2nd 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 regulating linked bingo games; clarifying conduct of 1.9 high school raffles; amending Minnesota Statutes 2002, 1.10 sections 349.12, subdivisions 4, 18, 19, 25, by adding 1.11 subdivisions; 349.151, subdivisions 4, 4b; 349.153; 1.12 349.155, subdivision 3; 349.161, subdivision 5; 1.13 349.163, subdivision 3; 349.166, subdivisions 1, 2; 1.14 349.167, subdivisions 4, 6, 7; 349.168, subdivisions 1.15 1, 2, 6, by adding a subdivision; 349.169, 1.16 subdivisions 1, 3; 349.17, subdivisions 3, 6, 7, by 1.17 adding a subdivision; 349.18, subdivision 1; 349.19, 1.18 subdivision 3, by adding a subdivision; 349.191, 1.19 subdivisions 1, 1a; 349.211, subdivision 1, by adding 1.20 a subdivision; 609.761, subdivision 5; proposing 1.21 coding for new law in Minnesota Statutes, chapter 349; 1.22 repealing Minnesota Statutes 2002, sections 349.168, 1.23 subdivision 9. 1.24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.25 Section 1. Minnesota Statutes 2002, section 349.12, is 1.26 amended by adding a subdivision to read: 1.27 Subd. 3b. [BAR OPERATION.] "Bar operation" means a method 1.28 of selling and redeeming gambling equipment within a leased 1.29 premises which is licensed for the on-sale of alcoholic 1.30 beverages where such sales and redemptions are made by an 1.31 employee of the lessor from a common area where food and 1.32 beverages are also sold. 1.33 Sec. 2. Minnesota Statutes 2002, section 349.12, 1.34 subdivision 4, is amended to read: 2.1 Subd. 4. [BINGO.] "Bingo" means a game where each player 2.2 has a bingo hard card or bingo paper sheet, for which a 2.3 consideration has been paid, and played in accordance with this 2.4 chapter and with rules of the board for the conduct of 2.5 bingo. Bingo also includes a linked bingo game. 2.6 Sec. 3. Minnesota Statutes 2002, section 349.12, is 2.7 amended by adding a subdivision to read: 2.8 Subd. 6a. [BOOTH OPERATION.] "Booth operation" means a 2.9 method of selling and redeeming gambling equipment by an 2.10 employee of a licensed organization in a premises the 2.11 organization leases or owns where such sales and redemptions are 2.12 made within a separate enclosure that is distinct from areas 2.13 where food and beverages are sold. 2.14 Sec. 4. Minnesota Statutes 2002, section 349.12, 2.15 subdivision 18, is amended to read: 2.16 Subd. 18. [GAMBLING EQUIPMENT.] "Gambling equipment" 2.17 means: bingo hard cards or paper sheets, linked bingo paper 2.18 sheets, devices for selecting bingo numbers, pull-tabs, jar 2.19 tickets, paddlewheels, paddlewheel tables, paddletickets, 2.20 paddleticket cards, tipboards, tipboard tickets, and pull-tab 2.21 dispensing devices. 2.22 Sec. 5. Minnesota Statutes 2002, section 349.12, 2.23 subdivision 19, is amended to read: 2.24 Subd. 19. [GAMBLING MANAGER.] "Gambling manager" means a 2.25 person who has been designated by the organization to supervise 2.26 the lawful gambling conducted by it and who: 2.27 (1) has been an active member of the organization for at 2.28 least two years at the time of the organization's initial 2.29 application for a license;
or2.30 (2) has been an active member of the organization for at 2.31 least the most recent six months prior to the effective date of 2.32 the organization's renewal license; or 2.33 (3) meets other qualifications as prescribed by the board 2.34 by rule. 2.35 Sec. 6. Minnesota Statutes 2002, section 349.12, is 2.36 amended by adding a subdivision to read: 3.1 Subd. 25a. [LINKED BINGO GAME.] "Linked bingo game" means 3.2 a bingo game played at two or more locations where licensed 3.3 organizations are authorized to conduct bingo, where there is a 3.4 common prize pool and a common selection of numbers or symbols 3.5 conducted at one location, and where the results of the 3.6 selection are transmitted to all participating locations by 3.7 satellite, telephone, or other means by a linked bingo game 3.8 provider. 3.9 Sec. 7. Minnesota Statutes 2002, section 349.12, is 3.10 amended by adding a subdivision to read: 3.11 Subd. 25b. [LINKED BINGO GAME PROVIDER.] "Linked bingo 3.12 game provider" means any person who provides the means to link 3.13 bingo prizes in a linked bingo game, who provides linked bingo 3.14 paper sheets to the participating organizations, who provides 3.15 linked bingo prize management, and who provides the linked bingo 3.16 game system. 3.17 Sec. 8. Minnesota Statutes 2002, section 349.12, is 3.18 amended by adding a subdivision to read: 3.19 Subd. 25c. [LINKED BINGO GAME SYSTEM.] "Linked bingo game 3.20 system" means the equipment used by the linked bingo provider to 3.21 conduct, transmit, and track a linked bingo game. The system 3.22 must be approved by the board before its use in this state and 3.23 it must have dial-up or other capability to permit the board to 3.24 monitor its operation remotely. 3.25 Sec. 9. Minnesota Statutes 2002, section 349.12, is 3.26 amended by adding a subdivision to read: 3.27 Subd. 25d. [LINKED BINGO PRIZE POOL.] "Linked bingo prize 3.28 pool" means the total of all prize money that each participating 3.29 organization has contributed to the linked bingo game prize. No 3.30 participating organization may contribute more than $300 per 3.31 bingo occasion to a linked bingo prize pool. 3.32 Sec. 10. Minnesota Statutes 2002, section 349.12, 3.33 subdivision 25, is amended to read: 3.34 Subd. 25. [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 3.35 or more of the following: 3.36 (1) any expenditure by or contribution to a 501(c)(3) or 4.1 festival organization, as defined in subdivision 15a, provided 4.2 that the organization and expenditure or contribution are in 4.3 conformity with standards prescribed by the board under section 4.4 349.154, which standards must apply to both types of 4.5 organizations in the same manner and to the same extent; 4.6 (2) a contribution to an individual or family suffering 4.7 from poverty, homelessness, or physical or mental disability, 4.8 which is used to relieve the effects of that poverty, 4.9 homelessness, or disability; 4.10 (3) a contribution to an individual for treatment for 4.11 delayed posttraumatic stress syndrome or a contribution to a 4.12 program recognized by the Minnesota department of human services 4.13 for the education, prevention, or treatment of compulsive 4.14 gambling; 4.15 (4) a contribution to or expenditure on a public or private 4.16 nonprofit educational institution registered with or accredited 4.17 by this state or any other state; 4.18 (5) a contribution to a scholarship fund for defraying the 4.19 cost of education to individuals where the funds are awarded 4.20 through an open and fair selection process; 4.21 (6) activities by an organization or a government entity 4.22 which recognize humanitarian or military service to the United 4.23 States, the state of Minnesota, or a community, subject to rules 4.24 of the board, provided that the rules must not include mileage 4.25 reimbursements in the computation of the per occasiondiem 4.26 reimbursement limit and must impose no aggregate annual limit on 4.27 the amount of reasonable and necessary expenditures made to 4.28 support: 4.29 (i) members of a military marching or color guard unit for 4.30 activities conducted within the state; 4.31 (ii) members of an organization solely for services 4.32 performed by the members at funeral services; or 4.33 (iii) members of military marching, color guard, or honor 4.34 guard units may be reimbursed for participating in color guard, 4.35 honor guard, or marching unit events within the state or states 4.36 contiguous to Minnesota at a per participant rate of up to $35 5.1 per occasiondiem; 5.2 (7) recreational, community, and athletic facilities and 5.3 activities intended primarily for persons under age 21, provided 5.4 that such facilities and activities do not discriminate on the 5.5 basis of gender and the organization complies with section 5.6 349.154; 5.7 (8) payment of local taxes authorized under this chapter, 5.8 taxes imposed by the United States on receipts from lawful 5.9 gambling, the taxes imposed by section 297E.02, subdivisions 1, 5.10 4, 5, and 6, and the tax imposed on unrelated business income by 5.11 section 290.05, subdivision 3; 5.12 (9) payment of real estate taxes and assessments on 5.13 permitted gambling premises wholly owned by the licensed 5.14 organization paying the taxes, or wholly leased by a licensed 5.15 veterans organization under a national charter recognized under 5.16 section 501(c)(19) of the Internal Revenue Code, not to exceed: 5.17 (i) for premises used for bingo, the amount that an 5.18 organization may expend under board rules on rent for bingo; and 5.19 (ii) $35,000 per year for premises used for other forms of 5.20 lawful gambling; 5.21 (10) a contribution to the United States, this state or any 5.22 of its political subdivisions, or any agency or instrumentality 5.23 thereof other than a direct contribution to a law enforcement or 5.24 prosecutorial agency; 5.25 (11) a contribution to or expenditure by a nonprofit 5.26 organization which is a church or body of communicants gathered 5.27 in common membership for mutual support and edification in 5.28 piety, worship, or religious observances; 5.29 (12) payment of the reasonable costs of an audit required 5.30 in section 297E.06, subdivision 4, provided the annual audit is 5.31 filed in a timely manner with the department of revenue; 5.32 (13) a contribution to or expenditure on a wildlife 5.33 management project that benefits the public at-large, provided 5.34 that the state agency with authority over that wildlife 5.35 management project approves the project before the contribution 5.36 or expenditure is made; 6.1 (14) expenditures, approved by the commissioner of natural 6.2 resources, by an organization for grooming and maintaining 6.3 snowmobile trails and all-terrain vehicle trails that are (1) 6.4 grant-in-aid trails established under section 85.019, or (2) 6.5 other trails open to public use, including purchase or lease of 6.6 equipment for this purpose; or6.7 (15) conducting nutritional programs, food shelves, and 6.8 congregate dining programs primarily for persons who are age 62 6.9 or older or disabled; 6.10 (16) a contribution to a community arts organization, or an 6.11 expenditure to sponsor arts programs in the community, including 6.12 but not limited to visual, literary, performing, or musical 6.13 arts; 6.14 (17) an expenditure by a licensed veterans organization for 6.15 payment of heat,water, sanitation, telephone, and other utility6.16 billsfuel for heating, electricity, and sewer costs for a 6.17 building wholly owned or wholly leased by ,and used as the 6.18 primary headquarters of , athe licensed veterans organization; 6.19 or 6.20 (18) expenditure by a licensed veterans organization of up 6.21 to $5,000 in a calendar year in net costs to the organization 6.22 for meals and other membership events, limited to members and 6.23 spouses, held in recognition of military service. No more than 6.24 $5,000 can be expended in total per calendar year under this 6.25 clause by all licensed veterans organizations sharing the same 6.26 veterans post home. 6.27 (b) Notwithstanding paragraph (a), "lawful purpose" does 6.28 not include: 6.29 (1) any expenditure made or incurred for the purpose of 6.30 influencing the nomination or election of a candidate for public 6.31 office or for the purpose of promoting or defeating a ballot 6.32 question; 6.33 (2) any activity intended to influence an election or a 6.34 governmental decision-making process; 6.35 (3) the erection, acquisition, improvement, expansion, 6.36 repair, or maintenance of real property or capital assets owned 7.1 or leased by an organization, unless the board has first 7.2 specifically authorized the expenditures after finding that (i) 7.3 the real property or capital assets will be used exclusively for 7.4 one or more of the purposes in paragraph (a); (ii) with respect 7.5 to expenditures for repair or maintenance only, that the 7.6 property is or will be used extensively as a meeting place or 7.7 event location by other nonprofit organizations or community or 7.8 service groups and that no rental fee is charged for the use; 7.9 (iii) with respect to expenditures, including a mortgage payment 7.10 or other debt service payment, for erection or acquisition only, 7.11 that the erection or acquisition is necessary to replace with a 7.12 comparable building, a building owned by the organization and 7.13 destroyed or made uninhabitable by fire or natural disaster, 7.14 provided that the expenditure may be only for that part of the 7.15 replacement cost not reimbursed by insurance; (iv) with respect 7.16 to expenditures, including a mortgage payment or other debt 7.17 service payment, for erection or acquisition only, that the 7.18 erection or acquisition is necessary to replace with a 7.19 comparable building a building owned by the organization that 7.20 was acquired from the organization by eminent domain or sold by 7.21 the organization to a purchaser that the organization reasonably 7.22 believed would otherwise have acquired the building by eminent 7.23 domain, provided that the expenditure may be only for that part 7.24 of the replacement cost that exceeds the compensation received 7.25 by the organization for the building being replaced; or (v) with 7.26 respect to an expenditure to bring an existing building into 7.27 compliance with the Americans with Disabilities Act under item 7.28 (ii), an organization has the option to apply the amount of the 7.29 board-approved expenditure to the erection or acquisition of a 7.30 replacement building that is in compliance with the Americans 7.31 with Disabilities Act; 7.32 (4) an expenditure by an organization which is a 7.33 contribution to a parent organization, foundation, or affiliate 7.34 of the contributing organization, if the parent organization, 7.35 foundation, or affiliate has provided to the contributing 7.36 organization within one year of the contribution any money, 8.1 grants, property, or other thing of value; 8.2 (5) a contribution by a licensed organization to another 8.3 licensed organization unless the board has specifically 8.4 authorized the contribution. The board must authorize such a 8.5 contribution when requested to do so by the contributing 8.6 organization unless it makes an affirmative finding that the 8.7 contribution will not be used by the recipient organization for 8.8 one or more of the purposes in paragraph (a); or 8.9 (6) a contribution to a statutory or home rule charter 8.10 city, county, or town by a licensed organization with the 8.11 knowledge that the governmental unit intends to use the 8.12 contribution for a pension or retirement fund. 8.13 Sec. 11. Minnesota Statutes 2002, section 349.12, is 8.14 amended by adding a subdivision to read: 8.15 Subd. 36. [VETERANS POST HOME.] "Veterans post home" means 8.16 a building, or portion of a building, that is leased or owned by 8.17 one or more licensed veterans organizations, and that is 8.18 considered the post home for all licensed veterans organizations 8.19 at that site. 8.20 Sec. 12. Minnesota Statutes 2002, section 349.12, is 8.21 amended by adding a subdivision to read: 8.22 Subd. 37. [WHOLLY LEASED BUILDING.] "Wholly leased 8.23 building" means a building that is leased in its entirety by a 8.24 licensed organization, and no part or portion of the building is 8.25 subleased to any other entity or licensed organization. 8.26 Sec. 13. Minnesota Statutes 2002, section 349.12, is 8.27 amended by adding a subdivision to read: 8.28 Subd. 38. [WHOLLY OWNED BUILDING.] "Wholly owned building" 8.29 means a building that is owned in its entirety by a licensed 8.30 organization, and no part or portion of the building is 8.31 subleased to any other entity or licensed organization. 8.32 Sec. 14. Minnesota Statutes 2002, section 349.151, 8.33 subdivision 4, is amended to read: 8.34 Subd. 4. [POWERS AND DUTIES.] (a) The board has the 8.35 following powers and duties: 8.36 (1) to regulate lawful gambling to ensure it is conducted 9.1 in the public interest; 9.2 (2) to issue licenses to organizations, distributors, bingo 9.3 halls, manufacturers, linked bingo game providers, and gambling 9.4 managers; 9.5 (3) to collect and deposit license, permit, and 9.6 registration fees due under this chapter; 9.7 (4) to receive reports required by this chapter and inspect 9.8 all premises, records, books, and other documents of 9.9 organizations, distributors, manufacturers, linked bingo game 9.10 providers, and bingo halls to insure compliance with all 9.11 applicable laws and rules; 9.12 (5) to make rules authorized by this chapter; 9.13 (6) to register gambling equipment and issue registration 9.14 stamps; 9.15 (7) to provide by rule for the mandatory posting by 9.16 organizations conducting lawful gambling of rules of play and 9.17 the odds and/or house percentage on each form of lawful 9.18 gambling; 9.19 (8) to report annually to the governor and legislature on 9.20 its activities and on recommended changes in the laws governing 9.21 gambling; 9.22 (9) to impose civil penalties of not more than $500 per 9.23 violation on organizations, distributors, employees eligible to 9.24 make sales on behalf of a distributor, manufacturers, bingo 9.25 halls, linked bingo game providers, and gambling managers for 9.26 failure to comply with any provision of this chapter or any rule 9.27 or order of the board; 9.28 (10) to issue premises permits to organizations licensed to 9.29 conduct lawful gambling; 9.30 (11) to delegate to the director the authority to issue or 9.31 deny license and premises permit applications and renewals under 9.32 criteria established by the board; 9.33 (12) to suspend or revoke licenses and premises permits of 9.34 organizations, distributors, manufacturers, bingo halls, linked 9.35 bingo game providers, or gambling managers as provided in this 9.36 chapter; 10.1 (13) to register employees of organizations licensed to 10.2 conduct lawful gambling; 10.3 (14) to require fingerprints from persons determined by 10.4 board rule to be subject to fingerprinting; 10.5 (15) to delegate to a compliance review group of the board 10.6 the authority to investigate alleged violations, issue consent 10.7 orders, and initiate contested cases on behalf of the board; 10.8 (16) to order organizations, distributors, manufacturers, 10.9 bingo halls, linked bingo game providers, and gambling managers 10.10 to take corrective actions; and 10.11 (17) to take all necessary steps to ensure the integrity of 10.12 and public confidence in lawful gambling. 10.13 (b) The board, or director if authorized to act on behalf 10.14 of the board, may by citation assess any organization, 10.15 distributor, employee eligible to make sales on behalf of a 10.16 distributor, manufacturer, bingo hall licensee, linked bingo 10.17 game provider, or gambling manager a civil penalty of not more 10.18 than $500 per violation for a failure to comply with any 10.19 provision of this chapter or any rule adopted or order issued by 10.20 the board. Any organization, distributor, bingo hall licensee, 10.21 gambling manager, linked bingo game provider, or manufacturer 10.22 assessed a civil penalty under this paragraph may request a 10.23 hearing before the board. Appeals of citations imposing a civil 10.24 penalty are not subject to the provisions of the Administrative 10.25 Procedure Act. 10.26 (c) All fees and penalties received by the board must be 10.27 deposited in the general fund. 10.28 Sec. 15. Minnesota Statutes 2002, section 349.151, 10.29 subdivision 4b, is amended to read: 10.30 Subd. 4b. [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 10.31 The board may by rule authorize but not require the use of 10.32 pull-tab dispensing devices. 10.33 (b) Rules adopted under paragraph (a): 10.34 (1) must limit the number of pull-tab dispensing devices on 10.35 any permitted premises to three; and 10.36 (2) must limit the use of pull-tab dispensing devices to a 11.1 permitted premises which is (i) a licensed premises for on-sales 11.2 of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 11.3 licensed bingo hall that allows gambling only by persons 18 11.4 years or older. 11.5 (c) Notwithstanding rules adopted under paragraph (b), 11.6 pull-tab dispensing devices may be used in establishments 11.7 licensed for the off-sale of intoxicating liquor, other than 11.8 drugstores and general food stores licensed under section 11.9 340A.405, subdivision 1. 11.10 (d) The director may charge a manufacturer a fee of up to11.11 $5,000 per pull-tab dispensing device to cover the costs of11.12 services provided by an independent testing laboratory to11.13 perform testing and analysis of pull-tab dispensing devices.11.14 The director shall deposit in a separate account in the state11.15 treasury all money the director receives as reimbursement for11.16 the costs of services provided by independent testing11.17 laboratories that have entered into contracts with the state to11.18 perform testing and analysis of pull-tab dispensing devices.11.19 Money in the account is appropriated to the director to pay the11.20 costs of services under those contracts.11.21 Sec. 16. Minnesota Statutes 2002, section 349.153, is 11.22 amended to read: 11.23 349.153 [CONFLICT OF INTEREST.] 11.24 (a) A person may not serve on the board, be the director, 11.25 or be an employee of the board who has an interest in any 11.26 corporation, association, limited liability company, or 11.27 partnership that is licensed by the board as a distributor, 11.28 manufacturer, linked bingo game provider, or abingo hall under 11.29 section 349.164. 11.30 (b) A member of the board, the director, or an employee of 11.31 the board may not accept employment with, receive compensation 11.32 directly or indirectly from, or enter into a contractual 11.33 relationship with an organization that conducts lawful gambling, 11.34 a distributor, a linked bingo game provider, a bingo hall, or a 11.35 manufacturer while employed with or a member of the board or 11.36 within one year after terminating employment with or leaving the 12.1 board. 12.2 (c) A distributor, bingo hall, manufacturer, linked bingo 12.3 game provider, or organization licensed to conduct lawful 12.4 gambling may not hire a former employee, director, or member of 12.5 the gambling control board for one year after the employee, 12.6 director, or member has terminated employment with or left the 12.7 gambling control board. 12.8 Sec. 17. Minnesota Statutes 2002, section 349.155, 12.9 subdivision 3, is amended to read: 12.10 Subd. 3. [MANDATORY DISQUALIFICATIONS.] (a) In the case of 12.11 licenses for manufacturers, distributors, bingo halls, linked 12.12 bingo game providers, and gambling managers, the board may not 12.13 issue or renew a license under this chapter, and shall revoke a 12.14 license under this chapter, if the applicant or licensee, or a 12.15 director, officer, partner, governor, person in a supervisory or 12.16 management position of the applicant or licensee, or an employee 12.17 eligible to make sales on behalf of the applicant or licensee: 12.18 (1) has ever been convicted of a felony or a crime 12.19 involving gambling; 12.20 (2) has ever been convicted of (i) assault, (ii) a criminal 12.21 violation involving the use of a firearm, or (iii) making 12.22 terroristic threats; 12.23 (3) is or has ever been connected with or engaged in an 12.24 illegal business; 12.25 (4) owes $500 or more in delinquent taxes as defined in 12.26 section 270.72; 12.27 (5) had a sales and use tax permit revoked by the 12.28 commissioner of revenue within the past two years; or 12.29 (6) after demand, has not filed tax returns required by the 12.30 commissioner of revenue. The board may deny or refuse to renew 12.31 a license under this chapter, and may revoke a license under 12.32 this chapter, if any of the conditions in this paragraph are 12.33 applicable to an affiliate or direct or indirect holder of more 12.34 than a five percent financial interest in the applicant or 12.35 licensee. 12.36 (b) In the case of licenses for organizations, the board 13.1 may not issue or renew a license under this chapter, and shall 13.2 revoke a license under this chapter, if the organization, or an 13.3 officer or member of the governing body of the organization: 13.4 (1) has been convicted of a felony or gross misdemeanor 13.5 within the five years before the issuance or renewal of the 13.6 license; 13.7 (2) has ever been convicted of a crime involving gambling; 13.8 or 13.9 (3) has had a license issued by the board or director 13.10 permanently revoked for violation of law or board rule. 13.11 Sec. 18. Minnesota Statutes 2002, section 349.161, 13.12 subdivision 5, is amended to read: 13.13 Subd. 5. [PROHIBITION.] (a) No distributor, or employee of 13.14 a distributor, may also be a wholesale distributor of alcoholic 13.15 beverages or an employee of a wholesale distributor of alcoholic 13.16 beverages. 13.17 (b) No distributor, or any representative, agent, 13.18 affiliate, or employee of a distributor, may: (1) be involved in 13.19 the conduct of lawful gambling by an organization; (2) keep or 13.20 assist in the keeping of an organization's financial records, 13.21 accounts, and inventories; or (3) prepare or assist in the 13.22 preparation of tax forms and other reporting forms required to 13.23 be submitted to the state by an organization. 13.24 (c) No distributor or any representative, agent, affiliate, 13.25 or employee of a distributor may provide a lessor of gambling 13.26 premises any compensation, gift, gratuity, premium, or other 13.27 thing of value. 13.28 (d) No distributor or any representative, agent, affiliate, 13.29 or employee of a distributor may participate in any gambling 13.30 activity at any gambling site or premises where gambling 13.31 equipment purchased from that distributor is being used in the 13.32 conduct of lawful gambling. 13.33 (e) No distributor or any representative, agent, affiliate, 13.34 or employee of a distributor may alter or modify any gambling 13.35 equipment, except to add a "last ticket sold" prize sticker. 13.36 (f) No distributor or any representative, agent, affiliate, 14.1 or employee of a distributor may: (1) recruit a person to 14.2 become a gambling manager of an organization or identify to an 14.3 organization a person as a candidate to become gambling manager 14.4 for the organization; or (2) identify for an organization a 14.5 potential gambling location. 14.6 (g) No distributor may purchase gambling equipment for 14.7 resale to a person for use within the state from any person not 14.8 licensed as a manufacturer under section 349.163, except for 14.9 gambling equipment returned from an organization licensed under 14.10 section 349.16, or exempt or excluded from licensing under 14.11 section 349.166. 14.12 (h) No distributor may sell gambling equipment to any 14.13 person for use in Minnesota other than (i) a licensed 14.14 organization or organization excluded or exempt from licensing, 14.15 or (ii) the governing body of an Indian tribe. 14.16 (i) No distributor may sell or otherwise provide a pull-tab 14.17 or tipboard deal with the symbol required by section 349.163, 14.18 subdivision 5, paragraph (h), visible on the flare to any person 14.19 other than in Minnesota to a licensed organization or 14.20 organization exempt from licensing. 14.21 Sec. 19. Minnesota Statutes 2002, section 349.163, 14.22 subdivision 3, is amended to read: 14.23 Subd. 3. [PROHIBITED SALES.] (a) A manufacturer may not: 14.24 (1) sell gambling equipment for use or resale within the 14.25 state to any person not licensed as a distributor, except that 14.26 gambling equipment used exclusively in a linked bingo game may 14.27 be sold to a licensed linked bingo game provider; or 14.28 (2) sell gambling equipment to a distributor in this state 14.29 that has the same serial number as another item of gambling 14.30 equipment of the same type that is sold by that manufacturer for 14.31 use or resale in this state. 14.32 (b) A manufacturer, affiliate of a manufacturer, or person 14.33 acting as a representative or agent of a manufacturer may not 14.34 provide a lessor of gambling premises or an appointed official 14.35 any compensation, gift, gratuity, premium, contribution, or 14.36 other thing of value. 15.1 (c) A manufacturer may not sell or otherwise provide a 15.2 pull-tab or tipboard deal with the symbol required by 15.3 subdivision 5, paragraph (h), imprinted on the flare to any 15.4 person other than a licensed distributor unless the manufacturer 15.5 first renders the symbol permanently invisible. 15.6 Sec. 20. [349.1635] [LINKED BINGO GAME PROVIDER LICENSE.] 15.7 Subdivision 1. [LICENSE REQUIRED.] No person may do any of 15.8 the following without having first obtained a license from the 15.9 board: 15.10 (1) provide the means to link prizes in a linked bingo 15.11 game; 15.12 (2) provide linked bingo game prize management; 15.13 (3) provide the linked bingo game system; or 15.14 (4) provide linked bingo game paper sheets to an 15.15 organization. 15.16 Subd. 2. [LICENSE APPLICATION.] The board may issue a 15.17 license to a linked bingo game provider who meets the 15.18 qualifications of this chapter and the rules adopted by the 15.19 board. The application shall be on a form prescribed by the 15.20 board. The license is valid for two years and the fee for a 15.21 linked bingo game provider license is $5,000 per year. 15.22 Subd. 3. [ATTACHMENTS TO APPLICATION.] An applicant for a 15.23 linked bingo game provider license must attach to its 15.24 application: 15.25 (1) evidence of a bond in the principal amount of $250,000 15.26 payable to the state of Minnesota conditioned on the payment of 15.27 all linked bingo game prizes and any other money due and payable 15.28 under this chapter; 15.29 (2) detailed plans and specifications for the operation of 15.30 the linked bingo game and the linked bingo game system; and 15.31 (3) any other information required by the board by rule. 15.32 Subd. 4. [PROHIBITION.] (a) Except for services associated 15.33 exclusively with a linked bingo game, a linked bingo game 15.34 provider may not participate or assist in the conduct of lawful 15.35 gambling by an organization. No linked bingo game provider may: 15.36 (1) also be licensed as a bingo hall or hold any financial 16.1 or managerial interest in a bingo hall; 16.2 (2) also be licensed as a distributor or hold any financial 16.3 or managerial interest in a distributor; 16.4 (3) sell or lease linked bingo game equipment to any person 16.5 not licensed as an organization; 16.6 (4) purchase gambling equipment to be used exclusively in a 16.7 linked bingo game from any person not licensed as a manufacturer 16.8 under section 349.163; or 16.9 (5) provide an organization, a lessor of gambling premises, 16.10 or an appointed official any compensation, gift, gratuity, 16.11 premium, or contribution. 16.12 (b) Employees of the board and the division of alcohol and 16.13 gambling enforcement may inspect the books, records, inventory, 16.14 and business premises of a licensed linked bingo game provider 16.15 without notice during the normal business hours of the linked 16.16 bingo game provider. The board may charge a linked bingo game 16.17 provider for the actual cost of conducting scheduled or 16.18 unscheduled inspections of the licensee's facilities. 16.19 Sec. 21. Minnesota Statutes 2002, section 349.166, 16.20 subdivision 1, is amended to read: 16.21 Subdivision 1. [EXCLUSIONS.] (a) Bingo, except for linked 16.22 bingo games, may be conducted without a license and without 16.23 complying with sections 349.168, subdivisions 1 and 2; 349.17, 16.24 subdivisions 1, 4, and 5; 349.18, subdivision 1; and 349.19, if 16.25 it is conducted: 16.26 (1) by an organization in connection with a county fair, 16.27 the state fair, or a civic celebration and is not conducted for 16.28 more than 12 consecutive days and is limited to no more than 16.29 four separate applications for activities applied for and 16.30 approved in a calendar year; or 16.31 (2) by an organization that conducts four or fewer bingo 16.32 occasions in a calendar year. 16.33 An organization that holds a license to conduct lawful 16.34 gambling under this chapter may not conduct bingo under this 16.35 subdivision. 16.36 (b) Bingo may be conducted within a nursing home or a 17.1 senior citizen housing project or by a senior citizen 17.2 organization if the prizes for a single bingo game do not exceed 17.3 $10, total prizes awarded at a single bingo occasion do not 17.4 exceed $200, no more than two bingo occasions are held by the 17.5 organization or at the facility each week, only members of the 17.6 organization or residents of the nursing home or housing project 17.7 are allowed to play in a bingo game, no compensation is paid for 17.8 any persons who conduct the bingo, and a manager is appointed to 17.9 supervise the bingo. Bingo conducted under this paragraph is 17.10 exempt from sections 349.11 to 349.23, and the board may not 17.11 require an organization that conducts bingo under this 17.12 paragraph, or the manager who supervises the bingo, to register 17.13 or file a report with the board. The gross receipts from bingo 17.14 conducted under the limitations of this subdivision are exempt 17.15 from taxation under chapter 297A. 17.16 (c) Raffles may be conducted by an organization without a 17.17 license and without complying with sections 349.154 to 349.165 17.18 and 349.167 to 349.213 if the value of all raffle prizes awarded 17.19 by the organization in a calendar year does not 17.20 exceed $750$1,500. 17.21 (d) Except as provided in paragraph (b), the organization 17.22 must maintain all required records of excluded gambling activity 17.23 for 3-1/2 years. 17.24 Sec. 22. Minnesota Statutes 2002, section 349.166, 17.25 subdivision 2, is amended to read: 17.26 Subd. 2. [EXEMPTIONS.] (a) Lawful gambling, with the 17.27 exception of linked bingo games, may be conducted by an 17.28 organization without a license and without complying with 17.29 sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4 17.30 and 5; 349.18, subdivision 1; and 349.19 if: 17.31 (1) the organization conducts lawful gambling on five or 17.32 fewer days in a calendar year; 17.33 (2) the organization does not award more than $50,000 in 17.34 prizes for lawful gambling in a calendar year; 17.35 (3) the organization pays a fee of $25 to the board, 17.36 notifies the board in writing not less than 30 days before each 18.1 lawful gambling occasion of the date and location of the 18.2 occasion, or 60 days for an occasion held in the case of a city 18.3 of the first class, the types of lawful gambling to be 18.4 conducted, the prizes to be awarded, and receives an exemption 18.5 identification number; 18.6 (4) the organization notifies the local government unit 30 18.7 days before the lawful gambling occasion, or 60 days for an 18.8 occasion held in a city of the first class; 18.9 (5) the organization purchases all gambling equipment and 18.10 supplies from a licensed distributor; and 18.11 (6) the organization reports to the board, on a single-page 18.12 form prescribed by the board, within 30 days of each gambling 18.13 occasion, the gross receipts, prizes, expenses, expenditures of 18.14 net profits from the occasion, and the identification of the 18.15 licensed distributor from whom all gambling equipment was 18.16 purchased. 18.17 (b) If the organization fails to file a timely report as 18.18 required by paragraph (a), clause (3) or (6), the board shall 18.19 not issue any authorization, license, or permit to the 18.20 organization to conduct lawful gambling on an exempt, excluded, 18.21 or licensed basis until the report has been filed. 18.22 (c) Merchandise prizes must be valued at their fair market 18.23 value. 18.24 (d) Unused pull-tab and tipboard deals must be returned to 18.25 the distributor within seven working days after the end of the 18.26 lawful gambling occasion. The distributor must accept and pay a 18.27 refund for all returns of unopened and undamaged deals returned 18.28 under this paragraph. 18.29 (e) An organization that is exempt from taxation on 18.30 purchases of pull-tabs and tipboards under section 297E.02, 18.31 subdivision 4, paragraph (b), clause (4), must return to the 18.32 distributor any tipboard or pull-tab deal no part of which is 18.33 used at the lawful gambling occasion for which it was purchased 18.34 by the organization. 18.35 (f) The organization must maintain all required records of 18.36 exempt gambling activity for 3-1/2 years. 19.1 Sec. 23. Minnesota Statutes 2002, section 349.167, 19.2 subdivision 4, is amended to read: 19.3 Subd. 4. [TRAINING OF GAMBLING MANAGERS.] The board shall 19.4 by rule require all persons licensed as gambling managers to 19.5 receive periodic training in laws and rules governing lawful 19.6 gambling. The rules must contain the following requirements: 19.7 (1) each gambling manager must receive training before 19.8 being issued a new license, except that in the case of the 19.9 death, disability, or termination of a gambling manager, a 19.10 replacement gambling manager must receive the training within 90 19.11 days of being issued a license; 19.12 (2) each gambling manager applying for a renewal of a 19.13 license must have received continuing education training, as 19.14 required by board rule, each year of the two-year license 19.15 period, or pass a gambling manager examination as required in 19.16 subdivision 7; and 19.17 (3) the training required by this subdivision may be 19.18 provided by a person authorized by the board to provide the 19.19 training. Before authorizing a person to provide training, the 19.20 board must determine that: 19.21 (i) the provider and all of the provider's personnel 19.22 conducting the training are qualified to do so; 19.23 (ii) the curriculum to be used fully and accurately covers 19.24 all elements of lawful gambling law and rules that the board 19.25 determines are necessary for a gambling manager to know and 19.26 understand; 19.27 (iii) the fee to be charged for participants in the 19.28 training sessions is fair and reasonable; and 19.29 (iv) the training provider has an adequate system for 19.30 documenting completion of training. 19.31 The rules may provide for differing training requirements 19.32 for gambling managers based on the class of license held by the 19.33 gambling manager's organization. 19.34 The board or the director may provide the training required 19.35 by this subdivision using employees of the board. 19.36 Sec. 24. Minnesota Statutes 2002, section 349.167, 20.1 subdivision 6, is amended to read: 20.2 Subd. 6. [RECRUITMENT OF GAMBLING MANAGERS.] No 20.3 organization may seek or accept assistance from a manufacturer 20.4 or, distributor, or linked bingo game provider, or a 20.5 representative, agent, affiliate, or employee of a manufacturer 20.6 or, distributor, or linked bingo game provider, in identifying 20.7 or recruiting candidates to become a gambling manager for the 20.8 organization. 20.9 Sec. 25. Minnesota Statutes 2002, section 349.167, 20.10 subdivision 7, is amended to read: 20.11 Subd. 7. [GAMBLING MANAGER EXAMINATION.] Each applicant 20.12 for a new gambling manager's license, and each renewing 20.13 applicant that has failed to receive training as required in 20.14 subdivision 4, must pass an examination prepared and 20.15 administered by the board that tests the applicant's knowledge 20.16 of the responsibilities of gambling managers, and of gambling 20.17 procedures, laws, and rules before being issued the license. In 20.18 the case of the death, disability, or termination of a gambling 20.19 manager, a replacement gambling manager must pass the 20.20 examination within 90 days of being issued a gambling manager's 20.21 license. The board shall revoke the replacement gambling 20.22 manager's license if the replacement gambling manager fails to 20.23 pass the examination as required in this subdivision. 20.24 Sec. 26. Minnesota Statutes 2002, section 349.168, 20.25 subdivision 1, is amended to read: 20.26 Subdivision 1. [REGISTRATION OF EMPLOYEES.] A person may 20.27 not receive compensation for participating in the conduct of 20.28 lawful gambling as an employee of a licensed organization unless 20.29 the person has first registered with the board on a form the 20.30 board prescribes. The form must require each registrant to 20.31 provide : (1)the person's name, address, and date of birth, and20.32 social security number; (2) a current photograph;and (3)the 20.33 name, address, and license number of the employing organization. 20.34 Sec. 27. Minnesota Statutes 2002, section 349.168, 20.35 subdivision 2, is amended to read: 20.36 Subd. 2. [IDENTIFICATION OF EMPLOYEES.] The board shall21.1 issue to each person registering under subdivision 1 a21.2 registration number and identification card which must include21.3 the employee's photograph.Each person receiving compensation 21.4 for the conduct of lawful gambling must wear the identification21.5 card provided by the boardpublicly display the person's name at 21.6 all times while conducting the lawful gambling. 21.7 Sec. 28. Minnesota Statutes 2002, section 349.168, 21.8 subdivision 6, is amended to read: 21.9 Subd. 6. [COMPENSATION PAID BY CHECK OR ELECTRONIC 21.10 TRANSFER.] Compensation paid by an organization in connection 21.11 with lawful gambling must either be: (1) in the form of a check 21.12 drawn on the organization's gambling account, as specified in 21.13 section 349.19, and paid directly to the person being 21.14 compensated; (2) transferred electronically from the 21.15 organization's gambling account, as specified in section 349.19, 21.16 subdivision 3, directly to the employee's bank account; or(3) 21.17 transferred electronically from the organization's gambling 21.18 account to the account of a payroll processing firm from which 21.19 payment in the form of a check is paid directly to the person 21.20 being compensated; or (4) transferred electronically to and from 21.21 the account of a payroll processing firm for payment to the 21.22 employee's account and for the payment of local, state, and 21.23 federal withholding taxes, provided that the payroll processing 21.24 firm is (i) currently registered with and meets the criteria of 21.25 the department of revenue as a third-party bulk filer under 21.26 section 290.92, subdivision 30, (ii) is able to provide proof of 21.27 a third-party audit and an annual report and statement of 21.28 financial condition, (iii) is able to provide evidence of a 21.29 fidelity bond, and (iv) can provide proof of having been in 21.30 business as a third-party bulk filer for the most recent three 21.31 years. 21.32 Sec. 29. Minnesota Statutes 2002, section 349.168, is 21.33 amended by adding a subdivision to read: 21.34 Subd. 10. [EMPLOYMENT OF CERTAIN PERSONS.] An organization 21.35 that sells pull-tabs and tip boards on leased premises within a 21.36 booth operation may not employ, other than as a seller of 22.1 pull-tabs and tip boards, the lessor of those premises or a 22.2 person who is employed by the lessor of those premises. 22.3 Sec. 30. Minnesota Statutes 2002, section 349.169, 22.4 subdivision 1, is amended to read: 22.5 Subdivision 1. [FILING REQUIRED.] AllWhen required by the 22.6 board, manufacturers and distributors must file with the 22.7 director , not later than the first day of each month,the prices 22.8 at which the manufacturer or distributor will sell all gambling 22.9 equipment in that monthcurrently offered for sale by that 22.10 manufacturer or distributor. The filing must be on a formin a 22.11 format the director prescribes. Prices filed must include all22.12 charges the manufacturer or distributor makes for each item of22.13 gambling equipment sold, including all volume discounts,22.14 exclusive of transportation costs. All filings are effective on22.15 the first day of the month for which they are filed, except that22.16 a manufacturer or distributor may amend a filed price within22.17 five days of filing it and may file a price any time during a22.18 month for gambling equipment not previously included on that22.19 month's filed pricing report, but may not later amend the price22.20 during the month.22.21 Sec. 31. Minnesota Statutes 2002, section 349.169, 22.22 subdivision 3, is amended to read: 22.23 Subd. 3. [SALES AT FILED PRICES.] When required to report 22.24 under subdivision 1, no manufacturer may sell to a distributor, 22.25 and no distributor may sell to an organization, any gambling 22.26 equipment for any price other than a price the manufacturer or 22.27 distributor has filed with the director under subdivision 22.28 1, including volume discounts, and exclusive of transportation 22.29 costs. 22.30 Sec. 32. Minnesota Statutes 2002, section 349.17, 22.31 subdivision 3, is amended to read: 22.32 Subd. 3. [WINNERS.] Each bingo winner must be determined 22.33 and every prize shall be awarded and delivered the same day on 22.34 which the bingo occasion is conducted, except that prizes won in 22.35 a linked bingo game must be delivered within three business days 22.36 of the day on which the occasion was conducted. 23.1 Sec. 33. Minnesota Statutes 2002, section 349.17, 23.2 subdivision 6, is amended to read: 23.3 Subd. 6. [CONDUCT OF BINGO.] (a) Each bingo hard card and 23.4 paper sheets must have five horizontal rows of spaces with each 23.5 row except one having five numbers. The center row must have 23.6 four numbers and the center space marked "free." Each column 23.7 must have one of the letters B-I-N-G-O in order at the top. 23.8 Bingo paper sheets may also have numbers that are not preprinted 23.9 but are filled in by players. 23.10 (b) A game of bingo begins with the first letter and number 23.11 called. Each player must cover or mark with a liquid dauber the 23.12 numbers when bingo balls, similarly numbered, are randomly 23.13 drawn, announced, and displayed to the players, either manually 23.14 or with a flashboard and monitor. The game is won when a player 23.15 has covered or marked a previously designated arrangement of 23.16 numbers on the card or sheet and declared bingo. The game is 23.17 completed when a winning card or sheet is verified and a prize 23.18 awarded, except that prizes won in linked bingo games may be 23.19 awarded pursuant to subdivision 3. 23.20 Sec. 34. Minnesota Statutes 2002, section 349.17, 23.21 subdivision 7, is amended to read: 23.22 Subd. 7. [NOON HOUR BINGO.] Notwithstanding subdivisions 1 23.23 and 3, an organization may conduct bingo subject to the 23.24 following restrictions: 23.25 (1) the bingo is conducted only between the hours of 11:00 23.26 a.m. and 2:00 p.m.; 23.27 (2) the bingo is conducted at a site the organization owns 23.28 or leases and which has a license for the sale of intoxicating 23.29 beverages on the premises under chapter 340A; 23.30 (3) the bingo is limited to one progressive bingo game per 23.31 site as defined by section 349.211, subdivision 2; 23.32 (4) the bingo is conducted using only bingo paper sheets; 23.33 and23.34 (5) if the premises are leased, the rent may not exceed $25 23.35 per day for each day bingo is conducted; and 23.36 (6) linked bingo games may not be conducted at a noon hour 24.1 bingo occasion. 24.2 Sec. 35. Minnesota Statutes 2002, section 349.17, is 24.3 amended by adding a subdivision to read: 24.4 Subd. 8. [LINKED BINGO GAMES.] (a) A licensed organization 24.5 may conduct or participate in a linked bingo game in association 24.6 with one or more other licensed organizations. 24.7 (b) Each participating licensed organization shall 24.8 contribute to each prize awarded in a linked bingo game in an 24.9 amount not to exceed $300 per occasion. 24.10 (c) The board may adopt rules to: 24.11 (1) specify the manner in which a linked bingo game must be 24.12 played and how the linked bingo prizes must be awarded; 24.13 (2) specify the records to be maintained by a linked bingo 24.14 game provider; 24.15 (3) require the submission of periodic reports by the 24.16 linked bingo game provider and specify the content of the 24.17 reports; 24.18 (4) establish the qualifications required to be licensed as 24.19 a linked bingo game provider; and 24.20 (5) any other matter involving the operation of a linked 24.21 bingo game. 24.22 Sec. 36. Minnesota Statutes 2002, section 349.18, 24.23 subdivision 1, is amended to read: 24.24 Subdivision 1. [LEASE OR OWNERSHIP REQUIRED; RENT 24.25 LIMITATIONS.] (a) An organization may conduct lawful gambling 24.26 only on premises it owns or leases. Leases must be on a form 24.27 prescribed by the board. Except for leases entered into before 24.28 August 1, 1994, the term of the lease may not begin before the 24.29 effective date of the premises permit and must expire on the 24.30 same day that the premises permit expires. Copies of all leases 24.31 must be made available to employees of the board and the 24.32 division of alcohol and gambling enforcement on request. A24.33 lease may not provide for payments determined directly or24.34 indirectly by the receipts or profits from lawful gambling.The 24.35 board may prescribe by rule limits on the amount of rent which 24.36 an organization may pay to a lessor for premises leased for 25.1 lawful gambling provided that no rule of the board may prescribe25.2 a limit of less than $1,000 per month on rent paid for premises25.3 used for lawful gambling other thanbingo. Any rule adopted by 25.4 the board limiting the amount of rent to be paid may only be 25.5 effective for leases entered into, or renewed, after the 25.6 effective date of the rule. 25.7 (b) Rent paid by an organization for leased premises is 25.8 subject to the following limits: 25.9 (1) for booth operations, including booth operations where 25.10 a pull-tab dispensing device is located, booth operations where 25.11 a bar operation is also conducted, and booth operations where 25.12 both a pull-tab dispensing device is located and a bar operation 25.13 is also conducted, the maximum rent is: 25.14 (i) in any month where the organization's gross profit at 25.15 those premises does not exceed $4,000, up to $400; and 25.16 (ii) in any month where the organization's gross profit at 25.17 those premises exceeds $4,000, up to $400 plus not more than ten 25.18 percent of the gross profit for that month in excess of $4,000; 25.19 (2) for bar operations, including bar operations where a 25.20 pull-tab dispensing device is located but not including bar 25.21 operations subject to clause (1), and for locations where only a 25.22 pull-tab dispensing device is located: 25.23 (i) in any month where the organization's gross profit at 25.24 those premises does not exceed $1,000, up to $200; and 25.25 (ii) in any month where the organization's gross profit at 25.26 those premises exceeds $1,000, up to $200 plus not more than 20 25.27 percent of the gross profit for that month in excess of $1,000; 25.28 (3) a lease not governed by clauses (1) and (2) must be 25.29 approved by the board before becoming effective; 25.30 (4) total rent paid to a lessor from all organizations from 25.31 leases governed by clause (1) may not exceed $1,750 per month. 25.32 Total rent paid to a lessor from all organizations from leases 25.33 governed by clause (2) may not exceed $2,000 per month. 25.34 (c) Amounts paid as rent under leases are all-inclusive. 25.35 No other services provided or contracted by the lessor may be 25.36 paid by the organization, including, but not limited to, trash 26.1 removal, janitorial and cleaning services, snow removal, lawn 26.2 services, electricity, heat, security, security monitoring, 26.3 storage, other utilities or services, and, in the case of bar 26.4 operations, compensation for cash shortages. Any other 26.5 expenditure made by an organization that is related to a leased 26.6 premises must be approved by the director. An organization may 26.7 not provide any compensation or thing of value to a lessor or 26.8 the lessor's employees from any fund source other than its 26.9 gambling account. Rent payments may not be made to an 26.10 individual. 26.11 (d) Notwithstanding paragraph (b), an organization may pay 26.12 a lessor for food or beverages or meeting room rental if the 26.13 charge made is comparable to similar charges made to other 26.14 individuals or groups. 26.15 (e) No person, distributor, manufacturer, lessor, linked 26.16 bingo game provider, or organization other than the licensed 26.17 organization leasing the space may conduct any activity other 26.18 than the sale or serving of food and beverages on the leased 26.19 premises during times when lawful gambling is being conducted on 26.20 the premises. 26.21 (c)(f) At a site where the leased premises consists of an 26.22 area on or behind a bar at which alcoholic beverages are sold 26.23 and employees of the lessor are employed by the organization as 26.24 pull-tab sellers at the site, pull-tabs and tipboard tickets may 26.25 be sold and redeemed by those employees at any place on or 26.26 behind the bar, but the tipboards and receptacles for pull-tabs 26.27 and cash drawers for lawful gambling receipts must be maintained 26.28 only within the leased premises. 26.29 (d)(g) Employees of a lessor may participate in lawful 26.30 gambling on the premises provided (1) if pull-tabs or tipboards 26.31 are sold, the organization voluntarily posts, or is required to 26.32 post, the major prizes as specified in section 349.172; and (2) 26.33 any employee of the lessor participating in lawful gambling is 26.34 not a gambling employee for the organization conducting lawful 26.35 gambling on the premises. 26.36 (e)(h) A gambling employee may purchase pull-tabs at the 27.1 site of the employee's place of employment provided: 27.2 (1) the organization voluntarily posts, or is required to 27.3 post, the major prizes for pull-tab or tipboard games as 27.4 specified in section 349.172; and 27.5 (2) the employee is not involved in the sale of pull-tabs 27.6 at that site. 27.7 (f)(i) At a leased site where an organization uses a 27.8 paddlewheel consisting of 30 numbers or less or a tipboard 27.9 consisting of 30 tickets or less, tickets may be sold throughout 27.10 the permitted premises, but winning tickets must be redeemed, 27.11 the paddlewheel must be located, and the tipboard seal must be 27.12 opened within the leased premises. 27.13 [EFFECTIVE DATE.] This section is effective May 31, 2003, 27.14 and applies to leases entered into or amended on and after that 27.15 date. 27.16 Sec. 37. Minnesota Statutes 2002, section 349.19, is 27.17 amended by adding a subdivision to read: 27.18 Subd. 2b. [LINKED BINGO PRIZE POOL ACCOUNT.] A licensed 27.19 organization participating in a linked bingo game must maintain 27.20 a separate account in a bank for the deposit of the 27.21 organization's portion of the linked bingo game prize pool. The 27.22 name of the bank, the account number, and authorization for 27.23 electronic funds transfer must be provided by the organization 27.24 to the linked bingo game provider. Deposits must be made into 27.25 the account by the organization as designated by the linked 27.26 bingo game provider. Money in the account must be available to 27.27 the linked bingo game provider at all times by electronic funds 27.28 transfer, unless the linked bingo game provider agrees to the 27.29 transfer of the funds by other means. 27.30 Sec. 38. Minnesota Statutes 2002, section 349.19, 27.31 subdivision 3, is amended to read: 27.32 Subd. 3. [EXPENDITURES.] (a) All expenditures of gross 27.33 profits from lawful gambling must be itemized as to payee, 27.34 purpose, amount, and date of payment, and must be in compliance 27.35 with section 349.154. Authorization of the expenditures must be 27.36 recorded in the monthly meeting minutes of the licensed 28.1 organization. Checks or authorizations for electronic fund 28.2 transfers for expenditures of gross profits must be signed by at 28.3 least two persons authorized by board rules to sign the checks. 28.4 Expenditures of gross profits from lawful gambling for local, 28.5 state, and federal taxes as identified in section 349.12, 28.6 subdivision 25, paragraph (a), clause (8), may be: (1) 28.7 transferred electronically from the organization's gambling 28.8 account directly to bank accounts identified by local, state, or 28.9 federal agencies if the organization's gambling account monthly 28.10 bank statement specifically identifies the payee by name, the 28.11 amount transferred, the account number of the account into which28.12 the funds were transferred,and the date of the transaction; or 28.13 (2) transferred electronically to and from the account of a 28.14 payroll processing firm that meets the criteria for such a firm 28.15 established under section 349.168, subdivision 6. Expenditures 28.16 of gross profits from lawful gambling as identified in section 28.17 349.12, subdivision 3a, and as authorized by section 349.15, 28.18 subdivision 1, for utilitypayments for utilities, insurance, 28.19 and payroll processing charges may be transferred electronically 28.20 from the organization's gambling account directly to bank 28.21 accounts identified by the utilityvendor if the organization's 28.22 gambling account monthly bank statement specifically identifies 28.23 the payee by name, the amount transferred, the account number of 28.24 the account into which the funds were transferred, and the date 28.25 of the transaction. Electronic payments of local, state, and 28.26 federal taxes and utility, payroll processing, or insurance 28.27 payments are permitted only if they have been authorized by the 28.28 membership, the organization maintains supporting documentation, 28.29 and the expenditures can be verified. 28.30 (b) Expenditures authorized by the board according to 28.31 section 349.12, subdivision 25, paragraph (b), clause (3), must 28.32 be 51 percent completed within two years of the date of board 28.33 approval. "Fifty-one percent completed" means that the work 28.34 completed must represent at least 51 percent of the value of the 28.35 project as documented by the contractor or vendor. An 28.36 organization that fails to comply with this paragraph shall 29.1 reapply to the board for approval of the project. 29.2 Sec. 39. Minnesota Statutes 2002, section 349.191, 29.3 subdivision 1, is amended to read: 29.4 Subdivision 1. [CREDIT RESTRICTION.] A manufacturer may 29.5 not offer or extend to a distributor, a linked bingo game 29.6 provider may not offer or extend to an organization, and a 29.7 distributor may not offer or extend to an organization, credit 29.8 for a period of more than 30 days for the sale or lease of any 29.9 gambling equipment. No right of action exists for the 29.10 collection of any claim based on credit prohibited by this 29.11 subdivision. The 30-day period allowed by this subdivision 29.12 begins with the day immediately following the day of invoice and 29.13 includes all successive days, including Sundays and holidays, to 29.14 and including the 30th successive day. 29.15 Sec. 40. Minnesota Statutes 2002, section 349.191, 29.16 subdivision 1a, is amended to read: 29.17 Subd. 1a. [CREDIT AND SALES TO DELINQUENT ORGANIZATIONS.] 29.18 (a) If a distributor or linked bingo game provider does not 29.19 receive payment in full from an organization within 35 days of 29.20 the day immediately following the date of the invoice, the 29.21 distributor or linked bingo game provider must notify the board 29.22 in writing of the delinquency on the next business day. 29.23 (b) If a distributor or linked bingo game provider who has 29.24 notified the board under paragraph (a) has not received payment 29.25 in full from the organization within 60 days of the notification 29.26 under paragraph (a), the distributor or linked bingo game 29.27 provider must notify the board of the continuing delinquency. 29.28 (c) On receipt of a notice under paragraph (a), the board 29.29 shall order all distributors and linked bingo game providers 29.30 that until further notice from the board, they may sell gambling 29.31 equipment to the delinquent organizations only on a cash basis 29.32 with no credit extended. On receipt of a notice under paragraph 29.33 (b), the board shall order all distributors and linked bingo 29.34 game providers not to sell any gambling equipment to the 29.35 delinquent organization. 29.36 (d) No distributor or linked bingo game provider may extend 30.1 credit or sell gambling equipment to an organization in 30.2 violation of an order under paragraph (c) until the board has 30.3 authorized such credit or sale. 30.4 Sec. 41. Minnesota Statutes 2002, section 349.211, 30.5 subdivision 1, is amended to read: 30.6 Subdivision 1. [BINGO.] Except as provided in 30.7 subdivisionsubdivisions 1a and 2, prizes for a single bingo 30.8 game may not exceed $200 except prizes for a cover-all game, 30.9 which may exceed $200 if the aggregate value of all cover-all 30.10 prizes in a bingo occasion does not exceed $1,000. Total prizes 30.11 awarded at a bingo occasion may not exceed $2,500, unless a 30.12 cover-all game is played in which case the limit is $3,500. A 30.13 prize may be determined based on the value of the bingo packet 30.14 sold to the player. For purposes of this subdivision, a 30.15 cover-all game is one in which a player must cover all spaces 30.16 except a single free space to win. 30.17 Sec. 42. Minnesota Statutes 2002, section 349.211, is 30.18 amended by adding a subdivision to read: 30.19 Subd. 1a. [LINKED BINGO PRIZES.] Prizes for a linked bingo 30.20 game shall be limited as follows: 30.21 (1) no organization may contribute more than $300 per 30.22 occasion to a linked bingo game prize pool; and 30.23 (2) if an organization contributes to a linked bingo game 30.24 prize pool, the organization's aggregate value of cover-all 30.25 prizes available during the bingo occasion must be reduced by 30.26 the amount contributed to the linked bingo game prize pool. 30.27 Sec. 43. Minnesota Statutes 2002, section 609.761, 30.28 subdivision 5, is amended to read: 30.29 Subd. 5. [HIGH SCHOOL RAFFLES.] Sections 609.755 and 30.30 609.76 do not prohibit a raffle, as defined in section 349.12, 30.31 subdivision 33, conducted by a school district or a nonprofit 30.32 organization organized primarily to support programs of a school 30.33 district, if the following conditions are complied with: 30.34 (1) tickets for the raffle may only be sold and the drawing 30.35 conducted at a high school event sponsored by a school 30.36 district. All tickets must be sold for the same price; 31.1 (2) tickets may only be sold to persons 18 years of age or 31.2 older attending the event; 31.3 (3) the drawing must be held during or immediately after 31.4 the conclusion of the event; and31.5 (4) one-half of the gross receipts from the sale of tickets 31.6 must be awarded as prizes for the raffle, and the remaining 31.7 one-half may only be expended to defray the school district's 31.8 costs of sending event participants to high school activities 31.9 held at other locations; and 31.10 (5) the school district or organization must report the 31.11 following information to the gambling control board annually: 31.12 the total amount of gross receipts received, the total expenses 31.13 for the raffles, the total prizes awarded, and an accounting of 31.14 the expenditures from the gross receipts of the raffles. 31.15 Sec. 44. [REPEALER.] 31.16 Minnesota Statutes 2002, section 349.168, subdivision 9, is 31.17 repealed.