SF 1856

3rd Unofficial Engrossment - 87th Legislature (2011 - 2012)

Posted on 05/08/2012 12:49 p.m.

1.1A bill for an act 1.2relating to lawful gambling; providing for electronic pull-tab games and 1.3electronic linked bingo games; modifying certain rates of tax on lawful 1.4gambling; making clarifying, conforming, and technical changes; appropriating 1.5money;amending Minnesota Statutes 2010, sections 297E.01, subdivisions 7, 8, 1.69; 297E.02, subdivisions 1, 3, 6, 7, 10, 11, by adding a subdivision; 297E.13, 1.7subdivision 5; 349.12, subdivisions 3b, 3c, 5, 6a, 12a, 18, 25, 25b, 25c, 25d, 29, 1.831, 32, by adding subdivisions; 349.13; 349.151, subdivisions 4b, 4c, by adding 1.9a subdivision; 349.155, subdivisions 3, 4; 349.161, subdivisions 1, 5; 349.162, 1.10subdivision 5; 349.163, subdivisions 1, 5, 6; 349.1635, subdivisions 2, 3, by 1.11adding a subdivision; 349.165, subdivision 2; 349.17, subdivisions 6, 7, 8, by 1.12adding a subdivision; 349.1721; 349.18, subdivision 1; 349.19, subdivisions 2, 1.133, 5, 10; 349.211, subdivision 1a; repealing Minnesota Statutes 2010, sections 1.14297E.02, subdivision 4; 349.15, subdivision 3; 349.19, subdivision 2a. 1.15BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.16    Section 1. Minnesota Statutes 2010, section 297E.01, subdivision 7, is amended to read: 1.17    Subd. 7. Gambling product. "Gambling product" means bingo hard cards, bingo 1.18paper sheets, or linked bingo paper sheets new text begin , or electronic linked bingo games new text end ; pull-tabs; 1.19 new text begin electronic pull-tab games; new text end tipboards; paddle tickets and paddle ticket cards; raffle tickets; 1.20or any other ticket, card, board, placard, device, or token that represents a chance, for 1.21which consideration is paid, to win a prize. 1.22 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 1.23    Sec. 2. Minnesota Statutes 2010, section 297E.01, subdivision 8, is amended to read: 1.24    Subd. 8. Gross receipts. "Gross receipts" means all receipts derived from lawful 1.25gambling activity including, but not limited to, the following items: 2.1(1) gross sales of bingo hard cards and new text begin , new text end paper sheets new text begin , linked bingo paper sheets, and new text end 2.2 new text begin electronic linked bingo games new text end before reduction for prizes, expenses, shortages, free plays, 2.3or any other charges or offsets; 2.4(2) the ideal gross of pull-tab new text begin , electronic pull-tab games, new text end and tipboard deals or games 2.5less the value of unsold and defective tickets and before reduction for prizes, expenses, 2.6shortages, free plays, or any other charges or offsets; 2.7(3) gross sales of raffle tickets and paddle tickets before reduction for prizes, 2.8expenses, shortages, free plays, or any other charges or offsets; 2.9(4) admission, commission, cover, or other charges imposed on participants in 2.10lawful gambling activity as a condition for or cost of participation; and 2.11(5) interest, dividends, annuities, profit from transactions, or other income derived 2.12from the accumulation or use of gambling proceeds. 2.13Gross receipts does not include proceeds from rental under section 349.18, 2.14subdivision 3 . 2.15 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 2.16    Sec. 3. Minnesota Statutes 2010, section 297E.01, subdivision 9, is amended to read: 2.17    Subd. 9. Ideal gross. "Ideal gross" means the total amount of receipts that would be 2.18received if every individual ticket in the pull-tab new text begin , electronic pull-tab games new text end or tipboard 2.19deal new text begin , paddle wheel game, and raffle ticket new text end was sold at its face value. In the calculation 2.20of ideal gross and prizes, a free play ticket new text begin pull-tab or electronic pull-tab new text end shall be valued 2.21at face value. new text begin Ideal gross also means the total amount of receipts that would be received new text end 2.22 new text begin if every bingo paper sheet, linked bingo paper sheet, and electronic linked bingo games new text end 2.23 new text begin were sold at face value. new text end 2.24 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 2.25    Sec. 4. Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read: 2.26    Subdivision 1. Imposition. A tax is imposed on all lawful gambling other than (1) 2.27 new text begin paper or electronic new text end pull-tab deals or games; (2) tipboard deals or games; and (3) new text begin electronic new text end 2.28 new text begin linked bingo; and (4) new text end items listed in section 297E.01, subdivision 8, clauses (4) and (5), at 2.29the rate of 8.5 percent on the gross receipts as defined in section 297E.01, subdivision 8, 2.30less prizes actually paid. The tax imposed by this subdivision is in lieu of the tax imposed 2.31by section 297A.62 and all local taxes and license fees except a fee authorized under 2.32section 349.16, subdivision 8, or a tax authorized under subdivision 5. 3.1The tax imposed under this subdivision is payable by the organization or party 3.2conducting, directly or indirectly, the gambling. 3.3 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for games reported as played after new text end 3.4 new text begin June 30, 2012. new text end 3.5    Sec. 5. Minnesota Statutes 2010, section 297E.02, subdivision 3, is amended to read: 3.6    Subd. 3. Collection; disposition. new text begin (a) new text end Taxes imposed by this section other than in 3.7subdivision 4 are due and payable to the commissioner when the gambling tax return 3.8is required to be filed. Taxes imposed by subdivision 4 are due and payable to the 3.9commissioner on or before the last business day of the month following the month in 3.10which the taxable sale was made. new text begin Distributors must file their monthly sales figures with new text end 3.11 new text begin the commissioner on a form prescribed by the commissioner. new text end Returns covering the taxes 3.12imposed under this section must be filed with the commissioner on or before the 20th day 3.13of the month following the close of the previous calendar month. The commissioner 3.14may require that the returns be filed via magnetic media or electronic data transfer. The 3.15proceeds, along with the revenue received from all license fees and other fees under 3.16sections 349.11 to 349.191, 349.211, and 349.213, must be paid to the commissioner of 3.17management and budget for deposit in the general fund. 3.18 new text begin (b) The sales tax imposed by chapter 297A on the sale of pull-tabs and tipboards by new text end 3.19 new text begin the distributor is imposed on the retail sales price. The retail sale of pull-tabs or tipboards new text end 3.20 new text begin by the organization is exempt from taxes imposed by chapter 297A and is exempt from all new text end 3.21 new text begin local taxes and license fees except a fee authorized under section 349.16, subdivision 8. new text end 3.22 new text begin (c) One-half of one percent of the revenue deposited in the general fund under new text end 3.23 new text begin paragraph (a), is appropriated to the commissioner of human services for the compulsive new text end 3.24 new text begin gambling treatment program established under section 245.98. One-half of one percent new text end 3.25 new text begin of the revenue deposited in the general fund under paragraph (a), is appropriated to new text end 3.26 new text begin the commissioner of human services for a grant to the state affiliate recognized by new text end 3.27 new text begin the National Council on Problem Gambling to increase public awareness of problem new text end 3.28 new text begin gambling, education and training for individuals and organizations providing effective new text end 3.29 new text begin treatment services to problem gamblers and their families, and research relating to problem new text end 3.30 new text begin gambling. Money appropriated by this paragraph must supplement and must not replace new text end 3.31 new text begin existing state funding for these programs. new text end 3.32 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 3.33    Sec. 6. Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read: 4.1    Subd. 6. Combined new text begin net new text end receipts tax. In addition to the taxes imposed under 4.2subdivisions 1 and 4, a tax is imposed on the combined receipts of the organization. As 4.3used in this section, "combined new text begin net new text end receipts" is the sum of the organization's gross receipts 4.4from lawful gambling less gross receipts directly derived from the conduct of new text begin paper new text end bingo, 4.5raffles, and paddle wheels, as defined in section 297E.01, subdivision 8, new text begin and less the net new text end 4.6 new text begin prizes actually paid, other than prizes actually paid for paper bingo, raffles, and paddle new text end 4.7 new text begin wheels, new text end for the fiscal year. The combined new text begin net new text end receipts of an organization are subject to a 4.8tax computed according to the following schedule: 4.9 4.10 4.11 If the combined new text begin net new text end receipts for the fiscal year are: The tax is: 4.12 Not over $500,000 new text begin $87,500 new text end zero new text begin 6.89 percent new text end 4.13 4.14 4.15 Over $500,000 new text begin $87,500 new text end , but not over $700,000 new text begin $122,500 new text end 1.7 new text begin $6,029 plus 13.78 new text end percent of the amount over $500,000 new text begin $87,500 new text end , but not over $700,000 new text begin $122,500 new text end 4.16 4.17 4.18 4.19 Over $700,000 new text begin $122,500 new text end , but not over $900,000 new text begin $157,500 new text end $3,400 new text begin $10,852 new text end plus 3.4 new text begin 20.67 new text end percent of the amount over $700,000 new text begin $122,500 new text end , but not over $900,000 new text begin $157,500 new text end 4.20 4.21 4.22 Over $900,000 new text begin $157,500 new text end $10,200 new text begin $18,086 new text end plus 5.1 new text begin 27.56 new text end percent of the amount over $900,000 new text begin $157,500 new text end 4.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 4.24    Sec. 7. Minnesota Statutes 2010, section 297E.02, is amended by adding a subdivision 4.25to read: 4.26     new text begin Subd. 6a. new text end new text begin Unaccounted games. new text end new text begin If a licensed distributor cannot account for a new text end 4.27 new text begin pull-tab game, an electronic pull-tab game, a tipboard deal, paddletickets, an electronic new text end 4.28 new text begin linked bingo game, bingo paper sheets, or linked bingo paper sheets, the distributor must new text end 4.29 new text begin report the sheets or games to the commissioner as lost and remit a tax of six percent new text end 4.30 new text begin on the ideal gross of the sheets or games. new text end 4.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 4.32    Sec. 8. Minnesota Statutes 2010, section 297E.02, subdivision 7, is amended to read: 4.33    Subd. 7. Untaxed gambling product. (a) In addition to penalties or criminal 4.34sanctions imposed by this chapter, a person, organization, or business entity possessing or 4.35selling a pull-tab new text begin , electronic pull-tab game new text end or tipboard upon which the tax imposed by 4.36subdivision 4 new text begin this chapter new text end has not been paid is liable for a tax of six percent of the ideal 5.1gross of each pull-tab new text begin , electronic pull-tab game, new text end or tipboard. The tax on a partial deal 5.2must be assessed as if it were a full deal. 5.3(b) In addition to penalties and criminal sanctions imposed by this chapter, a person 5.4not licensed by the board who conducts bingo, new text begin linked bingo, electronic linked bingo, new text end 5.5raffles, or paddle wheel games is liable for a tax of six percent of the gross receipts 5.6from that activity. 5.7(c) The tax must be assessed by the commissioner. An assessment must be 5.8considered a jeopardy assessment or jeopardy collection as provided in section 270C.36. 5.9The commissioner shall assess the tax based on personal knowledge or information 5.10available to the commissioner. The commissioner shall mail to the taxpayer at the 5.11taxpayer's last known address, or serve in person, a written notice of the amount of tax, 5.12demand its immediate payment, and, if payment is not immediately made, collect the tax 5.13by any method described in chapter 270C, except that the commissioner need not await the 5.14expiration of the times specified in chapter 270C. The tax assessed by the commissioner 5.15is presumed to be valid and correctly determined and assessed. The burden is upon the 5.16taxpayer to show its incorrectness or invalidity. The tax imposed under this subdivision 5.17does not apply to gambling that is exempt from taxation under subdivision 2. 5.18 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 5.19    Sec. 9. Minnesota Statutes 2010, section 297E.02, subdivision 10, is amended to read: 5.20    Subd. 10. Refunds; appropriation. A person who has, under this chapter, paid 5.21to the commissioner an amount of tax for a period in excess of the amount legally due 5.22for that period, may file with the commissioner a claim for a refund of the excess. The 5.23amount necessary to pay the refunds under this subdivision and subdivision 4, paragraph 5.24(d), is appropriated from the general fund to the commissioner. 5.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 5.26    Sec. 10. Minnesota Statutes 2010, section 297E.02, subdivision 11, is amended to read: 5.27    Subd. 11. Unplayed or Defective pull-tabs or tipboards new text begin gambling products new text end . If a 5.28deal of pull-tabs or tipboards registered with the board or bar coded in accordance with this 5.29chapter and chapter 349 and upon which the tax imposed by subdivision 4 has been paid is 5.30returned unplayed to the distributor, the commissioner shall allow a refund of the tax paid. 5.31If a defective deal registered with the board or bar coded in accordance with this 5.32chapter and chapter 349 and upon which the taxes have been paid is returned to the 5.33manufacturer, the distributor shall submit to the commissioner of revenue certification 6.1from the manufacturer that the deal was returned and in what respect it was defective. 6.2The certification must be on a form prescribed by the commissioner and must contain 6.3additional information the commissioner requires. 6.4The commissioner may require that no refund under this subdivision be made 6.5unless the new text begin that all defective and new text end returned pull-tabs or new text begin , new text end tipboards have been new text begin , paddle tickets, new text end 6.6 new text begin paper bingo sheets, and linked bingo paper sheets be new text end set aside for inspection by the 6.7commissioner's employee. 6.8Reductions in previously paid taxes authorized by this subdivision must be made 6.9when and in the manner prescribed by the commissioner. 6.10 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for games sold by a licensed new text end 6.11 new text begin distributor after June 30, 2012. new text end 6.12    Sec. 11. Minnesota Statutes 2010, section 297E.13, subdivision 5, is amended to read: 6.13    Subd. 5. Untaxed gambling equipment. It is a gross misdemeanor for a person to 6.14possess gambling equipment for resale in this state that has not been stamped or bar-coded 6.15in accordance with this chapter and chapter 349 and upon which the taxes imposed by 6.16chapter 297A or section 297E.02, subdivision 4, have not been paid. The director of 6.17alcohol and gambling enforcement or the commissioner or the designated inspectors 6.18and employees of the director or commissioner may seize in the name of the state of 6.19Minnesota any unregistered or untaxed gambling equipment. 6.20 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for actions occurring after June new text end 6.21 new text begin 30, 2012. new text end 6.22    Sec. 12. Minnesota Statutes 2010, section 349.12, subdivision 3b, is amended to read: 6.23    Subd. 3b. Bar operation. "Bar operation" means a method of selling and redeeming 6.24 new text begin disposable new text end gambling equipment new text begin by an employee of the lessor new text end within a leased premises 6.25which is licensed for the on-sale of alcoholic beverages where such sales and redemptions 6.26are made by an employee of the lessor from a common area where food and beverages 6.27are also sold. 6.28    Sec. 13. Minnesota Statutes 2010, section 349.12, subdivision 3c, is amended to read: 6.29    Subd. 3c. Bar bingo. "Bar bingo" is a bingo occasion conducted at a permitted 6.30premises in an area where intoxicating liquor or 3.2 percent malt beverages are sold and 6.31where the licensed organization conducts another form of lawful gambling. new text begin Bar bingo new text end 6.32 new text begin does not include bingo games linked to other permitted premises. new text end 7.1    Sec. 14. Minnesota Statutes 2010, section 349.12, subdivision 5, is amended to read: 7.2    Subd. 5. Bingo occasion. "Bingo occasion" means a single gathering or session at 7.3which a series of one or more successive bingo games is played. There is no limit on the 7.4number of games conducted during a bingo occasion but new text begin . new text end A bingo occasion must not last 7.5longer than eight consecutive hours. new text begin , except that linked bingo games played on electronic new text end 7.6 new text begin bingo devices may be played during regular business hours of the permitted premises, new text end 7.7 new text begin and all play during this period is considered a bingo occasion for reporting purposes. For new text end 7.8 new text begin permitted premises where the primary business is bingo, regular business hours shall be new text end 7.9 new text begin defined as the hours between 8:00 a.m. and 2:00 a.m. new text end 7.10    Sec. 15. Minnesota Statutes 2010, section 349.12, subdivision 6a, is amended to read: 7.11    Subd. 6a. Booth operation. "Booth operation" means a method of selling and 7.12redeeming new text begin disposable new text end gambling equipment by an employee of a licensed organization in 7.13a premises the organization leases or owns where such sales and redemptions are made 7.14within a separate enclosure that is distinct from areas where food and beverages are sold. 7.15    Sec. 16. Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read: 7.16    Subd. 12a. Electronic bingo device. "Electronic bingo device" means an new text begin a new text end 7.17 new text begin handheld and portable new text end electronic device new text begin that: new text end 7.18 new text begin (a) is new text end used by a bingo player to new text begin : new text end 7.19 new text begin (1) new text end monitor bingo paper sheets or a facsimile of a bingo paper sheet when purchased 7.20 new text begin and played new text end at the time and place of an organization's bingo occasion and which (1) 7.21provides a means for bingo players to new text begin , or to play an electronic bingo game that is linked new text end 7.22 new text begin with other permitted premises; new text end 7.23 new text begin (2) new text end activate numbers announced by a bingo caller; (2) compares new text begin or displayed, and new text end 7.24 new text begin to compare new text end the numbers entered by the player to the bingo faces previously stored in 7.25the memory of the device; and 7.26(3) identifies new text begin identify new text end a winning bingo pattern. new text begin or game requirement; and new text end 7.27 new text begin (4) play against other bingo players; new text end 7.28 new text begin (b) limits the play of bingo faces to 36 faces per game; new text end 7.29 new text begin (c) requires coded entry to activate play but does not allow the use of a coin, new text end 7.30 new text begin currency, or tokens to be inserted to activate play; new text end 7.31 new text begin (d) may only be used for play against other bingo players in a bingo game; new text end 7.32 new text begin (e) has no additional function as an amusement or gambling device other than as an new text end 7.33 new text begin electronic pull-tab game defined under section 349.12, subdivision 12c; new text end 7.34 new text begin (f) has the capability to ensure adequate levels of security internal controls; new text end 8.1 new text begin (g) has the capability to permit the board to electronically monitor the operation of new text end 8.2 new text begin the device and the internal accounting systems; and new text end 8.3 new text begin (h) has the capability to allow use by a player who is visually impaired. new text end 8.4Electronic bingo device does not mean any device into which coin, currency, or tokens are 8.5inserted to activate play. 8.6    Sec. 17. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision 8.7to read: 8.8     new text begin Subd. 12b. new text end new text begin Electronic pull-tab device. new text end new text begin "Electronic pull-tab device" means a new text end 8.9 new text begin handheld and portable electronic device that: new text end 8.10 new text begin (a) is used to play one or more electronic pull-tab games; new text end 8.11 new text begin (b) requires coded entry to activate play but does not allow the use of coin, currency, new text end 8.12 new text begin or tokens to be inserted to activate play; new text end 8.13 new text begin (c) requires that a player must activate or open each electronic pull-tab ticket and new text end 8.14 new text begin each individual line, row, or column of each electronic pull-tab ticket; new text end 8.15 new text begin (d) maintains information pertaining to accumulated win credits that may be applied new text end 8.16 new text begin to games in play or redeemed upon termination of play; new text end 8.17 new text begin (e) has no spinning symbols or other representations that mimic a video slot machine; new text end 8.18 new text begin (f) has no additional function as a gambling device other than as an electronic linked new text end 8.19 new text begin bingo game played on a device defined under section 349.12, subdivision 12a; new text end 8.20 new text begin (g) may incorporate an amusement game feature as part of the pull-tab game but new text end 8.21 new text begin may not require additional consideration for that feature or award any prize, or other new text end 8.22 new text begin benefit for that feature; new text end 8.23 new text begin (h) may have auditory or visual enhancements to promote or provide information new text end 8.24 new text begin about the game being played, provided the component does not affect the outcome of new text end 8.25 new text begin a game or display the results of a game; new text end 8.26 new text begin (i) maintains, on nonresettable meters, a printable, permanent record of all new text end 8.27 new text begin transactions involving each device electronic pull-tab games played on the device; new text end 8.28 new text begin (j) is not a pull-tab dispensing device as defined under subdivision 32a; and new text end 8.29 new text begin (k) has the capability to allow use by a player who is visually impaired. new text end 8.30    Sec. 18. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision 8.31to read: 8.32     new text begin Subd. 12c. new text end new text begin Electronic pull-tab game. new text end new text begin "Electronic pull-tab game" means a pull-tab new text end 8.33 new text begin game containing: new text end 8.34 new text begin (a) facsimiles of pull-tab tickets that are played on an electronic pull-tab device; new text end 9.1 new text begin (b) a predetermined, finite number of winning and losing tickets, not to exceed new text end 9.2 new text begin 7,500 tickets; new text end 9.3 new text begin (c) the same price for each ticket in the game; new text end 9.4 new text begin (d) a price paid by the player of not less than 25 cents per ticket; new text end 9.5 new text begin (e) tickets that are in conformance with applicable board rules for pull-tabs; new text end 9.6 new text begin (f) winning tickets that comply with prize limits under section 349.211; new text end 9.7 new text begin (g) a unique serial number that may not be regenerated; new text end 9.8 new text begin (h) an electronic flare that displays the game name, form number, predetermined, new text end 9.9 new text begin finite number of tickets in the game, and prize tier; and new text end 9.10 new text begin (i) no spinning symbols or other representations that mimic a video slot machine. new text end 9.11    Sec. 19. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision 9.12to read: 9.13     new text begin Subd. 12d. new text end new text begin Electronic pull-tab game system. new text end new text begin "Electronic pull-tab game system" new text end 9.14 new text begin means the equipment leased from a licensed distributor and used by a licensed organization new text end 9.15 new text begin to conduct, manage, and record electronic pull-tab games, and to report and transmit the new text end 9.16 new text begin game results as prescribed by the board and the Department of Revenue. The system must new text end 9.17 new text begin provide security and access levels sufficient so that internal control objectives are met as new text end 9.18 new text begin prescribed by the board. The system must contain a point of sale station. new text end 9.19    Sec. 20. Minnesota Statutes 2010, section 349.12, subdivision 18, is amended to read: 9.20    Subd. 18. Gambling equipment. "Gambling equipment" means: new text begin gambling new text end 9.21 new text begin equipment that is either disposable or permanent gambling equipment. new text end 9.22 new text begin (a) Disposable gambling equipment includes the following: new text end 9.23 new text begin (1) new text end bingo hard cards or paper sheets, new text begin including new text end linked bingo paper sheets, devices for 9.24selecting bingo numbers, electronic bingo devices, new text begin ; new text end 9.25 new text begin (2) paper and electronic new text end pull-tabs, new text begin ; new text end 9.26 new text begin (3) new text end jar tickets, paddle wheels, paddle wheel tables, new text begin ; new text end 9.27 new text begin (4) new text end paddle tickets, new text begin and new text end paddle ticket cards, new text begin ; new text end 9.28 new text begin (5) new text end tipboards, new text begin and new text end tipboard tickets, new text begin ; and new text end 9.29 new text begin (6) new text end promotional tickets that mimic a pull-tab or tipboard, pull-tab dispensing devices, 9.30and programmable electronic devices that have no effect on the outcome of a game and 9.31are used to provide a visual or auditory enhancement of a game. 9.32 new text begin (b) Permanent gambling equipment includes the following: new text end 9.33 new text begin (1) devices for selecting bingo numbers; new text end 9.34 new text begin (2) electronic bingo devices; new text end 10.1 new text begin (3) electronic pull-tab devices; new text end 10.2 new text begin (4) pull-tab dispensing devices; new text end 10.3 new text begin (5) programmable electronic devices that have no effect on the outcome of a game new text end 10.4 new text begin and are used to provide a visual or auditory enhancement of a game; new text end 10.5 new text begin (6) paddle wheels; and new text end 10.6 new text begin (7) paddle wheel tables. new text end 10.7    Sec. 21. Minnesota Statutes 2010, section 349.12, subdivision 25, is amended to read: 10.8    Subd. 25. Lawful purpose. (a) "Lawful purpose" means one or more of the 10.9following: 10.10    (1) any expenditure by or contribution to a 501(c)(3) or festival organization, as 10.11defined in subdivision 15a, provided that the organization and expenditure or contribution 10.12are in conformity with standards prescribed by the board under section 349.154, which 10.13standards must apply to both types of organizations in the same manner and to the same 10.14extent; 10.15    (2) a contribution to or expenditure for goods and services for an individual or 10.16family suffering from poverty, homelessness, or disability, which is used to relieve the 10.17effects of that suffering; 10.18    (3) a contribution to a program recognized by the Minnesota Department of Human 10.19Services for the education, prevention, or treatment of problem gambling; 10.20    (4) a contribution to or expenditure on a public or private nonprofit educational 10.21institution registered with or accredited by this state or any other state; 10.22    (5) a contribution to an individual, public or private nonprofit educational institution 10.23registered with or accredited by this state or any other state, or to a scholarship fund of a 10.24nonprofit organization whose primary mission is to award scholarships, for defraying the 10.25cost of education to individuals where the funds are awarded through an open and fair 10.26selection process; 10.27    (6) activities by an organization or a government entity which recognize military 10.28service to the United States, the state of Minnesota, or a community, subject to rules 10.29of the board, provided that the rules must not include mileage reimbursements in the 10.30computation of the per diem reimbursement limit and must impose no aggregate annual 10.31limit on the amount of reasonable and necessary expenditures made to support: 10.32    (i) members of a military marching or color guard unit for activities conducted 10.33within the state; 10.34    (ii) members of an organization solely for services performed by the members at 10.35funeral services; 11.1    (iii) members of military marching, color guard, or honor guard units may be 11.2reimbursed for participating in color guard, honor guard, or marching unit events within 11.3the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or 11.4    (iv) active military personnel and their immediate family members in need of 11.5support services; 11.6    (7) recreational, community, and athletic facilities and activities intended primarily 11.7for persons under age 21, provided that such facilities and activities do not discriminate on 11.8the basis of gender and the organization complies with section 349.154, subdivision 3a; 11.9    (8) payment of local taxes authorized under this chapter, taxes imposed by the 11.10United States on receipts from lawful gambling, the taxes imposed by section 297E.02, 11.11subdivisions 1, 4, 5, and 6, and the tax imposed on unrelated business income by section 11.12290.05, subdivision 3 ; 11.13    (9) payment of real estate taxes and assessments on permitted gambling premises 11.14owned by the licensed organization paying the taxes, or wholly leased by a licensed 11.15veterans organization under a national charter recognized under section 501(c)(19) of the 11.16Internal Revenue Code; 11.17    (10) a contribution to the United States, this state or any of its political subdivisions, 11.18or any agency or instrumentality thereof other than a direct contribution to a law 11.19enforcement or prosecutorial agency; 11.20    (11) a contribution to or expenditure by a nonprofit organization which is a church 11.21or body of communicants gathered in common membership for mutual support and 11.22edification in piety, worship, or religious observances; 11.23    (12) an expenditure for citizen monitoring of surface water quality by individuals 11.24or nongovernmental organizations that is consistent with section 115.06, subdivision 4, 11.25and Minnesota Pollution Control Agency guidance on monitoring procedures, quality 11.26assurance protocols, and data management, provided that the resulting data is submitted 11.27to the Minnesota Pollution Control Agency for review and inclusion in the state water 11.28quality database; 11.29    (13) a contribution to or expenditure on projects or activities approved by the 11.30commissioner of natural resources for: 11.31    (i) wildlife management projects that benefit the public at large; 11.32    (ii) grant-in-aid trail maintenance and grooming established under sections 84.83 11.33and 84.927, and other trails open to public use, including purchase or lease of equipment 11.34for this purpose; and 11.35    (iii) supplies and materials for safety training and educational programs coordinated 11.36by the Department of Natural Resources, including the Enforcement Division; 12.1    (14) conducting nutritional programs, food shelves, and congregate dining programs 12.2primarily for persons who are age 62 or older or disabled; 12.3    (15) a contribution to a community arts organization, or an expenditure to sponsor 12.4arts programs in the community, including but not limited to visual, literary, performing, 12.5or musical arts; 12.6    (16) an expenditure by a licensed fraternal organization or a licensed veterans 12.7organization for payment of water, fuel for heating, electricity, and sewer costs for: 12.8    (i) up to 100 percent for a building wholly owned or wholly leased by and used as 12.9the primary headquarters of the licensed veteran or fraternal organization; or 12.10    (ii) a proportional amount subject to approval by the director and based on the 12.11portion of a building used as the primary headquarters of the licensed veteran or fraternal 12.12organization; 12.13    (17) expenditure by a licensed veterans organization of up to $5,000 in a calendar 12.14year in net costs to the organization for meals and other membership events, limited to 12.15members and spouses, held in recognition of military service. No more than $5,000 can be 12.16expended in total per calendar year under this clause by all licensed veterans organizations 12.17sharing the same veterans post home; 12.18    (18) payment of fees authorized under this chapter imposed by the state of Minnesota 12.19to conduct lawful gambling in Minnesota; 12.20    (19) a contribution or expenditure to honor an individual's humanitarian service 12.21as demonstrated through philanthropy or volunteerism to the United States, this state, 12.22or local community; 12.23    (20) a contribution by a licensed organization to another licensed organization with 12.24prior board approval, with the contribution designated to be used for one or more of the 12.25following lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25); 12.26    (21) an expenditure that is a contribution to a parent organization, if the parent 12.27organization: (i) has not provided to the contributing organization within one year of the 12.28contribution any money, grants, property, or other thing of value, and (ii) has received 12.29prior board approval for the contribution that will be used for a program that meets one or 12.30more of the lawful purposes under subdivision 7a; 12.31    (22) an expenditure for the repair, maintenance, or improvement of real property 12.32and capital assets owned by an organization, or for the replacement of a capital asset that 12.33can no longer be repaired, with a fiscal year limit of five percent of gross profits from 12.34the previous fiscal year, with no carryforward of unused allowances. The fiscal year is 12.35July 1 through June 30. Total expenditures for the fiscal year may not exceed the limit 12.36unless the board has specifically approved the expenditures that exceed the limit due to 13.1extenuating circumstances beyond the organization's control. An expansion of a building 13.2or bar-related expenditures are not allowed under this provision. 13.3    (i) The expenditure must be related to the portion of the real property or capital asset 13.4that must be made available for use free of any charge to other nonprofit organizations, 13.5community groups, or service groups, or is used for the organization's primary mission or 13.6headquarters. 13.7    (ii) An expenditure may be made to bring an existing building that the organization 13.8owns into compliance with the Americans with Disabilities Act. 13.9    (iii) An organization may apply the amount that is allowed under item (ii) to the 13.10erection or acquisition of a replacement building that is in compliance with the Americans 13.11with Disabilities Act if the board has specifically approved the amount. The cost of 13.12the erection or acquisition of a replacement building may not be made from gambling 13.13proceeds, except for the portion allowed under this item; 13.14    (23) an expenditure for the acquisition or improvement of a capital asset with a cost 13.15greater than $2,000, excluding real property, that will be used exclusively for lawful 13.16purposes under this section if the board has specifically approved the amount; 13.17    (24) an expenditure for the acquisition, erection, improvement, or expansion of real 13.18property, if the board has first specifically authorized the expenditure after finding that the 13.19real property will be used exclusively for lawful purpose under this section; or 13.20    (25) an expenditure, including a mortgage payment or other debt service payment, 13.21for the erection or acquisition of a comparable building to replace an organization-owned 13.22building that was destroyed or made uninhabitable by fire or catastrophe or to replace an 13.23organization-owned building that was taken or sold under an eminent domain proceeding. 13.24The expenditure may be only for that part of the replacement cost not reimbursed by 13.25insurance for the fire or catastrophe or compensation not received from a governmental 13.26unit under the eminent domain proceeding, if the board has first specifically authorized 13.27the expenditure. 13.28    (b) Expenditures authorized by the board under clauses (24) and (25) must be 13.2951 percent completed within two years of the date of board approval; otherwise the 13.30organization must reapply to the board for approval of the project. "Fifty-one percent 13.31completed" means that the work completed must represent at least 51 percent of the value 13.32of the project as documented by the contractor or vendor. 13.33    (c) Notwithstanding paragraph (a), "lawful purpose" does not include: 13.34    (1) any expenditure made or incurred for the purpose of influencing the nomination 13.35or election of a candidate for public office or for the purpose of promoting or defeating a 13.36ballot question; 14.1    (2) any activity intended to influence an election or a governmental decision-making 14.2process; 14.3    (3) a contribution to a statutory or home rule charter city, county, or town by a 14.4licensed organization with the knowledge that the governmental unit intends to use the 14.5contribution for a pension or retirement fund; or 14.6    (4) a contribution to a 501(c)(3) organization or other entity with the intent or effect 14.7of not complying with lawful purpose restrictions or requirements. 14.8 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 14.9    Sec. 22. Minnesota Statutes 2010, section 349.12, subdivision 25b, is amended to read: 14.10    Subd. 25b. Linked bingo game provider. "Linked bingo game provider" means 14.11any person who provides the means to link bingo prizes in a linked bingo game, who 14.12provides linked bingo paper sheets to the participating organizations new text begin games new text end , who provides 14.13linked bingo prize management, and who provides the linked bingo game system. 14.14    Sec. 23. Minnesota Statutes 2010, section 349.12, subdivision 25c, is amended to read: 14.15    Subd. 25c. Linked bingo game system. "Linked bingo game system" means the 14.16equipment used by the linked bingo provider to conduct, transmit, and track a linked 14.17bingo game. The system must be approved by the board before its use in this state and 14.18it must have dial-up or other new text begin the new text end capability to permit the board to new text begin electronically new text end monitor 14.19its operation remotely. new text begin For linked electronic bingo games, the system includes electronic new text end 14.20 new text begin bingo devices. new text end 14.21    Sec. 24. Minnesota Statutes 2010, section 349.12, subdivision 25d, is amended to read: 14.22    Subd. 25d. Linked bingo prize pool. "Linked bingo prize pool" means the total 14.23of all prize money that each participating organization has contributed to a linked bingo 14.24game prize and includes any portion of the prize pool that is carried over from one 14.25occasion new text begin game new text end to another in a progressive linked bingo game. 14.26    Sec. 25. Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read: 14.27    Subd. 29. Paddle wheel. "Paddle wheel" means a new text begin vertical new text end wheel marked off into 14.28sections containing one or more numbers, and which, after being turned or spun, uses a 14.29pointer or marker to indicate winning chances new text begin , and may only be used to determine a new text end 14.30 new text begin winning number or numbers matching a winning paddle ticket purchased by a player. A new text end 14.31 new text begin paddle wheel may be an electronic device that simulates a paddle wheel new text end . 15.1    Sec. 26. Minnesota Statutes 2010, section 349.12, subdivision 31, is amended to read: 15.2    Subd. 31. Promotional ticket. A new text begin paper new text end pull-tab new text begin ticket new text end or new text begin paper new text end tipboard ticket 15.3created and printed by a licensed manufacturer with the words "no purchase necessary" and 15.4"for promotional use only" and for which no consideration is given is a promotional ticket. 15.5    Sec. 27. Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read: 15.6    Subd. 32. Pull-tab. "Pull-tab" means a single folded or banded new text begin paper new text end ticket or a new text begin , new text end 15.7multi-ply card with perforated break-open tabs, new text begin or a facsimile of a paper pull-tab ticket new text end 15.8 new text begin used in conjunction with an electronic pull-tab device, new text end the face of which is initially 15.9covered to conceal one or more numbers or symbols, new text begin and new text end where one or more of each set of 15.10tickets or new text begin , new text end cards new text begin , or facsimiles new text end has been designated in advance as a winner. 15.11    Sec. 28. Minnesota Statutes 2010, section 349.13, is amended to read: 15.12349.13 LAWFUL GAMBLING. 15.13Lawful gambling is not a lottery or gambling within the meaning of sections 609.75 15.14to 609.76 if it is conducted under this chapter. A pull-tab dispensing device new text begin , electronic new text end 15.15 new text begin bingo device, and electronic pull-tab device new text end permitted new text begin under this chapter and new text end by board 15.16rule is not a gambling device within the meaning of sections 609.75 to 609.76 and chapter 15.17299L. new text begin An electronic game device allowed under this chapter may not be a slot machine. new text end 15.18 new text begin Electronic game devices, including but not limited to electronic bingo devices, electronic new text end 15.19 new text begin paddle wheels, and electronic pull-tab devices authorized under this chapter, may only new text end 15.20 new text begin be used in the conduct of lawful gambling permitted under this chapter and board rule new text end 15.21 new text begin and may not display or simulate any other form of gambling or entertainment, except new text end 15.22 new text begin as otherwise allowed under this chapter. new text end 15.23    Sec. 29. Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read: 15.24    Subd. 4b. Pull-tab sales from dispensing devices. (a) The board may by rule 15.25authorize but not require the use of pull-tab dispensing devices. 15.26(b) Rules adopted under paragraph (a): 15.27(1) must limit the number of pull-tab dispensing devices on any permitted premises 15.28to three; and 15.29(2) must limit the use of pull-tab dispensing devices to a permitted premises which is 15.30(i) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt beverages; 15.31or (ii) a premises where bingo is conducted and admission is restricted to persons 18 15.32years or older. 16.1(c) Notwithstanding rules adopted under paragraph (b), pull-tab dispensing devices 16.2may be used in establishments licensed for the off-sale of intoxicating liquor, other than 16.3drugstores and general food stores licensed under section 340A.405, subdivision 1. 16.4    Sec. 30. Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read: 16.5    Subd. 4c. Electronic bingo new text begin devices new text end . (a) The board may by rule authorize but not 16.6require the use of electronic bingo devices. 16.7(b) Rules adopted under paragraph (a): 16.8(1) must limit the number of bingo faces that can be played using an electronic 16.9bingo device to 36; 16.10(2) must require that an electronic bingo device be used with corresponding bingo 16.11paper sheets or a facsimile, printed at the point of sale, as approved by the board; 16.12(3) must require that the electronic bingo device site system have dial-up capability 16.13to permit the board to remotely monitor the operation of the device and the internal 16.14accounting systems; and 16.15(4) must prohibit the price of a face played on an electronic bingo device from being 16.16less than the price of a face on a bingo paper sheet sold at the same occasion. 16.17 new text begin (b) The board, or the director if authorized by the board, may require the deactivation new text end 16.18 new text begin of an electronic bingo device for violation of a law or rule and to implement any other new text end 16.19 new text begin controls deemed necessary to ensure and maintain the integrity of electronic bingo devices new text end 16.20 new text begin and the electronic bingo games played on the devices. new text end 16.21    Sec. 31. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision 16.22to read: 16.23     new text begin Subd. 4d. new text end new text begin Electronic pull-tab devices and electronic pull-tab game system. new text end new text begin (a) new text end 16.24 new text begin The board may adopt rules it deems necessary to ensure the integrity of electronic pull-tab new text end 16.25 new text begin devices, the electronic pull-tab games played on the devices, and the electronic pull-tab new text end 16.26 new text begin game system necessary to operate them. new text end 16.27 new text begin (b) The board may not require an organization to use electronic pull-tab devices. new text end 16.28 new text begin (c) Before authorizing the lease or sale of electronic pull-tab devices and the new text end 16.29 new text begin electronic pull-tab game system, the board shall examine electronic pull-tab devices new text end 16.30 new text begin allowed under section 349.12, subdivision 12b. The board may contract for the new text end 16.31 new text begin examination of the game system and electronic pull-tab devices and may require a working new text end 16.32 new text begin model to be transported to locations the board designates for testing, examination, and new text end 16.33 new text begin analysis. The manufacturer must pay all costs of any testing, examination, analysis, and new text end 16.34 new text begin transportation of the model. The system must be approved by the board before its use in new text end 17.1 new text begin the state and must have the capability to permit the board to electronically monitor its new text end 17.2 new text begin operation and internal accounting systems. new text end 17.3 new text begin (d) The board may require a manufacturer to submit a certificate from an independent new text end 17.4 new text begin testing laboratory approved by the board to perform testing services, stating that the new text end 17.5 new text begin equipment has been tested, analyzed, and meets the standards required in this chapter new text end 17.6 new text begin and any applicable board rules. new text end 17.7 new text begin (e) The board, or the director if authorized by the board, may require the deactivation new text end 17.8 new text begin of an electronic pull-tab device for violation of a law or rule and to implement any other new text end 17.9 new text begin controls deemed necessary to ensure and maintain the integrity of electronic pull-tab new text end 17.10 new text begin devices and the electronic pull-tab games played on the devices. new text end 17.11    Sec. 32. Minnesota Statutes 2010, section 349.155, subdivision 3, is amended to read: 17.12    Subd. 3. Mandatory disqualifications. (a) In the case of licenses for manufacturers, 17.13distributors, distributor salespersons, linked bingo game providers, and gambling 17.14managers, the board may not issue or renew a license under this chapter, and shall revoke 17.15a license under this chapter, if the applicant or licensee, or a director, officer, partner, 17.16governor, or person in a supervisory or management position of the applicant or licensee: 17.17    (1) has ever been convicted of a felony or a crime involving gambling; 17.18    (2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use 17.19of a firearm, or (iii) making terroristic threats; 17.20    (3) is or has ever been connected with or engaged in an illegal business; 17.21    (4) owes $500 or more in delinquent taxes as defined in section 270C.72; 17.22    (5) had a sales and use tax permit revoked by the commissioner of revenue within 17.23the past two years; or 17.24    (6) after demand, has not filed tax returns required by the commissioner of revenue. 17.25The board may deny or refuse to renew a license under this chapter, and may revoke a 17.26license under this chapter, if any of the conditions in this paragraph are applicable to 17.27an affiliate or direct or indirect holder of more than a five percent financial interest in 17.28the applicant or licensee. 17.29    (b) In the case of licenses for organizations, the board may not issue a license under 17.30this chapter, and shall revoke a license under this chapter, if the organization, or an officer 17.31or member of the governing body of the organization: 17.32    (1) has been convicted of a felony or gross misdemeanor involving theft or fraud; new text begin or new text end 17.33    (2) has ever been convicted of a crime involving gambling; or new text begin . new text end 17.34    (3) has had a license issued by the board or director permanently revoked for 17.35violation of law or board rule. 18.1    Sec. 33. Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read: 18.2    Subd. 4. License revocation, suspension, denial; censure. new text begin (a) new text end The board may by 18.3order (i) deny, suspend, revoke, or refuse to renew a license or premises permit, or (ii) 18.4censure a licensee or applicant, if it finds that the order is in the public interest and that the 18.5applicant or licensee, or a director, officer, partner, governor, person in a supervisory or 18.6management position of the applicant or licensee, an employee eligible to make sales on 18.7behalf of the applicant or licensee, or direct or indirect holder of more than a five percent 18.8financial interest in the applicant or licensee: 18.9    (1) has violated or failed to comply with any provision of this chapter or chapter 18.10297E or 299L, or any rule adopted or order issued thereunder; 18.11    (2) has filed an application for a license that is incomplete in any material respect, or 18.12contains a statement that, in light of the circumstances under which it was made, is false, 18.13misleading, fraudulent, or a misrepresentation; 18.14    (3) has made a false statement in a document or report required to be submitted to 18.15the board or the commissioner of revenue, or has made a false statement to the board, the 18.16compliance review group, or the director; 18.17    (4) has been convicted of a crime in another jurisdiction that would be a felony if 18.18committed in Minnesota; 18.19    (5) is permanently or temporarily enjoined by any gambling regulatory agency from 18.20engaging in or continuing any conduct or practice involving any aspect of gambling; 18.21    (6) has had a gambling-related license revoked or suspended, or has paid or been 18.22required to pay a monetary penalty of $2,500 or more, by a gambling regulator in another 18.23state or jurisdiction; 18.24    (7) has been the subject of any of the following actions by the director of alcohol 18.25and gambling enforcement or commissioner of public safety: (i) had a license under 18.26chapter 299L denied, suspended, or revoked, (ii) been censured, reprimanded, has paid or 18.27been required to pay a monetary penalty or fine, or (iii) has been the subject of any other 18.28discipline by the director or commissioner; 18.29    (8) has engaged in conduct that is contrary to the public health, welfare, or safety, or 18.30to the integrity of gambling; or 18.31    (9) based on past activities or criminal record poses a threat to the public interest or 18.32to the effective regulation and control of gambling, or creates or enhances the dangers of 18.33unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling 18.34or the carrying on of the business and financial arrangements incidental to the conduct of 18.35gambling. 19.1     new text begin (b) The revocation or suspension of an organization's license may not exceed a new text end 19.2 new text begin period of ten years, including any revocation or suspension imposed by the board prior to new text end 19.3 new text begin the effective date of this paragraph, except that: new text end 19.4     new text begin (1) any prohibition placed by the board on who may be involved in the conduct, new text end 19.5 new text begin oversight, or management of the revoked organization's lawful gambling activity is new text end 19.6 new text begin permanent; and new text end 19.7     new text begin (2) a revocation or suspension will remain in effect until any taxes, fees, and fines new text end 19.8 new text begin that are delinquent have been paid by the organization to the satisfaction of the board. new text end 19.9    Sec. 34. Minnesota Statutes 2010, section 349.161, subdivision 1, is amended to read: 19.10    Subdivision 1. Prohibited acts; licenses required. (a) No person may: 19.11    (1) sell, offer for sale, or furnish gambling equipment for use within the state other 19.12than for lawful gambling exempt or excluded from licensing, except to an organization 19.13licensed for lawful gambling; 19.14    (2) sell, offer for sale, or furnish gambling equipment for use within the state without 19.15having obtained a distributor license or a distributor salesperson license under this section 19.16except that an organization authorized to conduct bingo by the board may loan bingo 19.17hard cards and devices for selecting bingo numbers to another organization authorized to 19.18conduct bingo new text begin and a linked bingo game provider may provide electronic bingo devices for new text end 19.19 new text begin linked electronic bingo games new text end ; 19.20    (3) sell, offer for sale, or furnish gambling equipment for use within the state that is 19.21not purchased or obtained from a manufacturer or distributor licensed under this chapter; or 19.22    (4) sell, offer for sale, or furnish gambling equipment for use within the state that 19.23has the same serial number as another item of gambling equipment of the same type sold 19.24or offered for sale or furnished for use in the state by that distributor. 19.25    (b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling 19.26equipment for use within the state without being employed by a licensed distributor or 19.27owning a distributor license. 19.28 new text begin (c) No distributor or distributor salesperson may also be licensed as a linked bingo new text end 19.29 new text begin game provider under section 349.1635. new text end 19.30    Sec. 35. Minnesota Statutes 2010, section 349.161, subdivision 5, is amended to read: 19.31    Subd. 5. Prohibition. (a) No distributor, distributor salesperson, or other employee 19.32of a distributor, may also be a wholesale distributor of alcoholic beverages or an employee 19.33of a wholesale distributor of alcoholic beverages. 20.1    (b) No distributor, distributor salesperson, or any representative, agent, affiliate, or 20.2other employee of a distributor, may: (1) be involved in the conduct of lawful gambling 20.3by an organization; (2) keep or assist in the keeping of an organization's financial records, 20.4accounts, and inventories; or (3) prepare or assist in the preparation of tax forms and other 20.5reporting forms required to be submitted to the state by an organization. 20.6    (c) No distributor, distributor salesperson, or any representative, agent, affiliate, 20.7or other employee of a distributor may provide a lessor of gambling premises any 20.8compensation, gift, gratuity, premium, or other thing of value. 20.9    (d) No distributor, distributor salesperson, or any representative, agent, affiliate, or 20.10other employee of a distributor may provide an employee or agent of the organization 20.11any compensation, gift, gratuity, premium, or other thing of value greater than $25 per 20.12organization in a calendar year. 20.13    (e) No distributor, distributor salesperson, or any representative, agent, affiliate, or 20.14other employee of a distributor may participate in any gambling activity at any gambling 20.15site or premises where gambling equipment purchased new text begin or leased new text end from that distributor or 20.16distributor salesperson is being used in the conduct of lawful gambling. 20.17    (f) No distributor, distributor salesperson, or any representative, agent, affiliate, or 20.18other employee of a distributor may alter or modify any gambling equipment, except to 20.19add a "last ticket sold" prize sticker new text begin for a paper pull-tab game new text end . 20.20    (g) No distributor, distributor salesperson, or any representative, agent, affiliate, or 20.21other employee of a distributor may: (1) recruit a person to become a gambling manager 20.22of an organization or identify to an organization a person as a candidate to become 20.23gambling manager for the organization; or (2) identify for an organization a potential 20.24gambling location. 20.25    (h) No distributor or distributor salesperson may purchase new text begin or lease new text end gambling 20.26equipment for resale new text begin or lease new text end to a person for use within the state from any person not 20.27licensed as a manufacturer under section 349.163, except for gambling equipment 20.28returned from an organization licensed under section 349.16, or exempt or excluded from 20.29licensing under section 349.166. 20.30    (i) No distributor or distributor salesperson may sell gambling equipment, except 20.31gambling equipment identified as a promotional ticket, to any person for use in Minnesota 20.32other than (i) a licensed organization or organization excluded or exempt from licensing, 20.33or (ii) the governing body of an Indian tribe. 20.34    (j) No distributor or distributor salesperson may sell or otherwise provide a new text begin paper new text end 20.35pull-tab or tipboard deal with the symbol required by section 349.163, subdivision 5, 21.1paragraph (d), visible on the flare to any person other than in Minnesota to a licensed 21.2organization or organization exempt from licensing. 21.3    Sec. 36. Minnesota Statutes 2010, section 349.162, subdivision 5, is amended to read: 21.4    Subd. 5. Sales from facilities. (a) All gambling equipment purchased or possessed 21.5by a licensed distributor for resale new text begin or lease new text end to any person for use in Minnesota must, prior 21.6to the equipment's resale new text begin or lease new text end , be unloaded into a storage facility located in Minnesota 21.7which the distributor owns or leases; and which has been registered, in advance and in 21.8writing, with the Division of Alcohol and Gambling Enforcement as a storage facility of 21.9the distributor. All unregistered gambling equipment and all unaffixed registration stamps 21.10owned by, or in the possession of, a licensed distributor in the state of Minnesota shall be 21.11stored at a storage facility which has been registered with the Division of Alcohol and 21.12Gambling Enforcement. No gambling equipment may be moved from the facility unless 21.13the gambling equipment has been first registered with the board or the Department of 21.14Revenue. new text begin A distributor must notify the board of the method that it will use to sell and new text end 21.15 new text begin transfer electronic pull-tab games to licensed organizations, and must receive approval of new text end 21.16 new text begin the board before implementing or making changes to the approved method. new text end 21.17(b) Notwithstanding section 349.163, subdivisions 5, 6, and 8, a licensed 21.18manufacturer may ship into Minnesota approved or unapproved gambling equipment if the 21.19licensed manufacturer ships the gambling equipment to a Minnesota storage facility that 21.20is: (1) owned or leased by the licensed manufacturer; and (2) registered, in advance and 21.21in writing, with the Division of Alcohol and Gambling Enforcement as a manufacturer's 21.22storage facility. No gambling equipment may be shipped into Minnesota to the 21.23manufacturer's registered storage facility unless the shipment of the gambling equipment 21.24is reported to the Department of Revenue in a manner prescribed by the department. 21.25No gambling equipment may be moved from the storage facility unless the gambling 21.26equipment is sold to a licensed distributor and is otherwise in conformity with this chapter, 21.27is shipped to an out-of-state site and the shipment is reported to the Department of 21.28Revenue in a manner prescribed by the department, or is otherwise sold and shipped as 21.29permitted by board rule. new text begin A manufacturer must notify the board of the method that it will new text end 21.30 new text begin use to sell and transfer electronic pull-tab games to licensed distributors, and must receive new text end 21.31 new text begin approval of the board before implementing or making changes to the approved method. new text end 21.32(c) All storage facilities owned, leased, used, or operated by a licensed distributor 21.33or manufacturer may be entered upon and inspected by the employees of the Division of 21.34Alcohol and Gambling Enforcement, the Division of Alcohol and Gambling Enforcement 21.35director's authorized representatives, employees of the Gambling Control Board or its 22.1authorized representatives, employees of the Department of Revenue, or authorized 22.2representatives of the director of the Division of Special Taxes of the Department of 22.3Revenue during reasonable and regular business hours. Obstruction of, or failure to 22.4permit, entry and inspection is cause for revocation or suspension of a manufacturer's or 22.5distributor's licenses and permits issued under this chapter. 22.6(d) Unregistered gambling equipment found at any location in Minnesota other than 22.7the manufacturing plant of a licensed manufacturer or a registered storage facility are 22.8contraband under section 349.2125. This paragraph does not apply: 22.9(1) to unregistered gambling equipment being transported in interstate commerce 22.10between locations outside this state, if the interstate shipment is verified by a bill of lading 22.11or other valid shipping document; and 22.12(2) to gambling equipment registered with the Department of Revenue for 22.13distribution to the tribal casinos. 22.14    Sec. 37. Minnesota Statutes 2010, section 349.163, subdivision 1, is amended to read: 22.15    Subdivision 1. License required. No manufacturer of gambling equipment may 22.16sell any gambling equipment to any person for use or resale within the state, unless the 22.17manufacturer has a current and valid license issued by the board under this section and has 22.18satisfied other criteria prescribed by the board by rule. new text begin A manufacturer licensed under this new text end 22.19 new text begin section may also be licensed as a linked bingo game provider under section 349.1635. new text end 22.20A manufacturer licensed under this section may not also be directly or indirectly 22.21licensed as a distributor under section 349.161. 22.22    Sec. 38. Minnesota Statutes 2010, section 349.163, subdivision 5, is amended to read: 22.23    Subd. 5. new text begin Paper new text end pull-tab and tipboard flares. (a) A manufacturer may not ship or 22.24cause to be shipped into this state or sell for use or resale in this state any deal of new text begin paper new text end 22.25pull-tabs or tipboards that does not have its own individual flare as required for that deal 22.26by this subdivision and rule of the board. A person other than a manufacturer may not 22.27manufacture, alter, modify, or otherwise change a flare for a deal of new text begin paper new text end pull-tabs or 22.28tipboards except as allowed by this chapter or board rules. 22.29(b) The flare of each new text begin paper new text end pull-tab and tipboard game must have affixed to 22.30or imprinted at the bottom a bar code that provides all information required by the 22.31commissioner of revenue under section 297E.04, subdivision 2. 22.32The serial number included in the bar code must be the same as the serial number 22.33of the tickets included in the deal. A manufacturer who manufactures a deal of new text begin paper new text end 23.1pull-tabs must affix to the outside of the box containing that game the same bar code that 23.2is affixed to or imprinted at the bottom of a flare for that deal. 23.3(c) No person may alter the bar code that appears on the outside of a box containing 23.4a deal of new text begin paper new text end pull-tabs and tipboards. Possession of a box containing a deal of new text begin paper new text end 23.5pull-tabs and tipboards that has a bar code different from the bar code of the deal inside 23.6the box is prima facie evidence that the possessor has altered the bar code on the box. 23.7(d) The flare of each deal of new text begin paper new text end pull-tabs and tipboards sold by a manufacturer for 23.8use or resale in Minnesota must have imprinted on it a symbol that is at least one inch high 23.9and one inch wide consisting of an outline of the geographic boundaries of Minnesota 23.10with the letters "MN" inside the outline. The flare must be placed inside the wrapping of 23.11the deal which the flare describes. 23.12(e) Each new text begin paper new text end pull-tab and tipboard flare must bear the following statement printed 23.13in letters large enough to be clearly legible: 23.14"Pull-tab (or tipboard) purchasers -- This pull-tab (or tipboard) game is not legal in 23.15Minnesota unless: 23.16-- an outline of Minnesota with letters "MN" inside it is imprinted on this sheet, and 23.17-- the serial number imprinted on the bar code at the bottom of this sheet is the same 23.18as the serial number on the pull-tab (or tipboard) ticket you have purchased." 23.19(f) The flare of each new text begin paper new text end pull-tab and tipboard game must have the serial number 23.20of the game imprinted on the bar code at the bottom of the flare in numerals at least 23.21one-half inch high. 23.22    Sec. 39. Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read: 23.23    Subd. 6. Samples of gambling equipment. new text begin (a) new text end The board shall require each 23.24licensed manufacturer to submit to the board one or more samples of each item of gambling 23.25equipment the manufacturer manufactures new text begin manufactured new text end for use or resale in this state. new text begin new text end 23.26 new text begin For purposes of this subdivision, a manufacturer is also required to submit the applicable new text end 23.27 new text begin version of any software necessary to operate electronic devices and related systems. new text end 23.28 new text begin (b) new text end The board shall inspect and test all the equipment new text begin , including software and new text end 23.29 new text begin software upgrades, new text end it deems necessary to determine the equipment's compliance with 23.30law and board rules. Samples required under this subdivision must be approved by the 23.31board before the equipment being sampled is shipped into or sold for use or resale in this 23.32state. The board shall impose a fee of $25 for each item of gambling equipment that the 23.33manufacturer submits for approval or for which the manufacturer requests approval. The 23.34board shall impose a fee of $100 for each sample of gambling equipment that it tests. 24.1 new text begin (c) new text end The board may require samples of gambling equipment to be tested by an 24.2independent testing laboratory prior to submission to the board for approval. All costs 24.3of testing by an independent testing laboratory must be borne by the manufacturer. An 24.4independent testing laboratory used by a manufacturer to test samples of gambling 24.5equipment must be approved by the board before the equipment is submitted to the 24.6laboratory for testing. 24.7 new text begin (d) new text end The board may request the assistance of the commissioner of public safety and 24.8the director of the State Lottery in performing the tests. 24.9    Sec. 40. Minnesota Statutes 2010, section 349.1635, subdivision 2, is amended to read: 24.10    Subd. 2. License application. The board may issue a license to a linked bingo game 24.11provider new text begin or to a manufacturer licensed under section 349.163 new text end who meets the qualifications 24.12of this chapter and the rules promulgated by the board. The application shall be on a form 24.13prescribed by the board. The license is valid for two years and the fee for a linked bingo 24.14game provider license is $5,000 per year. 24.15    Sec. 41. Minnesota Statutes 2010, section 349.1635, subdivision 3, is amended to read: 24.16    Subd. 3. Attachments to application. An applicant for a linked bingo game 24.17provider license must attach to its application: 24.18(1) evidence of a bond in the principal amount of $100,000 payable to the state of 24.19Minnesota conditioned on the payment of all linked bingo prizes and any other money due 24.20and payable under this chapter; 24.21(2) detailed plans and specifications for the operation of the linked bingo game and 24.22the linked bingo system, along with a proposed fee schedule for the cost of providing 24.23services and equipment to licensed organizations new text begin which may not exceed 15 percent of new text end 24.24 new text begin gross profits, unless a higher percentage, not to exceed 20 percent, is authorized by the new text end 24.25 new text begin board. The fee schedule must incorporate costs paid to distributors for services provided new text end 24.26 new text begin under subdivision 5 new text end ; and 24.27(3) any other information required by the board by rule. 24.28    Sec. 42. Minnesota Statutes 2010, section 349.1635, is amended by adding a 24.29subdivision to read: 24.30     new text begin Subd. 5. new text end new text begin Linked bingo game services requirements. new text end new text begin (a) A linked bingo game new text end 24.31 new text begin provider must contract with licensed distributors for linked bingo game services including, new text end 24.32 new text begin but not limited to, the solicitation of agreements with licensed organizations, and new text end 24.33 new text begin installation, repair, or maintenance of the linked bingo game system. new text end 25.1 new text begin (b) A distributor may not charge a fee to licensed organizations for services new text end 25.2 new text begin authorized and rendered under paragraph (a). new text end 25.3 new text begin (c) A linked bingo game provider may not contract with any distributor on an new text end 25.4 new text begin exclusive basis. new text end 25.5 new text begin (d) A linked bingo game provider may refuse to contract with a licensed distributor new text end 25.6 new text begin if the linked bingo game provider demonstrates that the licensed distributor is not capable new text end 25.7 new text begin of performing the services under the contract. new text end 25.8    Sec. 43. Minnesota Statutes 2010, section 349.165, subdivision 2, is amended to read: 25.9    Subd. 2. Contents of application. An application for a premises permit must 25.10contain: 25.11    (1) the name and address of the applying organization; 25.12    (2) a description of the site for which the permit is sought, including its address and, 25.13where applicable, its placement within another premises or establishment; 25.14    (3) if the site is leased, the name and address of the lessor and information about the 25.15lease the board requires, including all rents and other charges for the use of the site. The 25.16lease term is concurrent with the term of the premises permit. The lease must contain a 25.1730-day termination clause. No lease is required for the conduct of a raffle; and 25.18    (4) other information the board deems necessary to carry out its purposes. 25.19    An organization holding a premises permit must notify the board in writing within 25.20ten days whenever any material change is made in the above information. 25.21    Sec. 44. Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read: 25.22    Subd. 6. Conduct of bingo. new text begin The price of a face played on an electronic bingo new text end 25.23 new text begin device may not be less than the price of a face on a bingo paper sheet sold for the same new text end 25.24 new text begin game at the same occasion. new text end A game of bingo begins with the first letter and number called new text begin new text end 25.25 new text begin or displayed new text end . Each player must cover, mark, or activate the numbers when bingo numbers 25.26are randomly selected, new text begin and new text end announced, and new text begin or new text end displayed to the players, either manually 25.27or with a flashboard and monitor. The game is won when a player, using bingo paper, 25.28bingo hard card, or a facsimile of a bingo paper sheet, has completed, as described in the 25.29bingo program, a previously designated pattern or previously determined requirements 25.30of the game and declared bingo. The game is completed when a winning card, sheet, or 25.31facsimile is verified and a prize awarded pursuant to subdivision 3. 25.32    Sec. 45. Minnesota Statutes 2010, section 349.17, subdivision 7, is amended to read: 26.1    Subd. 7. Bar bingo. An organization may conduct bar bingo subject to the 26.2following restrictions: 26.3    (1) the bingo is conducted at a site the organization owns or leases and which has a 26.4license for the sale of intoxicating beverages on the premises under chapter 340A; new text begin and new text end 26.5    (2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper 26.6sheets purchased from a licensed distributor or licensed linked bingo game provider; and new text begin . new text end 26.7    (3) no rent may be paid for a bar bingo occasion. 26.8    Sec. 46. Minnesota Statutes 2010, section 349.17, subdivision 8, is amended to read: 26.9    Subd. 8. Linked bingo games. (a) A licensed organization may conduct or 26.10participate in not more than two linked bingo games per occasion, one of which may be a new text begin , new text end 26.11 new text begin including new text end progressive game new text begin games new text end in which a portion of the prize is carried over from 26.12one occasion new text begin game new text end to another until won by a player achieving a new text begin valid new text end bingo within a 26.13predetermined amount of bingo numbers called new text begin based upon a predetermined and posted new text end 26.14 new text begin win determination new text end . 26.15    (b) Each participating licensed organization shall contribute to each prize awarded in 26.16a linked bingo game in an amount not to exceed $300. new text begin Linked bingo games may only be new text end 26.17 new text begin conducted by licensed organizations who have a valid agreement with the linked bingo new text end 26.18 new text begin game provider. new text end 26.19    (c) An electronic bingo device as defined in section 349.12, subdivision 12a, may 26.20be used for a linked bingo game. 26.21    (d) The board may adopt rules to: 26.22    (1) specify the manner in which a linked bingo game must be played and how the 26.23linked bingo prizes must be awarded; 26.24    (2) specify the records to be maintained by a linked bingo game provider; 26.25    (3) require the submission of periodic reports by the linked bingo game provider and 26.26specify the content of the reports; 26.27    (4) establish the qualifications required to be licensed as a linked bingo game 26.28provider; and 26.29    (5) any other matter involving the operation of a linked bingo game. 26.30    Sec. 47. Minnesota Statutes 2010, section 349.17, is amended by adding a subdivision 26.31to read: 26.32     new text begin Subd. 9. new text end new text begin Linked bingo games played exclusively on electronic bingo devices. new text end new text begin In new text end 26.33 new text begin addition to the requirements of subdivision 8, the following requirements and restrictions new text end 26.34 new text begin apply when linked bingo games are played exclusively on electronic bingo devices. new text end 27.1 new text begin (a) The permitted premises must be: new text end 27.2 new text begin (1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent new text end 27.3 new text begin malt beverages, except for a general food store or drug store permitted to sell alcoholic new text end 27.4 new text begin beverages under section 340A.405, subdivision 1; or new text end 27.5 new text begin (2) a premises where bingo is conducted as the primary business and has a seating new text end 27.6 new text begin capacity of at least 100. new text end 27.7 new text begin (b) The number of electronic bingo devices is limited to: new text end 27.8 new text begin (1) no more than six devices in play for permitted premises with 200 seats or less; new text end 27.9 new text begin (2) no more than 12 devices in play for permitted premises with 201 seats or more; new text end 27.10 new text begin and new text end 27.11 new text begin (3) no more than 50 devices in play for permitted premises where bingo is the new text end 27.12 new text begin primary business. new text end 27.13 new text begin Seating capacity is determined as specified under the local fire code. new text end 27.14 new text begin (c) Prior to a bingo occasion, the linked bingo game provider, on behalf of the new text end 27.15 new text begin participating organizations, must provide to the board a bingo program in a format new text end 27.16 new text begin prescribed by the board. new text end 27.17 new text begin (d) Before participating in the play of a linked bingo game, a player must present new text end 27.18 new text begin and register a valid picture identification card that includes the player's address and new text end 27.19 new text begin date of birth. new text end 27.20 new text begin (e) An organization may remove from play a device that a player has not maintained new text end 27.21 new text begin in an activated mode for a specified period of time determined by the organization. The new text end 27.22 new text begin organization must provide the notice in its house rules. new text end 27.23    Sec. 48. Minnesota Statutes 2010, section 349.1721, is amended to read: 27.24349.1721 CONDUCT OF PULL-TABS. 27.25    Subdivision 1. Cumulative or carryover games. The board shall by rule permit 27.26pull-tab games with multiple seals. The board shall also adopt rules for pull-tab games with 27.27cumulative or carryover prizes. new text begin The rules shall also apply to electronic pull-tab games. new text end 27.28    Subd. 2. Event games. The board shall by rule permit pull-tab games in which 27.29certain winners are determined by the random selection of one or more bingo numbers 27.30or by another method approved by the board. new text begin The rules shall also apply to electronic new text end 27.31 new text begin pull-tab games. new text end 27.32     new text begin Subd. 3. new text end new text begin Pull-tab dispensing device location restrictions and requirements. new text end 27.33 new text begin The following pertain to pull-tab dispensing devices as defined under section 349.12, new text end 27.34 new text begin subdivision 32a. new text end 28.1 new text begin (a) The use of any pull-tab dispensing device must be at a permitted premises new text end 28.2 new text begin which is: new text end 28.3 new text begin (1) a licensed premises for on-sale of intoxicating liquor or 3.2 percent malt new text end 28.4 new text begin beverages; new text end 28.5 new text begin (2) a premises where bingo is conducted as the primary business; or new text end 28.6 new text begin (3) an establishment licensed for the off-sale of intoxicating liquor, other than drug new text end 28.7 new text begin stores and general food stores licensed under section 340A.405, subdivision 1. new text end 28.8 new text begin (b) The number of pull-tab dispensing devices located at any permitted premises new text end 28.9 new text begin is limited to three. new text end 28.10     new text begin Subd. 4. new text end new text begin Electronic pull-tab device requirements and restrictions. new text end new text begin The following new text end 28.11 new text begin pertain to the use of electronic pull-tab devices as defined under section 349.12, new text end 28.12 new text begin subdivision 12b. new text end 28.13 new text begin (a) The use of any electronic pull-tab device may only be at a permitted premises new text end 28.14 new text begin that is: new text end 28.15 new text begin (1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent new text end 28.16 new text begin malt beverages, except for a general food store or drug store permitted to sell alcoholic new text end 28.17 new text begin beverages under section 340A.405, subdivision 1; or new text end 28.18 new text begin (2) a premises where bingo is conducted as the primary business and has a seating new text end 28.19 new text begin capacity of at least 100; and new text end 28.20 new text begin (3) where the licensed organization sells paper pull-tabs. new text end 28.21 new text begin (b) The number of electronic pull-tab devices is limited to: new text end 28.22 new text begin (1) no more than six devices in play at any permitted premises with 200 seats or less; new text end 28.23 new text begin (2) no more than 12 devices in play at any permitted premises with 201 seats new text end 28.24 new text begin or more; and new text end 28.25 new text begin (3) no more than 50 devices in play at any permitted premises where the primary new text end 28.26 new text begin business is bingo. new text end 28.27 new text begin Seating capacity is determined as specified under the local fire code. new text end 28.28 new text begin (c) The hours of operation for the devices are limited to 8:00 a.m. to 2:00 a.m. new text end 28.29 new text begin (d) All electronic pull-tab games must be sold and played on the permitted premises new text end 28.30 new text begin and may not be linked to other permitted premises. new text end 28.31 new text begin (e) Electronic pull-tab games may not be transferred electronically or otherwise to new text end 28.32 new text begin any other location by the licensed organization. new text end 28.33 new text begin (f) Electronic pull-tab games may be commingled if the games are from the same new text end 28.34 new text begin family of games and manufacturer and contain the same game name, form number, type new text end 28.35 new text begin of game, ticket count, prize amounts, and prize denominations. Each commingled game new text end 28.36 new text begin must have a unique serial number. new text end 29.1 new text begin (g) An organization may remove from play a device that a player has not maintained new text end 29.2 new text begin in an activated mode for a specified period of time determined by the organization. The new text end 29.3 new text begin organization must provide the notice in its house rules. new text end 29.4 new text begin (h) Before participating in the play of an electronic pull-tab game, a player must new text end 29.5 new text begin present and register a valid picture identification card that includes the player's address new text end 29.6 new text begin and date of birth. new text end 29.7 new text begin (i) Each player is limited to the use of one device at a time. new text end 29.8     new text begin Subd. 5. new text end new text begin Multiple chance games. new text end new text begin The board may permit pull-tab games in which new text end 29.9 new text begin the holders of certain predesignated winning tickets, with a prize value not to exceed $75 new text end 29.10 new text begin each, have the option of turning in the winning tickets for the chance to win a prize of new text end 29.11 new text begin greater value. new text end 29.12    Sec. 49. Minnesota Statutes 2010, section 349.18, subdivision 1, is amended to read: 29.13    Subdivision 1. Lease or ownership required; rent limitations. (a) An organization 29.14may conduct lawful gambling only on premises it owns or leases. Leases must be on a 29.15form prescribed by the board. The term of the lease is concurrent with the premises permit. 29.16Leases approved by the board must specify that the board may authorize an organization 29.17to withhold rent from a lessor for a period of up to 90 days if the board determines that 29.18illegal gambling occurred on the premises or that the lessor or its employees participated 29.19in the illegal gambling or knew of the gambling and did not take prompt action to stop the 29.20gambling. The lease must authorize the continued tenancy of the organization without 29.21the payment of rent during the time period determined by the board under this paragraph. 29.22Copies of all leases must be made available to employees of the board and the Division of 29.23Alcohol and Gambling Enforcement on request. 29.24    (b) Rent paid by an organization for leased premises for the conduct of pull-tabs, 29.25tipboards, and paddle wheels new text begin lawful gambling new text end is subject to the following limits new text begin and new text end 29.26 new text begin restrictions new text end : 29.27    (1) For booth operations, including booth operations where a pull-tab dispensing 29.28device is located, booth operations where a bar operation is also conducted, and booth 29.29operations where both a pull-tab dispensing device is located and a bar operation is also 29.30conducted, the maximum rent is: new text begin monthly rent may not exceed ten percent of gross profits new text end 29.31 new text begin for that month. Total rent paid to a lessor from all organizations from leases governed by new text end 29.32 new text begin this clause may not exceed $1,750 per month. new text end 29.33    (i) in any month where the organization's gross profit at those premises does not 29.34exceed $4,000, up to $400; and 30.1    (ii) in any month where the organization's gross profit at those premises exceeds 30.2$4,000, up to $400 plus not more than ten percent of the gross profit for that month in 30.3excess of $4,000; 30.4    (2) For bar operations, including bar operations where a pull-tab dispensing device 30.5is located but not including bar operations subject to clause (1), and for locations where 30.6only a pull-tab dispensing device is located: new text begin monthly rent may not exceed: new text end 30.7 new text begin (i) 15 percent of the gross profits for that month from pull-tabs sold from a pull-tab new text end 30.8 new text begin dispensing device, electronic pull-tab games, and electronic linked bingo games; and new text end 30.9 new text begin (ii) more than 20 percent of gross profits from all other forms of lawful gambling. new text end 30.10    (i) in any month where the organization's gross profit at those premises does not 30.11exceed $1,000, up to $200; and 30.12    (ii) in any month where the organization's gross profit at those premises exceeds 30.13$1,000, up to $200 plus not more than 20 percent of the gross profit for that month 30.14in excess of $1,000; 30.15    (3) a lease not governed by clauses (1) and (2) must be approved by the board before 30.16becoming effective; new text begin For electronic linked bingo games and electronic pull-tab games that new text end 30.17 new text begin are operated for separate time periods within a business day by an organization and the new text end 30.18 new text begin lessor, monthly rent may not be more than: new text end 30.19 new text begin (i) 15 percent of the gross profits for that month for the time periods operated by new text end 30.20 new text begin the lessor. The lessor is responsible for cash shortages that occur during the time periods new text end 30.21 new text begin the games are operated by the lessor; and new text end 30.22 new text begin (ii) ten percent of gross profits for that month for the time periods operated by the new text end 30.23 new text begin organization. The organization is responsible for cash shortages that occur during the time new text end 30.24 new text begin periods the games are operated by the organization. new text end 30.25    (4) total rent paid to a lessor from all organizations from leases governed by clause 30.26(1) may not exceed $1,750 per month. 30.27    (c) Rent paid by an organization for leased premises for the conduct of bingo is 30.28subject to either of the following limits at the option of the parties to the lease: 30.29    (1) new text begin (4) For bingo conducted at a leased premises where the primary business is new text end 30.30 new text begin bingo, rent is limited to either new text end not more than ten percent of the monthly gross profit from 30.31all lawful gambling activities held during bingo occasions new text begin , new text end excluding bar bingo or at a 30.32rate based on a cost per square foot not to exceed 110 percent of a comparable cost per 30.33square foot for leased space as approved by the director; and new text begin . new text end 30.34    (2) new text begin (5) new text end No rent may be paid for bar bingo new text begin as defined in section 349.12, subdivision 3c new text end . 30.35 new text begin (6) A lease not governed by clauses (1) to (5) must be approved by the director new text end 30.36 new text begin before becoming effective. new text end 31.1    (d) new text begin (c) new text end Amounts paid as rent under leases are all-inclusive. No other services or 31.2expenses provided or contracted by the lessor may be paid by the organization, including, 31.3but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn 31.4services, electricity, heat, security, security monitoring, storage, new text begin and new text end other utilities or 31.5services, and, in the case of bar operations, cash shortages, unless approved by the 31.6director. new text begin The lessor shall be responsible for the cost of any communications network or new text end 31.7 new text begin service required to conduct electronic pull-tab games or electronic bingo games. new text end Any 31.8other expenditure made by an organization that is related to a leased premises must be 31.9approved by the director. new text begin For bar operations, the lessor is responsible for cash shortages. new text end 31.10An organization may not provide any compensation or thing of value to a lessor or the 31.11lessor's employees from any fund source other than its gambling account. Rent payments 31.12may not be made to an individual. 31.13    (e) new text begin (d) new text end Notwithstanding paragraph (b), an organization may pay a lessor for food 31.14or beverages or meeting room rental if the charge made is comparable to similar charges 31.15made to other individuals or groups. 31.16    (f) No entity other than the new text begin (e) A new text end licensed organization may new text begin not new text end conduct any activity 31.17within a booth operation new text begin on behalf of the lessor new text end on a leased premises. 31.18    Sec. 50. Minnesota Statutes 2010, section 349.19, subdivision 2, is amended to read: 31.19    Subd. 2. Accounts. (a) Gross receipts from lawful gambling by each organization 31.20must be segregated from all other revenues of the conducting organization and placed in a 31.21separate gambling bank account. 31.22(b) All expenditures for allowable expenses, taxes, and lawful purposes must be 31.23made from the separate account except (1) in the case of expenditures previously approved 31.24by the organization's membership for emergencies as defined by board rule, (2) as provided 31.25in subdivision 2a, or (3) when restricted to one electronic fund transaction for the payment 31.26of taxes for the organization as a whole, the organization may transfer the amount of taxes 31.27related to the conduct of gambling to the general account at the time when due and payable. 31.28(c) The name and address of the bank, the account number for the separate account, 31.29and the names of organization members authorized as signatories on the separate account 31.30must be provided to the board when the application is submitted. Changes in the 31.31information must be submitted to the board at least ten days before the change is made. 31.32(d) new text begin Except for gambling receipts from electronic pull-tab games and linked new text end 31.33 new text begin electronic bingo games, new text end gambling receipts must be deposited into the gambling bank 31.34account within four business days of completion of the bingo occasion, deal, or game from 31.35which they are received. 32.1 new text begin (1) new text end A deal of new text begin paper new text end pull-tabs is considered complete when either the last pull-tab of 32.2the deal is sold or the organization does not continue the play of the deal during the next 32.3scheduled period of time in which the organization will conduct pull-tabs. 32.4 new text begin (2) new text end A tipboard game is considered complete when the seal on the game flare is 32.5uncovered or the organization does not continue the play of the deal during the next 32.6scheduled period of time in which the organization will conduct tipboards. 32.7 new text begin (e) Gambling receipts from all electronic pull-tab games and all linked electronic new text end 32.8 new text begin bingo games must be recorded on a daily basis and deposited into the gambling bank new text end 32.9 new text begin account within two business days. new text end 32.10(e) new text begin (f) new text end Deposit records must be sufficient to allow determination of deposits made 32.11from each bingo occasion, deal, or game at each permitted premises. 32.12(f) new text begin (g) new text end The person who accounts for gambling gross receipts and profits may not be 32.13the same person who accounts for other revenues of the organization. 32.14    Sec. 51. Minnesota Statutes 2010, section 349.19, subdivision 3, is amended to read: 32.15    Subd. 3. Expenditures. (a) All expenditures of gross profits from lawful gambling 32.16must be itemized as to payee, purpose, amount, and date of payment. 32.17(b) Each licensed organization must report monthly to the board on a form new text begin in an new text end 32.18 new text begin electronic format new text end prescribed by the board each expenditure or contribution of net profits 32.19from lawful gambling. The reports must provide for each expenditure or contribution: 32.20(1) the name of the recipient of the expenditure or contribution; 32.21(2) the date the expenditure or contribution was approved by the organization; 32.22(3) the date, amount, and check number or electronic transfer confirmation number 32.23of the expenditure or contribution; 32.24(4) a brief description of how the expenditure or contribution meets one or more of 32.25the purposes in section 349.12, subdivision 25; and 32.26(5) in the case of expenditures authorized under section 349.12, subdivision 25, 32.27paragraph (a), clause (7), whether the expenditure is for a facility or activity that primarily 32.28benefits male or female participants. 32.29(c) Authorization of the expenditures must be recorded in the monthly meeting 32.30minutes of the licensed organization. 32.31(d) Checks or authorizations for electronic fund transfers for expenditures of gross 32.32profits must be signed by at least two persons authorized by board rules to sign the 32.33checks or authorizations. 32.34(e) Expenditures of gross profits from lawful gambling for local, state, and federal 32.35taxes as identified in section 349.12, subdivision 25, paragraph (a), clause (8), may be 33.1transferred electronically from the organization's gambling account directly to bank 33.2accounts identified by local, state, or federal agencies if the organization's gambling 33.3account monthly bank statement specifically identifies the payee by name, the amount 33.4transferred, and the date of the transaction. 33.5(f) Expenditures of gross profits from lawful gambling for payments for lawful 33.6purpose expenditures and allowable expenses may be transferred electronically from the 33.7organization's gambling account directly to bank accounts identified by the vendor if the 33.8organization's gambling account monthly bank statement specifically identifies the payee 33.9by name, the amount transferred, the account number of the account into which the funds 33.10were transferred, and the date of the transaction. 33.11(g) Expenditures of gross profits from lawful gambling for payroll compensation 33.12to an employee's account and for the payment of local, state, and federal withholding 33.13taxes may be transferred electronically to and from the account of a payroll processing 33.14firm provided that the firm: 33.15(1) is currently registered with and meets the criteria of the Department of Revenue 33.16as a third-party bulk filer under section 290.92, subdivision 30; 33.17(2) is able to provide proof of a third-party audit and an annual report and statement 33.18of financial condition; 33.19(3) is able to provide evidence of a fidelity bond; and 33.20(4) can provide proof of having been in business as a third-party bulk filer for the 33.21most recent three years. 33.22(h) Electronic payments of taxes, lawful purpose expenditures, and allowable 33.23expenses are permitted only if they have been authorized by the membership, the 33.24organization maintains supporting documentation, and the expenditures can be verified. 33.25 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 33.26    Sec. 52. Minnesota Statutes 2010, section 349.19, subdivision 5, is amended to read: 33.27    Subd. 5. Reports. new text begin (a) new text end A licensed organization must report new text begin monthly new text end to the 33.28Department of Revenue new text begin board in an electronic format prescribed by the board new text end and to its 33.29membership monthly, or quarterly in the case of a licensed organization which does not 33.30report more than $1,000 in gross receipts from lawful gambling in any calendar quarter, 33.31on its gross receipts, expenses, profits, and expenditure of profits from lawful gambling new text begin new text end 33.32 new text begin for each permitted premises. The organization must account for and report on each form new text end 33.33 new text begin of lawful gambling conducted new text end . The report new text begin organization new text end must include a reconciliation of 33.34the organization's profit carryover with its cash balance on hand. If the organization 34.1conducts both bingo and other forms of lawful gambling, the figures for both must be 34.2reported separately. 34.3 new text begin (b) new text end The organization must report annually to its membership and annually file with 34.4the board a financial summary report in a format prescribed by the board that identifies the 34.5organization's receipts and use of lawful gambling proceeds, including: new text begin monthly to the new text end 34.6 new text begin commissioner of revenue as required under section 297E.06. new text end 34.7(1) gross receipts; 34.8(2) prizes paid; 34.9(3) allowable expenses; 34.10(4) lawful purpose expenditures, including annual totals for types of charitable 34.11contributions and all taxes and fees as per section 349.12, subdivision 25, paragraph 34.12(a), clauses (8) and (18); 34.13(5) the percentage of annual gross profits used for charitable contributions; and 34.14(6) the percentage of annual gross profits used for all taxes and fees as per section 34.15349.12, subdivision 25, paragraph (a), clauses (8) and (18). 34.16 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2012. new text end 34.17    Sec. 53. Minnesota Statutes 2010, section 349.19, subdivision 10, is amended to read: 34.18    Subd. 10. Pull-tab records. (a) The board shall by rule require a licensed 34.19organization to require each winner of a new text begin paper new text end pull-tab prize of $50 or more to present 34.20identification in the form of a driver's license, Minnesota identification card, or other 34.21identification the board deems sufficient to allow the identification and tracking of the 34.22winner. The rule must require the organization to retain winning new text begin paper new text end pull-tabs of $50 or 34.23more, and the identification of the winner of the pull-tab, for 3-1/2 years. 34.24    (b) An organization must maintain separate cash banks for each deal of new text begin paper new text end 34.25pull-tabs unless (1) the licensed organization uses a pull-tab dispensing device, or (2) the 34.26organization uses a cash register, of a type approved by the board, which records all 34.27sales of new text begin paper new text end pull-tabs by separate deals. 34.28    (c) The board shall: 34.29    (1) by rule adopt minimum technical standards for cash registers that may be used 34.30by organizations, and shall approve for use by organizations any cash register that meets 34.31the standards; and 34.32    (2) before allowing an organization to use a cash register that commingles receipts 34.33from several different new text begin paper new text end pull-tab games in play, adopt rules that define how cash 34.34registers may be used and that establish a procedure for organizations to reconcile all 34.35pull-tab games in play at the end of each month. 35.1    Sec. 54. Minnesota Statutes 2010, section 349.211, subdivision 1a, is amended to read: 35.2    Subd. 1a. Linked bingo prizes. Prizes for a linked bingo game shall be limited 35.3as follows: 35.4(1) no organization may contribute more than $300 per linked bingo game to a 35.5linked bingo prize pool new text begin for linked bingo games played without electronic bingo devices, new text end 35.6 new text begin an organization may not contribute to a linked bingo game prize pool more than $300 new text end 35.7 new text begin per linked bingo game per site new text end ; 35.8 new text begin (2) for linked bingo games played exclusively with electronic bingo devices, an new text end 35.9 new text begin organization may not contribute more than 85 percent of the gross receipts per permitted new text end 35.10 new text begin premises to a linked bingo game prize pool; new text end 35.11(2) new text begin (3) new text end no organization may award more than $200 for a linked bingo game 35.12consolation prize. For purposes of this subdivision, a linked bingo game consolation 35.13prize is a prize awarded by an organization after a prize from the linked bingo prize pool 35.14has been won; and 35.15    (3) new text begin (4) new text end for a progressive linked bingo game, if no player declares a valid bingo 35.16within the new text begin for a progressive prize or prizes based on a new text end predetermined amount of bingo 35.17numbers called new text begin and posted win determination new text end , a portion of the prize is new text begin gross receipts new text end 35.18 new text begin may be new text end carried over to another occasion new text begin game new text end until the accumulated new text begin progressive new text end prize 35.19is won. The portion of the prize that is not carried over must be awarded to the first 35.20player or players who declares a valid bingo as additional numbers are called. If a valid 35.21bingo is declared within the predetermined amount of bingo numbers called, the entire 35.22prize pool for that game is awarded to the winner. The annual limit for progressive bingo 35.23game prizes contained in subdivision 2 must be reduced by the amount an organization 35.24contributes to progressive linked bingo games during the same calendar year. new text begin ; and new text end 35.25 new text begin (5) for linked bingo games played exclusively with electronic bingo devices, linked new text end 35.26 new text begin bingo prizes in excess of $599 shall be paid by the linked bingo game provider to the new text end 35.27 new text begin player within three business days. Winners of linked bingo prizes in excess of $599 will new text end 35.28 new text begin be given a receipt or claim voucher as proof of a win. new text end 35.29    Sec. 55. new text begin SEVERABILITY. new text end 35.30 new text begin If any provision of this act is found to be invalid because it is in conflict with a new text end 35.31 new text begin provision of the Minnesota Constitution or the Constitution of the United States, or for any new text end 35.32 new text begin other reason, all other provisions of this act shall remain valid and any rights, remedies, new text end 35.33 new text begin and privileges that have been otherwise accrued by this act, shall remain in effect and may new text end 35.34 new text begin be proceeded with and concluded under this act. new text end 36.1    Sec. 56. new text begin APPROPRIATION. new text end 36.2 new text begin $1,219,000 in fiscal year 2013 is appropriated from the lawful gambling regulation new text end 36.3 new text begin account in the special revenue fund to the Gambling Control Board for operating expenses new text end 36.4 new text begin related to the regulatory oversight of lawful gambling for electronic pull-tabs and new text end 36.5 new text begin electronic linked bingo. new text end 36.6    Sec. 57. new text begin REPEALER. new text end 36.7 new text begin Minnesota Statutes 2010, sections 297E.02, subdivision 4; 349.15, subdivision 3; new text end 36.8 new text begin and 349.19, subdivision 2a, new text end new text begin are repealed. new text end 36.9 new text begin EFFECTIVE DATE. new text end new text begin This section is effective for games sold by a licensed new text end 36.10 new text begin distributor after June 30, 2012, and the commissioner of revenue retains the authority to new text end 36.11 new text begin issue refunds under Minnesota Statutes 2010, section 297E.02, subdivision 4, paragraph new text end 36.12 new text begin (d), for games sold before July 1, 2012. new text end 36.13    Sec. 58. new text begin EFFECTIVE DATE. new text end 36.14 new text begin Unless otherwise specifically provided, this act is effective the day following final new text end 36.15 new text begin enactment. new text end