HF 1244

1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to lawful gambling; making various clarifying 
  1.3             and technical changes; providing and modifying 
  1.4             definitions; permitting resale of certain gambling 
  1.5             equipment; providing for fees, prices, and prize 
  1.6             limits; clarifying requirements for gambling managers 
  1.7             and employees, premises, records and reports; 
  1.8             clarifying conduct of high school raffles; amending 
  1.9             Minnesota Statutes 2002, sections 349.12, subdivisions 
  1.10            19, 25, by adding subdivisions; 349.151, subdivision 
  1.11            4b; 349.161, subdivision 5; 349.166, subdivision 1; 
  1.12            349.167, subdivisions 4, 7; 349.168, subdivisions 1, 
  1.13            2, 6, by adding a subdivision; 349.169, subdivisions 
  1.14            1, 3; 349.18, subdivision 1; 349.19, subdivision 3; 
  1.15            609.761, subdivision 5; repealing Minnesota Statutes 
  1.16            2002, section 349.168, subdivision 9. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  Minnesota Statutes 2002, section 349.12, is 
  1.19  amended by adding a subdivision to read: 
  1.20     Subd. 3b.  [BAR OPERATION.] "Bar operation" means a method 
  1.21  of selling and redeeming gambling equipment within a leased 
  1.22  premises which is licensed for the on-sale of alcoholic 
  1.23  beverages where such sales and redemptions are made by an 
  1.24  employee of the lessor from a common area where food and 
  1.25  beverages are also sold. 
  1.26     Sec. 2.  Minnesota Statutes 2002, section 349.12, is 
  1.27  amended by adding a subdivision to read: 
  1.28     Subd. 6a.  [BOOTH OPERATION.] "Booth operation" means a 
  1.29  method of selling and redeeming gambling equipment by an 
  1.30  employee of a licensed organization in a premises the 
  1.31  organization leases or owns where such sales and redemptions are 
  2.1   made within a separate enclosure that is distinct from areas 
  2.2   where food and beverages are sold. 
  2.3      Sec. 3.  Minnesota Statutes 2002, section 349.12, 
  2.4   subdivision 19, is amended to read: 
  2.5      Subd. 19.  [GAMBLING MANAGER.] "Gambling manager" means a 
  2.6   person who has been designated by the organization to supervise 
  2.7   the lawful gambling conducted by it and who: 
  2.8      (1) has been an active member of the organization for at 
  2.9   least two years at the time of the organization's initial 
  2.10  application for a license; or 
  2.11     (2) has been an active member of the organization for at 
  2.12  least the most recent six months prior to the effective date of 
  2.13  the organization's renewal license; or 
  2.14     (3) meets other qualifications as prescribed by the board 
  2.15  by rule. 
  2.16     Sec. 4.  Minnesota Statutes 2002, section 349.12, 
  2.17  subdivision 25, is amended to read: 
  2.18     Subd. 25.  [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 
  2.19  or more of the following:  
  2.20     (1) any expenditure by or contribution to a 501(c)(3) or 
  2.21  festival organization, as defined in subdivision 15a, provided 
  2.22  that the organization and expenditure or contribution are in 
  2.23  conformity with standards prescribed by the board under section 
  2.24  349.154, which standards must apply to both types of 
  2.25  organizations in the same manner and to the same extent; 
  2.26     (2) a contribution to an individual or family suffering 
  2.27  from poverty, homelessness, or physical or mental disability, 
  2.28  which is used to relieve the effects of that poverty, 
  2.29  homelessness, or disability; 
  2.30     (3) a contribution to an individual for treatment for 
  2.31  delayed posttraumatic stress syndrome or a contribution to a 
  2.32  program recognized by the Minnesota department of human services 
  2.33  for the education, prevention, or treatment of compulsive 
  2.34  gambling; 
  2.35     (4) a contribution to or expenditure on a public or private 
  2.36  nonprofit educational institution registered with or accredited 
  3.1   by this state or any other state; 
  3.2      (5) a contribution to a scholarship fund for defraying the 
  3.3   cost of education to individuals where the funds are awarded 
  3.4   through an open and fair selection process; 
  3.5      (6) activities by an organization or a government entity 
  3.6   which recognize humanitarian or military service to the United 
  3.7   States, the state of Minnesota, or a community, subject to rules 
  3.8   of the board, provided that the rules must not include mileage 
  3.9   reimbursements in the computation of the per occasion diem 
  3.10  reimbursement limit and must impose no aggregate annual limit on 
  3.11  the amount of reasonable and necessary expenditures made to 
  3.12  support: 
  3.13     (i) members of a military marching or color guard unit for 
  3.14  activities conducted within the state; 
  3.15     (ii) members of an organization solely for services 
  3.16  performed by the members at funeral services; or 
  3.17     (iii) members of military marching, color guard, or honor 
  3.18  guard units may be reimbursed for participating in color guard, 
  3.19  honor guard, or marching unit events within the state or states 
  3.20  contiguous to Minnesota at a per participant rate of up to $35 
  3.21  per occasion diem; 
  3.22     (7) recreational, community, and athletic facilities and 
  3.23  activities intended primarily for persons under age 21, provided 
  3.24  that such facilities and activities do not discriminate on the 
  3.25  basis of gender and the organization complies with section 
  3.26  349.154; 
  3.27     (8) payment of local taxes authorized under this chapter, 
  3.28  taxes imposed by the United States on receipts from lawful 
  3.29  gambling, the taxes imposed by section 297E.02, subdivisions 1, 
  3.30  4, 5, and 6, and the tax imposed on unrelated business income by 
  3.31  section 290.05, subdivision 3; 
  3.32     (9) payment of real estate taxes and assessments on 
  3.33  permitted gambling premises wholly owned by the licensed 
  3.34  organization paying the taxes, or wholly leased by a licensed 
  3.35  veterans organization under a national charter recognized under 
  3.36  section 501(c)(19) of the Internal Revenue Code, not to exceed: 
  4.1      (i) for premises used for bingo, the amount that an 
  4.2   organization may expend under board rules on rent for bingo; and 
  4.3      (ii) $35,000 per year for premises used for other forms of 
  4.4   lawful gambling; 
  4.5      (10) a contribution to the United States, this state or any 
  4.6   of its political subdivisions, or any agency or instrumentality 
  4.7   thereof other than a direct contribution to a law enforcement or 
  4.8   prosecutorial agency; 
  4.9      (11) a contribution to or expenditure by a nonprofit 
  4.10  organization which is a church or body of communicants gathered 
  4.11  in common membership for mutual support and edification in 
  4.12  piety, worship, or religious observances; 
  4.13     (12) payment of the reasonable costs of an audit required 
  4.14  in section 297E.06, subdivision 4, provided the annual audit is 
  4.15  filed in a timely manner with the department of revenue; 
  4.16     (13) a contribution to or expenditure on a wildlife 
  4.17  management project that benefits the public at-large, provided 
  4.18  that the state agency with authority over that wildlife 
  4.19  management project approves the project before the contribution 
  4.20  or expenditure is made; 
  4.21     (14) expenditures, approved by the commissioner of natural 
  4.22  resources, by an organization for grooming and maintaining 
  4.23  snowmobile trails and all-terrain vehicle trails that are (1) 
  4.24  grant-in-aid trails established under section 85.019, or (2) 
  4.25  other trails open to public use, including purchase or lease of 
  4.26  equipment for this purpose; or 
  4.27     (15) conducting nutritional programs, food shelves, and 
  4.28  congregate dining programs primarily for persons who are age 62 
  4.29  or older or disabled; 
  4.30     (16) a contribution to a community arts organization, or an 
  4.31  expenditure to sponsor arts programs in the community, including 
  4.32  but not limited to visual, literary, performing, or musical 
  4.33  arts; 
  4.34     (17) an expenditure by a licensed veterans organization for 
  4.35  payment of heat, water, sanitation, telephone, and other utility 
  4.36  bills fuel for heating, electricity, and sewer costs for a 
  5.1   building wholly owned or wholly leased by, and used as the 
  5.2   primary headquarters of, a the licensed veterans organization; 
  5.3   or 
  5.4      (18) expenditure by a licensed veterans organization of up 
  5.5   to $5,000 in a calendar year in net costs to the organization 
  5.6   for meals and other membership events, limited to members and 
  5.7   spouses, held in recognition of military service.  No more than 
  5.8   $5,000 can be expended in total per calendar year under this 
  5.9   clause by all licensed veterans organizations sharing the same 
  5.10  veterans post home. 
  5.11     (b) Notwithstanding paragraph (a), "lawful purpose" does 
  5.12  not include: 
  5.13     (1) any expenditure made or incurred for the purpose of 
  5.14  influencing the nomination or election of a candidate for public 
  5.15  office or for the purpose of promoting or defeating a ballot 
  5.16  question; 
  5.17     (2) any activity intended to influence an election or a 
  5.18  governmental decision-making process; 
  5.19     (3) the erection, acquisition, improvement, expansion, 
  5.20  repair, or maintenance of real property or capital assets owned 
  5.21  or leased by an organization, unless the board has first 
  5.22  specifically authorized the expenditures after finding that (i) 
  5.23  the real property or capital assets will be used exclusively for 
  5.24  one or more of the purposes in paragraph (a); (ii) with respect 
  5.25  to expenditures for repair or maintenance only, that the 
  5.26  property is or will be used extensively as a meeting place or 
  5.27  event location by other nonprofit organizations or community or 
  5.28  service groups and that no rental fee is charged for the use; 
  5.29  (iii) with respect to expenditures, including a mortgage payment 
  5.30  or other debt service payment, for erection or acquisition only, 
  5.31  that the erection or acquisition is necessary to replace with a 
  5.32  comparable building, a building owned by the organization and 
  5.33  destroyed or made uninhabitable by fire or natural disaster, 
  5.34  provided that the expenditure may be only for that part of the 
  5.35  replacement cost not reimbursed by insurance; (iv) with respect 
  5.36  to expenditures, including a mortgage payment or other debt 
  6.1   service payment, for erection or acquisition only, that the 
  6.2   erection or acquisition is necessary to replace with a 
  6.3   comparable building a building owned by the organization that 
  6.4   was acquired from the organization by eminent domain or sold by 
  6.5   the organization to a purchaser that the organization reasonably 
  6.6   believed would otherwise have acquired the building by eminent 
  6.7   domain, provided that the expenditure may be only for that part 
  6.8   of the replacement cost that exceeds the compensation received 
  6.9   by the organization for the building being replaced; or (v) with 
  6.10  respect to an expenditure to bring an existing building into 
  6.11  compliance with the Americans with Disabilities Act under item 
  6.12  (ii), an organization has the option to apply the amount of the 
  6.13  board-approved expenditure to the erection or acquisition of a 
  6.14  replacement building that is in compliance with the Americans 
  6.15  with Disabilities Act; 
  6.16     (4) an expenditure by an organization which is a 
  6.17  contribution to a parent organization, foundation, or affiliate 
  6.18  of the contributing organization, if the parent organization, 
  6.19  foundation, or affiliate has provided to the contributing 
  6.20  organization within one year of the contribution any money, 
  6.21  grants, property, or other thing of value; 
  6.22     (5) a contribution by a licensed organization to another 
  6.23  licensed organization unless the board has specifically 
  6.24  authorized the contribution.  The board must authorize such a 
  6.25  contribution when requested to do so by the contributing 
  6.26  organization unless it makes an affirmative finding that the 
  6.27  contribution will not be used by the recipient organization for 
  6.28  one or more of the purposes in paragraph (a); or 
  6.29     (6) a contribution to a statutory or home rule charter 
  6.30  city, county, or town by a licensed organization with the 
  6.31  knowledge that the governmental unit intends to use the 
  6.32  contribution for a pension or retirement fund. 
  6.33     Sec. 5.  Minnesota Statutes 2002, section 349.12, is 
  6.34  amended by adding a subdivision to read: 
  6.35     Subd. 36.  [VETERANS POST HOME.] "Veterans post home" means 
  6.36  a building, or portion of a building, that is leased or owned by 
  7.1   one or more licensed veterans organizations, and that is 
  7.2   considered the post home for all licensed veterans organizations 
  7.3   at that site. 
  7.4      Sec. 6.  Minnesota Statutes 2002, section 349.12, is 
  7.5   amended by adding a subdivision to read: 
  7.6      Subd. 37.  [WHOLLY LEASED BUILDING.] "Wholly leased 
  7.7   building" means a building that is leased in its entirety by a 
  7.8   licensed organization, and no part or portion of the building is 
  7.9   subleased to any other entity or licensed organization. 
  7.10     Sec. 7.  Minnesota Statutes 2002, section 349.12, is 
  7.11  amended by adding a subdivision to read: 
  7.12     Subd. 38.  [WHOLLY OWNED BUILDING.] "Wholly owned building" 
  7.13  means a building that is owned in its entirety by a licensed 
  7.14  organization, and no part or portion of the building is 
  7.15  subleased to any other entity or licensed organization. 
  7.16     Sec. 8.  Minnesota Statutes 2002, section 349.151, 
  7.17  subdivision 4b, is amended to read: 
  7.18     Subd. 4b.  [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 
  7.19  The board may by rule authorize but not require the use of 
  7.20  pull-tab dispensing devices. 
  7.21     (b) Rules adopted under paragraph (a): 
  7.22     (1) must limit the number of pull-tab dispensing devices on 
  7.23  any permitted premises to three; and 
  7.24     (2) must limit the use of pull-tab dispensing devices to a 
  7.25  permitted premises which is (i) a licensed premises for on-sales 
  7.26  of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
  7.27  licensed bingo hall that allows gambling only by persons 18 
  7.28  years or older. 
  7.29     (c) Notwithstanding rules adopted under paragraph (b), 
  7.30  pull-tab dispensing devices may be used in establishments 
  7.31  licensed for the off-sale of intoxicating liquor, other than 
  7.32  drugstores and general food stores licensed under section 
  7.33  340A.405, subdivision 1. 
  7.34     (d) The director may charge a manufacturer a fee of up to 
  7.35  $5,000 per pull-tab dispensing device to cover the costs of 
  7.36  services provided by an independent testing laboratory to 
  8.1   perform testing and analysis of pull-tab dispensing devices.  
  8.2   The director shall deposit in a separate account in the state 
  8.3   treasury all money the director receives as reimbursement for 
  8.4   the costs of services provided by independent testing 
  8.5   laboratories that have entered into contracts with the state to 
  8.6   perform testing and analysis of pull-tab dispensing devices.  
  8.7   Money in the account is appropriated to the director to pay the 
  8.8   costs of services under those contracts. 
  8.9      Sec. 9.  Minnesota Statutes 2002, section 349.161, 
  8.10  subdivision 5, is amended to read: 
  8.11     Subd. 5.  [PROHIBITION.] (a) No distributor, or employee of 
  8.12  a distributor, may also be a wholesale distributor of alcoholic 
  8.13  beverages or an employee of a wholesale distributor of alcoholic 
  8.14  beverages. 
  8.15     (b) No distributor, or any representative, agent, 
  8.16  affiliate, or employee of a distributor, may: (1) be involved in 
  8.17  the conduct of lawful gambling by an organization; (2) keep or 
  8.18  assist in the keeping of an organization's financial records, 
  8.19  accounts, and inventories; or (3) prepare or assist in the 
  8.20  preparation of tax forms and other reporting forms required to 
  8.21  be submitted to the state by an organization. 
  8.22     (c) No distributor or any representative, agent, affiliate, 
  8.23  or employee of a distributor may provide a lessor of gambling 
  8.24  premises any compensation, gift, gratuity, premium, or other 
  8.25  thing of value. 
  8.26     (d) No distributor or any representative, agent, affiliate, 
  8.27  or employee of a distributor may participate in any gambling 
  8.28  activity at any gambling site or premises where gambling 
  8.29  equipment purchased from that distributor is being used in the 
  8.30  conduct of lawful gambling. 
  8.31     (e) No distributor or any representative, agent, affiliate, 
  8.32  or employee of a distributor may alter or modify any gambling 
  8.33  equipment, except to add a "last ticket sold" prize sticker. 
  8.34     (f) No distributor or any representative, agent, affiliate, 
  8.35  or employee of a distributor may:  (1) recruit a person to 
  8.36  become a gambling manager of an organization or identify to an 
  9.1   organization a person as a candidate to become gambling manager 
  9.2   for the organization; or (2) identify for an organization a 
  9.3   potential gambling location. 
  9.4      (g) No distributor may purchase gambling equipment for 
  9.5   resale to a person for use within the state from any person not 
  9.6   licensed as a manufacturer under section 349.163, except for 
  9.7   gambling equipment returned from an organization licensed under 
  9.8   section 349.16, or exempt or excluded from licensing under 
  9.9   section 349.166. 
  9.10     (h) No distributor may sell gambling equipment to any 
  9.11  person for use in Minnesota other than (i) a licensed 
  9.12  organization or organization excluded or exempt from licensing, 
  9.13  or (ii) the governing body of an Indian tribe. 
  9.14     (i) No distributor may sell or otherwise provide a pull-tab 
  9.15  or tipboard deal with the symbol required by section 349.163, 
  9.16  subdivision 5, paragraph (h), visible on the flare to any person 
  9.17  other than in Minnesota to a licensed organization or 
  9.18  organization exempt from licensing. 
  9.19     Sec. 10.  Minnesota Statutes 2002, section 349.166, 
  9.20  subdivision 1, is amended to read: 
  9.21     Subdivision 1.  [EXCLUSIONS.] (a) Bingo may be conducted 
  9.22  without a license and without complying with sections 349.168, 
  9.23  subdivisions 1 and 2; 349.17, subdivisions 1, 4, and 5; 349.18, 
  9.24  subdivision 1; and 349.19, if it is conducted:  
  9.25     (1) by an organization in connection with a county fair, 
  9.26  the state fair, or a civic celebration and is not conducted for 
  9.27  more than 12 consecutive days and is limited to no more than 
  9.28  four separate applications for activities applied for and 
  9.29  approved in a calendar year; or 
  9.30     (2) by an organization that conducts four or fewer bingo 
  9.31  occasions in a calendar year.  
  9.32     An organization that holds a license to conduct lawful 
  9.33  gambling under this chapter may not conduct bingo under this 
  9.34  subdivision.  
  9.35     (b) Bingo may be conducted within a nursing home or a 
  9.36  senior citizen housing project or by a senior citizen 
 10.1   organization if the prizes for a single bingo game do not exceed 
 10.2   $10, total prizes awarded at a single bingo occasion do not 
 10.3   exceed $200, no more than two bingo occasions are held by the 
 10.4   organization or at the facility each week, only members of the 
 10.5   organization or residents of the nursing home or housing project 
 10.6   are allowed to play in a bingo game, no compensation is paid for 
 10.7   any persons who conduct the bingo, and a manager is appointed to 
 10.8   supervise the bingo.  Bingo conducted under this paragraph is 
 10.9   exempt from sections 349.11 to 349.23, and the board may not 
 10.10  require an organization that conducts bingo under this 
 10.11  paragraph, or the manager who supervises the bingo, to register 
 10.12  or file a report with the board.  The gross receipts from bingo 
 10.13  conducted under the limitations of this subdivision are exempt 
 10.14  from taxation under chapter 297A.  
 10.15     (c) Raffles may be conducted by an organization without a 
 10.16  license and without complying with sections 349.154 to 349.165 
 10.17  and 349.167 to 349.213 if the value of all raffle prizes awarded 
 10.18  by the organization in a calendar year does not 
 10.19  exceed $750 $1,500.  
 10.20     (d) Except as provided in paragraph (b), the organization 
 10.21  must maintain all required records of excluded gambling activity 
 10.22  for 3-1/2 years. 
 10.23     Sec. 11.  Minnesota Statutes 2002, section 349.167, 
 10.24  subdivision 4, is amended to read: 
 10.25     Subd. 4.  [TRAINING OF GAMBLING MANAGERS.] The board shall 
 10.26  by rule require all persons licensed as gambling managers to 
 10.27  receive periodic training in laws and rules governing lawful 
 10.28  gambling.  The rules must contain the following requirements: 
 10.29     (1) each gambling manager must receive training before 
 10.30  being issued a new license, except that in the case of the 
 10.31  death, disability, or termination of a gambling manager, a 
 10.32  replacement gambling manager must receive the training within 90 
 10.33  days of being issued a license; 
 10.34     (2) each gambling manager applying for a renewal of a 
 10.35  license must have received continuing education training, as 
 10.36  required by board rule, each year of the two-year license 
 11.1   period, or pass a gambling manager examination as required in 
 11.2   subdivision 7; and 
 11.3      (3) the training required by this subdivision may be 
 11.4   provided by a person authorized by the board to provide the 
 11.5   training.  Before authorizing a person to provide training, the 
 11.6   board must determine that: 
 11.7      (i) the provider and all of the provider's personnel 
 11.8   conducting the training are qualified to do so; 
 11.9      (ii) the curriculum to be used fully and accurately covers 
 11.10  all elements of lawful gambling law and rules that the board 
 11.11  determines are necessary for a gambling manager to know and 
 11.12  understand; 
 11.13     (iii) the fee to be charged for participants in the 
 11.14  training sessions is fair and reasonable; and 
 11.15     (iv) the training provider has an adequate system for 
 11.16  documenting completion of training. 
 11.17     The rules may provide for differing training requirements 
 11.18  for gambling managers based on the class of license held by the 
 11.19  gambling manager's organization. 
 11.20     The board or the director may provide the training required 
 11.21  by this subdivision using employees of the board. 
 11.22     Sec. 12.  Minnesota Statutes 2002, section 349.167, 
 11.23  subdivision 7, is amended to read: 
 11.24     Subd. 7.  [GAMBLING MANAGER EXAMINATION.] Each applicant 
 11.25  for a new gambling manager's license, and each renewing 
 11.26  applicant that has failed to receive training as required in 
 11.27  subdivision 4, must pass an examination prepared and 
 11.28  administered by the board that tests the applicant's knowledge 
 11.29  of the responsibilities of gambling managers, and of gambling 
 11.30  procedures, laws, and rules before being issued the license.  In 
 11.31  the case of the death, disability, or termination of a gambling 
 11.32  manager, a replacement gambling manager must pass the 
 11.33  examination within 90 days of being issued a gambling manager's 
 11.34  license.  The board shall revoke the replacement gambling 
 11.35  manager's license if the replacement gambling manager fails to 
 11.36  pass the examination as required in this subdivision. 
 12.1      Sec. 13.  Minnesota Statutes 2002, section 349.168, 
 12.2   subdivision 1, is amended to read: 
 12.3      Subdivision 1.  [REGISTRATION OF EMPLOYEES.] A person may 
 12.4   not receive compensation for participating in the conduct of 
 12.5   lawful gambling as an employee of a licensed organization unless 
 12.6   the person has first registered with the board on a form the 
 12.7   board prescribes.  The form must require each registrant to 
 12.8   provide:  (1) the person's name, address, and date of birth, and 
 12.9   social security number; (2) a current photograph; and (3) the 
 12.10  name, address, and license number of the employing organization. 
 12.11     Sec. 14.  Minnesota Statutes 2002, section 349.168, 
 12.12  subdivision 2, is amended to read: 
 12.13     Subd. 2.  [IDENTIFICATION OF EMPLOYEES.] The board shall 
 12.14  issue to each person registering under subdivision 1 a 
 12.15  registration number and identification card which must include 
 12.16  the employee's photograph.  Each person receiving compensation 
 12.17  for the conduct of lawful gambling must wear the identification 
 12.18  card provided by the board publicly display the person's name at 
 12.19  all times while conducting the lawful gambling. 
 12.20     Sec. 15.  Minnesota Statutes 2002, section 349.168, 
 12.21  subdivision 6, is amended to read: 
 12.22     Subd. 6.  [COMPENSATION PAID BY CHECK OR ELECTRONIC 
 12.23  TRANSFER.] Compensation paid by an organization in connection 
 12.24  with lawful gambling must either be:  (1) in the form of a check 
 12.25  drawn on the organization's gambling account, as specified in 
 12.26  section 349.19, and paid directly to the person being 
 12.27  compensated; (2) transferred electronically from the 
 12.28  organization's gambling account, as specified in section 349.19, 
 12.29  subdivision 3, directly to the employee's bank account; or (3) 
 12.30  transferred electronically from the organization's gambling 
 12.31  account to the account of a payroll processing firm from which 
 12.32  payment in the form of a check is paid directly to the person 
 12.33  being compensated; or (4) transferred electronically to and from 
 12.34  the account of a payroll processing firm for payment to the 
 12.35  employee's account and for the payment of local, state, and 
 12.36  federal withholding taxes, provided that the payroll processing 
 13.1   firm is (i) currently registered with and meets the criteria of 
 13.2   the department of revenue as a third-party bulk filer under 
 13.3   section 290.92, subdivision 30, (ii) is able to provide proof of 
 13.4   a third-party audit and an annual report and statement of 
 13.5   financial condition, (iii) is able to provide evidence of a 
 13.6   fidelity bond, and (iv) can provide proof of having been in 
 13.7   business as a third-party bulk filer for the most recent three 
 13.8   years. 
 13.9      Sec. 16.  Minnesota Statutes 2002, section 349.168, is 
 13.10  amended by adding a subdivision to read: 
 13.11     Subd. 10.  [EMPLOYMENT OF CERTAIN PERSONS.] An organization 
 13.12  that sells pull-tabs and tip boards on leased premises within a 
 13.13  booth operation may not employ, other than as a seller of 
 13.14  pull-tabs and tip boards, the lessor of those premises or a 
 13.15  person who is employed by the lessor of those premises. 
 13.16     Sec. 17.  Minnesota Statutes 2002, section 349.169, 
 13.17  subdivision 1, is amended to read: 
 13.18     Subdivision 1.  [FILING REQUIRED.] All When required by the 
 13.19  board, manufacturers and distributors must file with the 
 13.20  director, not later than the first day of each month, the prices 
 13.21  at which the manufacturer or distributor will sell all gambling 
 13.22  equipment in that month currently offered for sale by that 
 13.23  manufacturer or distributor.  The filing must be on a form in a 
 13.24  format the director prescribes.  Prices filed must include all 
 13.25  charges the manufacturer or distributor makes for each item of 
 13.26  gambling equipment sold, including all volume discounts, 
 13.27  exclusive of transportation costs.  All filings are effective on 
 13.28  the first day of the month for which they are filed, except that 
 13.29  a manufacturer or distributor may amend a filed price within 
 13.30  five days of filing it and may file a price any time during a 
 13.31  month for gambling equipment not previously included on that 
 13.32  month's filed pricing report, but may not later amend the price 
 13.33  during the month. 
 13.34     Sec. 18.  Minnesota Statutes 2002, section 349.169, 
 13.35  subdivision 3, is amended to read: 
 13.36     Subd. 3.  [SALES AT FILED PRICES.] When required to report 
 14.1   under subdivision 1, no manufacturer may sell to a distributor, 
 14.2   and no distributor may sell to an organization, any gambling 
 14.3   equipment for any price other than a price the manufacturer or 
 14.4   distributor has filed with the director under subdivision 
 14.5   1, including volume discounts, and exclusive of transportation 
 14.6   costs. 
 14.7      Sec. 19.  Minnesota Statutes 2002, section 349.18, 
 14.8   subdivision 1, is amended to read: 
 14.9      Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED; RENT 
 14.10  LIMITATIONS.] (a) An organization may conduct lawful gambling 
 14.11  only on premises it owns or leases.  Leases must be on a form 
 14.12  prescribed by the board.  Except for leases entered into before 
 14.13  August 1, 1994, the term of the lease may not begin before the 
 14.14  effective date of the premises permit and must expire on the 
 14.15  same day that the premises permit expires.  Copies of all leases 
 14.16  must be made available to employees of the board and the 
 14.17  division of alcohol and gambling enforcement on request.  A 
 14.18  lease may not provide for payments determined directly or 
 14.19  indirectly by the receipts or profits from lawful gambling.  The 
 14.20  board may prescribe by rule limits on the amount of rent which 
 14.21  an organization may pay to a lessor for premises leased for 
 14.22  lawful gambling provided that no rule of the board may prescribe 
 14.23  a limit of less than $1,000 per month on rent paid for premises 
 14.24  used for lawful gambling other than bingo.  Any rule adopted by 
 14.25  the board limiting the amount of rent to be paid may only be 
 14.26  effective for leases entered into, or renewed, after the 
 14.27  effective date of the rule. 
 14.28     (b) Rent paid by an organization for leased premises is 
 14.29  subject to the following limits: 
 14.30     (1) for booth operations, including booth operations where 
 14.31  a pull-tab dispensing device is located, booth operations where 
 14.32  a bar operation is also conducted, and booth operations where 
 14.33  both a pull-tab dispensing device is located and a bar operation 
 14.34  is also conducted, the maximum rent is: 
 14.35     (i) in any month where the organization's gross profit at 
 14.36  those premises does not exceed $4,000, up to $400; and 
 15.1      (ii) in any month where the organization's gross profit at 
 15.2   those premises exceeds $4,000, up to $400 plus not more than ten 
 15.3   percent of the gross profit for that month in excess of $4,000; 
 15.4      (2) for bar operations, including bar operations where a 
 15.5   pull-tab dispensing device is located but not including bar 
 15.6   operations subject to clause (1), and for locations where only a 
 15.7   pull-tab dispensing device is located: 
 15.8      (i) in any month where the organization's gross profit at 
 15.9   those premises does not exceed $1,000, up to $200; and 
 15.10     (ii) in any month where the organization's gross profit at 
 15.11  those premises exceeds $1,000, up to $200 plus not more than 20 
 15.12  percent of the gross profit for that month in excess of $1,000; 
 15.13     (3) a lease not governed by clauses (1) and (2) must be 
 15.14  approved by the board before becoming effective; 
 15.15     (4) total rent paid to a lessor from all organizations from 
 15.16  leases governed by clause (1) may not exceed $1,750 per month.  
 15.17  Total rent paid to a lessor from all organizations from leases 
 15.18  governed by clause (2) may not exceed $2,000 per month.  
 15.19     (c) Amounts paid as rent under leases are all-inclusive.  
 15.20  No other services provided or contracted by the lessor may be 
 15.21  paid by the organization, including, but not limited to, trash 
 15.22  removal, janitorial and cleaning services, snow removal, lawn 
 15.23  services, electricity, heat, security, security monitoring, 
 15.24  storage, other utilities or services, and, in the case of bar 
 15.25  operations, compensation for cash shortages.  Any other 
 15.26  expenditure made by an organization that is related to a leased 
 15.27  premises must be approved by the director.  An organization may 
 15.28  not provide any compensation or thing of value to a lessor or 
 15.29  the lessor's employees from any fund source other than its 
 15.30  gambling account.  Rent payments may not be made to an 
 15.31  individual. 
 15.32     (d) Notwithstanding paragraph (b), an organization may pay 
 15.33  a lessor for food or beverages or meeting room rental if the 
 15.34  charge made is comparable to similar charges made to other 
 15.35  individuals or groups. 
 15.36     (e) No person, distributor, manufacturer, lessor, or 
 16.1   organization other than the licensed organization leasing the 
 16.2   space may conduct any activity other than the sale or serving of 
 16.3   food and beverages on the leased premises during times when 
 16.4   lawful gambling is being conducted on the premises. 
 16.5      (c) (f) At a site where the leased premises consists of an 
 16.6   area on or behind a bar at which alcoholic beverages are sold 
 16.7   and employees of the lessor are employed by the organization as 
 16.8   pull-tab sellers at the site, pull-tabs and tipboard tickets may 
 16.9   be sold and redeemed by those employees at any place on or 
 16.10  behind the bar, but the tipboards and receptacles for pull-tabs 
 16.11  and cash drawers for lawful gambling receipts must be maintained 
 16.12  only within the leased premises. 
 16.13     (d) (g) Employees of a lessor may participate in lawful 
 16.14  gambling on the premises provided (1) if pull-tabs or tipboards 
 16.15  are sold, the organization voluntarily posts, or is required to 
 16.16  post, the major prizes as specified in section 349.172; and (2) 
 16.17  any employee of the lessor participating in lawful gambling is 
 16.18  not a gambling employee for the organization conducting lawful 
 16.19  gambling on the premises. 
 16.20     (e) (h) A gambling employee may purchase pull-tabs at the 
 16.21  site of the employee's place of employment provided: 
 16.22     (1) the organization voluntarily posts, or is required to 
 16.23  post, the major prizes for pull-tab or tipboard games as 
 16.24  specified in section 349.172; and 
 16.25     (2) the employee is not involved in the sale of pull-tabs 
 16.26  at that site. 
 16.27     (f) (i) At a leased site where an organization uses a 
 16.28  paddlewheel consisting of 30 numbers or less or a tipboard 
 16.29  consisting of 30 tickets or less, tickets may be sold throughout 
 16.30  the permitted premises, but winning tickets must be redeemed, 
 16.31  the paddlewheel must be located, and the tipboard seal must be 
 16.32  opened within the leased premises. 
 16.33     [EFFECTIVE DATE.] This section is effective May 31, 2003, 
 16.34  and applies to leases entered into or amended on and after that 
 16.35  date. 
 16.36     Sec. 20.  Minnesota Statutes 2002, section 349.19, 
 17.1   subdivision 3, is amended to read: 
 17.2      Subd. 3.  [EXPENDITURES.] (a) All expenditures of gross 
 17.3   profits from lawful gambling must be itemized as to payee, 
 17.4   purpose, amount, and date of payment, and must be in compliance 
 17.5   with section 349.154.  Authorization of the expenditures must be 
 17.6   recorded in the monthly meeting minutes of the licensed 
 17.7   organization.  Checks or authorizations for electronic fund 
 17.8   transfers for expenditures of gross profits must be signed by at 
 17.9   least two persons authorized by board rules to sign the checks.  
 17.10  Expenditures of gross profits from lawful gambling for local, 
 17.11  state, and federal taxes as identified in section 349.12, 
 17.12  subdivision 25, paragraph (a), clause (8), may be:  (1) 
 17.13  transferred electronically from the organization's gambling 
 17.14  account directly to bank accounts identified by local, state, or 
 17.15  federal agencies if the organization's gambling account monthly 
 17.16  bank statement specifically identifies the payee by name, the 
 17.17  amount transferred, the account number of the account into which 
 17.18  the funds were transferred, and the date of the transaction; or 
 17.19  (2) transferred electronically to and from the account of a 
 17.20  payroll processing firm that meets the criteria for such a firm 
 17.21  established under section 349.168, subdivision 6.  Expenditures 
 17.22  of gross profits from lawful gambling as identified in section 
 17.23  349.12, subdivision 3a, and as authorized by section 349.15, 
 17.24  subdivision 1, for utility payments for utilities, insurance, 
 17.25  and payroll processing charges may be transferred electronically 
 17.26  from the organization's gambling account directly to bank 
 17.27  accounts identified by the utility vendor if the organization's 
 17.28  gambling account monthly bank statement specifically identifies 
 17.29  the payee by name, the amount transferred, the account number of 
 17.30  the account into which the funds were transferred, and the date 
 17.31  of the transaction.  Electronic payments of local, state, and 
 17.32  federal taxes and utility, payroll processing, or insurance 
 17.33  payments are permitted only if they have been authorized by the 
 17.34  membership, the organization maintains supporting documentation, 
 17.35  and the expenditures can be verified. 
 17.36     (b) Expenditures authorized by the board according to 
 18.1   section 349.12, subdivision 25, paragraph (b), clause (3), must 
 18.2   be 51 percent completed within two years of the date of board 
 18.3   approval.  "Fifty-one percent completed" means that the work 
 18.4   completed must represent at least 51 percent of the value of the 
 18.5   project as documented by the contractor or vendor.  An 
 18.6   organization that fails to comply with this paragraph shall 
 18.7   reapply to the board for approval of the project. 
 18.8      Sec. 21.  Minnesota Statutes 2002, section 609.761, 
 18.9   subdivision 5, is amended to read: 
 18.10     Subd. 5.  [HIGH SCHOOL RAFFLES.] Sections 609.755 and 
 18.11  609.76 do not prohibit a raffle, as defined in section 349.12, 
 18.12  subdivision 33, conducted by a school district or a nonprofit 
 18.13  organization organized primarily to support programs of a school 
 18.14  district, if the following conditions are complied with: 
 18.15     (1) tickets for the raffle may only be sold and the drawing 
 18.16  conducted at a high school event sponsored by a school 
 18.17  district.  All tickets must be sold for the same price; 
 18.18     (2) tickets may only be sold to persons 18 years of age or 
 18.19  older attending the event; 
 18.20     (3) the drawing must be held during or immediately after 
 18.21  the conclusion of the event; and 
 18.22     (4) one-half of the gross receipts from the sale of tickets 
 18.23  must be awarded as prizes for the raffle, and the remaining 
 18.24  one-half may only be expended to defray the school district's 
 18.25  costs of sending event participants to high school activities 
 18.26  held at other locations; and 
 18.27     (5) the school district or organization must report the 
 18.28  following information to the gambling control board annually:  
 18.29  the total amount of gross receipts received, the total expenses 
 18.30  for the raffles, the total prizes awarded, and an accounting of 
 18.31  the expenditures from the gross receipts of the raffles.  
 18.32     Sec. 22.  [REPEALER.] 
 18.33     Minnesota Statutes 2002, section 349.168, subdivision 9, is 
 18.34  repealed.