1.1 	A bill for an act
1.2 	relating to gambling; providing for breeders' fund distribution; making various 
1.3 	clarifying, technical, and conforming changes to lawful gambling provisions; 
1.4 	modifying expenditure restriction requirements; providing for conduct of certain 
1.5 	pull-tab games; requiring a report;amending Minnesota Statutes 2004, sections 
1.6 	240.18, subdivision 3a; 349.12, subdivisions 4, 18, 21; 349.1635, subdivision 
1.7 	3; 349.168, subdivision 10; 349.17, subdivision 6; 349.19, subdivisions 2, 3; 
1.8 	349.211, subdivision 2a; Minnesota Statutes 2005 Supplement, sections 349.12, 
1.9 	subdivisions 12a, 25; 349.15, subdivision 1; 349.151, subdivision 4c; 349.153; 
1.10 	349.16, subdivision 2; 349.162, subdivisions 4, 5; 349.1635, subdivision 4; 
1.11 	349.166, subdivisions 1, 2; 349.167, subdivision 1; 349.17, subdivisions 5, 7; 
1.12 	349.173; 349.18, subdivision 1; 349.213, subdivision 1; proposing coding for 
1.13 	new law in Minnesota Statutes, chapter 349.
1.14 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.15 	Section 1. Minnesota Statutes 2004, section 240.18, subdivision 3a, is amended to read:
1.16 		Subd. 3a.Other categories. Available money apportioned to breeds other than 
1.17 	breeds contained in subdivisions 2 and 3 must be distributed as financial incentives to 
1.18 	encourage horse racing and horse breeding for such breeds. Available money apportioned 
1.19 	for the Arabian breed may be distributed to owners who are Minnesota residents racing at 
1.20 	licensed Minnesota racetracks or at racetracks of border states.

1.21 	Sec. 2. Minnesota Statutes 2004, section 349.12, subdivision 4, is amended to read:
1.22 		Subd. 4.Bingo. "Bingo" means a game where each player has a bingo hard card 
1.23 	or, bingo paper sheet, or facsimile of a bingo paper sheet when used in conjunction 
1.24 	with an electronic bingo device, for which a consideration has been paid, and played in 
1.25 	accordance with this chapter and with rules of the board for the conduct of bingo. "Bingo" 
1.26 	also includes a linked bingo game.

2.1 	Sec. 3. Minnesota Statutes 2005 Supplement, section 349.12, subdivision 12a, is 
2.2 	amended to read:
2.3 		Subd. 12a.Electronic bingo device. "Electronic bingo device" means an electronic 
2.4 	device used by a bingo player to monitor bingo paper sheets or facsimile of a bingo paper 
2.5 	sheet when purchased at the time and place of an organization's bingo occasion and which 
2.6 	(1) provides a means for bingo players to input numbers announced by a bingo caller; (2) 
2.7 	compares the numbers entered by the player to the bingo faces previously stored in the 
2.8 	memory of the device; and (3) identifies a winning bingo pattern.
2.9 	Electronic bingo device does not mean any device into which coin, currency, or tokens are 
2.10 	inserted to activate play.

2.11 	Sec. 4. Minnesota Statutes 2004, section 349.12, subdivision 18, is amended to read:
2.12 		Subd. 18.Gambling equipment. "Gambling equipment" means: bingo hard cards 
2.13 	or paper sheets, linked bingo paper sheets, devices for selecting bingo numbers, electronic 
2.14 	bingo devices, pull-tabs, jar tickets, paddlewheels, paddlewheel tables, paddletickets, 
2.15 	paddleticket cards, tipboards, tipboard tickets, and pull-tab dispensing devices.

2.16 	Sec. 5. Minnesota Statutes 2004, section 349.12, subdivision 21, is amended to read:
2.17 		Subd. 21.Gross receipts. "Gross receipts" means all receipts derived from lawful 
2.18 	gambling activity including, but not limited to, the following items:
2.19 	(1) gross sales of bingo hard cards and, paper sheets, facsimiles of bingo paper 
2.20 	sheets when used in conjunction with an electronic bingo device, and rental of electronic 
2.21 	bingo devices before reduction for prizes, expenses, shortages, free plays, or any other 
2.22 	charges or offsets;
2.23 	(2) the ideal gross of pull-tab and tipboard deals or games less the value of unsold 
2.24 	and defective tickets and before reduction for prizes, expenses, shortages, free plays, 
2.25 	or any other charges or offsets;
2.26 	(3) gross sales of raffle tickets and paddletickets before reduction for prizes, 
2.27 	expenses, shortages, free plays, or any other charges or offsets;
2.28 	(4) admission, commission, cover, or other charges imposed on participants in 
2.29 	lawful gambling activity as a condition for or cost of participation; and
2.30 	(5) interest, dividends, annuities, profit from transactions, or other income derived 
2.31 	from the accumulation or use of gambling proceeds.
2.32 	Gross receipts does not include proceeds from rental under section  349.164 or
2.33 	349.18, subdivision 3. 

3.1 	Sec. 6. Minnesota Statutes 2005 Supplement, section 349.12, subdivision 25, is 
3.2 	amended to read:
3.3 		Subd. 25.Lawful purpose. (a) "Lawful purpose" means one or more of the 
3.4 	following:
3.5 	(1) any expenditure by or contribution to a 501(c)(3) or festival organization, as 
3.6 	defined in subdivision 15a, provided that the organization and expenditure or contribution 
3.7 	are in conformity with standards prescribed by the board under section 349.154, which 
3.8 	standards must apply to both types of organizations in the same manner and to the same 
3.9 	extent;
3.10 	(2) a contribution to or expenditure for goods and services for an individual or 
3.11 	family suffering from poverty, homelessness, or disability, which is used to relieve the 
3.12 	effects of that suffering;
3.13 	(3) a contribution to a program recognized by the Minnesota Department of Human 
3.14 	Services for the education, prevention, or treatment of problem gambling;
3.15 	(4) a contribution to or expenditure on a public or private nonprofit educational 
3.16 	institution registered with or accredited by this state or any other state;
3.17 	(5) a contribution to a scholarship fund an individual, public or private nonprofit 
3.18 	educational institution registered with or accredited by this state or any other state, or 
3.19 	to a scholarship fund of a nonprofit organization whose primary mission is to award 
3.20 	scholarships, for defraying the cost of education to individuals where the funds are 
3.21 	awarded through an open and fair selection process;
3.22 	(6) activities by an organization or a government entity which recognize military 
3.23 	service to the United States, the state of Minnesota, or a community, subject to rules 
3.24 	of the board, provided that the rules must not include mileage reimbursements in the 
3.25 	computation of the per diem reimbursement limit and must impose no aggregate annual 
3.26 	limit on the amount of reasonable and necessary expenditures made to support:
3.27 	(i) members of a military marching or color guard unit for activities conducted 
3.28 	within the state;
3.29 	(ii) members of an organization solely for services performed by the members at 
3.30 	funeral services;
3.31 	(iii) members of military marching, color guard, or honor guard units may be 
3.32 	reimbursed for participating in color guard, honor guard, or marching unit events within 
3.33 	the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or
3.34 	(iv) active military personnel and their immediate family members in need of 
3.35 	support services;
4.1 	(7) recreational, community, and athletic facilities and activities intended primarily 
4.2 	for persons under age 21, provided that such facilities and activities do not discriminate on 
4.3 	the basis of gender and the organization complies with section 349.154;
4.4 	(8) payment of local taxes authorized under this chapter, taxes imposed by the 
4.5 	United States on receipts from lawful gambling, the taxes imposed by section 297E.02, 
4.6 	subdivisions 1, 4, 5, and 6, and the tax imposed on unrelated business income by section 
4.7 	290.05, subdivision 3;
4.8 	(9) payment of real estate taxes and assessments on permitted gambling premises 
4.9 	owned by the licensed organization paying the taxes, or wholly leased by a licensed 
4.10 	veterans organization under a national charter recognized under section 501(c)(19) of the 
4.11 	Internal Revenue Code;
4.12 	(10) a contribution to the United States, this state or any of its political subdivisions, 
4.13 	or any agency or instrumentality thereof other than a direct contribution to a law 
4.14 	enforcement or prosecutorial agency;
4.15 	(11) a contribution to or expenditure by a nonprofit organization which is a church 
4.16 	or body of communicants gathered in common membership for mutual support and 
4.17 	edification in piety, worship, or religious observances;
4.18 	(12) payment of the reasonable costs of an audit required in section 297E.06, 
4.19 	subdivision 4, provided the annual audit is filed in a timely manner with the Department of 
4.20 	Revenue and paid prior to June 30, 2006;
4.21 	(13) a contribution to or expenditure on projects or activities approved by the 
4.22 	commissioner of natural resources for:
4.23 	(i) wildlife management projects that benefit the public at large;
4.24 	(ii) grant-in-aid trail maintenance and grooming established under sections 84.83
4.25 	and 84.927, and other trails open to public use, including purchase or lease of equipment 
4.26 	for this purpose; and
4.27 	(iii) supplies and materials for safety training and educational programs coordinated 
4.28 	by the Department of Natural Resources, including the Enforcement Division;
4.29 	(14) conducting nutritional programs, food shelves, and congregate dining programs 
4.30 	primarily for persons who are age 62 or older or disabled;
4.31 	(15) a contribution to a community arts organization, or an expenditure to sponsor 
4.32 	arts programs in the community, including but not limited to visual, literary, performing, 
4.33 	or musical arts;
4.34 	(16) an expenditure by a licensed veterans organization for payment of water, fuel 
4.35 	for heating, electricity, and sewer costs for a building wholly owned or wholly leased by 
4.36 	and used as the primary headquarters of the licensed veterans organization;
5.1 	(17) expenditure by a licensed veterans organization of up to $5,000 in a calendar 
5.2 	year in net costs to the organization for meals and other membership events, limited to 
5.3 	members and spouses, held in recognition of military service. No more than $5,000 can be 
5.4 	expended in total per calendar year under this clause by all licensed veterans organizations 
5.5 	sharing the same veterans post home;
5.6 	(18) payment of fees authorized under this chapter imposed by the state of Minnesota 
5.7 	to conduct lawful gambling in Minnesota; or
5.8 	(19) a contribution or expenditure to honor an individual's humanitarian service 
5.9 	as demonstrated through philanthropy or volunteerism to the United States, this state, 
5.10 	or local community.
5.11 	(b) Notwithstanding paragraph (a), "lawful purpose" does not include:
5.12 	(1) any expenditure made or incurred for the purpose of influencing the nomination 
5.13 	or election of a candidate for public office or for the purpose of promoting or defeating a 
5.14 	ballot question;
5.15 	(2) any activity intended to influence an election or a governmental decision-making 
5.16 	process;
5.17 	(3) the erection, acquisition, improvement, expansion, repair, or maintenance of real 
5.18 	property or capital assets owned or leased by an organization, unless the board has first 
5.19 	specifically authorized the expenditures after finding that (i) the real property or capital 
5.20 	assets will be used exclusively for one or more of the purposes in paragraph (a); (ii) 
5.21 	with respect to expenditures for repair or maintenance only, that the property is or will 
5.22 	be used extensively as a meeting place or event location by other nonprofit organizations 
5.23 	or community or service groups and that no rental fee is charged for the use; (iii) with 
5.24 	respect to expenditures, including a mortgage payment or other debt service payment, 
5.25 	for erection or acquisition only, that the erection or acquisition is necessary to replace 
5.26 	with a comparable building, a building owned by the organization and destroyed or 
5.27 	made uninhabitable by fire or catastrophe, provided that the expenditure may be only 
5.28 	for that part of the replacement cost not reimbursed by insurance; (iv) with respect to 
5.29 	expenditures, including a mortgage payment or other debt service payment, for erection or 
5.30 	acquisition only, that the erection or acquisition is necessary to replace with a comparable 
5.31 	building a building owned by the organization that was acquired from the organization by 
5.32 	eminent domain or sold by the organization to a purchaser that the organization reasonably 
5.33 	believed would otherwise have acquired the building by eminent domain, provided 
5.34 	that the expenditure may be only for that part of the replacement cost that exceeds the 
5.35 	compensation received by the organization for the building being replaced; or (v) with 
5.36 	respect to an expenditure to bring an existing building into compliance with the Americans 
6.1 	with Disabilities Act under item (ii), an organization has the option to apply the amount of 
6.2 	the board-approved expenditure to the erection or acquisition of a replacement building 
6.3 	that is in compliance with the Americans with Disabilities Act;
6.4 	(4) an expenditure by an organization which is a contribution to a parent 
6.5 	organization, foundation, or affiliate of the contributing organization, if the parent 
6.6 	organization, foundation, or affiliate has provided to the contributing organization within 
6.7 	one year of the contribution any money, grants, property, or other thing of value;
6.8 	(5) a contribution by a licensed organization to another licensed organization unless 
6.9 	the board has specifically authorized the contribution. The board must authorize such a 
6.10 	contribution when requested to do so by the contributing organization unless it makes an 
6.11 	affirmative finding that the contribution will not be used by the recipient organization for 
6.12 	one or more of the purposes in paragraph (a); or
6.13 	(6) a contribution to a statutory or home rule charter city, county, or town by a 
6.14 	licensed organization with the knowledge that the governmental unit intends to use the 
6.15 	contribution for a pension or retirement fund.

6.16 	Sec. 7. Minnesota Statutes 2005 Supplement, section 349.15, subdivision 1, is 
6.17 	amended to read:
6.18 		Subdivision 1.Expenditure restrictions. Gross profits from lawful gambling 
6.19 	may be expended only for lawful purposes or allowable expenses as authorized by the 
6.20 	membership of the conducting organization at a monthly meeting of the organization's 
6.21 	membership. Provided that no more than 70 percent of the gross profit less the tax imposed 
6.22 	under section 297E.02, subdivision 1, from bingo, and no more than 60 percent of the 
6.23 	gross profit from other forms of lawful gambling, may be expended biennially during the 
6.24 	term of the license for allowable expenses related to lawful gambling. For licenses issued 
6.25 	after June 30, 2006, compliance with this subdivision will be measured on a biennial basis 
6.26 	that is concurrent with the term of the license. Compliance with this subdivision is a 
6.27 	condition for the renewal of any license beginning on July 1, 2008. For licenses renewed 
6.28 	with an effective date between July 1, 2006, and June 30, 2008, an organization shall 
6.29 	carry forward an amount equal to 15 percent of any positive allowable expense carryover 
6.30 	amount. This balance must be used to offset any future negative expense balance at the 
6.31 	time of license renewal. 

6.32 	Sec. 8. Minnesota Statutes 2005 Supplement, section 349.151, subdivision 4c, is 
6.33 	amended to read:
7.1 		Subd. 4c.Electronic bingo. (a) The board may by rule authorize but not require the 
7.2 	use of electronic bingo devices.
7.3 	(b) Rules adopted under paragraph (a):
7.4 	(1) must limit the number of bingo faces that can be played using an electronic 
7.5 	bingo device to 36;
7.6 	(2) must require that an electronic bingo device be used with corresponding bingo 
7.7 	paper sheets or a facsimile, printed at the point of sale, as approved by the board;
7.8 	(3) must require that the electronic bingo device site system have dial-up capability 
7.9 	to permit the board to remotely monitor the operation of the device and the internal 
7.10 	accounting systems; and
7.11 	(4) must prohibit the price of a face played on an electronic bingo device from being 
7.12 	less than the price of a face on a bingo paper sheet sold at the same occasion.

7.13 	Sec. 9. Minnesota Statutes 2005 Supplement, section 349.153, is amended to read:
7.14 	349.153 CONFLICT OF INTEREST.
7.15 	(a) A person may not serve on the board, be the director, or be an employee of the 
7.16 	board who has an interest in any corporation, association, limited liability company, or 
7.17 	partnership that is licensed by the board as a distributor, manufacturer, or linked bingo 
7.18 	game provider under section 349.164.
7.19 	(b) A member of the board, the director, or an employee of the board may not 
7.20 	accept employment with, receive compensation directly or indirectly from, or enter into a 
7.21 	contractual relationship with an organization that conducts lawful gambling, a distributor, 
7.22 	a linked bingo game provider, or a manufacturer while employed with or a member of the 
7.23 	board or within one year after terminating employment with or leaving the board.
7.24 	(c) A distributor, manufacturer, linked bingo game provider, or organization licensed 
7.25 	to conduct lawful gambling may not hire a former employee, director, or member of 
7.26 	the Gambling Control Board for one year after the employee, director, or member has 
7.27 	terminated employment with or left the Gambling Control Board.
7.28 	(d) A member of the board, the director, or an employee of the board may not 
7.29 	purchase any chance in a lawful gambling game unless it is part of an investigation.

7.30 	Sec. 10. Minnesota Statutes 2005 Supplement, section 349.16, subdivision 2, is 
7.31 	amended to read:
7.32 		Subd. 2.Issuance of gambling licenses. (a) Licenses authorizing organizations 
7.33 	to conduct lawful gambling may be issued by the board to organizations meeting the 
8.1 	qualifications in paragraphs (b) to (h) if the board determines that the license is consistent 
8.2 	with the purpose of sections 349.11 to 349.22.
8.3 	(b) The organization must have been in existence for the most recent three years 
8.4 	preceding the license application as a registered Minnesota nonprofit corporation or as 
8.5 	an organization designated as exempt from the payment of income taxes by the Internal 
8.6 	Revenue Code.
8.7 	(c) The organization at the time of licensing must have at least 15 active members.
8.8 	(d) The organization must not be in existence solely for the purpose of conducting 
8.9 	gambling.
8.10 	(e) The organization has identified in its license application the lawful purposes on 
8.11 	which it proposes to expend net profits from lawful gambling and has identified an annual 
8.12 	goal for charitable contributions, expressed as a percentage of gross profits.
8.13 	(f) The organization has identified on its license application a gambling manager and 
8.14 	certifies that the manager is qualified under this chapter.
8.15 	(g) The organization must not, in the opinion of the board after consultation with the 
8.16 	commissioner of revenue, be seeking licensing primarily for the purpose of evading or 
8.17 	reducing the tax imposed by section 297E.02, subdivision 6.
8.18 	(h) The organization has not exceeded the expenditure restrictions imposed under 
8.19 	section 349.15, subdivision 1, or if the organization has exceeded the expenditure 
8.20 	restrictions under section 349.15, subdivision 1, the organization has reimbursed any 
8.21 	excess expenses from a source of nongambling funds. Reimbursement of excess expenses 
8.22 	is a condition for license renewal. The board may by rule impose sanctions or penalties on 
8.23 	organizations that exceed the expenditure restrictions under section 349.15, subdivision 1. 

8.24 	Sec. 11. Minnesota Statutes 2005 Supplement, section 349.162, subdivision 4, is 
8.25 	amended to read:
8.26 		Subd. 4.Prohibition. (a) No person other than a licensed distributor may possess 
8.27 	unaffixed registration stamps issued by the board for the purpose of registering gambling 
8.28 	equipment.
8.29 	(b) Unless otherwise provided in this chapter, no person may possess gambling 
8.30 	equipment that has not been registered.
8.31 	(c) On and after January 1, 1991, No distributor may:
8.32 	(1) sell a bingo hard card or paper sheet that does not bear an individual number; or
8.33 	(2) sell a package of bingo paper sheets that does not contain bingo paper sheets 
8.34 	in numerical order.

9.1 	Sec. 12. Minnesota Statutes 2005 Supplement, section 349.162, subdivision 5, is 
9.2 	amended to read:
9.3 		Subd. 5.Sales from facilities. (a) All gambling equipment purchased or possessed 
9.4 	by a licensed distributor for resale to any person for use in Minnesota must, prior to the 
9.5 	equipment's resale, be unloaded into a storage facility located in Minnesota which the 
9.6 	distributor owns or leases; and which has been registered, in advance and in writing, with 
9.7 	the Division of Alcohol and Gambling Enforcement as a storage facility of the distributor. 
9.8 	All unregistered gambling equipment and all unaffixed registration stamps owned by, or 
9.9 	in the possession of, a licensed distributor in the state of Minnesota shall be stored at a 
9.10 	storage facility which has been registered with the Division of Alcohol and Gambling 
9.11 	Enforcement. No gambling equipment may be moved from the facility unless the 
9.12 	gambling equipment has been first registered with the board or the Department of Revenue.
9.13 	(b) Notwithstanding section 349.163, subdivisions 5, 6, and 8, a licensed 
9.14 	manufacturer may ship into Minnesota approved or unapproved gambling equipment 
9.15 	if the licensed manufacturer ships the gambling equipment to a Minnesota storage 
9.16 	facility that is: (1) owned or leased by the licensed manufacturer; and (2) registered, in 
9.17 	advance and in writing, with the Division of Alcohol and Gambling Enforcement as a 
9.18 	manufacturer's storage facility. No gambling equipment may be shipped into Minnesota 
9.19 	to the manufacturer's registered storage facility unless the shipment of the gambling 
9.20 	equipment is reported to the Department of Revenue in a manner prescribed by the 
9.21 	department. No gambling equipment may be moved from the storage facility unless 
9.22 	the gambling equipment is sold to a licensed distributor and is otherwise in conformity 
9.23 	with this chapter, is shipped to an out-of-state site and the shipment is reported to the 
9.24 	Department of Revenue in a manner prescribed by the department, or is otherwise sold 
9.25 	and shipped as permitted by board rule.
9.26 	(c) All storage facilities owned, leased, used, or operated by a licensed distributor 
9.27 	or manufacturer may be entered upon and inspected by the employees of the Division of 
9.28 	Alcohol and Gambling Enforcement, the Division of Alcohol and Gambling Enforcement 
9.29 	director's authorized representatives, employees of the Gambling Control Board or its 
9.30 	authorized representatives, employees of the Department of Revenue, or authorized 
9.31 	representatives of the director of the Division of Special Taxes of the Department of 
9.32 	Revenue during reasonable and regular business hours. Obstruction of, or failure to 
9.33 	permit, entry and inspection is cause for revocation or suspension of a manufacturer's or 
9.34 	distributor's licenses and permits issued under this chapter.
9.35 	(d) Unregistered gambling equipment and unaffixed registration stamps found at 
9.36 	any location in Minnesota other than the manufacturing plant of a licensed manufacturer 
10.1 	or a registered storage facility are contraband under section 349.2125. This paragraph 
10.2 	does not apply:
10.3 	(1) to unregistered gambling equipment being transported in interstate commerce 
10.4 	between locations outside this state, if the interstate shipment is verified by a bill of lading 
10.5 	or other valid shipping document; and
10.6 	(2) to gambling equipment registered with the Department of Revenue for 
10.7 	distribution to the tribal casinos.

10.8 	Sec. 13. Minnesota Statutes 2004, section 349.1635, subdivision 3, is amended to read:
10.9 		Subd. 3.Attachments to application. An applicant for a linked bingo game 
10.10 	provider license must attach to its application:
10.11 	(1) evidence of a bond in the principal amount of $250,000 $100,000 payable to the 
10.12 	state of Minnesota conditioned on the payment of all linked bingo prizes and any other 
10.13 	money due and payable under this chapter;
10.14 	(2) detailed plans and specifications for the operation of the linked bingo game 
10.15 	and the linked bingo system; and
10.16 	(3) any other information required by the board by rule.

10.17 	Sec. 14. Minnesota Statutes 2005 Supplement, section 349.1635, subdivision 4, 
10.18 	is amended to read:
10.19 		Subd. 4.Prohibition. (a) Except for services associated exclusively with a linked 
10.20 	bingo game, a linked bingo game provider may not participate or assist in the conduct 
10.21 	of lawful gambling by an organization. No linked bingo game provider or employee, 
10.22 	representative, agent, affiliate, or other employee of a linked bingo game provider  may:
10.23 	(1) hold any financial or managerial interest in a premises leased for the conduct 
10.24 	of bingo;
10.25 	(2) also be licensed as a distributor or hold any financial or managerial interest 
10.26 	in a distributor;
10.27 	(3) sell or lease linked bingo game equipment to any person not licensed as an 
10.28 	organization;
10.29 	(4) purchase gambling equipment to be used exclusively in a linked bingo game 
10.30 	from any person not licensed as a manufacturer under section 349.163; and
10.31 	(5) provide an organization, a lessor of gambling premises, or an appointed official 
10.32 	any compensation, gift, gratuity, premium, or contribution.; and
10.33 	(6) provide an employee or agent of the organization any compensation, gift, gratuity, 
10.34 	premium, or other thing of value greater than $25 per organization in a calendar year.
11.1 	(b) Employees of the board and the Division of Alcohol and Gambling Enforcement 
11.2 	may inspect the books, records, inventory, and business premises of a licensed linked 
11.3 	bingo game provider without notice during the normal business hours of the linked bingo 
11.4 	game provider. The board may charge a linked bingo game provider for the actual cost of 
11.5 	conducting scheduled or unscheduled inspections of the licensee's facilities.

11.6 	Sec. 15. Minnesota Statutes 2005 Supplement, section 349.166, subdivision 1, is 
11.7 	amended to read:
11.8 		Subdivision 1.Exclusions. (a) Bingo, with the exception of linked bingo games, 
11.9 	may be conducted without a license and without complying with sections 349.168, 
11.10 	subdivisions 1 and 2; 349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and 349.19, 
11.11 	if it is conducted:
11.12 	(1) by an organization in connection with a county fair, the state fair, or a civic 
11.13 	celebration and is not conducted for more than 12 consecutive days and is limited to no 
11.14 	more than four separate applications for activities applied for and approved in a calendar 
11.15 	year; or
11.16 	(2) by an organization that conducts bingo on four or fewer bingo occasions days
11.17 	in a calendar year.
11.18 	An organization that holds a license to conduct lawful gambling under this chapter 
11.19 	may not conduct bingo under this subdivision.
11.20 	(b) Bingo may be conducted within a nursing home or a senior citizen housing 
11.21 	project or by a senior citizen organization if the prizes for a single bingo game do not 
11.22 	exceed $10, total prizes awarded at a single bingo occasion do not exceed $200, no more 
11.23 	than two bingo occasions are held by the organization or at the facility each week, only 
11.24 	members of the organization or residents of the nursing home or housing project are 
11.25 	allowed to play in a bingo game, no compensation is paid for any persons who conduct the 
11.26 	bingo, and a manager is appointed to supervise the bingo. Bingo conducted under this 
11.27 	paragraph is exempt from sections 349.11 to 349.23, and the board may not require an 
11.28 	organization that conducts bingo under this paragraph, or the manager who supervises the 
11.29 	bingo, to register or file a report with the board. The gross receipts from bingo conducted 
11.30 	under the limitations of this subdivision are exempt from taxation under chapter 297A.
11.31 	(c) Raffles may be conducted by an organization without registering with the board 
11.32 	if the value of all raffle prizes awarded by the organization in a calendar year does not 
11.33 	exceed $1,500.
11.34 	(d) Except as provided in paragraph (b), the organization must maintain all required 
11.35 	records of excluded gambling activity for 3-1/2 years.

12.1 	Sec. 16. Minnesota Statutes 2005 Supplement, section 349.166, subdivision 2, is 
12.2 	amended to read:
12.3 		Subd. 2.Exemptions. (a) Lawful gambling, with the exception of linked bingo 
12.4 	games, may be conducted by an organization without a license and without complying 
12.5 	with sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4 and 5; 349.18, 
12.6 	subdivision 1; and 349.19 if:
12.7 	(1) the organization conducts lawful gambling on five or fewer days in a calendar 
12.8 	year;
12.9 	(2) the organization does not award more than $50,000 in prizes for lawful gambling 
12.10 	in a calendar year;
12.11 	(3) the organization pays a fee of $50 to the board, notifies the board in writing 
12.12 	not less than 30 days before each lawful gambling occasion of the date and location of 
12.13 	the occasion, or 60 days for an occasion held in the case of a city of the first class, the 
12.14 	types of lawful gambling to be conducted, the prizes to be awarded, and receives an 
12.15 	exemption identification number;
12.16 	(4) the organization notifies the local government unit 30 days before the lawful 
12.17 	gambling occasion, or 60 days for an occasion held in a city of the first class;
12.18 	(5) the organization purchases all gambling equipment and supplies from a licensed 
12.19 	distributor; and
12.20 	(6) the organization reports to the board, on a single-page form prescribed by the 
12.21 	board, within 30 days of each gambling occasion, the gross receipts, prizes, expenses, 
12.22 	expenditures of net profits from the occasion, and the identification of the licensed 
12.23 	distributor from whom all gambling equipment was purchased.
12.24 	(b) If the organization fails to file a timely report as required by paragraph (a), clause 
12.25 	(3) or (6), the board shall not issue any authorization, license, or permit to the organization 
12.26 	to conduct lawful gambling on an exempt, excluded, or licensed basis until the report has 
12.27 	been filed and the organization may be subject to penalty as determined by the board. The 
12.28 	board may refuse to issue any authorization, license, or permit if a report or application is 
12.29 	determined to be incomplete or knowingly contains false or inaccurate information.
12.30 	(c) Merchandise prizes must be valued at their fair market value.
12.31 	(d) Organizations that qualify to conduct exempt raffles under paragraph (a), are 
12.32 	exempt from section 349.173, paragraph (b), clause (2), if the raffle tickets are sold only 
12.33 	in combination with an organization's membership or a ticket for an organization's 
12.34 	membership dinner and are not included with any other raffle conducted under the exempt 
12.35 	permit.
13.1 	(e) Unused pull-tab and tipboard deals must be returned to the distributor within 
13.2 	seven working days after the end of the lawful gambling occasion. The distributor must 
13.3 	accept and pay a refund for all returns of unopened and undamaged deals returned under 
13.4 	this paragraph.
13.5 	(f) An organization that is exempt from taxation on purchases of pull-tabs and 
13.6 	tipboards under section 297E.02, subdivision 4, paragraph (b), clause (4), must return to 
13.7 	the distributor any tipboard or pull-tab deal no part of which is used at the lawful gambling 
13.8 	occasion for which it was purchased by the organization.
13.9 	(g) The organization must maintain all required records of exempt gambling activity 
13.10 	for 3-1/2 years.

13.11 	Sec. 17. Minnesota Statutes 2005 Supplement, section 349.167, subdivision 1, is 
13.12 	amended to read:
13.13 		Subdivision 1.Gambling manager required. (a) All lawful gambling conducted by 
13.14 	a licensed organization must be under the supervision of a gambling manager. A gambling 
13.15 	manager designated by an organization to supervise lawful gambling is responsible for the 
13.16 	gambling gross receipts of the organization and for its conduct in compliance with all laws 
13.17 	and rules. A person designated as a gambling manager shall maintain a dishonesty bond in 
13.18 	the sum of $10,000 in favor of the organization conditioned on the faithful performance 
13.19 	of the manager's duties. The terms of the bond must provide that notice be given to the 
13.20 	board in writing not less than 30 days before its cancellation.
13.21 	(b) A person may not act as a gambling manager for more than one organization.
13.22 	(c) An organization may not conduct lawful gambling without having a gambling 
13.23 	manager.
13.24 	(d) An organization may not have more than one gambling manager at any time.

13.25 	Sec. 18. Minnesota Statutes 2004, section 349.168, subdivision 10, is amended to read:
13.26 		Subd. 10.Employment of certain persons. An organization that sells pull-tabs 
13.27 	and tip boards on leased premises within a booth operation may not employ, other than 
13.28 	as a seller of pull-tabs and tip boards, the lessor of those premises or a person who is 
13.29 	employed by the lessor of those premises leases a premises may not pay compensation to 
13.30 	the lessor, a member of the lessor's immediate family, or lessor's employees, other than as 
13.31 	a seller of pull-tabs and tipboards within a booth operation on the premises. A member of 
13.32 	the lessor's immediate family may be compensated by an organization for the conduct of 
13.33 	gambling at other sites not owned by the lessor.

14.1 	Sec. 19. Minnesota Statutes 2005 Supplement, section 349.17, subdivision 5, is 
14.2 	amended to read:
14.3 		Subd. 5.Bingo cards and sheets. (a) The board shall by rule require that all 
14.4 	licensed organizations: (1) conduct bingo only using liquid daubers on a bingo paper 
14.5 	sheets sheet or facsimile of a bingo face that bear bears  an individual number recorded 
14.6 	by the distributor or linked bingo game provider; and (2) use each bingo paper sheet for 
14.7 	no more than one bingo occasion. In lieu of the requirements of clause (2), a licensed 
14.8 	organization may electronically record the sale of each bingo hard card or paper sheet at 
14.9 	each bingo occasion using an electronic recording system approved by the board.
14.10 	(b) The requirements of paragraph (a) shall only apply to a licensed organization 
14.11 	that received gross receipts from bingo in excess of $150,000 in the organization's last 
14.12 	fiscal year.

14.13 	Sec. 20. Minnesota Statutes 2004, section 349.17, subdivision 6, is amended to read:
14.14 		Subd. 6.Conduct of bingo. (a) Each bingo hard card and paper sheets must have 
14.15 	five horizontal rows of spaces with each row except one having five numbers. The center 
14.16 	row must have four numbers and the center space marked "free." Each column must 
14.17 	have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also have 
14.18 	numbers that are not preprinted but are filled in by players.
14.19 	(b) A game of bingo begins with the first letter and number called. Each player must 
14.20 	cover or mark with a liquid dauber the numbers when bingo balls, similarly numbered,
14.21 	numbers are randomly drawn selected, announced, and displayed to the players, either 
14.22 	manually or with a flashboard and monitor. The game is won when a player has covered 
14.23 	or marked a previously designated arrangement of numbers on the card or sheet and 
14.24 	declared bingo. The game is completed when a winning card or sheet is verified and a 
14.25 	prize awarded, except that prizes won in linked bingo games may be awarded pursuant to 
14.26 	subdivision 3.

14.27 	Sec. 21. Minnesota Statutes 2005 Supplement, section 349.17, subdivision 7, is 
14.28 	amended to read:
14.29 		Subd. 7.Bar bingo. An organization may conduct bar bingo subject to the 
14.30 	following restrictions:
14.31 	(1) the bingo is conducted at a site the organization owns or leases and which has a 
14.32 	license for the sale of intoxicating beverages on the premises under chapter 340A;
14.33 	(2) the bingo is conducted using only bingo paper sheets purchased from a licensed 
14.34 	distributor; and
15.1 	(3) no rent may be paid for a bar bingo occasion; and
15.2 	(4) linked bingo games may not be conducted at a bar bingo occasion.

15.3 	Sec. 22. [349.1721] CONDUCT OF PULL-TABS.
15.4 		Subdivision 1.Cumulative or carryover games. The board shall by rule permit 
15.5 	pull-tab games with multiple seals. The board shall also adopt rules for pull-tab games 
15.6 	with cumulative or carryover prizes.
15.7 		Subd. 2.Event games. The board shall by rule permit pull-tab games in which 
15.8 	certain winners are determined by the random selection of one or more bingo numbers or 
15.9 	by another method approved by the board.

15.10 	Sec. 23. Minnesota Statutes 2005 Supplement, section 349.173, is amended to read:
15.11 	349.173 CONDUCT OF RAFFLES.
15.12 	(a) Raffle tickets or certificates of participation at a minimum must list the three 
15.13 	most expensive prizes to be awarded. If additional prizes will be awarded, a complete 
15.14 	list of additional prizes must be publicly posted at the event and copies of the complete 
15.15 	prize list made available upon request. Notwithstanding section 349.12, subdivision 33, 
15.16 	raffles conducted under the exemptions in section 349.166 may use tickets that contain 
15.17 	only the sequential number of the raffle ticket and no other information if the organization 
15.18 	makes a list of prizes and a statement of other relevant information required by rule 
15.19 	available to persons purchasing tickets and if tickets are only sold at the event and on the 
15.20 	date when the tickets are drawn.
15.21 	(b) Raffles must be conducted in a manner that ensures:
15.22 	(1) all entries in the raffle have an equal chance of selection;
15.23 	(2) entry in the raffle is not conditioned upon any other purchase, except that a 
15.24 	certificate of participation may be a button with a nominal value of less than $5;
15.25 	(3) the method of selection is conducted in a public forum;
15.26 	(4) the method of selection cannot be manipulated or based on the outcome of an 
15.27 	event not under the control of the organization;
15.28 	(5) physical presence at the raffle is not a requirement to win; and
15.29 	(6) all sold and unsold tickets or certificates of participation are accounted for.
15.30 	(c) Methods of selecting winning entries from a raffle other than prescribed in rule 
15.31 	may be used with the prior written approval of the board.

15.32 	Sec. 24. Minnesota Statutes 2005 Supplement, section 349.18, subdivision 1, is 
15.33 	amended to read:
16.1 		Subdivision 1.Lease or ownership required; rent limitations. (a) An organization 
16.2 	may conduct lawful gambling only on premises it owns or leases. Leases must be on a 
16.3 	form prescribed by the board. Except for leases entered into before August 1, 1994, The 
16.4 	term of the lease may not begin before the effective date of the premises permit and must 
16.5 	expire on the same day that the premises permit expires. Leases approved by the board 
16.6 	must specify that the board may authorize an organization to withhold rent from a lessor 
16.7 	for a period of up to 90 days if the board determines that illegal gambling occurred on 
16.8 	the premises and that the lessor or its employees participated in the illegal gambling or 
16.9 	knew of the gambling and did not take prompt action to stop the gambling. The lease must 
16.10 	authorize the continued tenancy of the organization without the payment of rent during 
16.11 	the time period determined by the board under this paragraph. Copies of all leases must 
16.12 	be made available to employees of the board and the Division of Alcohol and Gambling 
16.13 	Enforcement on request. The board may prescribe by rule limits on the amount of rent 
16.14 	which an organization may pay to a lessor for premises leased for bingo. Any rule adopted 
16.15 	by the board limiting the amount of rent to be paid may only be effective for leases entered 
16.16 	into, or renewed, after the effective date of the rule.
16.17 	(b) Rent paid by an organization for leased premises for the conduct of pull-tabs, 
16.18 	tipboards, and paddlewheels is subject to the following limits:
16.19 	(1) for booth operations, including booth operations where a pull-tab dispensing 
16.20 	device is located, booth operations where a bar operation is also conducted, and booth 
16.21 	operations where both a pull-tab dispensing device is located and a bar operation is also 
16.22 	conducted, the maximum rent is:
16.23 	(i) in any month where the organization's gross profit at those premises does not 
16.24 	exceed $4,000, up to $400; and
16.25 	(ii) in any month where the organization's gross profit at those premises exceeds 
16.26 	$4,000, up to $400 plus not more than ten percent of the gross profit for that month in 
16.27 	excess of $4,000;
16.28 	(2) for bar operations, including bar operations where a pull-tab dispensing device 
16.29 	is located but not including bar operations subject to clause (1), and for locations where 
16.30 	only a pull-tab dispensing device is located:
16.31 	(i) in any month where the organization's gross profit at those premises does not 
16.32 	exceed $1,000, up to $200; and
16.33 	(ii) in any month where the organization's gross profit at those premises exceeds 
16.34 	$1,000, up to $200 plus not more than 20 percent of the gross profit for that month 
16.35 	in excess of $1,000;
17.1 	(3) a lease not governed by clauses (1) and (2) must be approved by the board 
17.2 	before becoming effective;
17.3 	(4) total rent paid to a lessor from all organizations from leases governed by clause 
17.4 	(1) may not exceed $1,750 per month. Total rent paid to a lessor from all organizations 
17.5 	from leases governed by clause (2) may not exceed $2,500 per month.
17.6 	(c) Rent paid by an organization for leased premises for the conduct of bingo is 
17.7 	subject to either of the following limits at the option of the parties to the lease:
17.8 	(1) not more than ten percent of the monthly gross profit from all lawful gambling 
17.9 	activities held during bingo occasions excluding bar bingo or at a rate based on a cost per 
17.10 	square foot not to exceed 110 percent of a comparable cost per square foot for leased space 
17.11 	as approved by the director; and
17.12 	(2) no rent may be paid for bar bingo.
17.13 	(d) Amounts paid as rent under leases are all-inclusive. No other services or 
17.14 	expenses provided or contracted by the lessor may be paid by the organization, including, 
17.15 	but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn 
17.16 	services, electricity, heat, security, security monitoring, storage, other utilities or services, 
17.17 	and, in the case of bar operations, cash shortages, unless approved by the director. Any 
17.18 	other expenditure made by an organization that is related to a leased premises must be 
17.19 	approved by the director. An organization may not provide any compensation or thing of 
17.20 	value to a lessor or the lessor's employees from any fund source other than its gambling 
17.21 	account. Rent payments may not be made to an individual.
17.22 	(e) Notwithstanding paragraph (b), an organization may pay a lessor for food or 
17.23 	beverages or meeting room rental if the charge made is comparable to similar charges 
17.24 	made to other individuals or groups.
17.25 	(f) No person, distributor, manufacturer, lessor, linked bingo game provider, or 
17.26 	organization other than the licensed organization leasing the space may conduct any 
17.27 	activity other than the sale or serving of food and beverages on the leased premises during 
17.28 	times when lawful gambling is being conducted on the No entity other than the licensed 
17.29 	organization may conduct any activity within a booth operation on a leased premises.
17.30 	(g) At a site where the leased premises consists of an area on or behind a bar at 
17.31 	which alcoholic beverages are sold and employees of the lessor are employed by the 
17.32 	organization as pull-tab sellers at the site, pull-tabs and tipboard tickets may be sold 
17.33 	and redeemed by those employees at any place on or behind the bar, but the tipboards 
17.34 	and receptacles for pull-tabs and cash drawers for lawful gambling receipts must be 
17.35 	maintained only within the leased premises.
18.1 	(h) (g) Employees of a lessor not involved in the conduct of lawful gambling on the 
18.2 	premises or nongambling employees of an organization conducting lawful gambling on 
18.3 	the premises may participate in lawful gambling on the premises provided (1) if pull-tabs 
18.4 	or tipboards are sold, the organization voluntarily posts, or is required to post, posts the 
18.5 	major prizes as specified in section 349.172; and (2) any employee participating in lawful 
18.6 	gambling is not a gambling employee for the organization conducting lawful gambling 
18.7 	on the premises awarded.
18.8 	(i) (h) A gambling employee may purchase pull-tabs or tipboards at the site of the 
18.9 	employee's place of employment provided:
18.10 	(1) the organization voluntarily posts, or is required to post, the major prizes for 
18.11 	pull-tab or tipboard games as specified in section 349.172; and
18.12 	(2) the employee is not involved in the sale of pull-tabs or tipboards at that site.
18.13 	(j) (i) At a leased site where an organization uses a paddlewheel consisting of 
18.14 	30 numbers or less or a tipboard consisting of 30 tickets or less, tickets may be sold 
18.15 	throughout the permitted premises, but winning tickets must be redeemed, the paddlewheel 
18.16 	must be located, and the tipboard seal must be opened within the leased premises.
18.17 	(k) A member of the lessor's immediate family may not be a compensated employee 
18.18 	of an organization leasing space at the premises. For purposes of this paragraph, a 
18.19 	"member of the immediate family" is a spouse, parent, child, or sibling.

18.20 	Sec. 25. Minnesota Statutes 2004, section 349.19, subdivision 2, is amended to read:
18.21 		Subd. 2.Accounts. Gross receipts from lawful gambling by each organization must 
18.22 	be segregated from all other revenues of the conducting organization and placed in a 
18.23 	separate account. All expenditures for expenses, taxes, and lawful purposes must be made 
18.24 	from the separate account except (1) in the case of expenditures previously approved 
18.25 	by the organization's membership for emergencies as defined by board rule, or (2) as 
18.26 	provided in subdivision 2a, or (3) when restricted to one electronic fund transaction for 
18.27 	the payment of taxes for the organization as a whole, the organization may transfer the 
18.28 	amount of taxes related to the conduct of gambling to the general account at the time when 
18.29 	due and payable. The name and address of the bank, the account number for the separate 
18.30 	account, and the names of organization members authorized as signatories on the separate 
18.31 	account must be provided to the board when the application is submitted. Changes in the 
18.32 	information must be submitted to the board at least ten days before the change is made. 
18.33 	Gambling receipts must be deposited into the gambling bank account within four business 
18.34 	days of completion of the bingo occasion, deal, or game from which they are received. A 
18.35 	deal of pull-tabs is considered complete when either the last pull-tab of the deal is sold or 
19.1 	the organization does not continue the play of the deal during the next scheduled period 
19.2 	of time in which the organization will conduct pull-tabs. A tipboard game is considered 
19.3 	complete when the seal on the game flare is uncovered. Deposit records must be sufficient 
19.4 	to allow determination of deposits made from each bingo occasion, deal, or game at each 
19.5 	permitted premises. The person who accounts for gambling gross receipts and profits may 
19.6 	not be the same person who accounts for other revenues of the organization.

19.7 	Sec. 26. Minnesota Statutes 2004, section 349.19, subdivision 3, is amended to read:
19.8 		Subd. 3.Expenditures. (a) All expenditures of gross profits from lawful gambling 
19.9 	must be itemized as to payee, purpose, amount, and date of payment, and must be in 
19.10 	compliance with section  349.154. Authorization of the expenditures must be recorded 
19.11 	in the monthly meeting minutes of the licensed organization. Checks or authorizations 
19.12 	for electronic fund transfers for expenditures of gross profits must be signed by at least 
19.13 	two persons authorized by board rules to sign the checks. Expenditures of gross profits 
19.14 	from lawful gambling for local, state, and federal taxes as identified in section  349.12, 
19.15 	subdivision 25, paragraph (a), clause (8), may be: (1) transferred electronically from 
19.16 	the organization's gambling account directly to bank accounts identified by local, state, 
19.17 	or federal agencies if the organization's gambling account monthly bank statement 
19.18 	specifically identifies the payee by name, the amount transferred, and the date of 
19.19 	the transaction; or (2) transferred electronically to and from the account of a payroll 
19.20 	processing firm that meets the criteria for such a firm established under section  349.168, 
19.21 	subdivision 6. Expenditures of gross profits from lawful gambling as identified in section  
19.22 	349.12, subdivision 3a, and as authorized by section  349.15, subdivision 1, for payments 
19.23 	for utilities, insurance, and payroll processing charges taxes and allowable expenses
19.24 	may be transferred electronically from the organization's gambling account directly to 
19.25 	bank accounts identified by the vendor if the organization's gambling account monthly 
19.26 	bank statement specifically identifies the payee by name, the amount transferred, the 
19.27 	account number of the account into which the funds were transferred, and the date of the 
19.28 	transaction. Electronic payments of local, state, and federal taxes and utility, payroll 
19.29 	processing, or insurance payments allowable expenses are permitted only if they have 
19.30 	been authorized by the membership, the organization maintains supporting documentation, 
19.31 	and the expenditures can be verified. 
19.32 	(b) Expenditures authorized by the board according to section  349.12, subdivision 
19.33 	25, paragraph (b), clause (3), must be 51 percent completed within two years of the date 
19.34 	of board approval. "Fifty-one percent completed" means that the work completed must 
19.35 	represent at least 51 percent of the value of the project as documented by the contractor 
20.1 	or vendor. An organization that fails to comply with this paragraph shall reapply to the 
20.2 	board for approval of the project. 

20.3 	Sec. 27. Minnesota Statutes 2004, section 349.211, subdivision 2a, is amended to read:
20.4 		Subd. 2a.Pull-tab prizes. The maximum prize which may be awarded for any 
20.5 	single pull-tab is $599, not including any cumulative or carryover prizes. Cumulative or 
20.6 	carryover prizes in a pull-tab game shall not exceed $2,500. An organization may not 
20.7 	sell any pull-tab for more than $2.

20.8 	Sec. 28. Minnesota Statutes 2005 Supplement, section 349.213, subdivision 1, is 
20.9 	amended to read:
20.10 		Subdivision 1.Local regulation. (a) A statutory or home rule city or county has the 
20.11 	authority to adopt more stringent regulation of lawful gambling within its jurisdiction, 
20.12 	including the prohibition of lawful gambling, and may require a permit for the conduct 
20.13 	of gambling exempt from licensing under section 349.166. The fee for a permit issued 
20.14 	under this subdivision section 349.166 may not exceed $100. The authority granted by 
20.15 	this subdivision does not include the authority to require a license or fee for a license or 
20.16 	permit to conduct gambling by organizations, gambling managers, gambling employees,
20.17 	or sales by distributors or linked bingo game providers licensed by or registered with 
20.18 	the board. The authority granted by this subdivision does not include the authority to 
20.19 	require an organization to make specific expenditures of more than ten percent per year 
20.20 	from its net profits derived from lawful gambling. For the purposes of this subdivision, 
20.21 	net profits are gross profits less amounts expended for allowable expenses and paid in 
20.22 	taxes assessed on lawful gambling. A statutory or home rule charter city or a county may 
20.23 	not require an organization conducting lawful gambling within its jurisdiction to make 
20.24 	an expenditure to the city or county as a condition to operate within that city or county, 
20.25 	except as authorized under section 349.16, subdivision 8, or 297E.02; provided, however, 
20.26 	that an ordinance requirement that such organizations must contribute ten percent per 
20.27 	year of their net profits derived from lawful gambling conducted at premises within the 
20.28 	city's or county's jurisdiction to a fund administered and regulated by the responsible 
20.29 	local unit of government without cost to such fund, for disbursement by the responsible 
20.30 	local unit of government of the receipts for (i) lawful purposes charitable contributions 
20.31 	as defined in section 349.12, subdivision 7a, or (ii) police, fire, and other emergency or 
20.32 	public safety-related services, equipment, and training, excluding pension obligations, is 
20.33 	not considered an expenditure to the city or county nor a tax under section 297E.02, and is 
20.34 	valid and lawful. A city or county making expenditures authorized under this paragraph 
21.1 	must by March 15 of each year file a report with the board, on a form the board prescribes, 
21.2 	that lists all such revenues collected and expenditures for the previous calendar year.
21.3 	(b) A statutory or home rule city or county may by ordinance require that a licensed 
21.4 	organization conducting lawful gambling within its jurisdiction expend all or a portion 
21.5 	of its expenditures for lawful purposes on lawful purposes conducted or located within 
21.6 	the city's or county's trade area. Such an ordinance must be limited to lawful purpose 
21.7 	expenditures of gross profits derived from lawful gambling conducted at premises within 
21.8 	the city's or county's jurisdiction, must define the city's or county's trade area, and must 
21.9 	specify the percentage of lawful purpose expenditures which must be expended within the 
21.10 	trade area. A trade area defined by a city under this subdivision must include each city and 
21.11 	township contiguous to the defining city.
21.12 	(c) A more stringent regulation or prohibition of lawful gambling adopted by a 
21.13 	political subdivision under this subdivision must apply equally to all forms of lawful 
21.14 	gambling within the jurisdiction of the political subdivision, except a political subdivision 
21.15 	may prohibit the use of paddlewheels.

21.16 	Sec. 29. REPORT ON AUTOMATION OF REPORTING REQUIREMENTS 
21.17 	FOR LAWFUL GAMBLING.
 21.18 	The commissioner of revenue and the executive director of the Gambling Control 
21.19 	Board shall conduct a feasibility study pertaining to consolidation and automation of 
21.20 	reporting requirements for lawful gambling activities and shall submit a report with 
21.21 	findings and recommendations to the legislature and the governor by January 31, 2007.

21.22 	Sec. 30. EFFECTIVE DATE.
 21.23 	This act is effective the day following final enactment.