 	amended to read:
33.1 	349.213 LOCAL AUTHORITY.
33.2 		Subdivision 1.Local regulation. (a) A statutory or home
33.3 	rule city or county has the authority to adopt more stringent
33.4 	regulation of lawful gambling within its jurisdiction, including
33.5 	the prohibition of lawful gambling, and may require a permit for
33.6 	the conduct of gambling exempt from licensing under section
33.7 	349.166.  The fee for a permit issued under this subdivision may
33.8 	not exceed $100.  The authority granted by this subdivision does
33.9 	not include the authority to require a license or permit to
33.10 	conduct gambling by organizations or sales by distributors or
33.11 	linked bingo game providers licensed by the board.  The
33.12 	authority granted by this subdivision does not include the
33.13 	authority to require an organization to make specific
33.14 	expenditures of more than ten percent per year from its net
33.15 	profits derived from lawful gambling.  For the purposes of this
33.16 	subdivision, net profits are gross profits less amounts expended
33.17 	for allowable expenses and paid in taxes assessed on lawful
33.18 	gambling.  A statutory or home rule charter city or a county may
33.19 	not require an organization conducting lawful gambling within
33.20 	its jurisdiction to make an expenditure to the city or county as
33.21 	a condition to operate within that city or county, except as
33.22 	authorized under section 349.16, subdivision 8, or 297E.02;
33.23 	provided, however, that an ordinance requirement that such
33.24 	organizations must contribute ten percent per year of their net
33.25 	profits derived from lawful gambling conducted at premises
33.26 	within the city's or county's jurisdiction to a fund
33.27 	administered and regulated by the responsible local unit of
33.28 	government without cost to such fund, for disbursement by the
33.29 	responsible local unit of government of the receipts for (i)
33.30 	lawful purposes, or (ii) police, fire, and other emergency or
33.31 	public safety-related services, equipment, and training,
33.32 	excluding pension obligations, is not considered an expenditure
33.33 	to the city or county nor a tax under section 297E.02, and is
33.34 	valid and lawful.  A city or county making expenditures
33.35 	authorized under this paragraph must by March 15 of each year
33.36 	file a report with the board, on a form the board prescribes,
34.1 	that lists all such revenues collected and expenditures for the
34.2 	previous calendar year.
34.3 	(b) A statutory or home rule city or county may by
34.4 	ordinance require that a licensed organization conducting lawful
34.5 	gambling within its jurisdiction expend all or a portion of its
34.6 	expenditures for lawful purposes on lawful purposes conducted or
34.7 	located within the city's or county's trade area.  Such an
34.8 	ordinance must be limited to lawful purpose expenditures of
34.9 	gross profits derived from lawful gambling conducted at premises
34.10 	within the city's or county's jurisdiction, must define the
34.11 	city's or county's trade area, and must specify the percentage
34.12 	of lawful purpose expenditures which must be expended within the
34.13 	trade area.  A trade area defined by a city under this
34.14 	subdivision must include each city and township contiguous to
34.15 	the defining city.
34.16 	(c) A more stringent regulation or prohibition of lawful
34.17 	gambling adopted by a political subdivision under this
34.18 	subdivision must apply equally to all forms of lawful gambling
34.19 	within the jurisdiction of the political subdivision, except a
34.20 	political subdivision may prohibit the use of paddlewheels.
34.21 		Subd. 2.Local approval. Before issuing or renewing a
34.22 	premises permit or bingo hall license, the board must notify the
34.23 	city council of the statutory or home rule city in which the
34.24 	organization's premises or the bingo hall is located or, if the
34.25 	premises or hall is located outside a city, the county board of
34.26 	the county and the town board of the town where the premises or
34.27 	hall is located.  The board may require organizations or bingo
34.28 	halls to notify the appropriate local government at the time of
34.29 	application.  This required notification is sufficient to
34.30 	constitute the notice required by this subdivision.  The board
34.31 	may not issue or renew a premises permit or bingo hall license 
34.32 	unless the organization submits a resolution from the city
34.33 	council or county board approving the premises permit or bingo
34.34 	hall license.  The resolution must have been adopted within 90
34.35 	days of the date of application for the new or renewed permit or
34.36 	license.
35.1 		Subd. 3.Local gambling tax. A statutory or home rule
35.2 	charter city that has one or more licensed organizations
35.3 	operating lawful gambling, and a county that has one or more
35.4 	licensed organizations outside incorporated areas operating
35.5 	lawful gambling, may impose a local gambling tax on each
35.6 	licensed organization within the city's or county's
35.7 	jurisdiction.  The tax may be imposed only if the amount to be
35.8 	received by the city or county is necessary to cover the costs
35.9 	incurred by the city or county to regulate lawful gambling.  The
35.10 	tax imposed by this subdivision may not exceed three percent per
35.11 	year of the gross receipts of a licensed organization from all
35.12 	lawful gambling less prizes actually paid out by the
35.13 	organization.  A city or county may not use money collected
35.14 	under this subdivision for any purpose other than to regulate
35.15 	lawful gambling. All documents pertaining to site inspections,
35.16 	fines, penalties, or other corrective action involving local
35.17 	lawful gambling regulation must be shared with the board within
35.18 	30 days of filing at the city or county of jurisdiction.A tax
35.19 	imposed under this subdivision is in lieu of all other local
35.20 	taxes and local investigation fees on lawful gambling.  A city
35.21 	or county that imposes a tax under this subdivision shall
35.22 	annually, by March 15, file a report with the board in a form
35.23 	prescribed by the board showing (1) the amount of revenue
35.24 	produced by the tax during the preceding calendar year, and (2)
35.25 	the use of the proceeds of the tax.

35.26 	Sec. 35. Minnesota Statutes 2004, section 609.75,
35.27 	subdivision 1, is amended to read:
35.28 		Subdivision 1.Lottery.  (a) A lottery is a plan which
35.29 	provides for the distribution of money, property or other reward
35.30 	or benefit to persons selected by chance from among participants
35.31 	some or all of whom have given a consideration for the chance of
35.32 	being selected.  A participant's payment for use of a 900
35.33 	telephone number or another means of communication that results
35.34 	in payment to the sponsor of the plan constitutes consideration
35.35 	under this paragraph.
35.36 	(b) An in-package chance promotion is not a lottery if all
36.1 	of the following are met:
36.2 	(1) participation is available, free and without purchase
36.3 	of the package, from the retailer or by mail or toll-free
36.4 	telephone request to the sponsor for entry or for a game piece;
36.5 	(2) the label of the promotional package and any related
36.6 	advertising clearly states any method of participation and the
36.7 	scheduled termination date of the promotion;
36.8 	(3) the sponsor on request provides a retailer with a
36.9 	supply of entry forms or game pieces adequate to permit free
36.10 	participation in the promotion by the retailer's customers;
36.11 	(4) the sponsor does not misrepresent a participant's
36.12 	chances of winning any prize;
36.13 	(5) the sponsor randomly distributes all game pieces and
36.14 	maintains records of random distribution for at least one year
36.15 	after the termination date of the promotion;
36.16 	(6) all prizes are randomly awarded if game pieces are not
36.17 	used in the promotion; and
36.18 	(7) the sponsor provides on request of a state agency a
36.19 	record of the names and addresses of all winners of prizes
36.20 	valued at $100 or more, if the request is made within one year
36.21 	after the termination date of the promotion.
36.22 	(c) Except as provided by section 349.40, acts in this
36.23 	state in furtherance of a lottery conducted outside of this
36.24 	state are included notwithstanding its validity where conducted.
36.25 	(d) The distribution of property, or other reward or
36.26 	benefit by an employer to persons selected by chance from among
36.27 	participants who , all of whom:
36.28 	(1) have made a contribution through a payroll or pension
36.29 	deduction campaign to a registered combined charitable
36.30 	organization, within the meaning of section 309.501; or 
36.31 	(2) have paid other consideration to the employer entirely
36.32 	for the benefit of such a registered combined charitable
36.33 	organization, as a precondition to the chance of being selected,
36.34 	is not a lottery if:
36.35 	(1) (i) all of the persons eligible to be selected are
36.36 	employed by or retirees of the employer; and
37.1 	(2) (ii) the cost of the property or other reward or
37.2 	benefit distributed and all costs associated with the
37.3 	distribution are borne by the employer.

37.4 	Sec. 36. REPEALER.
 37.5 	Minnesota Statutes 2004, sections 349.162, subdivision 3;
37.6 	349.164; and 349.17, subdivision 1, are repealed.