1.1 	A bill for an act
1.2 	relating to lawful gambling; modifying lawful purpose and other definitions; 
1.3 	establishing a rating system for annual lawful purpose expenditures and imposing 
1.4 	civil penalties; modifying provisions relating to licensing and permits and 
1.5 	providing for fees; regulating conduct of bingo and other games; modifying lease 
1.6 	requirements; regulating who may participate in lawful gambling; providing for 
1.7 	expenditures of gross profits; providing for local approval; changing annual 
1.8 	audit requirements; making clarifying, technical, and conforming changes 
1.9 	to lawful gambling provisions;amending Minnesota Statutes 2008, sections 
1.10 	297E.06, subdivision 4; 349.11; 349.12, subdivisions 3a, 7, 7a, 12a, 18, 19, 
1.11 	21, 25, 32a, 33; 349.15, subdivisions 1, 1a; 349.151, subdivision 4; 349.154, 
1.12 	subdivision 1; 349.155, subdivisions 3, 4a; 349.16, subdivisions 2, 3, 6, 8, 11, by 
1.13 	adding subdivisions; 349.162, subdivision 6; 349.1635, subdivision 3; 349.1641; 
1.14 	349.165, subdivisions 1, 2, 3, by adding a subdivision; 349.166, subdivision 
1.15 	2; 349.167, subdivision 2; 349.168, subdivision 8; 349.169, subdivisions 1, 
1.16 	3; 349.17, subdivisions 3, 5, 6, 7; 349.173; 349.18, subdivision 1; 349.19, 
1.17 	subdivisions 2, 2a, 3, 9, 10; 349.191, subdivisions 1, 1a, 1b, 2, 3, 4; 349.2127, 
1.18 	subdivision 7; 349.213, subdivisions 1, 2; proposing coding for new law in 
1.19 	Minnesota Statutes, chapter 349; repealing Minnesota Statutes 2008, sections 
1.20 	349.15, subdivisions 4, 5; 349.154, subdivision 2; 349.155, subdivision 7; 
1.21 	349.16, subdivisions 9, 10; 349.166, subdivision 3; 349.168, subdivisions 4, 6, 7, 
1.22 	10; 349.18, subdivisions 2, 3; 349.2127, subdivision 8.
1.23 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.24 	Section 1. Minnesota Statutes 2008, section 297E.06, subdivision 4, is amended to read:
1.25 		Subd. 4.Annual audit, certified inventory, and cash count. (a) An organization 
1.26 	licensed under chapter 349 with gross receipts from lawful gambling of more than 
1.27 	$300,000 $500,000 in any year must have an annual financial audit of its lawful gambling 
1.28 	activities and funds for that year. An organization licensed under chapter 349 with gross 
1.29 	receipts from lawful gambling of more than $150,000 but not more than $300,000 in any 
1.30 	year must have an annual financial review of its lawful gambling activities and funds for 
1.31 	that year.
2.1 	(b) The commissioner may require a financial audit of the lawful gambling activities 
2.2 	and funds of an organization licensed under chapter 349, with gross receipts less than 
2.3 	$500,000 annually, when an organization has:
2.4 	(1) failed to timely file required gambling tax returns;
2.5 	(2) failed to timely pay the gambling tax or regulatory fee;
2.6 	(3) filed fraudulent gambling tax returns;
2.7 	(4) failed to take corrective actions required by the commissioner; or
2.8 	(5) failed to otherwise comply with chapter 297E.
2.9 	(c) Audits and financial reviews under this subdivision must be performed by an 
2.10 	independent accountant licensed by the state of Minnesota.
2.11 	(d) An organization licensed under chapter 349 must perform an annual certified 
2.12 	inventory and cash count at the end of its fiscal year and submit the report to the 
2.13 	commissioner within 30 days after the end of its fiscal year. The report shall be on a form 
2.14 	prescribed by the commissioner.
2.15 	(b) (e) The commissioner of revenue shall prescribe standards for the audits and 
2.16 	financial review, certified inventory, and cash count reports required under this subdivision. 
2.17 	The standards may vary based on the gross receipts of the organization. The standards 
2.18 	must incorporate and be consistent with standards prescribed by the American Institute 
2.19 	of Certified Public Accountants. A complete, true, and correct copy of the audit audits, 
2.20 	certified inventory, and cash count report must be filed as prescribed by the commissioner.

2.21 	Sec. 2. Minnesota Statutes 2008, section 349.11, is amended to read:
2.22 	349.11 PURPOSE.
2.23 	The purpose of sections 349.11 to 349.22 is to regulate lawful gambling to prevent 
2.24 	its commercialization, to insure integrity of operations, and to provide for the use of net 
2.25 	profits only for lawful purposes.  

2.26 	Sec. 3. Minnesota Statutes 2008, section 349.12, subdivision 3a, is amended to read:
2.27 		Subd. 3a.Allowable expense. "Allowable expense" means the percentage of the 
2.28 	total cost incurred by the organization in the purchase of any good, service, or other item 
2.29 	which corresponds to the proportion of the total actual use of the good, service, or other 
2.30 	item that is directly related to conduct of lawful gambling. Allowable expense includes 
2.31 	the advertising of the conduct of lawful gambling, provided that the amount expended 
2.32 	does not exceed five percent of the annual gross profits of the organization or $5,000 per 
2.33 	year per organization, whichever is less. The board may adopt rules to regulate the content 
2.34 	of the advertising to ensure that the content is consistent with the public welfare.

3.1 	Sec. 4. Minnesota Statutes 2008, section 349.12, subdivision 7, is amended to read:
3.2 		Subd. 7.Capital assets. "Capital assets" means property, real or personal, except 
3.3 	gambling equipment, with an expected useful life of at least one year two years and a 
3.4 	minimum value of $2,000.

3.5 	Sec. 5. Minnesota Statutes 2008, section 349.12, subdivision 7a, is amended to read:
3.6 		Subd. 7a.Charitable contribution. "Charitable contribution" means one or more 
3.7 	of the lawful purposes expenditures under section 349.12, subdivision 25, paragraph (a), 
3.8 	clauses (1) to (7), (10), (11), (13) to(10) to (15), and (19).

3.9 	Sec. 6. Minnesota Statutes 2008, section 349.12, subdivision 12a, is amended to read:
3.10 		Subd. 12a.Electronic bingo device. "Electronic bingo device" means an electronic 
3.11 	device used by a bingo player to monitor bingo paper sheets or a facsimile of a bingo 
3.12 	paper sheet when purchased at the time and place of an organization's bingo occasion and 
3.13 	which (1) provides a means for bingo players to input activate numbers announced by a 
3.14 	bingo caller; (2) compares the numbers entered by the player to the bingo faces previously 
3.15 	stored in the memory of the device; and (3) identifies a winning bingo pattern.
3.16 	Electronic bingo device does not mean any device into which coin, currency, or tokens are 
3.17 	inserted to activate play.

3.18 	Sec. 7. Minnesota Statutes 2008, section 349.12, subdivision 18, is amended to read:
3.19 		Subd. 18. Gambling equipment. "Gambling equipment" means: bingo hard cards 
3.20 	or paper sheets, linked bingo paper sheets, devices for selecting bingo numbers, electronic 
3.21 	bingo devices, pull-tabs, jar tickets, paddle wheels, paddle wheel tables, paddle tickets, 
3.22 	paddle ticket cards, tipboards, tipboard tickets, promotional tickets that mimic a pull-tab 
3.23 	or tipboard, and pull-tab dispensing devices, and programmable electronic devices that 
3.24 	have no effect on the outcome of a game and are used to provide a visual or auditory 
3.25 	enhancement of a game. 

3.26 	Sec. 8. Minnesota Statutes 2008, section 349.12, subdivision 19, is amended to read:
3.27 		Subd. 19.Gambling manager. "Gambling manager" means a person who has been 
3.28 	designated by the organization to supervise the lawful gambling conducted by it and who:,
3.29 	(1) has been an active member of the organization for at least two years the most 
3.30 	recent six months at the time of the organization's initial application for a gambling 
3.31 	manager license;, and
4.1 	(2) has been an active member of the organization for at least the most recent six 
4.2 	months prior to the effective date of the organization's renewal license; or
4.3 	(3) meets other qualifications as prescribed by the board by rule.

4.4 	Sec. 9. Minnesota Statutes 2008, section 349.12, subdivision 21, is amended to read:
4.5 		Subd. 21.Gross receipts. "Gross receipts" means all receipts derived from lawful 
4.6 	gambling activity including, but not limited to, the following items:
4.7 	(1) gross sales of bingo hard cards, paper sheets, facsimiles of bingo paper sheets 
4.8 	when used in conjunction with an electronic bingo device, and rental of electronic bingo 
4.9 	devices before reduction for prizes, expenses, shortages, free plays, or any other charges 
4.10 	or offsets;
4.11 	(2) the ideal gross of pull-tab and tipboard deals or games less the value of unsold 
4.12 	and defective tickets and before reduction for prizes, expenses, shortages, free plays, 
4.13 	or any other charges or offsets;
4.14 	(3) gross sales of raffle tickets and paddle tickets before reduction for prizes, 
4.15 	expenses, shortages, free plays, or any other charges or offsets;
4.16 	(4) admission, commission, cover, or other charges imposed on participants in 
4.17 	lawful gambling activity as a condition for or cost of participation; and
4.18 	(5) interest, dividends, annuities, profit from transactions, or other income derived 
4.19 	from the accumulation or use of gambling proceeds.
4.20 	Gross receipts does not include rental proceeds from rental under section    349.18, 
4.21 	subdivision 3 premises owned by an organization and leased to one or more other 
4.22 	organizations for the purposes of conducting lawful gambling. 

4.23 	Sec. 10. Minnesota Statutes 2008, section 349.12, subdivision 25, is amended to read:
4.24 		Subd. 25.Lawful purpose. (a) "Lawful purpose" means one or more of the 
4.25 	following:
4.26 	(1) any expenditure by or contribution to a 501(c)(3) or festival organization, as 
4.27 	defined in subdivision 15a, provided that the organization and expenditure or contribution 
4.28 	are in conformity with standards prescribed by the board under section 349.154, which 
4.29 	standards must apply to both types of organizations in the same manner and to the same 
4.30 	extent;
4.31 	(2) a contribution to or expenditure for goods and services for an individual or 
4.32 	family suffering from poverty, homelessness, or disability, which is used to relieve the 
4.33 	effects of that suffering;
5.1 	(3) a contribution to a program recognized by the Minnesota Department of Human 
5.2 	Services for the education, prevention, or treatment of problem gambling;
5.3 	(4) a contribution to or expenditure on a public or private nonprofit educational 
5.4 	institution registered with or accredited by this state or any other state;
5.5 	(5) a contribution to an individual, public or private nonprofit educational institution 
5.6 	registered with or accredited by this state or any other state, or to a scholarship fund of a 
5.7 	nonprofit organization whose primary mission is to award scholarships, for defraying the 
5.8 	cost of education to individuals where the funds are awarded through an open and fair 
5.9 	selection process;
5.10 	(6) activities by an organization or a government entity which recognize military 
5.11 	service to the United States, the state of Minnesota, or a community, subject to rules 
5.12 	of the board, provided that the rules must not include mileage reimbursements in the 
5.13 	computation of the per diem reimbursement limit and must impose no aggregate annual 
5.14 	limit on the amount of reasonable and necessary expenditures made to support:
5.15 	(i) members of a military marching or color guard unit for activities conducted 
5.16 	within the state;
5.17 	(ii) members of an organization solely for services performed by the members at 
5.18 	funeral services;
5.19 	(iii) members of military marching, color guard, or honor guard units may be 
5.20 	reimbursed for participating in color guard, honor guard, or marching unit events within 
5.21 	the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or
5.22 	(iv) active military personnel and their immediate family members in need of 
5.23 	support services;
5.24 	(7) recreational, community, and athletic facilities and activities intended primarily 
5.25 	for persons under age 21, provided that such facilities and activities do not discriminate on 
5.26 	the basis of gender and the organization complies with section 349.154, subdivision 3a;
5.27 	(8) payment of local taxes authorized under this chapter, taxes imposed by the 
5.28 	United States on receipts from lawful gambling, the taxes imposed by section 297E.02, 
5.29 	subdivisions 1, 4, 5, and 6, and the tax imposed on unrelated business income by section 
5.30 	290.05, subdivision 3;
5.31 	(9) payment of real estate taxes and assessments on permitted gambling premises 
5.32 	owned by the licensed organization paying the taxes, or wholly leased by a licensed 
5.33 	veterans organization under a national charter recognized under section 501(c)(19) of the 
5.34 	Internal Revenue Code;
6.1 	(10) a contribution to the United States, this state or any of its political subdivisions, 
6.2 	or any agency or instrumentality thereof other than a direct contribution to a law 
6.3 	enforcement or prosecutorial agency;
6.4 	(11) a contribution to or expenditure by a nonprofit organization which is a church 
6.5 	or body of communicants gathered in common membership for mutual support and 
6.6 	edification in piety, worship, or religious observances;
6.7 	(12) payment of the reasonable costs of an audit required in section 297E.06, 
6.8 	subdivision 4, provided the annual audit is filed in a timely manner with the Department of 
6.9 	Revenue and paid prior to June 30, 2006;
6.10 	(12) an expenditure for citizen monitoring of surface water quality by individuals 
6.11 	or nongovernmental organizations that is consistent with section 115.06, subdivision 4, 
6.12 	and Minnesota Pollution Control Agency guidance on monitoring procedures, quality 
6.13 	assurance protocols, and data management, provided that the resulting data is submitted 
6.14 	to the Minnesota Pollution Control Agency for review and inclusion in the state water 
6.15 	quality database;
6.16 	(13) a contribution to or expenditure on projects or activities approved by the 
6.17 	commissioner of natural resources for:
6.18 	(i) wildlife management projects that benefit the public at large;
6.19 	(ii) grant-in-aid trail maintenance and grooming established under sections 84.83
6.20 	and 84.927, and other trails open to public use, including purchase or lease of equipment 
6.21 	for this purpose; and
6.22 	(iii) supplies and materials for safety training and educational programs coordinated 
6.23 	by the Department of Natural Resources, including the Enforcement Division;
6.24 	(14) conducting nutritional programs, food shelves, and congregate dining programs 
6.25 	primarily for persons who are age 62 or older or disabled;
6.26 	(15) a contribution to a community arts organization, or an expenditure to sponsor 
6.27 	arts programs in the community, including but not limited to visual, literary, performing, 
6.28 	or musical arts;
6.29 	(16) an expenditure by a licensed fraternal organization or a licensed veterans 
6.30 	organization for payment of water, fuel for heating, electricity, and sewer costs for a 
6.31 	building wholly owned or wholly leased by and used as the primary headquarters of the 
6.32 	licensed veterans organization or  fraternal organization;
6.33 	(17) expenditure by a licensed veterans organization of up to $5,000 in a calendar 
6.34 	year in net costs to the organization for meals and other membership events, limited to 
6.35 	members and spouses, held in recognition of military service. No more than $5,000 can be 
7.1 	expended in total per calendar year under this clause by all licensed veterans organizations 
7.2 	sharing the same veterans post home;
7.3 	(18) payment of fees authorized under this chapter imposed by the state of Minnesota 
7.4 	to conduct lawful gambling in Minnesota; or
7.5 	(19) a contribution or expenditure to honor an individual's humanitarian service as 
7.6 	demonstrated through philanthropy or volunteerism to the United States, this state, or 
7.7 	local community.;
7.8 	(20) a contribution by a licensed organization to another licensed organization with 
7.9 	prior board approval, with the contribution designated to be used for one or more of the 
7.10 	following lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25);
7.11 	(21) an expenditure that is a contribution to a parent organization, if the parent 
7.12 	organization: (i) has not provided to the contributing organization within one year of the 
7.13 	contribution any money, grants, property, or other thing of value, and (ii) has received 
7.14 	prior board approval for the contribution that will be used for a program that meets one or 
7.15 	more of the lawful purposes under subdivision 7a;
7.16 	(22) an expenditure for the repair, maintenance, or improvement of real property 
7.17 	and capital assets owned by an organization, or for the replacement of a capital asset that 
7.18 	can no longer be repaired, with a fiscal year limit of five percent of gross profits from 
7.19 	the previous fiscal year, with no carryforward of unused allowances. The fiscal year is 
7.20 	July 1 through June 30. Total expenditures for the fiscal year may not exceed the limit 
7.21 	unless the board has specifically approved the expenditures that exceed the limit due to 
7.22 	extenuating circumstances beyond the organization's control. An expansion of a building 
7.23 	or bar-related expenditures are not allowed under this provision.
7.24 	(i) The expenditure must be related to the portion of the real property or capital asset 
7.25 	that must be made available for use free of any charge to other nonprofit organizations, 
7.26 	community groups, service groups, or is used for the organization's primary mission or 
7.27 	headquarters.
7.28 	(ii) An expenditure may be made to bring an existing building that the organization 
7.29 	owns into compliance with the Americans with Disabilities Act.
7.30 	(iii) An organization may apply the amount that is allowed under item (ii) to the 
7.31 	erection or acquisition of a replacement building that is in compliance with the Americans 
7.32 	with Disabilities Act if the board has specifically approved the amount. The cost of 
7.33 	the erection or acquisition of a replacement building may not be made from gambling 
7.34 	proceeds, except for the portion allowed under this item;
8.1 	(23) an expenditure for the acquisition or improvement of a capital asset with a cost 
8.2 	greater than $2,000, excluding real property, that will be used exclusively for lawful 
8.3 	purposes under this section if the board has specifically approved the amount;
8.4 	(24) an expenditure for the acquisition, erection, improvement, or expansion of real 
8.5 	property, if the board has first specifically authorized the expenditure after finding that the 
8.6 	real property will be used exclusively for lawful purpose under this section; or
8.7 	(25) an expenditure, including a mortgage payment or other debt service payment, 
8.8 	for the erection or acquisition of a comparable building to replace an organization-owned 
8.9 	building that was destroyed or made uninhabitable by fire or catastrophe or to replace an 
8.10 	organization-owned building that was taken or sold under an eminent domain proceeding. 
8.11 	The expenditure may be only for that part of the replacement cost not reimbursed by 
8.12 	insurance for the fire or catastrophe or compensation not received from a governmental 
8.13 	unit under the eminent domain proceeding, if the board has first specifically authorized 
8.14 	the expenditure.
8.15 	(b) Expenditures authorized by the board under clauses (24) and (25) must be 
8.16 	51 percent completed within two years of the date of board approval; otherwise the 
8.17 	organization must reapply to the board for approval of the project. "Fifty-one percent 
8.18 	completed" means that the work completed must represent at least 51 percent of the value 
8.19 	of the project as documented by the contractor or vendor.
8.20 	(b) (c) Notwithstanding paragraph (a), "lawful purpose" does not include:
8.21 	(1) any expenditure made or incurred for the purpose of influencing the nomination 
8.22 	or election of a candidate for public office or for the purpose of promoting or defeating a 
8.23 	ballot question;
8.24 	(2) any activity intended to influence an election or a governmental decision-making 
8.25 	process;
8.26 	(3) the erection, acquisition, improvement, expansion, repair, or maintenance of real 
8.27 	property or capital assets owned or leased by an organization, unless the board has first 
8.28 	specifically authorized the expenditures after finding that (i) the real property or capital 
8.29 	assets will be used exclusively for one or more of the purposes in paragraph (a); (ii) 
8.30 	with respect to expenditures for repair or maintenance only, that the property is or will 
8.31 	be used extensively as a meeting place or event location by other nonprofit organizations 
8.32 	or community or service groups and that no rental fee is charged for the use; (iii) with 
8.33 	respect to expenditures, including a mortgage payment or other debt service payment, 
8.34 	for erection or acquisition only, that the erection or acquisition is necessary to replace 
8.35 	with a comparable building, a building owned by the organization and destroyed or 
8.36 	made uninhabitable by fire or catastrophe, provided that the expenditure may be only 
9.1 	for that part of the replacement cost not reimbursed by insurance; (iv) with respect to 
9.2 	expenditures, including a mortgage payment or other debt service payment, for erection or 
9.3 	acquisition only, that the erection or acquisition is necessary to replace with a comparable 
9.4 	building a building owned by the organization that was acquired from the organization by 
9.5 	eminent domain or sold by the organization to a purchaser that the organization reasonably 
9.6 	believed would otherwise have acquired the building by eminent domain, provided 
9.7 	that the expenditure may be only for that part of the replacement cost that exceeds the 
9.8 	compensation received by the organization for the building being replaced; or (v) with 
9.9 	respect to an expenditure to bring an existing building into compliance with the Americans 
9.10 	with Disabilities Act under item (ii), an organization has the option to apply the amount of 
9.11 	the board-approved expenditure to the erection or acquisition of a replacement building 
9.12 	that is in compliance with the Americans with Disabilities Act;
9.13 	(4) an expenditure by an organization which is a contribution to a parent 
9.14 	organization, foundation, or affiliate of the contributing organization, if the parent 
9.15 	organization, foundation, or affiliate has provided to the contributing organization within 
9.16 	one year of the contribution any money, grants, property, or other thing of value;
9.17 	(5) a contribution by a licensed organization to another licensed organization unless 
9.18 	the board has specifically authorized the contribution. The board must authorize such a 
9.19 	contribution when requested to do so by the contributing organization unless it makes an 
9.20 	affirmative finding that the contribution will not be used by the recipient organization for 
9.21 	one or more of the purposes in paragraph (a); or
9.22 	(6) (3) a contribution to a statutory or home rule charter city, county, or town by a 
9.23 	licensed organization with the knowledge that the governmental unit intends to use the 
9.24 	contribution for a pension or retirement fund.; or
9.25 	(4) a contribution to a 501(c)(3) organization or other entity with the intent or effect 
9.26 	of not complying with lawful purpose restrictions or requirements.

9.27 	Sec. 11. Minnesota Statutes 2008, section 349.12, subdivision 32a, is amended to read:
9.28 		Subd. 32a.Pull-tab dispensing device. "Pull-tab dispensing device" means a 
9.29 	mechanical device that dispenses paper pull-tabs and has no additional function as an 
9.30 	amusement or gambling device. A pull-tab dispensing device may have as a component 
9.31 	an auditory or visual enhancement to promote or provide information about a game being 
9.32 	dispensed, provided the component does not affect the outcome of a game or display the 
9.33 	results of a game or an individual ticket.

9.34 	Sec. 12. Minnesota Statutes 2008, section 349.12, subdivision 33, is amended to read:
10.1 		Subd. 33.Raffle. "Raffle" means a game in which a participant buys a ticket or 
10.2 	other certificate of participation in an event where the prize determination is based on a 
10.3 	method of random selection and all entries have an equal chance of selection. The ticket 
10.4 	or certificate of participation must include the location, date, and time of the selection of 
10.5 	the winning entries.

10.6 	Sec. 13. Minnesota Statutes 2008, section 349.15, subdivision 1, is amended to read:
10.7 		Subdivision 1. Expenditure restrictions, requirements, and civil penalties.
 10.8 	(a) Gross profits from lawful gambling may be expended only for lawful purposes or 
10.9 	allowable expenses as authorized by the membership of the conducting organization at a 
10.10 	monthly meeting of the organization's membership. 
10.11 	(b) Provided that no more than 70 percent of the gross profit from bingo, and no more 
10.12 	than 60 percent of the gross profit from other forms of lawful gambling, may be expended 
10.13 	biennially during the term of the license for allowable expenses related to lawful gambling, 
10.14 	except that for the period of July 1, 2008, to June 30, 2009, no more than 75 percent of the 
10.15 	gross profit from bingo, and no more than 65 percent of the gross profit from other forms 
10.16 	of lawful gambling, may be expended for allowable expenses related to lawful gambling. 
10.17 	For licenses issued after June 30, 2006, compliance with this subdivision will be measured 
10.18 	on a biennial basis that is concurrent with the term of the license. Compliance with this 
10.19 	subdivision is a condition for the renewal of any license beginning on July 1, 2008. For 
10.20 	licenses renewed with an effective date between July 1, 2006, and June 30, 2008, an 
10.21 	organization shall carry forward an amount equal to 15 percent of any positive allowable 
10.22 	expense carryover amount. This balance must be used to offset any future negative 
10.23 	expense balance at the time of license renewal.This provision expires June 30, 2009.
10.24 	(c) For each 12-month period beginning July 1, 2009, a licensed organization will 
10.25 	be evaluated by the board to determine a rating based on the percentage of annual lawful 
10.26 	purpose expenditures when compared to available gross profits for the same period. The 
10.27 	rating will be used to determine the organization's profitability percent and is not a rating 
10.28 	of the organization's lawful gambling operation. An organization will be evaluated 
10.29 	according to the following criteria:
10.30 	(1) an organization that expends 50 percent or more of gross profits on lawful 
10.31 	purposes will receive a five-star rating;
10.32 	(2) an organization that expends 40 percent or more but less than 50 percent of gross 
10.33 	profits on lawful purposes will receive a four-star rating;
10.34 	(3) an organization that expends 30 percent or more but less than 40 percent of gross 
10.35 	profits on lawful purposes will receive a three-star rating;
11.1 	(4) an organization that expends 20 percent or more but less than 30 percent of gross 
11.2 	profits on lawful purposes will receive a two-star rating; and
11.3 	(5) an organization the expends less than 20 percent of gross profits on lawful 
11.4 	purposes will receive a one-star rating.
11.5 	(d) An organization that fails to expend a minimum of 30 percent annually of gross 
11.6 	profits on lawful purposes is automatically on probation effective July 1 for a period of 
11.7 	one year. The organization must increase their rating to a minimum of 30 percent or be 
11.8 	subject to sanctions by the board. If an organization fails to meet the minimum after a 
11.9 	one-year probation the board may suspend the organization's license or impose a civil 
11.10 	penalty as follows:
11.11 	(1) in determining any suspension or penalty for a violation of this paragraph, the 
11.12 	board must consider any unique factors or extraordinary circumstances that caused the 
11.13 	organization to not meet the minimum rate of profitability. Unique factors or extraordinary 
11.14 	circumstances include, but are not limited to, the purchase of capital assets necessary to 
11.15 	conduct lawful gambling; road or other construction causing impaired access to the lawful 
11.16 	gambling premises; and flood, tornado, or other catastrophe that had a direct impact on the 
11.17 	continuing lawful gambling operation; and
11.18 	(2) notwithstanding section 349.151, subdivision 4, paragraph (a), clause (10), the 
11.19 	board may impose a civil penalty under this subdivision up to $10,000.

11.20 	Sec. 14. Minnesota Statutes 2008, section 349.15, subdivision 1a, is amended to read:
11.21 		Subd. 1a.Disaster relief. An organization may expend net profits from lawful 
11.22 	gambling to relieve the effects of a disaster as defined in section 12.03, subdivision 2, 
11.23 	without the prior approval of its membership if: 
11.24 	(1) the contribution is a lawful purpose under section 349.12, subdivision 25, 
11.25 	paragraph (a); 
11.26 	(2) the contribution is authorized by the organization's chief executive officer and 
11.27 	gambling manager; and
11.28 	(3) the contribution is approved by the membership of the organization at its next 
11.29 	regularly scheduled monthly meeting.
11.30 	If the contribution is not approved by the membership of the organization at its next 
11.31 	regularly scheduled monthly meeting, the organization shall reimburse its gambling 
11.32 	account in the amount of the contribution.

11.33 	Sec. 15. Minnesota Statutes 2008, section 349.151, subdivision 4, is amended to read:
11.34 		Subd. 4.Powers and duties. (a) The board has the following powers and duties:
12.1 	(1) to regulate lawful gambling to ensure it is conducted in the public interest;
12.2 	(2) to issue licenses to organizations and gambling managers, and to issue licenses 
12.3 	and renewals to  distributors, distributor salespersons, manufacturers, and linked bingo 
12.4 	game providers, and gambling managers;
12.5 	(3) to collect and deposit license, permit, and registration fees due under this chapter;
12.6 	(4) to receive reports required by this chapter and inspect all premises, records, 
12.7 	books, and other documents of organizations, distributors, manufacturers, and linked 
12.8 	bingo game providers to insure compliance with all applicable laws and rules;
12.9 	(5) to make rules authorized by this chapter;
12.10 	(6) to register gambling equipment and issue registration stamps;
12.11 	(7) to provide by rule for the mandatory posting by organizations conducting lawful 
12.12 	gambling of rules of play and the odds and/or house percentage on each form of lawful 
12.13 	gambling;
12.14 	(8) to report annually to the governor and legislature on its activities and on 
12.15 	recommended changes in the laws governing gambling;
12.16 	(9) to report annually to the governor and legislature a financial summary for each 
12.17 	licensed organization identifying the gross receipts, prizes paid, allowable expenses, 
12.18 	lawful purpose expenditures including charitable contributions and all taxes and fees as 
12.19 	per section 349.12, subdivision 25, paragraph (a), clauses (8) and (18), and the percentage 
12.20 	of annual gross profit used for lawful purposes;
12.21 	(10) to impose civil penalties of not more than $500 $1,000 per violation on 
12.22 	organizations, distributors, distributor salespersons, manufacturers, linked bingo game 
12.23 	providers, and gambling managers for failure violating or failing to comply with any 
12.24 	provision of this chapter, chapter 297E, or any rule or order of the board;
12.25 	(11) to issue premises permits to organizations licensed to conduct lawful gambling;
12.26 	(12) to delegate to the director the authority to issue or deny license and premises 
12.27 	permit applications and renewals under criteria established by the board;
12.28 	(13) to delegate to the director the authority to approve or deny fund loss requests, 
12.29 	contribution of gambling funds to another licensed organization, and property expenditure 
12.30 	requests under criteria established by the board;
12.31 	(14) to suspend or revoke licenses and premises permits of organizations, 
12.32 	distributors, distributor salespersons, manufacturers, linked bingo game providers, or 
12.33 	gambling managers as provided in this chapter;
12.34 	(15) to approve or deny requests from licensees for:
12.35 	(i) waivers from fee requirements as provided in section 349.16, subdivision 6; and
12.36 	(ii) variances from Gambling Control Board rules under section 14.055; and
13.1 	(16) to register employees of organizations licensed to conduct lawful gambling;
13.2 	(17) to require fingerprints from persons determined by board rule to be subject to 
13.3 	fingerprinting;
13.4 	(18) to delegate to a compliance review group of the board the authority to investigate 
13.5 	alleged violations, issue consent orders, and initiate contested cases on behalf of the board;
13.6 	(19) to order organizations, distributors, distributor salespersons, manufacturers, 
13.7 	linked bingo game providers, and gambling managers to take corrective actions; and
13.8 	(20) to take all necessary steps to ensure the integrity of and public confidence 
13.9 	in lawful gambling.
13.10 	(b) The board, or director if authorized to act on behalf of the board, may by citation 
13.11 	assess any organization, distributor, distributor salesperson, manufacturer, linked bingo 
13.12 	game provider, or gambling manager a civil penalty of not more than $500 $1,000 per 
13.13 	violation for a failure to comply with any provision of this chapter, chapter 297E, or 
13.14 	any rule adopted or order issued by the board. Any organization, distributor, distributor 
13.15 	salesperson, gambling manager, linked bingo game provider, or manufacturer assessed 
13.16 	a civil penalty under this paragraph may request a hearing before the board. Appeals of 
13.17 	citations imposing a civil penalty are not subject to the provisions of the Administrative 
13.18 	Procedure Act.
13.19 	(c) All penalties received by the board must be deposited in the general fund.
13.20 	(d) All fees imposed by the board under sections 349.16 to 349.167 must be 
13.21 	deposited in the state treasury and credited to a lawful gambling regulation account in the 
13.22 	special revenue fund. Receipts in this account are available for the operations of the board 
13.23 	up to the amount authorized in biennial appropriations from the legislature.

13.24 	Sec. 16. Minnesota Statutes 2008, section 349.154, subdivision 1, is amended to read:
13.25 		Subdivision 1.Standards for certain organizations. The board shall by rule 
13.26 	prescribe standards that must be met annually by any licensed organization that is a 
13.27 	501(c)(3) or festival organization. The standards must provide:
13.28 	(1) operating standards for the organization, including a maximum percentage 
13.29 	or percentages of the organization's total expenditures that may be expended for the 
13.30 	organization's administration and operation; and
13.31 	(2) standards for any expenditure by the organization of net profits from lawful 
13.32 	gambling, including a requirement that the expenditure be related to the primary purpose 
13.33 	of the organization.

13.34 	Sec. 17. Minnesota Statutes 2008, section 349.155, subdivision 3, is amended to read:
14.1 		Subd. 3.Mandatory disqualifications. (a) In the case of licenses for manufacturers, 
14.2 	distributors, distributor salespersons, linked bingo game providers, and gambling 
14.3 	managers, the board may not issue or renew a license under this chapter, and shall revoke 
14.4 	a license under this chapter, if the applicant or licensee, or a director, officer, partner, 
14.5 	governor, or person in a supervisory or management position of the applicant or licensee:
14.6 	(1) has ever been convicted of a felony or a crime involving gambling;
14.7 	(2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use 
14.8 	of a firearm, or (iii) making terroristic threats;
14.9 	(3) is or has ever been connected with or engaged in an illegal business;
14.10 	(4) owes $500 or more in delinquent taxes as defined in section 270C.72;
14.11 	(5) had a sales and use tax permit revoked by the commissioner of revenue within 
14.12 	the past two years; or
14.13 	(6) after demand, has not filed tax returns required by the commissioner of revenue. 
14.14 	The board may deny or refuse to renew a license under this chapter, and may revoke a 
14.15 	license under this chapter, if any of the conditions in this paragraph are applicable to 
14.16 	an affiliate or direct or indirect holder of more than a five percent financial interest in 
14.17 	the applicant or licensee.
14.18 	(b) In the case of licenses for organizations, the board may not issue or renew a 
14.19 	license under this chapter, and shall revoke a license under this chapter, if the organization, 
14.20 	or an officer or member of the governing body of the organization:
14.21 	(1) has been convicted of a felony or gross misdemeanor involving theft or fraud;
14.22 	(2) has ever been convicted of a crime involving gambling; or
14.23 	(3) has had a license issued by the board or director permanently revoked for 
14.24 	violation of law or board rule.

14.25 	Sec. 18. Minnesota Statutes 2008, section 349.155, subdivision 4a, is amended to read:
14.26 		Subd. 4a.Illegal gambling. (a) The board may not deny, suspend, or revoke, or 
14.27 	refuse to renew an organization's premises permit because illegal gambling occurred at the 
14.28 	site for which the premises permit was issued, unless the board determines that: (1) the 
14.29 	organization knowingly participated in the illegal gambling; or (2) the organization or any 
14.30 	of its agents knew of the illegal gambling and the organization did not notify the lessor of 
14.31 	the premises, in writing and with specificity, that illegal gambling was being conducted on 
14.32 	the premises and requesting that the lessor take appropriate action. For purposes of this 
14.33 	paragraph, "agent" means any person, compensated or otherwise, who participates in the 
14.34 	conduct of the organization's lawful gambling.
15.1 	(b) The board may not deny, suspend, or revoke, or refuse to renew an organization's 
15.2 	license because illegal gambling occurred at a site for which a premises permit was issued 
15.3 	to the organization unless the board determines that the organization's chief executive 
15.4 	officer, gambling manager, or one or more of its assistant gambling managers participated 
15.5 	in or authorized the illegal gambling.

15.6 	Sec. 19. Minnesota Statutes 2008, section 349.16, subdivision 2, is amended to read:
15.7 		Subd. 2.Issuance of gambling licenses. (a) Licenses authorizing organizations 
15.8 	to conduct lawful gambling may be issued by the board to organizations meeting the 
15.9 	qualifications in paragraphs (b) to (h) (e) if the board determines that the license is 
15.10 	consistent with the purpose of sections 349.11 to 349.22.
15.11 	(b) The organization must have been in existence for the most recent three years 
15.12 	preceding the license application as a registered Minnesota nonprofit corporation or as 
15.13 	an organization designated as exempt from the payment of income taxes by the Internal 
15.14 	Revenue Code.
15.15 	(c) The organization at the time of licensing must have at least 15 active members at 
15.16 	the time of its initial license application, and thereafter the organization must have at least 
15.17 	13 members eligible to vote on gambling matters.
15.18 	(d) The organization must not be in existence solely for the purpose of conducting 
15.19 	gambling.
15.20 	(e) The organization has identified in its license application the lawful purposes on 
15.21 	which it proposes to expend net profits from lawful gambling and has identified an annual 
15.22 	goal for charitable contributions, expressed as a percentage of gross profits.
15.23 	(f) (e) The organization has identified on its license application a gambling manager 
15.24 	and certifies that the manager is qualified under this chapter.
15.25 	(g) The organization must not, in the opinion of the board after consultation with the 
15.26 	commissioner of revenue, be seeking licensing primarily for the purpose of evading or 
15.27 	reducing the tax imposed by section 297E.02, subdivision 6.
15.28 	(h) The organization has not exceeded the expenditure restrictions imposed under 
15.29 	section 349.15, subdivision 1, or if the organization has exceeded the expenditure 
15.30 	restrictions under section 349.15, subdivision 1, the organization has reimbursed any 
15.31 	excess expenses from a source of nongambling funds. Reimbursement of excess expenses 
15.32 	is a condition for license renewal. The board may by rule impose sanctions or penalties on 
15.33 	organizations that exceed the expenditure restrictions under section 349.15, subdivision 1. 

15.34 	Sec. 20. Minnesota Statutes 2008, section 349.16, subdivision 3, is amended to read:
16.1 		Subd. 3.Term of license. Licenses issued under this section are perpetual and valid 
16.2 	for two years unless the board revokes or suspends the license, the organization terminates 
16.3 	the license, or the license lapses.

16.4 	Sec. 21. Minnesota Statutes 2008, section 349.16, is amended by adding a subdivision 
16.5 	to read:
16.6 		Subd. 3a.Lapsed licenses. (a) An organization license is considered to be lapsed 
16.7 	if the organization:
16.8 	(1) did not conduct and report any gambling sales activity within seven months 
16.9 	from the date of the last gambling activity;
16.10 	(2) failed to have a gambling manager as required by section 349.167;
16.11 	(3) failed to pay annual license and permit fees; or
16.12 	(4) surrenders, withdraws, or otherwise terminates the license and files a termination 
16.13 	plan required under section 349.19.
16.14 	(b) If the organization license is determined to be lapsed, the board may:
16.15 	(1) institute a proceeding under section 349.155;
16.16 	(2) require the organization to file a termination plan required under section 349.19;
16.17 	(3) enter a revocation order as of the date on which the license was considered lapsed;
16.18 	(4) impose a civil penalty as provided under section 349.151, subdivision 4;
16.19 	(5) order corrective action as provided under section 349.151, subdivision 7; or
16.20 	(6) summarily suspend the license as provided under section 349.1641.

16.21 	Sec. 22. Minnesota Statutes 2008, section 349.16, subdivision 6, is amended to read:
16.22 		Subd. 6.License fees. The board shall impose an annual fee of $350 for an 
16.23 	organization's license application. Organizations that expect to receive less than $100,000 
16.24 	in gross annual receipts may request from the board a waiver of organization license fees.

16.25 	Sec. 23. Minnesota Statutes 2008, section 349.16, is amended by adding a subdivision 
16.26 	to read:
16.27 		Subd. 6a.Monthly regulatory fee. An organization must pay a monthly regulatory 
16.28 	fee of 0.1 percent of the organization's gross receipts from lawful gambling conducted 
16.29 	each month. The fee must be reported and paid on a monthly basis in a format as 
16.30 	determined by the commissioner of revenue, and remitted to the commissioner of revenue 
16.31 	with the organization's monthly tax return. All monthly regulatory fees received by the 
16.32 	commissioner of revenue under this subdivision must be deposited in the lawful gambling 
16.33 	regulation account in the special revenue fund according to section 349.151. Failure to 
17.1 	pay the monthly regulatory fees in a timely manner may result in disciplinary action 
17.2 	by the board.

17.3 	Sec. 24. Minnesota Statutes 2008, section 349.16, subdivision 8, is amended to read:
17.4 		Subd. 8.Local investigation fee. A statutory or home rule charter city or county 
17.5 	notified under section 349.213, subdivision 2, may assess an annual investigation fee on 
17.6 	organizations applying for or renewing a an initial premises permit or conducting lawful 
17.7 	gambling at a site within their jurisdiction under section 349.213, subdivision 2. An 
17.8 	investigation fee may not exceed the following limits:
17.9 	(1) for cities of the first class, $500;
17.10 	(2) for cities of the second class, $250;
17.11 	(3) for all other cities, $100; and
17.12 	(4) for counties, $375.

17.13 	Sec. 25. Minnesota Statutes 2008, section 349.16, subdivision 11, is amended to read:
17.14 		Subd. 11.Agreement to pay taxes. An organization which is recognized by 
17.15 	federal law, regulation, or other ruling as a quasi-governmental organization that would 
17.16 	otherwise be exempt from one or more taxes under chapter 297E must agree to pay all 
17.17 	taxes under chapter 297E on lawful gambling conducted by the organization as a condition 
17.18 	of receiving or renewing a license or premises permit.

17.19 	Sec. 26. Minnesota Statutes 2008, section 349.16, is amended by adding a subdivision 
17.20 	to read:
17.21 		Subd. 12.Organization license information. The organization must notify the 
17.22 	board within ten days when changes in the application information occur.

17.23 	Sec. 27. Minnesota Statutes 2008, section 349.162, subdivision 6, is amended to read:
17.24 		Subd. 6.Removal of equipment from inventory. Authorized employees of the 
17.25 	board, the Division of Alcohol and Gambling Enforcement of the Department of Public 
17.26 	Safety, and the commissioner of revenue may remove gambling equipment from the 
17.27 	inventories of distributors and organizations and test that equipment to determine its 
17.28 	compliance with all applicable laws and rules. A distributor or organization may return to 
17.29 	the manufacturer thereof any gambling equipment which is determined to be in violation 
17.30 	of law or rule. The cost to an organization of gambling equipment removed from inventory 
17.31 	under this paragraph and found to be in compliance with all applicable law and rules is an 
17.32 	allowable expense under section 349.15 349.12, subdivision 3a.  

18.1 	Sec. 28. Minnesota Statutes 2008, section 349.1635, subdivision 3, is amended to read:
18.2 		Subd. 3.Attachments to application. An applicant for a linked bingo game 
18.3 	provider license must attach to its application:
18.4 	(1) evidence of a bond in the principal amount of  $100,000 payable to the state of 
18.5 	Minnesota conditioned on the payment of all linked bingo prizes and any other money due 
18.6 	and payable under this chapter;
18.7 	(2) detailed plans and specifications for the operation of the linked bingo game and 
18.8 	the linked bingo system, along with a proposed fee schedule for the cost of providing 
18.9 	services and equipment to licensed organizations; and
18.10 	(3) any other information required by the board by rule.

18.11 	Sec. 29. Minnesota Statutes 2008, section 349.1641, is amended to read:
18.12 	349.1641 LICENSES; SUMMARY SUSPENSION. 
18.13 	(a) The board may (1) summarily suspend the license of an organization that is 
18.14 	more than three months 45 days late in filing a tax return or in paying a tax required 
18.15 	under chapter 297E and may keep the suspension in effect until all required returns are 
18.16 	filed and required taxes are paid; (2) summarily suspend for not more than 90 days 
18.17 	any license issued by the board or director for what the board determines are actions 
18.18 	detrimental to the integrity of lawful gambling in Minnesota; and (3) summarily suspend 
18.19 	the license of a gambling manager who has failed to receive the training required under 
18.20 	section 349.167, subdivision 4, clause (2), and may keep the suspension in effect until 
18.21 	the gambling manager passes an examination prepared and administered by the board. 
18.22 	The examination does not qualify as continuing education credit for the next calendar 
18.23 	year; and (4) summarily suspend the license of an organization that fails to pay the fees 
18.24 	required under section 349.16, 349.165, or 349.167, and may keep the suspension in effect 
18.25 	until all required fees are paid. 
18.26 	(b) The board must notify the licensee at least 14 days before suspending the license 
18.27 	under this section. If a license is summarily suspended under this section, a contested 
18.28 	case hearing on the merits must be held within 20 days of the issuance of the order 
18.29 	of suspension, unless the parties agree to a later hearing date. The administrative law 
18.30 	judge's report must be issued within 20 days after the close of the hearing record. In all 
18.31 	cases involving summary suspension, the board must issue its final decision within 30 
18.32 	days after receipt of the report of the administrative law judge and subsequent exceptions 
18.33 	and argument under section 14.61. When an organization's license is suspended under 
18.34 	this section, the board shall within three days notify all municipalities in which the 
18.35 	organization's gambling premises are located and all licensed distributors in the state. 

19.1 	Sec. 30. Minnesota Statutes 2008, section 349.165, subdivision 1, is amended to read:
19.2 		Subdivision 1.Premises permit required; application. A licensed organization 
19.3 	may not conduct lawful gambling at any site unless it has first obtained from the board 
19.4 	a premises permit for the site. The board shall prescribe a form for permit applications, 
19.5 	and each application for a permit must be submitted on a separate form. The premises 
19.6 	permit issued by the board runs concurrently on a perpetual basis with the license of 
19.7 	the organization unless the premises permit is suspended, or revoked by the board, or 
19.8 	voluntarily terminated by the organization. The board may by rule limit the number of 
19.9 	premises permits that may be issued to an organization.

19.10 	Sec. 31. Minnesota Statutes 2008, section 349.165, subdivision 2, is amended to read:
19.11 		Subd. 2.Contents of application. An application for a premises permit must 
19.12 	contain:
19.13 	(1) the name and address of the applying organization;
19.14 	(2) a description of the site for which the permit is sought, including its address and, 
19.15 	where applicable, its placement within another premises or establishment;
19.16 	(3) if the site is leased, the name and address of the lessor and information about the 
19.17 	lease the board requires, including all rents and other charges for the use of the site. The 
19.18 	lease term is concurrent with the term of the premises permit. The lease must contain a 
19.19 	30-day termination clause. No lease is required for the conduct of a raffle; and
19.20 	(4) other information the board deems necessary to carry out its purposes.
19.21 	An organization holding a premises permit must notify the board in writing within 
19.22 	ten days whenever any material change is made in the above information.

19.23 	Sec. 32. Minnesota Statutes 2008, section 349.165, subdivision 3, is amended to read:
19.24 		Subd. 3.Fees. (a) The board may issue premises permits to organizations licensed 
19.25 	under section 349.16, subdivision 6. The annual fee for each premises permit is $150.  
19.26 	(b) In addition to the annual fee for a premises permit, an organization must pay 
19.27 	a monthly regulatory fee of 0.1 percent of the organization's gross receipts from lawful 
19.28 	gambling conducted at that site. The fee must be reported and paid on a monthly basis in a 
19.29 	format as determined by the commissioner of revenue, and remitted to the commissioner 
19.30 	of revenue along with the organization's monthly tax return for that premises. All premises 
19.31 	permit fees received by the commissioner of revenue under this subdivision must be 
19.32 	deposited in the lawful gambling regulation account in the special revenue fund according 
19.33 	to section 349.151. Failure to pay the monthly premises permit fees in a timely manner 
19.34 	may result in disciplinary action by the board.  

20.1 	Sec. 33. Minnesota Statutes 2008, section 349.165, is amended by adding a subdivision 
20.2 	to read:
20.3 		Subd. 5.Off-site permits. (a) A licensed organization may conduct lawful 
20.4 	gambling on a premises other than the organization's permitted premises if it has first 
20.5 	submitted to the board an application and lease on forms provided by the board, obtained 
20.6 	authorization required under section 349.213, and received a permit from the board for up 
20.7 	to four events in a calendar year in connection with a county fair, the state fair, a church 
20.8 	festival, or a civic celebration, not to exceed three days per event.
20.9 	(b) No lease is required for the conduct of a raffle.
20.10 	(c) No fee may be assessed for an off-site permit by the board or by local authority 
20.11 	under section 349.213.

20.12 	Sec. 34. Minnesota Statutes 2008, section 349.166, subdivision 2, is amended to read:
20.13 		Subd. 2.Exemptions. (a) Lawful gambling, with the exception of linked bingo 
20.14 	games, may be conducted by an organization without a license and without complying 
20.15 	with sections 349.168, subdivisions 1 and 2; 349.17, subdivisions subdivision 4 and 5; 
20.16 	349.18, subdivision 1; and 349.19 if:
20.17 	(1) the organization conducts lawful gambling on five or fewer days in a calendar 
20.18 	year;
20.19 	(2) the organization does not award more than $50,000 in prizes for lawful gambling 
20.20 	in a calendar year;
20.21 	(3) the organization submits a board-prescribed application and pays a fee of $50 
20.22 	to the board, notifies the board in writing not less than 30 days before for each lawful
20.23 	gambling occasion of, and receives an exempt permit number from the board. If the 
20.24 	application is postmarked or received less than 30 days before the gambling occasion the 
20.25 	fee is $100 for that application. The application must include the date and location of 
20.26 	the occasion, or 60 days for an occasion held in the case of a city of the first class, the 
20.27 	types of lawful gambling to be conducted, and the prizes to be awarded, and receives an 
20.28 	exemption identification number;
20.29 	(4) the organization notifies the local government unit 30 days before the lawful 
20.30 	gambling occasion, or 60 days for an occasion held in a city of the first class;
20.31 	(5) the organization purchases all gambling equipment and supplies from a licensed 
20.32 	distributor; and
20.33 	(6) the organization reports to the board, on a single-page form prescribed by the 
20.34 	board, within 30 days of each gambling occasion, the gross receipts, prizes, expenses, 
21.1 	expenditures of net profits from the occasion, and the identification of the licensed 
21.2 	distributor from whom all gambling equipment was purchased.
21.3 	(b) If the organization fails to file a timely report as required by paragraph (a), clause 
21.4 	(3) or (6), the board shall not issue any authorization, license, or permit to the organization 
21.5 	to conduct lawful gambling on an exempt, excluded, or licensed basis until the report has 
21.6 	been filed and the organization may be subject to penalty as determined by the board. The 
21.7 	board may refuse to issue any authorization, license, or permit if a report or application is 
21.8 	determined to be incomplete or knowingly contains false or inaccurate information.
21.9 	(c) Merchandise prizes must be valued at their fair market value.
21.10 	(d) Organizations that qualify to conduct exempt raffles under paragraph (a), are 
21.11 	exempt from section 349.173, paragraph (b), clause (2), if the raffle tickets are sold 
21.12 	only in combination with an organization's membership or a ticket for an organization's 
21.13 	membership dinner and are not included with any other raffle conducted under the exempt 
21.14 	permit.
21.15 	(e) Unused pull-tab and tipboard deals must be returned to the distributor within 
21.16 	seven working days after the end of the lawful gambling occasion. The distributor must 
21.17 	accept and pay a refund for all returns of unopened and undamaged deals returned under 
21.18 	this paragraph.
21.19 	(f) An organization that is exempt from taxation on purchases of pull-tabs and 
21.20 	tipboards under section 297E.02, subdivision 4, paragraph (b), clause (4), must return to 
21.21 	the distributor any tipboard or pull-tab deal no part of which is used at the lawful gambling 
21.22 	occasion for which it was purchased by the organization.
21.23 	(g) (f) The organization must maintain all required records of exempt gambling 
21.24 	activity for 3-1/2 years.

21.25 	Sec. 35. Minnesota Statutes 2008, section 349.167, subdivision 2, is amended to read:
21.26 		Subd. 2. Gambling managers; licenses. (a) A person may not serve as a gambling 
21.27 	manager for an organization unless the person possesses a valid gambling manager's 
21.28 	license issued by the board or otherwise meets the temporary requirements allowed under 
21.29 	paragraph (d). In addition to the disqualifications in section 349.155, subdivision 3, the 
21.30 	board may not issue a gambling manager's license to a person applying for the license who: 
21.31 	(1) has not complied with subdivision 4, clauses (1) and (2); 
21.32 	(2) within the five years before the date of the license application, has committed 
21.33 	a violation of law or board rule that resulted in the revocation of a license issued by the 
21.34 	board; 
22.1 	(3) has ever been convicted of a criminal violation involving fraud, theft, tax 
22.2 	evasion, misrepresentation, or gambling; or 
22.3 	(4) has engaged in conduct the board determines is contrary to the public health, 
22.4 	welfare, or safety or the integrity of lawful gambling. 
22.5 	(b) A gambling manager's license runs concurrent with the organization's license 
22.6 	unless the gambling manager's license is suspended or revoked by the board or otherwise 
22.7 	terminated by the organization or gambling manager.
22.8 	(c) The annual fee for a gambling manager's license is $100. 
22.9 	(d) At the time of the death, disability, or termination of a gambling manager, the 
22.10 	organization must:
22.11 	(1) contact the board within one business day to establish a plan to replace the 
22.12 	gambling manager; and
22.13 	(2) submit a complete application and fee within four business days.
22.14 	(e) An organization that fails to meet the requirements of paragraph (d) must 
22.15 	discontinue its gambling operation until a gambling manager application and fee is 
22.16 	received by the board and a license has been issued by the board and received by the 
22.17 	gambling manager.

22.18 	Sec. 36. Minnesota Statutes 2008, section 349.168, subdivision 8, is amended to read:
22.19 		Subd. 8.Percentage of gross profit Compensation paid. (a) A licensed 
22.20 	organization may pay a percentage of the gross profit from raffle ticket sales to a nonprofit 
22.21 	organization that sells raffle tickets for the licensed organization.
22.22 	(b) A licensed organization may compensate an employee of the organization for 
22.23 	the sale of gambling equipment at a bar operation if the frequency of the activity is one 
22.24 	day or less per week and the games are limited to 32 chances or less per game. For 
22.25 	purposes of this paragraph, an employee must not be a lessor, employee of the lessor, or an 
22.26 	immediate family member of the lessor.
22.27 	(c) An organization that leases a premises may not pay compensation to the lessor, 
22.28 	a member of the lessor's immediate family, or the lessor's employees, other than as a 
22.29 	seller of pull-tabs and tipboards within a booth operation on the premises. A member of 
22.30 	the lessor's immediate family may be compensated by an organization for the conduct of 
22.31 	gambling at other sites not owned by the lessor.

22.32 	Sec. 37. Minnesota Statutes 2008, section 349.169, subdivision 1, is amended to read:
22.33 		Subdivision 1.Filing required. When required by the board, manufacturers and,
22.34 	distributors, and linked bingo game providers must file with the director the prices 
23.1 	at which the manufacturer or, distributor, or linked bingo game provider will sell all 
23.2 	gambling equipment currently offered for sale by that manufacturer or, distributor, or 
23.3 	linked bingo game provider. The filing must be in a format the director prescribes.

23.4 	Sec. 38. Minnesota Statutes 2008, section 349.169, subdivision 3, is amended to read:
23.5 		Subd. 3.Sales at filed prices. When required to report under subdivision 1, no 
23.6 	manufacturer may sell to a distributor or linked bingo game provider, and no distributor or 
23.7 	linked bingo game provider may sell to an organization, any gambling equipment for any 
23.8 	price other than a price the manufacturer or, distributor, or linked bingo game provider has 
23.9 	filed with the director under subdivision 1, including volume discounts, and exclusive of 
23.10 	transportation costs.

23.11 	Sec. 39. Minnesota Statutes 2008, section 349.17, subdivision 3, is amended to read:
23.12 		Subd. 3.Winners. Each bingo winner must be determined and every prize shall be 
23.13 	awarded and delivered the same day on which the bingo occasion is conducted, except 
23.14 	that prizes won in payment for a progressive prize or a linked bingo game prize must be 
23.15 	delivered within three business days of the day on which the occasion was conducted.

23.16 	Sec. 40. Minnesota Statutes 2008, section 349.17, subdivision 5, is amended to read:
23.17 		Subd. 5.Bingo cards and sheets. (a) The board shall by rule require that all 
23.18 	licensed organizations: (1) conduct bingo only using  a bingo paper sheet or facsimile of a 
23.19 	bingo face that  bears  an individual number recorded by the distributor or linked bingo 
23.20 	game provider; and (2) use each bingo paper sheet for no more than one bingo occasion. 
23.21 	In lieu of the requirements of clause (2), a licensed organization may electronically record 
23.22 	the sale of each bingo hard card or paper sheet at each bingo occasion using an electronic 
23.23 	recording system approved by the board.
23.24 	(b) The requirements of paragraph (a) shall only apply to a licensed organization 
23.25 	that received gross receipts from bingo in excess of $150,000 in the organization's last 
23.26 	fiscal year.
23.27 	(c) Each bingo hard card, bingo paper sheet, or a facsimile of a bingo paper sheet 
23.28 	must have five horizontal rows of spaces with each row except one having five numbers. 
23.29 	The center row must have four numbers and the center space marked "free." Each column 
23.30 	must have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also 
23.31 	have numbers that are not preprinted but are filled in by players.

23.32 	Sec. 41. Minnesota Statutes 2008, section 349.17, subdivision 6, is amended to read:
24.1 		Subd. 6.Conduct of bingo. (a) Each bingo hard card and paper sheets must have 
24.2 	five horizontal rows of spaces with each row except one having five numbers. The center 
24.3 	row must have four numbers and the center space marked "free." Each column must 
24.4 	have one of the letters B-I-N-G-O in order at the top. Bingo paper sheets may also have 
24.5 	numbers that are not preprinted but are filled in by players.
24.6 	(b) A game of bingo begins with the first letter and number called. Each player must 
24.7 	cover or, mark, or activate the numbers when bingo  numbers are randomly  selected, 
24.8 	announced, and displayed to the players, either manually or with a flashboard and monitor. 
24.9 	The game is won when a player, using bingo paper, bingo hard card, or a facsimile of a 
24.10 	bingo paper sheet, has covered or marked completed, as described in the bingo program, a 
24.11 	previously designated arrangement of numbers on the card or sheet pattern or previously 
24.12 	determined requirements of the game and declared bingo. The game is completed when a 
24.13 	winning card or, sheet, or facsimile is verified and a prize awarded, except that prizes won 
24.14 	in linked bingo games may be awarded pursuant to subdivision 3.

24.15 	Sec. 42. Minnesota Statutes 2008, section 349.17, subdivision 7, is amended to read:
24.16 		Subd. 7. Bar bingo. An organization may conduct bar bingo subject to the 
24.17 	following restrictions: 
24.18 	(1) the bingo is conducted at a site the organization owns or leases and which has a 
24.19 	license for the sale of intoxicating beverages on the premises under chapter 340A; 
24.20 	(2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper 
24.21 	sheets purchased from a licensed distributor or licensed linked bingo game provider; and
24.22 	(3) no rent may be paid for a bar bingo occasion; and
24.23 	(4) the lessor's immediate family and employees may participate if they are not 
24.24 	involved with the sale or operation of bar bingo. 

24.25 	Sec. 43. Minnesota Statutes 2008, section 349.173, is amended to read:
24.26 	349.173 CONDUCT OF RAFFLES.
24.27 	(a) Raffle tickets or certificates of participation at a minimum must list the three 
24.28 	most expensive prizes to be awarded and include the location, date, and time of the 
24.29 	selection of the winning entries. If additional prizes will be awarded, a complete list of 
24.30 	additional prizes must be publicly posted at the event and copies of the complete prize list 
24.31 	made available upon request. Notwithstanding section 349.12, subdivision 33, Raffles 
24.32 	conducted under the exemptions in section 349.166 may use tickets that contain only the 
24.33 	sequential number of the raffle ticket and no other information if the organization makes 
24.34 	a list of prizes and a statement of other relevant information required by rule available 
25.1 	to persons purchasing tickets and if tickets are only sold at the event and on the date 
25.2 	when the tickets are drawn.
25.3 	(b) Raffles must be conducted in a manner that ensures:
25.4 	(1) all entries in the raffle have an equal chance of selection;
25.5 	(2) entry in the raffle is not conditioned upon any other purchase, except that a 
25.6 	certificate of participation may be a button with a nominal value of less than $5;
25.7 	(3) the method of selection is conducted in a public forum;
25.8 	(4) the method of selection cannot be manipulated or based on the outcome of an 
25.9 	event not under the control of the organization;
25.10 	(5) physical presence at the raffle is not a requirement to win; and
25.11 	(6) all sold and unsold tickets or certificates of participation are accounted for.
25.12 	(c) Methods of selecting winning entries from a raffle other than prescribed in rule 
25.13 	may be used with the prior written approval of the board.

25.14 	Sec. 44. Minnesota Statutes 2008, section 349.18, subdivision 1, is amended to read:
25.15 		Subdivision 1. Lease or ownership required; rent limitations. (a) An organization 
25.16 	may conduct lawful gambling only on premises it owns or leases. Leases must be on a 
25.17 	form prescribed by the board.  The term of the lease may not begin before the effective 
25.18 	date of the premises permit and must expire on the same day that the premises permit 
25.19 	expires is concurrent with the premises permit. Leases approved by the board must 
25.20 	specify that the board may authorize an organization to withhold rent from a lessor for 
25.21 	a period of up to 90 days if the board determines that illegal gambling occurred on the 
25.22 	premises and or that the lessor or its employees participated in the illegal gambling or 
25.23 	knew of the gambling and did not take prompt action to stop the gambling. The lease must 
25.24 	authorize the continued tenancy of the organization without the payment of rent during 
25.25 	the time period determined by the board under this paragraph. Copies of all leases must 
25.26 	be made available to employees of the board and the Division of Alcohol and Gambling 
25.27 	Enforcement on request. The board may prescribe by rule limits on the amount of rent 
25.28 	which an organization may pay to a lessor for premises leased for bingo. Any rule adopted 
25.29 	by the board limiting the amount of rent to be paid may only be effective for leases entered 
25.30 	into, or renewed, after the effective date of the rule.
25.31 	(b) Rent paid by an organization for leased premises for the conduct of pull-tabs, 
25.32 	tipboards, and paddle wheels is subject to the following limits: 
25.33 	(1) for booth operations, including booth operations where a pull-tab dispensing 
25.34 	device is located, booth operations where a bar operation is also conducted, and booth 
26.1 	operations where both a pull-tab dispensing device is located and a bar operation is also 
26.2 	conducted, the maximum rent is: 
26.3 	(i) in any month where the organization's gross profit at those premises does not 
26.4 	exceed $4,000, up to $400; and 
26.5 	(ii) in any month where the organization's gross profit at those premises exceeds 
26.6 	$4,000, up to $400 plus not more than ten percent of the gross profit for that month in 
26.7 	excess of $4,000; 
26.8 	(2) for bar operations, including bar operations where a pull-tab dispensing device 
26.9 	is located but not including bar operations subject to clause (1), and for locations where 
26.10 	only a pull-tab dispensing device is located: 
26.11 	(i) in any month where the organization's gross profit at those premises does not 
26.12 	exceed $1,000, up to $200; and 
26.13 	(ii) in any month where the organization's gross profit at those premises exceeds 
26.14 	$1,000, up to $200 plus not more than 20 percent of the gross profit for that month 
26.15 	in excess of $1,000; 
26.16 	(3) a lease not governed by clauses (1) and (2) must be approved by the board 
26.17 	before becoming effective; 
26.18 	(4) total rent paid to a lessor from all organizations from leases governed by clause 
26.19 	(1) may not exceed $1,750 per month. Total rent paid to a lessor from all organizations 
26.20 	from leases governed by clause (2) may not exceed $2,500 per month.
26.21 	(c) Rent paid by an organization for leased premises for the conduct of bingo is 
26.22 	subject to either of the following limits at the option of the parties to the lease: 
26.23 	(1) not more than ten percent of the monthly gross profit from all lawful gambling 
26.24 	activities held during bingo occasions excluding bar bingo or at a rate based on a cost per 
26.25 	square foot not to exceed 110 percent of a comparable cost per square foot for leased space 
26.26 	as approved by the director; and 
26.27 	(2) no rent may be paid for bar bingo. 
26.28 	(d) Amounts paid as rent under leases are all-inclusive. No other services or 
26.29 	expenses provided or contracted by the lessor may be paid by the organization, including, 
26.30 	but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn 
26.31 	services, electricity, heat, security, security monitoring, storage, other utilities or services, 
26.32 	and, in the case of bar operations, cash shortages, unless approved by the director. Any 
26.33 	other expenditure made by an organization that is related to a leased premises must be 
26.34 	approved by the director. An organization may not provide any compensation or thing of 
26.35 	value to a lessor or the lessor's employees from any fund source other than its gambling 
26.36 	account. Rent payments may not be made to an individual. 
27.1 	(e) Notwithstanding paragraph (b), an organization may pay a lessor for food or 
27.2 	beverages or meeting room rental if the charge made is comparable to similar charges 
27.3 	made to other individuals or groups. 
27.4 	(f)  No entity other than the licensed organization may conduct any activity within 
27.5 	a booth operation on a leased premises.
27.6 	(g) Employees of a lessor not involved in the conduct of lawful gambling on the 
27.7 	premises or nongambling employees of an organization conducting lawful gambling on 
27.8 	the premises may participate in lawful gambling on the premises provided  if pull-tabs or 
27.9 	tipboards are sold, the organization  posts the major prizes  awarded.
27.10 	(h) A gambling employee may purchase pull-tabs or tipboards at the site of the 
27.11 	employee's place of employment provided: 
27.12 	(1) the organization  posts the major prizes for pull-tab or tipboard games; and 
27.13 	(2) the employee is not involved in the sale of pull-tabs or tipboards at that site.
27.14 	(i) At a leased site where an organization uses a paddle wheel consisting of 32 
27.15 	numbers or less or a tipboard consisting of 32 tickets or less, tickets may be sold 
27.16 	throughout the permitted premises, but winning tickets must be redeemed, the paddle 
27.17 	wheel must be located, and the tipboard seal must be opened within the leased premises. 

27.18 	Sec. 45. [349.181] RESTRICTIONS ON WHO MAY PARTICIPATE IN LAWFUL 
27.19 	GAMBLING.
27.20 		Subdivision 1.Minimum age. (a) A person under age 18 may not participate:
27.21 	(1) as a player in games of pull-tabs, tipboards, paddlewheel, or raffles;
27.22 	(2) as a player in a bingo game other than:
27.23 	(i) a bingo game exempt or excluded from licensing; or
27.24 	(ii) a bingo game conducted by an organization as part of an annual community 
27.25 	event if the person under age 18 is accompanied by a parent or guardian; and
27.26 	(3) in the conduct of pull-tabs, tipboards, paddlewheels, bingo, or raffles, except that 
27.27 	a person under age 18 may sell raffle tickets.
27.28 	Violation of this paragraph is a misdemeanor.
27.29 	(b) A licensed organization or employee may not allow a person under age 18 to 
27.30 	participate in lawful gambling in violation of paragraph (a). Violation of this paragraph 
27.31 	is a misdemeanor.
27.32 	(c) In a prosecution under paragraph (b), it is a defense for the defendant to prove by 
27.33 	a preponderance of the evidence that the defendant reasonably and in good faith relied 
27.34 	upon representations of proof of age authorized in section 340A.503, subdivision 6, 
27.35 	paragraph (a).
28.1 		Subd. 2.Gambling manager. A gambling manager may not participate directly or 
28.2 	indirectly as a player in any lawful gambling conducted by the organization for which 
28.3 	the gambling manager is licensed.
28.4 		Subd. 3.Organization and lessor employees and volunteers. (a) For purposes of 
28.5 	this section, "volunteer" means a person who is not compensated by an organization but 
28.6 	who performs activities in the conduct of lawful gambling for that organization.
28.7 	(b) For purposes of this section, "conduct of pull-tabs, tipboards, and paddlewheels" 
28.8 	includes selling tickets, redeeming tickets, auditing games, making deposits, spinning the 
28.9 	paddlewheel, and conducting inventory.
28.10 	(c) For purposes of this section, "conduct of bingo" includes selling bingo hard cards, 
28.11 	bingo paper sheets, or facsimiles of bingo paper sheets, completing bingo occasion records, 
28.12 	selecting or announcing bingo numbers, making deposits, and conducting inventory.
28.13 	(d) An employee or volunteer who is involved in the conduct of pull-tabs, tipboards, 
28.14 	or paddlewheels at a permitted premises may not participate directly or indirectly as a 
28.15 	player in a pull-tab, tipboard, or paddlewheel game at that same premises. This restriction 
28.16 	is in effect until six weeks after the employee or volunteer is no longer involved in the 
28.17 	conduct of pull-tab, tipboard, or paddlewheel games at that same premises.
28.18 	(e) An employee or volunteer who is involved in the conduct of any lawful gambling 
28.19 	during a bingo occasion may not participate directly or indirectly as a player in any lawful 
28.20 	gambling during that bingo occasion.
28.21 		Subd. 4.Lessor. The lessor of a permitted premises may not participate directly or 
28.22 	indirectly as a player in any lawful gambling conducted at that premises.
28.23 		Subd. 5.Lessor's immediate family. The lessor's immediate family may not 
28.24 	participate directly or indirectly as a player in a pull-tab, tipboard, or paddlewheel game 
28.25 	conducted at that premises.

28.26 	Sec. 46. Minnesota Statutes 2008, section 349.19, subdivision 2, is amended to read:
28.27 		Subd. 2.Accounts. (a) Gross receipts from lawful gambling by each organization 
28.28 	must be segregated from all other revenues of the conducting organization and placed in a 
28.29 	separate gambling bank account.
28.30 	(b) All expenditures for allowable expenses, taxes, and lawful purposes must be 
28.31 	made from the separate account except (1) in the case of expenditures previously approved 
28.32 	by the organization's membership for emergencies as defined by board rule, (2) as provided 
28.33 	in subdivision 2a, or (3) when restricted to one electronic fund transaction for the payment 
28.34 	of taxes for the organization as a whole, the organization may transfer the amount of taxes 
28.35 	related to the conduct of gambling to the general account at the time when due and payable.
29.1 	(c) The name and address of the bank, the account number for the separate account, 
29.2 	and the names of organization members authorized as signatories on the separate account 
29.3 	must be provided to the board when the application is submitted. Changes in the 
29.4 	information must be submitted to the board at least ten days before the change is made.
29.5 	(d) Gambling receipts must be deposited into the gambling bank account within 
29.6 	four business days of completion of the bingo occasion, deal, or game from which they 
29.7 	are received. A deal of pull-tabs is considered complete when either the last pull-tab 
29.8 	of the deal is sold or the organization does not continue the play of the deal during 
29.9 	the next scheduled period of time in which the organization will conduct pull-tabs. A 
29.10 	tipboard game is considered complete when the seal on the game flare is uncovered or 
29.11 	the organization does not continue the play of the deal during the next scheduled period 
29.12 	of time in which the organization will conduct tipboards.
29.13 	(e) Deposit records must be sufficient to allow determination of deposits made from 
29.14 	each bingo occasion, deal, or game at each permitted premises.
29.15 	(f) The person who accounts for gambling gross receipts and profits may not be the 
29.16 	same person who accounts for other revenues of the organization.

29.17 	Sec. 47. Minnesota Statutes 2008, section 349.19, subdivision 2a, is amended to read:
29.18 		Subd. 2a.Tax refund or credit. (a) Each organization that receives a refund or 
29.19 	credit under section 297E.02, subdivision 4, paragraph (d), must within four business 
29.20 	days of receiving a refund under that paragraph deposit the refund in the organization's 
29.21 	gambling account.  
29.22 	(b) The organization may expend the tax refund or credit issued under section 
29.23 	297E.02, subdivision 4, paragraph (d), only for lawful purposes, other than lawful 
29.24 	purposes described in section 349.12, subdivision 25, paragraph (a), clauses (8), and (9), 
29.25 	and (12). Amounts subject to this paragraph must be spent for qualifying lawful purposes 
29.26 	no later than one year after the refund or credit is received.  

29.27 	Sec. 48. Minnesota Statutes 2008, section 349.19, subdivision 3, is amended to read:
29.28 		Subd. 3.Expenditures. (a) All expenditures of gross profits from lawful gambling 
29.29 	must be itemized as to payee, purpose, amount, and date of payment, and must be in 
29.30 	compliance with section 349.154.
29.31 	(b) Each licensed organization must report monthly to the board on a form prescribed 
29.32 	by the board each expenditure or contribution of net profits from lawful gambling. The 
29.33 	reports must provide for each expenditure or contribution:
29.34 	(1) the name of the recipient of the expenditure or contribution;
30.1 	(2) the date the expenditure or contribution was approved by the organization;
30.2 	(3) the date, amount, and check number or electronic transfer confirmation number 
30.3 	of the expenditure or contribution;
30.4 	(4) a brief description of how the expenditure or contribution meets one or more of 
30.5 	the purposes in section 349.12, subdivision 25; and
30.6 	(5) in the case of expenditures authorized under section 349.12, subdivision 25, 
30.7 	paragraph (a), clause (7), whether the expenditure is for a facility or activity that primarily 
30.8 	benefits male or female participants.
30.9 	(c) Authorization of the expenditures must be recorded in the monthly meeting 
30.10 	minutes of the licensed organization.
30.11 	(d) Checks or authorizations for electronic fund transfers for expenditures of gross 
30.12 	profits must be signed by at least two persons authorized by board rules to sign the 
30.13 	checks or authorizations.
30.14 	(e) Expenditures of gross profits from lawful gambling for local, state, and federal 
30.15 	taxes as identified in section 349.12, subdivision 25, paragraph (a), clause (8), may be: 
30.16 	(1) transferred electronically from the organization's gambling account directly to bank 
30.17 	accounts identified by local, state, or federal agencies if the organization's gambling 
30.18 	account monthly bank statement specifically identifies the payee by name, the amount 
30.19 	transferred, and the date of the transaction; or (2) transferred electronically to and from 
30.20 	the account of a payroll processing firm that meets the criteria for such a firm established 
30.21 	under section 349.168, subdivision 6.
30.22 	(f) Expenditures of gross profits from lawful gambling as identified in section 
30.23 	349.12, subdivision 3a, and as authorized by section 349.15, subdivision 1, for payments 
30.24 	for  taxes lawful purpose expenditures and allowable expenses may be transferred 
30.25 	electronically from the organization's gambling account directly to bank accounts 
30.26 	identified by the vendor if the organization's gambling account monthly bank statement 
30.27 	specifically identifies the payee by name, the amount transferred, the account number of 
30.28 	the account into which the funds were transferred, and the date of the transaction.
30.29 	(g) Expenditures of gross profits from lawful gambling for payroll compensation 
30.30 	to an employee's account and for the payment of local, state, and federal withholding 
30.31 	taxes may be transferred electronically to and from the account of a payroll processing 
30.32 	firm provided that the firm:
30.33 	(1) is currently registered with and meets the criteria of the Department of Revenue 
30.34 	as a third-party bulk filer under section 290.92, subdivision 30;
30.35 	(2) is able to provide proof of a third-party audit and an annual report and statement 
30.36 	of financial condition;
31.1 	(3) is able to provide evidence of a fidelity bond; and
31.2 	(4) can provide proof of having been in business as a third-party bulk filer for the 
31.3 	most recent three years.
31.4 	(h) Electronic payments of  taxes, lawful purpose expenditures, and  allowable 
31.5 	expenses are permitted only if they have been authorized by the membership, the 
31.6 	organization maintains supporting documentation, and the expenditures can be verified. 
31.7 	(b) Expenditures authorized by the board according to section 349.12, subdivision 
31.8 	25, paragraph (b), clause (3), must be 51 percent completed within two years of the date 
31.9 	of board approval. "Fifty-one percent completed" means that the work completed must 
31.10 	represent at least 51 percent of the value of the project as documented by the contractor 
31.11 	or vendor. An organization that fails to comply with this paragraph shall reapply to the 
31.12 	board for approval of the project. 

31.13 	Sec. 49. Minnesota Statutes 2008, section 349.19, subdivision 9, is amended to read:
31.14 		Subd. 9.Annual financial audit; filing requirement. An organization licensed 
31.15 	under this chapter must have an annual financial audit or financial review when required 
31.16 	by section 297E.06, subdivision 4.

31.17 	Sec. 50. Minnesota Statutes 2008, section 349.19, subdivision 10, is amended to read:
31.18 		Subd. 10. Pull-tab records. (a) The board shall by rule require a licensed 
31.19 	organization to require each winner of a pull-tab prize of $50 or more to present 
31.20 	identification in the form of a driver's license, Minnesota identification card, or other 
31.21 	identification the board deems sufficient to allow the identification and tracing tracking of 
31.22 	the winner. The rule must require the organization to retain winning pull-tabs of $50 or 
31.23 	more, and the identification of the winner of the pull-tab, for 3-1/2 years. 
31.24 	(b) An organization must maintain separate cash banks for each deal of pull-tabs 
31.25 	unless (1) the licensed organization uses a pull-tab dispensing device, or (2) the 
31.26 	organization uses a cash register, of a type approved by the board, which records all 
31.27 	sales of pull-tabs by separate deals. 
31.28 	(c) The board shall: 
31.29 	(1) by rule adopt minimum technical standards for cash registers that may be used 
31.30 	by organizations, and shall approve for use by organizations any cash register that meets 
31.31 	the standards; and 
31.32 	(2) before allowing an organization to use a cash register that commingles receipts 
31.33 	from several different pull-tab games in play, adopt rules that define how cash registers 
32.1 	may be used and that establish a procedure for organizations to reconcile all pull-tab 
32.2 	games in play at the end of each month. 

32.3 	Sec. 51. Minnesota Statutes 2008, section 349.191, subdivision 1, is amended to read:
32.4 		Subdivision 1.Credit restriction. A manufacturer may not offer or extend to a 
32.5 	distributor or linked bingo game provider, a linked bingo game provider may not offer or 
32.6 	extend to an organization, and or a distributor may not offer or extend to an organization, 
32.7 	credit for a period of more than 30 days for the sale or lease of any gambling equipment. 
32.8 	No right of action exists for the collection of any claim based on credit prohibited by 
32.9 	this subdivision. The 30-day period allowed by this subdivision begins with the day 
32.10 	immediately following the day of invoice and includes all successive days, including 
32.11 	Sundays and holidays, to and including the 30th successive day.

32.12 	Sec. 52. Minnesota Statutes 2008, section 349.191, subdivision 1a, is amended to read:
32.13 		Subd. 1a. Credit and sales to delinquent organizations. (a) If a distributor or 
32.14 	linked bingo game provider does not receive payment in full from an organization within 
32.15 	30 days of the day immediately following the date of the invoice, the distributor or 
32.16 	linked bingo game provider must notify the board in writing of the delinquency on the 
32.17 	next business day. 
32.18 	(b) If a distributor or linked bingo game provider who has notified the board under 
32.19 	paragraph (a) has not received payment in full from the organization within 60 days of the 
32.20 	notification under paragraph (a), the distributor or linked bingo game provider must notify 
32.21 	the board of the continuing delinquency. 
32.22 	(c) On receipt of a notice under paragraph (a), the board shall order all distributors 
32.23 	and linked bingo game providers that until further notice from the board, they may sell
32.24 	or lease gambling equipment to the delinquent organizations only on a cash basis with 
32.25 	no credit extended. On receipt of a notice under paragraph (b), the board shall order all 
32.26 	distributors and linked bingo game providers not to sell or lease any gambling equipment 
32.27 	to the delinquent organization. 
32.28 	(d) No distributor or linked bingo game provider may extend credit or sell or lease
32.29 	gambling equipment to an organization in violation of an order under paragraph (c) until 
32.30 	the board has authorized such credit or sale or lease. 

32.31 	Sec. 53. Minnesota Statutes 2008, section 349.191, subdivision 1b, is amended to read:
32.32 		Subd. 1b. Credit and sales to delinquent distributors or linked bingo game 
32.33 	providers. (a) If a manufacturer does not receive payment in full from a distributor or 
33.1 	linked bingo game provider within 30 days of the day immediately following the date of 
33.2 	invoice, the manufacturer must notify the board in writing of the delinquency on the 
33.3 	next business day. 
33.4 	(b) If a manufacturer who has notified the board under paragraph (a) has not 
33.5 	received payment in full from the distributor or linked bingo game provider within 60 
33.6 	days of the notification under paragraph (a), the manufacturer must notify the board of the 
33.7 	continuing delinquency. 
33.8 	(c) On receipt of a notice under paragraph (a), the board shall order all manufacturers 
33.9 	that until further notice from the board, they may sell or lease gambling equipment to 
33.10 	the delinquent distributor or linked bingo game provider only on a cash basis with no 
33.11 	credit extended. On receipt of a notice under paragraph (b), the board shall order all 
33.12 	manufacturers not to sell or lease any gambling equipment to the delinquent distributor
33.13 	or linked bingo game provider. 
33.14 	(d) No manufacturer may extend credit or sell or lease gambling equipment to 
33.15 	a distributor or linked bingo game provider in violation of an order under paragraph (c) 
33.16 	until the board has authorized such credit or sale or lease. 

33.17 	Sec. 54. Minnesota Statutes 2008, section 349.191, subdivision 2, is amended to read:
33.18 		Subd. 2.Invoices. All invoices prepared by a manufacturer or, distributor, or 
33.19 	linked bingo game provider and presented as part of a credit transaction for the purchase 
33.20 	of gambling equipment must clearly bear the words "Notice: State Law Prohibits the 
33.21 	Extension of Credit For This Sale or Lease For More Than 30 Days."

33.22 	Sec. 55. Minnesota Statutes 2008, section 349.191, subdivision 3, is amended to read:
33.23 		Subd. 3.Rules. Any rule of the board which requires a manufacturer to report to 
33.24 	the board any distributor or linked bingo game provider who is delinquent in payment 
33.25 	for gambling equipment must provide that a distributor or linked bingo game provider is 
33.26 	subject to the rule if the distributor or linked bingo game provider is more than 30 days 
33.27 	delinquent in payment to a manufacturer.

33.28 	Sec. 56. Minnesota Statutes 2008, section 349.191, subdivision 4, is amended to read:
33.29 		Subd. 4.Credit; postdated checks. For purposes of this section, "credit" includes 
33.30 	acceptance by a manufacturer or, distributor, or linked bingo game provider of a postdated 
33.31 	check in payment for gambling equipment.

33.32 	Sec. 57. Minnesota Statutes 2008, section 349.2127, subdivision 7, is amended to read:
34.1 		Subd. 7.Checks for gambling purchases. An organization may not accept checks 
34.2 	or debit cards in payment for the purchase of any gambling equipment or for the chance to 
34.3 	participate in any form of lawful gambling except a raffle. If an organization accepts a 
34.4 	check or debit card, the payment of which is subsequently dishonored, the organization 
34.5 	shall reimburse its gambling account for the amount of the dishonored check payment
34.6 	within 30 days of receiving notice of the dishonor. This subdivision does not apply to 
34.7 	gaming activities conducted pursuant to the Indian Gaming Regulatory Act, United States 
34.8 	Code, title 25, section 2701 et seq.

34.9 	Sec. 58. Minnesota Statutes 2008, section 349.213, subdivision 1, is amended to read:
34.10 		Subdivision 1.Local regulation. (a) A statutory or home rule city or county has the 
34.11 	authority to adopt more stringent regulation of lawful gambling within its jurisdiction, 
34.12 	including the prohibition of lawful gambling, and.
34.13 	(b) A statutory or home rule city or county may require a permit for the conduct 
34.14 	of gambling exempt from licensing under section 349.166. The fee for a permit issued 
34.15 	under  section 349.166 may not exceed $100.
34.16 	(c) The authority granted by this subdivision does not include the authority to require 
34.17 	a license or fee for a license or permit to conduct gambling by organizations, gambling 
34.18 	managers, gambling employees, or sales by distributors or linked bingo game providers 
34.19 	licensed by or registered with the board.
34.20 	(d) The authority granted by this subdivision does not include the authority to require 
34.21 	an organization to make specific expenditures of more than ten percent per year from its 
34.22 	net profits derived from lawful gambling.
34.23 	(e) For the purposes of this subdivision, net profits are gross profits less amounts 
34.24 	expended for allowable expenses and paid in taxes assessed on lawful gambling.
34.25 	(f) A statutory or home rule charter city or a county may not require an organization 
34.26 	conducting lawful gambling within its jurisdiction to make an expenditure to the city or 
34.27 	county as a condition to operate within that city or county, except:
34.28 	(1) as authorized under section 349.16, subdivision 8, or 297E.02; provided, 
34.29 	however, that or
34.30 	(2) by an ordinance requirement that such organizations must contribute ten percent 
34.31 	per year of their net profits derived from lawful gambling conducted at premises within 
34.32 	the city's or county's jurisdiction to a fund administered and regulated by the responsible 
34.33 	local unit of government without cost to such fund, for disbursement. The funds must 
34.34 	be disbursed by the responsible local unit of government of the receipts for (i)  charitable 
34.35 	contributions as defined in section 349.12, subdivision 7a, or (ii) police, fire, and other 
35.1 	emergency or public safety-related services, equipment, and training, excluding pension 
35.2 	obligations,. A contribution made by an organization is not considered an expenditure 
35.3 	to the city or county nor a tax under section 297E.02, and is valid and lawful. A city or 
35.4 	county receiving and making expenditures authorized under this paragraph clause must by 
35.5 	March 15 of each year file a report with the board, on a form the board prescribes, that 
35.6 	lists all such revenues collected, interest received on fund balances, and expenditures for 
35.7 	the previous calendar year.
35.8 	(b) (g) A statutory or home rule city or county may by ordinance require that a 
35.9 	licensed organization conducting lawful gambling within its jurisdiction expend all or a 
35.10 	portion of its expenditures for lawful purposes on lawful purposes conducted or located 
35.11 	within the city's or county's trade area. Such an ordinance must be limited to lawful 
35.12 	purpose expenditures of gross profits derived from lawful gambling conducted at premises 
35.13 	within the city's or county's jurisdiction, must define the city's or county's trade area, and 
35.14 	must specify the percentage of lawful purpose expenditures which must be expended 
35.15 	within the trade area. A trade area defined by a city under this subdivision must include 
35.16 	each city and township contiguous to the defining city.
35.17 	(c) (h) A more stringent regulation or prohibition of lawful gambling adopted by 
35.18 	a political subdivision under this subdivision must apply equally to all forms of lawful 
35.19 	gambling within the jurisdiction of the political subdivision, except a political subdivision 
35.20 	may prohibit the use of paddlewheels.

35.21 	Sec. 59. Minnesota Statutes 2008, section 349.213, subdivision 2, is amended to read:
35.22 		Subd. 2.Local approval. Before issuing or renewing a premises permit, the board 
35.23 	must notify the city council of the statutory or home rule city in which the organization's 
35.24 	premises is located or, if the premises is located outside a city, the county board of the 
35.25 	county and the town board of the town where the premises is located. The board may 
35.26 	require organizations to notify the appropriate local government at the time of application. 
35.27 	This required notification is sufficient to constitute the notice required by this subdivision. 
35.28 	The board may not issue or renew a premises permit unless the organization submits a 
35.29 	resolution from the city council or county board approving the premises permit. The 
35.30 	resolution must have been adopted within 90 days of the date of application for the new 
35.31 	or renewed permit or license. The board may not issue an initial premises permit unless 
35.32 	approval is received from:
35.33 	(1) the city council of the statutory or home rule city in which the organization's 
35.34 	premises is located; or
35.35 	(2) the county board of the county where the premises is located.
36.1 	The organization must submit a resolution from the city council or county board 
36.2 	approving the premises permit. The resolution must have been adopted within 90 days of 
36.3 	the date of application for the new permit.

36.4 	Sec. 60.  REPEALER.
 36.5 	(a) Minnesota Statutes 2008, sections 349.15, subdivision 4; 349.154, subdivision 2; 
36.6 	349.155, subdivision 7; 349.16, subdivisions 9 and 10; 349.166, subdivision 3; 349.168, 
36.7 	subdivisions 4, 6, 7, and 10; 349.18, subdivisions 2 and 3; and 349.2127, subdivision 8,
36.8 	are repealed effective July 1, 2009.
36.9 	(b) Minnesota Statutes 2008, section 349.15, subdivision 5, is repealed effective 
36.10 	December 31, 2009.

36.11 	Sec. 61. EFFECTIVE DATE.
 36.12 	Except as otherwise provided, this act is effective July 1, 2009.