1.1A bill for an act1.2relating 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, or electronic linked bingo games; pull-tabs; 1.19electronic pull-tab games; 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.1.22EFFECTIVE DATE.This section is effective July 1, 2012.1.23    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, paper sheets, linked bingo paper sheets, and 2.2electronic linked bingo games before reduction for prizes, expenses, shortages, free plays, 2.3or any other charges or offsets;2.4(2) the ideal gross of pull-tab, electronic pull-tab games, 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; and2.11(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
         .2.15EFFECTIVE DATE.This section is effective July 1, 2012.2.16    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, electronic pull-tab games or tipboard 2.19deal, paddle wheel game, and raffle ticket was sold at its face value. In the calculation 2.20of ideal gross and prizes, a free play ticket pull-tab or electronic pull-tab shall be valued 2.21at face value. Ideal gross also means the total amount of receipts that would be received 2.22if every bingo paper sheet, linked bingo paper sheet, and electronic linked bingo games 2.23were sold at face value.2.24EFFECTIVE DATE.This section is effective July 1, 2012.2.25    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) 2.27paper or electronic pull-tab deals or games; (2) tipboard deals or games; and (3) electronic 2.28linked bingo; and (4) 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.3.3EFFECTIVE DATE.This section is effective for games reported as played after 3.4June 30, 2012.3.5    Sec. 5. Minnesota Statutes 2010, section 297E.02, subdivision 3, is amended to read:3.6    Subd. 3. Collection; disposition.(a) 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. Distributors must file their monthly sales figures with 3.11the commissioner on a form prescribed by the commissioner. 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(b) The sales tax imposed by chapter 297A on the sale of pull-tabs and tipboards by 3.19the distributor is imposed on the retail sales price. The retail sale of pull-tabs or tipboards 3.20by the organization is exempt from taxes imposed by chapter 297A and is exempt from all 3.21local taxes and license fees except a fee authorized under section 349.16, subdivision 8.3.22(c) One-half of one percent of the revenue deposited in the general fund under 3.23paragraph (a), is appropriated to the commissioner of human services for the compulsive 3.24gambling treatment program established under section 245.98. One-half of one percent 3.25of the revenue deposited in the general fund under paragraph (a), is appropriated to 3.26the commissioner of human services for a grant to the state affiliate recognized by 3.27the National Council on Problem Gambling to increase public awareness of problem 3.28gambling, education and training for individuals and organizations providing effective 3.29treatment services to problem gamblers and their families, and research relating to problem 3.30gambling. Money appropriated by this paragraph must supplement and must not replace 3.31existing state funding for these programs.3.32EFFECTIVE DATE.This section is effective July 1, 2012.3.33    Sec. 6. Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read:4.1    Subd. 6. Combined net 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 net receipts" is the sum of the organization's gross receipts 4.4from lawful gambling less gross receipts directly derived from the conduct of paper bingo, 4.5raffles, and paddle wheels, as defined in section 
         297E.01, subdivision 8, and less the net 4.6prizes actually paid, other than prizes actually paid for paper bingo, raffles, and paddle 4.7wheels, for the fiscal year. The combined net receipts of an organization are subject to a 4.8tax computed according to the following schedule:

4.94.104.11If the combined net 
                  		receipts for the fiscal year 
                  		are:The tax is:4.12Not over $500,000$87,500zero6.89 percent4.134.144.15Over $500,000$87,500, 
                  		but not over $700,000$122,5001.7$6,029 plus 13.78 percent of the 
                  		amount over $500,000$87,500, but 
                  		not over $700,000$122,5004.164.174.184.19Over $700,000$122,500, 
                  		but not over $900,000$157,500$3,400$10,852 plus 3.420.67
                  		percent of the amount over $700,000$122,500, but not over $900,000$157,5004.204.214.22Over $900,000$157,500$10,200$18,086 plus 5.127.56
                  		percent of the amount over $900,000$157,500

4.23EFFECTIVE DATE.This section is effective July 1, 2012.4.24    Sec. 7. Minnesota Statutes 2010, section 297E.02, is amended by adding a subdivision 4.25to read:4.26    Subd. 6a.Unaccounted games.If a licensed distributor cannot account for a 4.27pull-tab game, an electronic pull-tab game, a tipboard deal, paddletickets, an electronic 4.28linked bingo game, bingo paper sheets, or linked bingo paper sheets, the distributor must 4.29report the sheets or games to the commissioner as lost and remit a tax of six percent 4.30on the ideal gross of the sheets or games.4.31EFFECTIVE DATE.This section is effective July 1, 2012.4.32    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, electronic pull-tab game or tipboard upon which the tax imposed by 4.36subdivision 4 this chapter has not been paid is liable for a tax of six percent of the ideal 5.1gross of each pull-tab, electronic pull-tab game,  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, linked bingo, electronic linked bingo, 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 2.5.18EFFECTIVE DATE.This section is effective July 1, 2012.5.19    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.5.25EFFECTIVE DATE.This section is effective July 1, 2012.5.26    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 gambling products.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 that all defective and returned pull-tabs or, tipboards have been, paddle tickets, 6.6paper bingo sheets, and linked bingo paper sheets be 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.6.10EFFECTIVE DATE.This section is effective for games sold by a licensed 6.11distributor after June 30, 2012.6.12    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.6.20EFFECTIVE DATE.This section is effective for actions occurring after June 6.2130, 2012.6.22    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 6.24disposable gambling equipment by an employee of the lessor 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. Bar bingo 6.32does not include bingo games linked to other permitted premises.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. A bingo occasion must not last 7.5longer than eight consecutive hours., except that linked bingo games played on electronic 7.6bingo devices may be played during regular business hours of the permitted premises, 7.7and all play during this period is considered a bingo occasion for reporting purposes. For 7.8permitted premises where the primary business is bingo, regular business hours shall be 7.9defined as the hours between 8:00 a.m. and 2:00 a.m.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 disposable 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 a 7.17handheld and portable electronic device that:7.18(a) is used by a bingo player to:7.19(1) monitor bingo paper sheets or a facsimile of a bingo paper sheet when purchased 7.20and played at the time and place of an organization's bingo occasion and which (1) 7.21provides a means for bingo players to, or to play an electronic bingo game that is linked 7.22with other permitted premises;7.23(2) activate numbers announced by a bingo caller; (2) compares or displayed, and 7.24to compare the numbers entered by the player to the bingo faces previously stored in 7.25the memory of the device; and 7.26(3) identifies identify a winning bingo pattern. or game requirement; and7.27(4) play against other bingo players;7.28(b) limits the play of bingo faces to 36 faces per game;7.29(c) requires coded entry to activate play but does not allow the use of a coin, 7.30currency, or tokens to be inserted to activate play;7.31(d) may only be used for play against other bingo players in a bingo game;7.32(e) has no additional function as an amusement or gambling device other than as an 7.33electronic pull-tab game defined under section 349.12, subdivision 12c;7.34(f) has the capability to ensure adequate levels of security internal controls;8.1(g) has the capability to permit the board to electronically monitor the operation of 8.2the device and the internal accounting systems; and8.3(h) has the capability to allow use by a player who is visually impaired.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    Subd. 12b.Electronic pull-tab device."Electronic pull-tab device" means a 8.9handheld and portable electronic device that:8.10(a) is used to play one or more electronic pull-tab games;8.11(b) requires coded entry to activate play but does not allow the use of coin, currency, 8.12or tokens to be inserted to activate play; 8.13(c) requires that a player must activate or open each electronic pull-tab ticket and 8.14each individual line, row, or column of each electronic pull-tab ticket; 8.15(d) maintains information pertaining to accumulated win credits that may be applied 8.16to games in play or redeemed upon termination of play;8.17(e) has no spinning symbols or other representations that mimic a video slot machine;8.18(f) has no additional function as a gambling device other than as an electronic linked 8.19bingo game played on a device defined under section 349.12, subdivision 12a;8.20(g) may incorporate an amusement game feature as part of the pull-tab game but 8.21may not require additional consideration for that feature or award any prize, or other 8.22benefit for that feature;8.23(h) may have auditory or visual enhancements to promote or provide information 8.24about the game being played, provided the component does not affect the outcome of 8.25a game or display the results of a game;8.26(i) maintains, on nonresettable meters, a printable, permanent record of all 8.27transactions involving each device electronic pull-tab games played on the device;8.28(j) is not a pull-tab dispensing device as defined under subdivision 32a; and8.29(k) has the capability to allow use by a player who is visually impaired.8.30    Sec. 18. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision 8.31to read:8.32    Subd. 12c.Electronic pull-tab game."Electronic pull-tab game" means a pull-tab 8.33game containing:8.34(a) facsimiles of pull-tab tickets that are played on an electronic pull-tab device;9.1(b) a predetermined, finite number of winning and losing tickets, not to exceed 9.27,500 tickets;9.3(c) the same price for each ticket in the game;9.4(d) a price paid by the player of not less than 25 cents per ticket;9.5(e) tickets that are in conformance with applicable board rules for pull-tabs;9.6(f) winning tickets that comply with prize limits under section 349.211;9.7(g) a unique serial number that may not be regenerated;9.8(h) an electronic flare that displays the game name, form number, predetermined, 9.9finite number of tickets in the game, and prize tier; and9.10(i) no spinning symbols or other representations that mimic a video slot machine.9.11    Sec. 19. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision 9.12to read:9.13    Subd. 12d.Electronic pull-tab game system."Electronic pull-tab game system" 9.14means the equipment leased from a licensed distributor and used by a licensed organization 9.15to conduct, manage, and record electronic pull-tab games, and to report and transmit the 9.16game results as prescribed by the board and the Department of Revenue. The system must 9.17provide security and access levels sufficient so that internal control objectives are met as 9.18prescribed by the board. The system must contain a point of sale station.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: gambling 9.21equipment that is either disposable or permanent gambling equipment. 9.22(a) Disposable gambling equipment includes the following:9.23(1) bingo hard cards or paper sheets, including linked bingo paper sheets, devices for 9.24selecting bingo numbers, electronic bingo devices,;9.25(2) paper and electronic pull-tabs,;9.26(3) jar tickets, paddle wheels, paddle wheel tables,;9.27(4) paddle tickets, and paddle ticket cards,;9.28(5) tipboards, and tipboard tickets,; and9.29(6) 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(b) Permanent gambling equipment includes the following:9.33(1) devices for selecting bingo numbers;9.34(2) electronic bingo devices;10.1(3) electronic pull-tab devices;10.2(4) pull-tab dispensing devices;10.3(5) programmable electronic devices that have no effect on the outcome of a game 10.4and are used to provide a visual or auditory enhancement of a game;10.5(6) paddle wheels; and10.6(7) paddle wheel tables.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; or11.4    (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; and11.35    (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; or12.10    (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; or13.20    (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; or14.6    (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.14.8EFFECTIVE DATE.This section is effective July 1, 2012.14.9    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 games, 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 the capability to permit the board to electronically monitor 14.19its operation remotely. For linked electronic bingo games, the system includes electronic 14.20bingo devices.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 game 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 vertical 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, and may only be used to determine a 14.30winning number or numbers matching a winning paddle ticket purchased by a player. A 14.31paddle wheel may be an electronic device that simulates a paddle wheel.15.1    Sec. 26. Minnesota Statutes 2010, section 349.12, subdivision 31, is amended to read:15.2    Subd. 31. Promotional ticket. A paper pull-tab ticket or paper 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 paper ticket or a,15.7multi-ply card with perforated break-open tabs, or a facsimile of a paper pull-tab ticket 15.8used in conjunction with an electronic pull-tab device, the face of which is initially 15.9covered to conceal one or more numbers or symbols, and where one or more of each set of 15.10tickets or, cards, or facsimiles 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 
         609.7515.14to 
         609.76 if it is conducted under this chapter. A pull-tab dispensing device, electronic 15.15bingo device, and electronic pull-tab device permitted under this chapter and by board 15.16rule is not a gambling device within the meaning of sections 
         609.75 to 
         609.76 and chapter 15.17299L. An electronic game device allowed under this chapter may not be a slot machine. 15.18Electronic game devices, including but not limited to electronic bingo devices, electronic 15.19paddle wheels, and electronic pull-tab devices authorized under this chapter, may only 15.20be used in the conduct of lawful gambling permitted under this chapter and board rule 15.21and may not display or simulate any other form of gambling or entertainment, except 15.22as otherwise allowed under this chapter. 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; and15.29(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 devices. (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; and16.15(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(b) The board, or the director if authorized by the board, may require the deactivation 16.18of an electronic bingo device for violation of a law or rule and to implement any other 16.19controls deemed necessary to ensure and maintain the integrity of electronic bingo devices 16.20and the electronic bingo games played on the devices.16.21    Sec. 31. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision 16.22to read:16.23    Subd. 4d.Electronic pull-tab devices and electronic pull-tab game system.(a) 16.24The board may adopt rules it deems necessary to ensure the integrity of electronic pull-tab 16.25devices, the electronic pull-tab games played on the devices, and the electronic pull-tab 16.26game system necessary to operate them.16.27(b) The board may not require an organization to use electronic pull-tab devices.16.28(c) Before authorizing the lease or sale of electronic pull-tab devices and the 16.29electronic pull-tab game system, the board shall examine electronic pull-tab devices 16.30allowed under section 349.12, subdivision 12b. The board may contract for the 16.31examination of the game system and electronic pull-tab devices and may require a working 16.32model to be transported to locations the board designates for testing, examination, and 16.33analysis. The manufacturer must pay all costs of any testing, examination, analysis, and 16.34transportation of the model. The system must be approved by the board before its use in 17.1the state and must have the capability to permit the board to electronically monitor its 17.2operation and internal accounting systems. 17.3(d) The board may require a manufacturer to submit a certificate from an independent 17.4testing laboratory approved by the board to perform testing services, stating that the 17.5equipment has been tested, analyzed, and meets the standards required in this chapter 17.6and any applicable board rules.17.7(e) The board, or the director if authorized by the board, may require the deactivation 17.8of an electronic pull-tab device for violation of a law or rule and to implement any other 17.9controls deemed necessary to ensure and maintain the integrity of electronic pull-tab 17.10devices and the electronic pull-tab games played on the devices.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; or17.24    (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; or17.33    (2) has ever been convicted of a crime involving gambling; or.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.(a) 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; or18.31    (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    (b) The revocation or suspension of an organization's license may not exceed a 19.2period of ten years, including any revocation or suspension imposed by the board prior to 19.3the effective date of this paragraph, except that:19.4    (1) any prohibition placed by the board on who may be involved in the conduct, 19.5oversight, or management of the revoked organization's lawful gambling activity is 19.6permanent; and19.7    (2) a revocation or suspension will remain in effect until any taxes, fees, and fines 19.8that are delinquent have been paid by the organization to the satisfaction of the board.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 and a linked bingo game provider may provide electronic bingo devices for 19.19linked electronic bingo games;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; or19.22    (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(c) No distributor or distributor salesperson may also be licensed as a linked bingo 19.29game provider under section 349.1635.19.30    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 or leased 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 for a paper pull-tab game.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 or lease gambling 20.26equipment for resale or lease 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 paper20.35pull-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 or lease to any person for use in Minnesota must, prior 21.6to the equipment's resale or lease, 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. A distributor must notify the board of the method that it will use to sell and 21.15transfer electronic pull-tab games to licensed organizations, and must receive approval of 21.16the board before implementing or making changes to the approved method.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. A manufacturer must notify the board of the method that it will 21.30use to sell and transfer electronic pull-tab games to licensed distributors, and must receive 21.31approval of the board before implementing or making changes to the approved method.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; and22.12(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. A manufacturer licensed under this 22.19section may also be licensed as a linked bingo game provider under section 349.1635. 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. Paper 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 paper22.25pull-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 paper pull-tabs or 22.28tipboards except as allowed by this chapter or board rules.22.29(b) The flare of each paper 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 paper23.1pull-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 paper pull-tabs and tipboards. Possession of a box containing a deal of paper23.5pull-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 paper 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 paper 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, and23.17-- 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 paper 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.(a) 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 manufactured for use or resale in this state.23.26For purposes of this subdivision, a manufacturer is also required to submit the applicable 23.27version of any software necessary to operate electronic devices and related systems.23.28(b) The board shall inspect and test all the equipment, including software and 23.29software upgrades, 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(c) 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(d) 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 or to a manufacturer licensed under section 349.163 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 which may not exceed 15 percent of 24.24gross profits, unless a higher percentage, not to exceed 20 percent, is authorized by the 24.25board. The fee schedule must incorporate costs paid to distributors for services provided 24.26under subdivision 5; and24.27(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    Subd. 5.Linked bingo game services requirements.(a) A linked bingo game 24.31provider must contract with licensed distributors for linked bingo game services including, 24.32but not limited to, the solicitation of agreements with licensed organizations, and 24.33installation, repair, or maintenance of the linked bingo game system.25.1(b) A distributor may not charge a fee to licensed organizations for services 25.2authorized and rendered under paragraph (a).25.3(c) A linked bingo game provider may not contract with any distributor on an 25.4exclusive basis.25.5(d) A linked bingo game provider may refuse to contract with a licensed distributor 25.6if the linked bingo game provider demonstrates that the licensed distributor is not capable 25.7of performing the services under the contract.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; and25.18    (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.The price of a face played on an electronic bingo 25.23device may not be less than the price of a face on a bingo paper sheet sold for the same 25.24game at the same occasion. A game of bingo begins with the first letter and number called25.25or displayed. Each player must cover, mark, or activate the numbers when bingo numbers 25.26are randomly selected, and announced, and or 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; and26.5    (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.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, 26.11including progressive gamegames in which a portion of the prize is carried over from 26.12one occasion game to another until won by a player achieving a valid bingo within a 26.13predetermined amount of bingo numbers calledbased upon a predetermined and posted 26.14win determination.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. Linked bingo games may only be 26.17conducted by licensed organizations who have a valid agreement with the linked bingo 26.18game provider.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; and26.29    (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    Subd. 9.Linked bingo games played exclusively on electronic bingo devices.In 26.33addition to the requirements of subdivision 8, the following requirements and restrictions 26.34apply when linked bingo games are played exclusively on electronic bingo devices.27.1(a) The permitted premises must be:27.2(1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent 27.3malt beverages, except for a general food store or drug store permitted to sell alcoholic 27.4beverages under section 340A.405, subdivision 1; or27.5(2) a premises where bingo is conducted as the primary business and has a seating 27.6capacity of at least 100.27.7(b) The number of electronic bingo devices is limited to:27.8(1) no more than six devices in play for permitted premises with 200 seats or less;27.9(2) no more than 12 devices in play for permitted premises with 201 seats or more; 27.10and27.11(3) no more than 50 devices in play for permitted premises where bingo is the 27.12primary business.27.13Seating capacity is determined as specified under the local fire code.27.14(c) Prior to a bingo occasion, the linked bingo game provider, on behalf of the 27.15participating organizations, must provide to the board a bingo program in a format 27.16prescribed by the board.27.17(d) Before participating in the play of a linked bingo game, a player must present 27.18and register a valid picture identification card that includes the player's address and 27.19date of birth.27.20(e) An organization may remove from play a device that a player has not maintained 27.21in an activated mode for a specified period of time determined by the organization. The 27.22organization must provide the notice in its house rules.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. The rules shall also apply to electronic pull-tab games.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. The rules shall also apply to electronic 27.31pull-tab games. 27.32    Subd. 3.Pull-tab dispensing device location restrictions and requirements.27.33The following pertain to pull-tab dispensing devices as defined under section 349.12, 27.34subdivision 32a.28.1(a) The use of any pull-tab dispensing device must be at a permitted premises 28.2which is:28.3(1) a licensed premises for on-sale of intoxicating liquor or 3.2 percent malt 28.4beverages;28.5(2) a premises where bingo is conducted as the primary business; or28.6(3) an establishment licensed for the off-sale of intoxicating liquor, other than drug 28.7stores and general food stores licensed under section 340A.405, subdivision 1.28.8(b) The number of pull-tab dispensing devices located at any permitted premises 28.9is limited to three.28.10    Subd. 4.Electronic pull-tab device requirements and restrictions.The following 28.11pertain to the use of electronic pull-tab devices as defined under section 349.12, 28.12subdivision 12b.28.13(a) The use of any electronic pull-tab device may only be at a permitted premises 28.14that is:28.15(1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent 28.16malt beverages, except for a general food store or drug store permitted to sell alcoholic 28.17beverages under section 340A.405, subdivision 1; or28.18(2) a premises where bingo is conducted as the primary business and has a seating 28.19capacity of at least 100; and28.20(3) where the licensed organization sells paper pull-tabs. 28.21(b) The number of electronic pull-tab devices is limited to:28.22(1) no more than six devices in play at any permitted premises with 200 seats or less;28.23(2) no more than 12 devices in play at any permitted premises with 201 seats 28.24or more; and28.25(3) no more than 50 devices in play at any permitted premises where the primary 28.26business is bingo.28.27Seating capacity is determined as specified under the local fire code.28.28(c) The hours of operation for the devices are limited to 8:00 a.m. to 2:00 a.m.28.29(d) All electronic pull-tab games must be sold and played on the permitted premises 28.30and may not be linked to other permitted premises.28.31(e) Electronic pull-tab games may not be transferred electronically or otherwise to 28.32any other location by the licensed organization.28.33(f) Electronic pull-tab games may be commingled if the games are from the same 28.34family of games and manufacturer and contain the same game name, form number, type 28.35of game, ticket count, prize amounts, and prize denominations. Each commingled game 28.36must have a unique serial number.29.1(g) An organization may remove from play a device that a player has not maintained 29.2in an activated mode for a specified period of time determined by the organization. The 29.3organization must provide the notice in its house rules. 29.4(h) Before participating in the play of an electronic pull-tab game, a player must 29.5present and register a valid picture identification card that includes the player's address 29.6and date of birth.29.7(i) Each player is limited to the use of one device at a time.29.8    Subd. 5.Multiple chance games.The board may permit pull-tab games in which 29.9the holders of certain predesignated winning tickets, with a prize value not to exceed $75 29.10each, have the option of turning in the winning tickets for the chance to win a prize of 29.11greater value.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 lawful gambling is subject to the following limits and 29.26restrictions: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: monthly rent may not exceed ten percent of gross profits 29.31for that month. Total rent paid to a lessor from all organizations from leases governed by 29.32this clause may not exceed $1,750 per month.29.33    (i) in any month where the organization's gross profit at those premises does not 29.34exceed $4,000, up to $400; and30.1    (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: monthly rent may not exceed:30.7(i) 15 percent of the gross profits for that month from pull-tabs sold from a pull-tab 30.8dispensing device, electronic pull-tab games, and electronic linked bingo games; and30.9(ii) more than 20 percent of gross profits from all other forms of lawful gambling.30.10    (i) in any month where the organization's gross profit at those premises does not 30.11exceed $1,000, up to $200; and30.12    (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; For electronic linked bingo games and electronic pull-tab games that 30.17are operated for separate time periods within a business day by an organization and the 30.18lessor, monthly rent may not be more than:30.19(i) 15 percent of the gross profits for that month for the time periods operated by 30.20the lessor. The lessor is responsible for cash shortages that occur during the time periods 30.21the games are operated by the lessor; and30.22(ii) ten percent of gross profits for that month for the time periods operated by the 30.23organization. The organization is responsible for cash shortages that occur during the time 30.24periods the games are operated by the organization.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) (4) For bingo conducted at a leased premises where the primary business is 30.30bingo, rent is limited to either not more than ten percent of the monthly gross profit from 30.31all lawful gambling activities held during bingo occasions, 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.30.34    (2) (5) No rent may be paid for bar bingo as defined in section 349.12, subdivision 3c.30.35(6) A lease not governed by clauses (1) to (5) must be approved by the director 30.36before becoming effective.31.1    (d) (c) 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, and other utilities or 31.5services, and, in the case of bar operations, cash shortages, unless approved by the 31.6director. The lessor shall be responsible for the cost of any communications network or 31.7service required to conduct electronic pull-tab games or electronic bingo games. Any 31.8other expenditure made by an organization that is related to a leased premises must be 31.9approved by the director. For bar operations, the lessor is responsible for cash shortages.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) (d) 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 (e) A licensed organization may not conduct any activity 31.17within a booth operation on behalf of the lessor 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) Except for gambling receipts from electronic pull-tab games and linked 31.33electronic bingo games, 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(1) A deal of paper 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(2) 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(e) Gambling receipts from all electronic pull-tab games and all linked electronic 32.8bingo games must be recorded on a daily basis and deposited into the gambling bank 32.9account within two business days.32.10(e) (f) 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) (g) 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 in an 32.18electronic format 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; and32.26(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; and33.20(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.33.25EFFECTIVE DATE.This section is effective July 1, 2012.33.26    Sec. 52. Minnesota Statutes 2010, section 349.19, subdivision 5, is amended to read:33.27    Subd. 5. Reports.(a) A licensed organization must report monthly to the 33.28Department of Revenue board in an electronic format prescribed by the board 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 gambling33.32for each permitted premises. The organization must account for and report on each form 33.33of lawful gambling conducted. The report organization 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(b) 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: monthly to the 34.6commissioner of revenue as required under section 297E.06.34.7(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; and34.14(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).34.16EFFECTIVE DATE.This section is effective July 1, 2012.34.17    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 paper 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 paper 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 paper34.25pull-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 paper 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; and34.32    (2) before allowing an organization to use a cash register that commingles receipts 34.33from several different paper 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 for linked bingo games played without electronic bingo devices, 35.6an organization may not contribute to a linked bingo game prize pool more than $300 35.7per linked bingo game per site;35.8(2) for linked bingo games played exclusively with electronic bingo devices, an 35.9organization may not contribute more than 85 percent of the gross receipts per permitted 35.10premises to a linked bingo game prize pool;35.11(2) (3) 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; and35.15    (3) (4) for a progressive linked bingo game, if no player declares a valid bingo 35.16within the for a progressive prize or prizes based on a predetermined amount of bingo 35.17numbers called and posted win determination, a portion of the prize is gross receipts 35.18may be carried over to another occasion game until the accumulated progressive 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.; and35.25(5) for linked bingo games played exclusively with electronic bingo devices, linked 35.26bingo prizes in excess of $599 shall be paid by the linked bingo game provider to the 35.27player within three business days. Winners of linked bingo prizes in excess of $599 will 35.28be given a receipt or claim voucher as proof of a win.35.29    Sec. 55. SEVERABILITY.35.30If any provision of this act is found to be invalid because it is in conflict with a 35.31provision of the Minnesota Constitution or the Constitution of the United States, or for any 35.32other reason, all other provisions of this act shall remain valid and any rights, remedies, 35.33and privileges that have been otherwise accrued by this act, shall remain in effect and may 35.34be proceeded with and concluded under this act.36.1    Sec. 56. APPROPRIATION.36.2$1,219,000 in fiscal year 2013 is appropriated from the lawful gambling regulation 36.3account in the special revenue fund to the Gambling Control Board for operating expenses 36.4related to the regulatory oversight of lawful gambling for electronic pull-tabs and 36.5electronic linked bingo.36.6    Sec. 57.  REPEALER.36.7Minnesota Statutes 2010, sections 297E.02, subdivision 4; 349.15, subdivision 3; 36.8and 349.19, subdivision 2a, are repealed.36.9EFFECTIVE DATE.This section is effective for games sold by a licensed 36.10distributor after June 30, 2012, and the commissioner of revenue retains the authority to 36.11issue refunds under Minnesota Statutes 2010, section 297E.02, subdivision 4, paragraph 36.12(d), for games sold before July 1, 2012.36.13    Sec. 58. EFFECTIVE DATE.36.14Unless otherwise specifically provided, this act is effective the day following final 36.15enactment.