HF 1244

2nd Unofficial 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; providing for conduct of linked bingo 
  1.5             games; permitting resale of certain gambling 
  1.6             equipment; providing for fees, prices, and prize 
  1.7             limits; clarifying requirements for gambling managers 
  1.8             and employees, premises, records and reports; 
  1.9             clarifying conduct of high school raffles; amending 
  1.10            Minnesota Statutes 2002, sections 349.12, subdivisions 
  1.11            4, 18, 19, 25, by adding subdivisions; 349.151, 
  1.12            subdivisions 4, 4b; 349.153; 349.155, subdivision 3; 
  1.13            349.161, subdivision 5; 349.163, subdivision 3; 
  1.14            349.166, subdivisions 1, 2; 349.167, subdivisions 4, 
  1.15            6, 7; 349.168, subdivisions 1, 2, 6, by adding a 
  1.16            subdivision; 349.169, subdivisions 1, 3; 349.17, 
  1.17            subdivisions 3, 6, 7, by adding a subdivision; 349.18, 
  1.18            subdivision 1; 349.19, subdivision 3, by adding a 
  1.19            subdivision; 349.191, subdivisions 1, 1a; 349.211, 
  1.20            subdivision 1, by adding a subdivision; 609.761, 
  1.21            subdivision 5; proposing coding for new law in 
  1.22            Minnesota Statutes, chapter 349; repealing Minnesota 
  1.23            Statutes 2002, section 349.168, 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; or 
  2.30     (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, 
  2.36  subdivision 25, is amended to read: 
  3.1      Subd. 25.  [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 
  3.2   or more of the following:  
  3.3      (1) any expenditure by or contribution to a 501(c)(3) or 
  3.4   festival organization, as defined in subdivision 15a, provided 
  3.5   that the organization and expenditure or contribution are in 
  3.6   conformity with standards prescribed by the board under section 
  3.7   349.154, which standards must apply to both types of 
  3.8   organizations in the same manner and to the same extent; 
  3.9      (2) a contribution to an individual or family suffering 
  3.10  from poverty, homelessness, or physical or mental disability, 
  3.11  which is used to relieve the effects of that poverty, 
  3.12  homelessness, or disability; 
  3.13     (3) a contribution to an individual for treatment for 
  3.14  delayed posttraumatic stress syndrome or a contribution to a 
  3.15  program recognized by the Minnesota department of human services 
  3.16  for the education, prevention, or treatment of compulsive 
  3.17  gambling; 
  3.18     (4) a contribution to or expenditure on a public or private 
  3.19  nonprofit educational institution registered with or accredited 
  3.20  by this state or any other state; 
  3.21     (5) a contribution to a scholarship fund for defraying the 
  3.22  cost of education to individuals where the funds are awarded 
  3.23  through an open and fair selection process; 
  3.24     (6) activities by an organization or a government entity 
  3.25  which recognize humanitarian or military service to the United 
  3.26  States, the state of Minnesota, or a community, subject to rules 
  3.27  of the board, provided that the rules must not include mileage 
  3.28  reimbursements in the computation of the per occasion diem 
  3.29  reimbursement limit and must impose no aggregate annual limit on 
  3.30  the amount of reasonable and necessary expenditures made to 
  3.31  support: 
  3.32     (i) members of a military marching or color guard unit for 
  3.33  activities conducted within the state; 
  3.34     (ii) members of an organization solely for services 
  3.35  performed by the members at funeral services; or 
  3.36     (iii) members of military marching, color guard, or honor 
  4.1   guard units may be reimbursed for participating in color guard, 
  4.2   honor guard, or marching unit events within the state or states 
  4.3   contiguous to Minnesota at a per participant rate of up to $35 
  4.4   per occasion diem; 
  4.5      (7) recreational, community, and athletic facilities and 
  4.6   activities intended primarily for persons under age 21, provided 
  4.7   that such facilities and activities do not discriminate on the 
  4.8   basis of gender and the organization complies with section 
  4.9   349.154; 
  4.10     (8) payment of local taxes authorized under this chapter, 
  4.11  taxes imposed by the United States on receipts from lawful 
  4.12  gambling, the taxes imposed by section 297E.02, subdivisions 1, 
  4.13  4, 5, and 6, and the tax imposed on unrelated business income by 
  4.14  section 290.05, subdivision 3; 
  4.15     (9) payment of real estate taxes and assessments on 
  4.16  permitted gambling premises wholly owned by the licensed 
  4.17  organization paying the taxes, or wholly leased by a licensed 
  4.18  veterans organization under a national charter recognized under 
  4.19  section 501(c)(19) of the Internal Revenue Code, not to exceed: 
  4.20     (i) for premises used for bingo, the amount that an 
  4.21  organization may expend under board rules on rent for bingo; and 
  4.22     (ii) $35,000 per year for premises used for other forms of 
  4.23  lawful gambling; 
  4.24     (10) a contribution to the United States, this state or any 
  4.25  of its political subdivisions, or any agency or instrumentality 
  4.26  thereof other than a direct contribution to a law enforcement or 
  4.27  prosecutorial agency; 
  4.28     (11) a contribution to or expenditure by a nonprofit 
  4.29  organization which is a church or body of communicants gathered 
  4.30  in common membership for mutual support and edification in 
  4.31  piety, worship, or religious observances; 
  4.32     (12) payment of the reasonable costs of an audit required 
  4.33  in section 297E.06, subdivision 4, provided the annual audit is 
  4.34  filed in a timely manner with the department of revenue; 
  4.35     (13) a contribution to or expenditure on a wildlife 
  4.36  management project that benefits the public at-large, provided 
  5.1   that the state agency with authority over that wildlife 
  5.2   management project approves the project before the contribution 
  5.3   or expenditure is made; 
  5.4      (14) expenditures, approved by the commissioner of natural 
  5.5   resources, by an organization for grooming and maintaining 
  5.6   snowmobile trails and all-terrain vehicle trails that are (1) 
  5.7   grant-in-aid trails established under section 85.019, or (2) 
  5.8   other trails open to public use, including purchase or lease of 
  5.9   equipment for this purpose; or 
  5.10     (15) conducting nutritional programs, food shelves, and 
  5.11  congregate dining programs primarily for persons who are age 62 
  5.12  or older or disabled; 
  5.13     (16) a contribution to a community arts organization, or an 
  5.14  expenditure to sponsor arts programs in the community, including 
  5.15  but not limited to visual, literary, performing, or musical 
  5.16  arts; 
  5.17     (17) an expenditure by a licensed veterans organization for 
  5.18  payment of heat, water, sanitation, telephone, and other utility 
  5.19  bills fuel for heating, electricity, and sewer costs for a 
  5.20  building wholly owned or wholly leased by, and used as the 
  5.21  primary headquarters of, a the licensed veterans organization; 
  5.22  or 
  5.23     (18) expenditure by a licensed veterans organization of up 
  5.24  to $5,000 in a calendar year in net costs to the organization 
  5.25  for meals and other membership events, limited to members and 
  5.26  spouses, held in recognition of military service.  No more than 
  5.27  $5,000 can be expended in total per calendar year under this 
  5.28  clause by all licensed veterans organizations sharing the same 
  5.29  veterans post home. 
  5.30     (b) Notwithstanding paragraph (a), "lawful purpose" does 
  5.31  not include: 
  5.32     (1) any expenditure made or incurred for the purpose of 
  5.33  influencing the nomination or election of a candidate for public 
  5.34  office or for the purpose of promoting or defeating a ballot 
  5.35  question; 
  5.36     (2) any activity intended to influence an election or a 
  6.1   governmental decision-making process; 
  6.2      (3) the erection, acquisition, improvement, expansion, 
  6.3   repair, or maintenance of real property or capital assets owned 
  6.4   or leased by an organization, unless the board has first 
  6.5   specifically authorized the expenditures after finding that (i) 
  6.6   the real property or capital assets will be used exclusively for 
  6.7   one or more of the purposes in paragraph (a); (ii) with respect 
  6.8   to expenditures for repair or maintenance only, that the 
  6.9   property is or will be used extensively as a meeting place or 
  6.10  event location by other nonprofit organizations or community or 
  6.11  service groups and that no rental fee is charged for the use; 
  6.12  (iii) with respect to expenditures, including a mortgage payment 
  6.13  or other debt service payment, for erection or acquisition only, 
  6.14  that the erection or acquisition is necessary to replace with a 
  6.15  comparable building, a building owned by the organization and 
  6.16  destroyed or made uninhabitable by fire or natural disaster, 
  6.17  provided that the expenditure may be only for that part of the 
  6.18  replacement cost not reimbursed by insurance; (iv) with respect 
  6.19  to expenditures, including a mortgage payment or other debt 
  6.20  service payment, for erection or acquisition only, that the 
  6.21  erection or acquisition is necessary to replace with a 
  6.22  comparable building a building owned by the organization that 
  6.23  was acquired from the organization by eminent domain or sold by 
  6.24  the organization to a purchaser that the organization reasonably 
  6.25  believed would otherwise have acquired the building by eminent 
  6.26  domain, provided that the expenditure may be only for that part 
  6.27  of the replacement cost that exceeds the compensation received 
  6.28  by the organization for the building being replaced; or (v) with 
  6.29  respect to an expenditure to bring an existing building into 
  6.30  compliance with the Americans with Disabilities Act under item 
  6.31  (ii), an organization has the option to apply the amount of the 
  6.32  board-approved expenditure to the erection or acquisition of a 
  6.33  replacement building that is in compliance with the Americans 
  6.34  with Disabilities Act; 
  6.35     (4) an expenditure by an organization which is a 
  6.36  contribution to a parent organization, foundation, or affiliate 
  7.1   of the contributing organization, if the parent organization, 
  7.2   foundation, or affiliate has provided to the contributing 
  7.3   organization within one year of the contribution any money, 
  7.4   grants, property, or other thing of value; 
  7.5      (5) a contribution by a licensed organization to another 
  7.6   licensed organization unless the board has specifically 
  7.7   authorized the contribution.  The board must authorize such a 
  7.8   contribution when requested to do so by the contributing 
  7.9   organization unless it makes an affirmative finding that the 
  7.10  contribution will not be used by the recipient organization for 
  7.11  one or more of the purposes in paragraph (a); or 
  7.12     (6) a contribution to a statutory or home rule charter 
  7.13  city, county, or town by a licensed organization with the 
  7.14  knowledge that the governmental unit intends to use the 
  7.15  contribution for a pension or retirement fund. 
  7.16     Sec. 7.  Minnesota Statutes 2002, section 349.12, is 
  7.17  amended by adding a subdivision to read: 
  7.18     Subd. 25a.  [LINKED BINGO GAME.] "Linked bingo game" means 
  7.19  a bingo game played at two or more locations where licensed 
  7.20  organizations are authorized to conduct bingo, where there is a 
  7.21  common prize pool and a common selection of numbers or symbols 
  7.22  conducted at one location, and where the results of the 
  7.23  selection are transmitted to all participating locations by 
  7.24  satellite, telephone, or other means by a linked bingo game 
  7.25  provider. 
  7.26     Sec. 8.  Minnesota Statutes 2002, section 349.12, is 
  7.27  amended by adding a subdivision to read: 
  7.28     Subd. 25b.  [LINKED BINGO GAME PROVIDER.] "Linked bingo 
  7.29  game provider" means any person who provides the means to link 
  7.30  bingo prizes in a linked bingo game, who provides linked bingo 
  7.31  paper sheets to the participating organizations, who provides 
  7.32  linked bingo prize management, and who provides the linked bingo 
  7.33  game system. 
  7.34     Sec. 9.  Minnesota Statutes 2002, section 349.12, is 
  7.35  amended by adding a subdivision to read: 
  7.36     Subd. 25c.  [LINKED BINGO GAME SYSTEM.] "Linked bingo game 
  8.1   system" means the equipment used by the linked bingo provider to 
  8.2   conduct, transmit, and track a linked bingo game.  The system 
  8.3   must be approved by the board before its use in this state and 
  8.4   it must have dial-up or other capability to permit the board to 
  8.5   monitor its operation remotely. 
  8.6      Sec. 10.  Minnesota Statutes 2002, section 349.12, is 
  8.7   amended by adding a subdivision to read: 
  8.8      Subd. 25d.  [LINKED BINGO PRIZE POOL.] "Linked bingo prize 
  8.9   pool" means the total of all prize money that each participating 
  8.10  organization has contributed to the linked bingo game prize.  No 
  8.11  participating organization may contribute more than $300 per 
  8.12  bingo occasion to a linked bingo prize pool. 
  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 to 
 11.11  $5,000 per pull-tab dispensing device to cover the costs of 
 11.12  services provided by an independent testing laboratory to 
 11.13  perform testing and analysis of pull-tab dispensing devices.  
 11.14  The director shall deposit in a separate account in the state 
 11.15  treasury all money the director receives as reimbursement for 
 11.16  the costs of services provided by independent testing 
 11.17  laboratories that have entered into contracts with the state to 
 11.18  perform testing and analysis of pull-tab dispensing devices.  
 11.19  Money in the account is appropriated to the director to pay the 
 11.20  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 a bingo 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 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 system; or 
 15.14     (4) provide linked bingo paper sheets to an organization. 
 15.15     Subd. 2.  [LICENSE APPLICATION.] The board may issue a 
 15.16  license to a linked bingo game provider who meets the 
 15.17  qualifications of this chapter and the rules promulgated by the 
 15.18  board.  The application shall be on a form prescribed by the 
 15.19  board.  The license is valid for two years and the fee for a 
 15.20  linked bingo game provider license is $5,000 per year.  
 15.21     Subd. 3.  [ATTACHMENTS TO APPLICATION.] An applicant for a 
 15.22  linked bingo game provider license must attach to its 
 15.23  application: 
 15.24     (1) evidence of a bond in the principal amount of $250,000 
 15.25  payable to the state of Minnesota conditioned on the payment of 
 15.26  all linked bingo prizes and any other money due and payable 
 15.27  under this chapter; 
 15.28     (2) detailed plans and specifications for the operation of 
 15.29  the linked bingo game and the linked bingo system; and 
 15.30     (3) any other information required by the board by rule.  
 15.31     Subd. 4.  [PROHIBITION.] (a) Except for services associated 
 15.32  exclusively with a linked bingo game, a linked bingo game 
 15.33  provider may not participate or assist in the conduct of lawful 
 15.34  gambling by an organization.  No linked bingo game provider may: 
 15.35     (1) also be licensed as a bingo hall or hold any financial 
 15.36  or managerial interest in a bingo hall; 
 16.1      (2) also be licensed as a distributor or hold any financial 
 16.2   or managerial interest in a distributor; 
 16.3      (3) sell or lease linked bingo game equipment to any person 
 16.4   not licensed as an organization; 
 16.5      (4) purchase gambling equipment to be used exclusively in a 
 16.6   linked bingo game from any person not licensed as a manufacturer 
 16.7   under section 349.163; and 
 16.8      (5) provide an organization, a lessor of gambling premises, 
 16.9   or an appointed official any compensation, gift, gratuity, 
 16.10  premium, or contribution. 
 16.11     (b) Employees of the board and the division of alcohol and 
 16.12  gambling enforcement may inspect the books, records, inventory, 
 16.13  and business premises of a licensed linked bingo game provider 
 16.14  without notice during the normal business hours of the linked 
 16.15  bingo game provider.  The board may charge a linked bingo game 
 16.16  provider for the actual cost of conducting scheduled or 
 16.17  unscheduled inspections of the licensee's facilities. 
 16.18     Sec. 21.  Minnesota Statutes 2002, section 349.166, 
 16.19  subdivision 1, is amended to read: 
 16.20     Subdivision 1.  [EXCLUSIONS.] (a) Bingo, with the exception 
 16.21  of linked bingo games, may be conducted without a license and 
 16.22  without complying with sections 349.168, subdivisions 1 and 2; 
 16.23  349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and 
 16.24  349.19, if it is conducted:  
 16.25     (1) by an organization in connection with a county fair, 
 16.26  the state fair, or a civic celebration and is not conducted for 
 16.27  more than 12 consecutive days and is limited to no more than 
 16.28  four separate applications for activities applied for and 
 16.29  approved in a calendar year; or 
 16.30     (2) by an organization that conducts four or fewer bingo 
 16.31  occasions in a calendar year.  
 16.32     An organization that holds a license to conduct lawful 
 16.33  gambling under this chapter may not conduct bingo under this 
 16.34  subdivision.  
 16.35     (b) Bingo may be conducted within a nursing home or a 
 16.36  senior citizen housing project or by a senior citizen 
 17.1   organization if the prizes for a single bingo game do not exceed 
 17.2   $10, total prizes awarded at a single bingo occasion do not 
 17.3   exceed $200, no more than two bingo occasions are held by the 
 17.4   organization or at the facility each week, only members of the 
 17.5   organization or residents of the nursing home or housing project 
 17.6   are allowed to play in a bingo game, no compensation is paid for 
 17.7   any persons who conduct the bingo, and a manager is appointed to 
 17.8   supervise the bingo.  Bingo conducted under this paragraph is 
 17.9   exempt from sections 349.11 to 349.23, and the board may not 
 17.10  require an organization that conducts bingo under this 
 17.11  paragraph, or the manager who supervises the bingo, to register 
 17.12  or file a report with the board.  The gross receipts from bingo 
 17.13  conducted under the limitations of this subdivision are exempt 
 17.14  from taxation under chapter 297A.  
 17.15     (c) Raffles may be conducted by an organization without a 
 17.16  license and without complying with sections 349.154 to 349.165 
 17.17  and 349.167 to 349.213 if the value of all raffle prizes awarded 
 17.18  by the organization in a calendar year does not 
 17.19  exceed $750 $1,500.  
 17.20     (d) Except as provided in paragraph (b), the organization 
 17.21  must maintain all required records of excluded gambling activity 
 17.22  for 3-1/2 years. 
 17.23     Sec. 22.  Minnesota Statutes 2002, section 349.166, 
 17.24  subdivision 2, is amended to read: 
 17.25     Subd. 2.  [EXEMPTIONS.] (a) Lawful gambling, with the 
 17.26  exception of linked bingo games, may be conducted by an 
 17.27  organization without a license and without complying with 
 17.28  sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4 
 17.29  and 5; 349.18, subdivision 1; and 349.19 if: 
 17.30     (1) the organization conducts lawful gambling on five or 
 17.31  fewer days in a calendar year; 
 17.32     (2) the organization does not award more than $50,000 in 
 17.33  prizes for lawful gambling in a calendar year; 
 17.34     (3) the organization pays a fee of $25 to the board, 
 17.35  notifies the board in writing not less than 30 days before each 
 17.36  lawful gambling occasion of the date and location of the 
 18.1   occasion, or 60 days for an occasion held in the case of a city 
 18.2   of the first class, the types of lawful gambling to be 
 18.3   conducted, the prizes to be awarded, and receives an exemption 
 18.4   identification number; 
 18.5      (4) the organization notifies the local government unit 30 
 18.6   days before the lawful gambling occasion, or 60 days for an 
 18.7   occasion held in a city of the first class; 
 18.8      (5) the organization purchases all gambling equipment and 
 18.9   supplies from a licensed distributor; and 
 18.10     (6) the organization reports to the board, on a single-page 
 18.11  form prescribed by the board, within 30 days of each gambling 
 18.12  occasion, the gross receipts, prizes, expenses, expenditures of 
 18.13  net profits from the occasion, and the identification of the 
 18.14  licensed distributor from whom all gambling equipment was 
 18.15  purchased.  
 18.16     (b) If the organization fails to file a timely report as 
 18.17  required by paragraph (a), clause (3) or (6), the board shall 
 18.18  not issue any authorization, license, or permit to the 
 18.19  organization to conduct lawful gambling on an exempt, excluded, 
 18.20  or licensed basis until the report has been filed. 
 18.21     (c) Merchandise prizes must be valued at their fair market 
 18.22  value. 
 18.23     (d) Unused pull-tab and tipboard deals must be returned to 
 18.24  the distributor within seven working days after the end of the 
 18.25  lawful gambling occasion.  The distributor must accept and pay a 
 18.26  refund for all returns of unopened and undamaged deals returned 
 18.27  under this paragraph. 
 18.28     (e) An organization that is exempt from taxation on 
 18.29  purchases of pull-tabs and tipboards under section 297E.02, 
 18.30  subdivision 4, paragraph (b), clause (4), must return to the 
 18.31  distributor any tipboard or pull-tab deal no part of which is 
 18.32  used at the lawful gambling occasion for which it was purchased 
 18.33  by the organization. 
 18.34     (f) The organization must maintain all required records of 
 18.35  exempt gambling activity for 3-1/2 years. 
 18.36     Sec. 23.  Minnesota Statutes 2002, section 349.167, 
 19.1   subdivision 4, is amended to read: 
 19.2      Subd. 4.  [TRAINING OF GAMBLING MANAGERS.] The board shall 
 19.3   by rule require all persons licensed as gambling managers to 
 19.4   receive periodic training in laws and rules governing lawful 
 19.5   gambling.  The rules must contain the following requirements: 
 19.6      (1) each gambling manager must receive training before 
 19.7   being issued a new license, except that in the case of the 
 19.8   death, disability, or termination of a gambling manager, a 
 19.9   replacement gambling manager must receive the training within 90 
 19.10  days of being issued a license; 
 19.11     (2) each gambling manager applying for a renewal of a 
 19.12  license must have received continuing education training, as 
 19.13  required by board rule, each year of the two-year license 
 19.14  period, or pass a gambling manager examination as required in 
 19.15  subdivision 7; and 
 19.16     (3) the training required by this subdivision may be 
 19.17  provided by a person authorized by the board to provide the 
 19.18  training.  Before authorizing a person to provide training, the 
 19.19  board must determine that: 
 19.20     (i) the provider and all of the provider's personnel 
 19.21  conducting the training are qualified to do so; 
 19.22     (ii) the curriculum to be used fully and accurately covers 
 19.23  all elements of lawful gambling law and rules that the board 
 19.24  determines are necessary for a gambling manager to know and 
 19.25  understand; 
 19.26     (iii) the fee to be charged for participants in the 
 19.27  training sessions is fair and reasonable; and 
 19.28     (iv) the training provider has an adequate system for 
 19.29  documenting completion of training. 
 19.30     The rules may provide for differing training requirements 
 19.31  for gambling managers based on the class of license held by the 
 19.32  gambling manager's organization. 
 19.33     The board or the director may provide the training required 
 19.34  by this subdivision using employees of the board. 
 19.35     Sec. 24.  Minnesota Statutes 2002, section 349.167, 
 19.36  subdivision 6, is amended to read: 
 20.1      Subd. 6.  [RECRUITMENT OF GAMBLING MANAGERS.] No 
 20.2   organization may seek or accept assistance from a manufacturer 
 20.3   or, distributor, or linked bingo game provider, or a 
 20.4   representative, agent, affiliate, or employee of a manufacturer 
 20.5   or, distributor, or linked bingo game provider, in identifying 
 20.6   or recruiting candidates to become a gambling manager for the 
 20.7   organization. 
 20.8      Sec. 25.  Minnesota Statutes 2002, section 349.167, 
 20.9   subdivision 7, is amended to read: 
 20.10     Subd. 7.  [GAMBLING MANAGER EXAMINATION.] Each applicant 
 20.11  for a new gambling manager's license, and each renewing 
 20.12  applicant that has failed to receive training as required in 
 20.13  subdivision 4, must pass an examination prepared and 
 20.14  administered by the board that tests the applicant's knowledge 
 20.15  of the responsibilities of gambling managers, and of gambling 
 20.16  procedures, laws, and rules before being issued the license.  In 
 20.17  the case of the death, disability, or termination of a gambling 
 20.18  manager, a replacement gambling manager must pass the 
 20.19  examination within 90 days of being issued a gambling manager's 
 20.20  license.  The board shall revoke the replacement gambling 
 20.21  manager's license if the replacement gambling manager fails to 
 20.22  pass the examination as required in this subdivision. 
 20.23     Sec. 26.  Minnesota Statutes 2002, section 349.168, 
 20.24  subdivision 1, is amended to read: 
 20.25     Subdivision 1.  [REGISTRATION OF EMPLOYEES.] A person may 
 20.26  not receive compensation for participating in the conduct of 
 20.27  lawful gambling as an employee of a licensed organization unless 
 20.28  the person has first registered with the board on a form the 
 20.29  board prescribes.  The form must require each registrant to 
 20.30  provide:  (1) the person's name, address, and date of birth, and 
 20.31  social security number; (2) a current photograph; and (3) the 
 20.32  name, address, and license number of the employing organization. 
 20.33     Sec. 27.  Minnesota Statutes 2002, section 349.168, 
 20.34  subdivision 2, is amended to read: 
 20.35     Subd. 2.  [IDENTIFICATION OF EMPLOYEES.] The board shall 
 20.36  issue to each person registering under subdivision 1 a 
 21.1   registration number and identification card which must include 
 21.2   the employee's photograph.  Each person receiving compensation 
 21.3   for the conduct of lawful gambling must wear the identification 
 21.4   card provided by the board publicly display the person's name at 
 21.5   all times while conducting the lawful gambling. 
 21.6      Sec. 28.  Minnesota Statutes 2002, section 349.168, 
 21.7   subdivision 6, is amended to read: 
 21.8      Subd. 6.  [COMPENSATION PAID BY CHECK OR ELECTRONIC 
 21.9   TRANSFER.] Compensation paid by an organization in connection 
 21.10  with lawful gambling must either be:  (1) in the form of a check 
 21.11  drawn on the organization's gambling account, as specified in 
 21.12  section 349.19, and paid directly to the person being 
 21.13  compensated; (2) transferred electronically from the 
 21.14  organization's gambling account, as specified in section 349.19, 
 21.15  subdivision 3, directly to the employee's bank account; or (3) 
 21.16  transferred electronically from the organization's gambling 
 21.17  account to the account of a payroll processing firm from which 
 21.18  payment in the form of a check is paid directly to the person 
 21.19  being compensated; or (4) transferred electronically to and from 
 21.20  the account of a payroll processing firm for payment to the 
 21.21  employee's account and for the payment of local, state, and 
 21.22  federal withholding taxes, provided that the payroll processing 
 21.23  firm is (i) currently registered with and meets the criteria of 
 21.24  the department of revenue as a third-party bulk filer under 
 21.25  section 290.92, subdivision 30, (ii) is able to provide proof of 
 21.26  a third-party audit and an annual report and statement of 
 21.27  financial condition, (iii) is able to provide evidence of a 
 21.28  fidelity bond, and (iv) can provide proof of having been in 
 21.29  business as a third-party bulk filer for the most recent three 
 21.30  years. 
 21.31     Sec. 29.  Minnesota Statutes 2002, section 349.168, is 
 21.32  amended by adding a subdivision to read: 
 21.33     Subd. 10.  [EMPLOYMENT OF CERTAIN PERSONS.] An organization 
 21.34  that sells pull-tabs and tip boards on leased premises within a 
 21.35  booth operation may not employ, other than as a seller of 
 21.36  pull-tabs and tip boards, the lessor of those premises or a 
 22.1   person who is employed by the lessor of those premises. 
 22.2      Sec. 30.  Minnesota Statutes 2002, section 349.169, 
 22.3   subdivision 1, is amended to read: 
 22.4      Subdivision 1.  [FILING REQUIRED.] All When required by the 
 22.5   board, manufacturers and distributors must file with the 
 22.6   director, not later than the first day of each month, the prices 
 22.7   at which the manufacturer or distributor will sell all gambling 
 22.8   equipment in that month currently offered for sale by that 
 22.9   manufacturer or distributor.  The filing must be on a form in a 
 22.10  format the director prescribes.  Prices filed must include all 
 22.11  charges the manufacturer or distributor makes for each item of 
 22.12  gambling equipment sold, including all volume discounts, 
 22.13  exclusive of transportation costs.  All filings are effective on 
 22.14  the first day of the month for which they are filed, except that 
 22.15  a manufacturer or distributor may amend a filed price within 
 22.16  five days of filing it and may file a price any time during a 
 22.17  month for gambling equipment not previously included on that 
 22.18  month's filed pricing report, but may not later amend the price 
 22.19  during the month. 
 22.20     Sec. 31.  Minnesota Statutes 2002, section 349.169, 
 22.21  subdivision 3, is amended to read: 
 22.22     Subd. 3.  [SALES AT FILED PRICES.] When required to report 
 22.23  under subdivision 1, no manufacturer may sell to a distributor, 
 22.24  and no distributor may sell to an organization, any gambling 
 22.25  equipment for any price other than a price the manufacturer or 
 22.26  distributor has filed with the director under subdivision 
 22.27  1, including volume discounts, and exclusive of transportation 
 22.28  costs. 
 22.29     Sec. 32.  Minnesota Statutes 2002, section 349.17, 
 22.30  subdivision 3, is amended to read: 
 22.31     Subd. 3.  [WINNERS.] Each bingo winner must be determined 
 22.32  and every prize shall be awarded and delivered the same day on 
 22.33  which the bingo occasion is conducted, except that prizes won in 
 22.34  a linked bingo game must be delivered within three business days 
 22.35  of the day on which the occasion was conducted. 
 22.36     Sec. 33.  Minnesota Statutes 2002, section 349.17, 
 23.1   subdivision 6, is amended to read: 
 23.2      Subd. 6.  [CONDUCT OF BINGO.] (a) Each bingo hard card and 
 23.3   paper sheets must have five horizontal rows of spaces with each 
 23.4   row except one having five numbers.  The center row must have 
 23.5   four numbers and the center space marked "free."  Each column 
 23.6   must have one of the letters B-I-N-G-O in order at the top.  
 23.7   Bingo paper sheets may also have numbers that are not preprinted 
 23.8   but are filled in by players. 
 23.9      (b) A game of bingo begins with the first letter and number 
 23.10  called.  Each player must cover or mark with a liquid dauber the 
 23.11  numbers when bingo balls, similarly numbered, are randomly 
 23.12  drawn, announced, and displayed to the players, either manually 
 23.13  or with a flashboard and monitor.  The game is won when a player 
 23.14  has covered or marked a previously designated arrangement of 
 23.15  numbers on the card or sheet and declared bingo.  The game is 
 23.16  completed when a winning card or sheet is verified and a prize 
 23.17  awarded, except that prizes won in linked bingo games may be 
 23.18  awarded pursuant to subdivision 3.  
 23.19     Sec. 34.  Minnesota Statutes 2002, section 349.17, 
 23.20  subdivision 7, is amended to read: 
 23.21     Subd. 7.  [NOON HOUR BINGO.] Notwithstanding subdivisions 1 
 23.22  and 3, an organization may conduct bingo subject to the 
 23.23  following restrictions: 
 23.24     (1) the bingo is conducted only between the hours of 11:00 
 23.25  a.m. and 2:00 p.m.; 
 23.26     (2) the bingo is conducted at a site the organization owns 
 23.27  or leases and which has a license for the sale of intoxicating 
 23.28  beverages on the premises under chapter 340A; 
 23.29     (3) the bingo is limited to one progressive bingo game per 
 23.30  site as defined by section 349.211, subdivision 2; 
 23.31     (4) the bingo is conducted using only bingo paper sheets; 
 23.32  and 
 23.33     (5) if the premises are leased, the rent may not exceed $25 
 23.34  per day for each day bingo is conducted; and 
 23.35     (6) linked bingo games may not be conducted at a noon hour 
 23.36  bingo occasion. 
 24.1      Sec. 35.  Minnesota Statutes 2002, section 349.17, is 
 24.2   amended by adding a subdivision to read: 
 24.3      Subd. 8.  [LINKED BINGO GAMES.] (a) A licensed organization 
 24.4   may conduct or participate in a linked bingo game in association 
 24.5   with one or more other licensed organizations. 
 24.6      (b) Each participating licensed organization shall 
 24.7   contribute to each prize awarded in a linked bingo game in an 
 24.8   amount not to exceed $300 per occasion. 
 24.9      (c) The board may adopt rules to: 
 24.10     (1) specify the manner in which a linked bingo game must be 
 24.11  played and how the linked bingo prizes must be awarded; 
 24.12     (2) specify the records to be maintained by a linked bingo 
 24.13  game provider; 
 24.14     (3) require the submission of periodic reports by the 
 24.15  linked bingo game provider and specify the content of the 
 24.16  reports; 
 24.17     (4) establish the qualifications required to be licensed as 
 24.18  a linked bingo game provider; and 
 24.19     (5) any other matter involving the operation of a linked 
 24.20  bingo game. 
 24.21     Sec. 36.  Minnesota Statutes 2002, section 349.18, 
 24.22  subdivision 1, is amended to read: 
 24.23     Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED; RENT 
 24.24  LIMITATIONS.] (a) An organization may conduct lawful gambling 
 24.25  only on premises it owns or leases.  Leases must be on a form 
 24.26  prescribed by the board.  Except for leases entered into before 
 24.27  August 1, 1994, the term of the lease may not begin before the 
 24.28  effective date of the premises permit and must expire on the 
 24.29  same day that the premises permit expires.  Copies of all leases 
 24.30  must be made available to employees of the board and the 
 24.31  division of alcohol and gambling enforcement on request.  A 
 24.32  lease may not provide for payments determined directly or 
 24.33  indirectly by the receipts or profits from lawful gambling.  The 
 24.34  board may prescribe by rule limits on the amount of rent which 
 24.35  an organization may pay to a lessor for premises leased for 
 24.36  lawful gambling provided that no rule of the board may prescribe 
 25.1   a limit of less than $1,000 per month on rent paid for premises 
 25.2   used for lawful gambling other than bingo.  Any rule adopted by 
 25.3   the board limiting the amount of rent to be paid may only be 
 25.4   effective for leases entered into, or renewed, after the 
 25.5   effective date of the rule. 
 25.6      (b) Rent paid by an organization for leased premises is 
 25.7   subject to the following limits: 
 25.8      (1) for booth operations, including booth operations where 
 25.9   a pull-tab dispensing device is located, booth operations where 
 25.10  a bar operation is also conducted, and booth operations where 
 25.11  both a pull-tab dispensing device is located and a bar operation 
 25.12  is also conducted, the maximum rent is: 
 25.13     (i) in any month where the organization's gross profit at 
 25.14  those premises does not exceed $4,000, up to $400; and 
 25.15     (ii) in any month where the organization's gross profit at 
 25.16  those premises exceeds $4,000, up to $400 plus not more than ten 
 25.17  percent of the gross profit for that month in excess of $4,000; 
 25.18     (2) for bar operations, including bar operations where a 
 25.19  pull-tab dispensing device is located but not including bar 
 25.20  operations subject to clause (1), and for locations where only a 
 25.21  pull-tab dispensing device is located: 
 25.22     (i) in any month where the organization's gross profit at 
 25.23  those premises does not exceed $1,000, up to $200; and 
 25.24     (ii) in any month where the organization's gross profit at 
 25.25  those premises exceeds $1,000, up to $200 plus not more than 20 
 25.26  percent of the gross profit for that month in excess of $1,000; 
 25.27     (3) a lease not governed by clauses (1) and (2) must be 
 25.28  approved by the board before becoming effective; 
 25.29     (4) total rent paid to a lessor from all organizations from 
 25.30  leases governed by clause (1) may not exceed $1,750 per month.  
 25.31  Total rent paid to a lessor from all organizations from leases 
 25.32  governed by clause (2) may not exceed $2,000 per month.  
 25.33     (c) Amounts paid as rent under leases are all-inclusive.  
 25.34  No other services provided or contracted by the lessor may be 
 25.35  paid by the organization, including, but not limited to, trash 
 25.36  removal, janitorial and cleaning services, snow removal, lawn 
 26.1   services, electricity, heat, security, security monitoring, 
 26.2   storage, other utilities or services, and, in the case of bar 
 26.3   operations, compensation for cash shortages.  Any other 
 26.4   expenditure made by an organization that is related to a leased 
 26.5   premises must be approved by the director.  An organization may 
 26.6   not provide any compensation or thing of value to a lessor or 
 26.7   the lessor's employees from any fund source other than its 
 26.8   gambling account.  Rent payments may not be made to an 
 26.9   individual. 
 26.10     (d) Notwithstanding paragraph (b), an organization may pay 
 26.11  a lessor for food or beverages or meeting room rental if the 
 26.12  charge made is comparable to similar charges made to other 
 26.13  individuals or groups. 
 26.14     (e) No person, distributor, manufacturer, lessor, linked 
 26.15  bingo game provider, or organization other than the licensed 
 26.16  organization leasing the space may conduct any activity other 
 26.17  than the sale or serving of food and beverages on the leased 
 26.18  premises during times when lawful gambling is being conducted on 
 26.19  the premises. 
 26.20     (c) (f) At a site where the leased premises consists of an 
 26.21  area on or behind a bar at which alcoholic beverages are sold 
 26.22  and employees of the lessor are employed by the organization as 
 26.23  pull-tab sellers at the site, pull-tabs and tipboard tickets may 
 26.24  be sold and redeemed by those employees at any place on or 
 26.25  behind the bar, but the tipboards and receptacles for pull-tabs 
 26.26  and cash drawers for lawful gambling receipts must be maintained 
 26.27  only within the leased premises. 
 26.28     (d) (g) Employees of a lessor may participate in lawful 
 26.29  gambling on the premises provided (1) if pull-tabs or tipboards 
 26.30  are sold, the organization voluntarily posts, or is required to 
 26.31  post, the major prizes as specified in section 349.172; and (2) 
 26.32  any employee of the lessor participating in lawful gambling is 
 26.33  not a gambling employee for the organization conducting lawful 
 26.34  gambling on the premises. 
 26.35     (e) (h) A gambling employee may purchase pull-tabs at the 
 26.36  site of the employee's place of employment provided: 
 27.1      (1) the organization voluntarily posts, or is required to 
 27.2   post, the major prizes for pull-tab or tipboard games as 
 27.3   specified in section 349.172; and 
 27.4      (2) the employee is not involved in the sale of pull-tabs 
 27.5   at that site. 
 27.6      (f) (i) At a leased site where an organization uses a 
 27.7   paddlewheel consisting of 30 numbers or less or a tipboard 
 27.8   consisting of 30 tickets or less, tickets may be sold throughout 
 27.9   the permitted premises, but winning tickets must be redeemed, 
 27.10  the paddlewheel must be located, and the tipboard seal must be 
 27.11  opened within the leased premises. 
 27.12     [EFFECTIVE DATE.] This section is effective May 31, 2003, 
 27.13  and applies to leases entered into or amended on and after that 
 27.14  date. 
 27.15     Sec. 37.  Minnesota Statutes 2002, section 349.19, is 
 27.16  amended by adding a subdivision to read: 
 27.17     Subd. 2b.  [LINKED BINGO PRIZE POOL ACCOUNT.] A licensed 
 27.18  organization participating in a linked bingo game must maintain 
 27.19  a separate account in a bank for the deposit of the 
 27.20  organization's portion of the linked bingo game prize pool.  The 
 27.21  name of the bank, the account number, and authorization for 
 27.22  electronic funds transfer must be provided by the organization 
 27.23  to the linked bingo game provider.  Deposits must be made into 
 27.24  the account by the organization as designated by the linked 
 27.25  bingo game provider.  Money in the account must be available to 
 27.26  the linked bingo game provider at all times by electronic funds 
 27.27  transfer, unless the linked bingo provider agrees to the 
 27.28  transfer of the funds by other means. 
 27.29     Sec. 38.  Minnesota Statutes 2002, section 349.19, 
 27.30  subdivision 3, is amended to read: 
 27.31     Subd. 3.  [EXPENDITURES.] (a) All expenditures of gross 
 27.32  profits from lawful gambling must be itemized as to payee, 
 27.33  purpose, amount, and date of payment, and must be in compliance 
 27.34  with section 349.154.  Authorization of the expenditures must be 
 27.35  recorded in the monthly meeting minutes of the licensed 
 27.36  organization.  Checks or authorizations for electronic fund 
 28.1   transfers for expenditures of gross profits must be signed by at 
 28.2   least two persons authorized by board rules to sign the checks.  
 28.3   Expenditures of gross profits from lawful gambling for local, 
 28.4   state, and federal taxes as identified in section 349.12, 
 28.5   subdivision 25, paragraph (a), clause (8), may be:  (1) 
 28.6   transferred electronically from the organization's gambling 
 28.7   account directly to bank accounts identified by local, state, or 
 28.8   federal agencies if the organization's gambling account monthly 
 28.9   bank statement specifically identifies the payee by name, the 
 28.10  amount transferred, the account number of the account into which 
 28.11  the funds were transferred, and the date of the transaction; or 
 28.12  (2) transferred electronically to and from the account of a 
 28.13  payroll processing firm that meets the criteria for such a firm 
 28.14  established under section 349.168, subdivision 6.  Expenditures 
 28.15  of gross profits from lawful gambling as identified in section 
 28.16  349.12, subdivision 3a, and as authorized by section 349.15, 
 28.17  subdivision 1, for utility payments for utilities, insurance, 
 28.18  and payroll processing charges may be transferred electronically 
 28.19  from the organization's gambling account directly to bank 
 28.20  accounts identified by the utility vendor if the organization's 
 28.21  gambling account monthly bank statement specifically identifies 
 28.22  the payee by name, the amount transferred, the account number of 
 28.23  the account into which the funds were transferred, and the date 
 28.24  of the transaction.  Electronic payments of local, state, and 
 28.25  federal taxes and utility, payroll processing, or insurance 
 28.26  payments are permitted only if they have been authorized by the 
 28.27  membership, the organization maintains supporting documentation, 
 28.28  and the expenditures can be verified. 
 28.29     (b) Expenditures authorized by the board according to 
 28.30  section 349.12, subdivision 25, paragraph (b), clause (3), must 
 28.31  be 51 percent completed within two years of the date of board 
 28.32  approval.  "Fifty-one percent completed" means that the work 
 28.33  completed must represent at least 51 percent of the value of the 
 28.34  project as documented by the contractor or vendor.  An 
 28.35  organization that fails to comply with this paragraph shall 
 28.36  reapply to the board for approval of the project. 
 29.1      Sec. 39.  Minnesota Statutes 2002, section 349.191, 
 29.2   subdivision 1, is amended to read: 
 29.3      Subdivision 1.  [CREDIT RESTRICTION.] A manufacturer may 
 29.4   not offer or extend to a distributor, a linked bingo game 
 29.5   provider may not offer or extend to an organization, and a 
 29.6   distributor may not offer or extend to an organization, credit 
 29.7   for a period of more than 30 days for the sale or lease of any 
 29.8   gambling equipment.  No right of action exists for the 
 29.9   collection of any claim based on credit prohibited by this 
 29.10  subdivision.  The 30-day period allowed by this subdivision 
 29.11  begins with the day immediately following the day of invoice and 
 29.12  includes all successive days, including Sundays and holidays, to 
 29.13  and including the 30th successive day. 
 29.14     Sec. 40.  Minnesota Statutes 2002, section 349.191, 
 29.15  subdivision 1a, is amended to read: 
 29.16     Subd. 1a.  [CREDIT AND SALES TO DELINQUENT ORGANIZATIONS.] 
 29.17  (a) If a distributor or linked bingo game provider does not 
 29.18  receive payment in full from an organization within 35 days of 
 29.19  the day immediately following the date of the invoice, the 
 29.20  distributor or linked bingo game provider must notify the board 
 29.21  in writing of the delinquency on the next business day. 
 29.22     (b) If a distributor or linked bingo game provider who has 
 29.23  notified the board under paragraph (a) has not received payment 
 29.24  in full from the organization within 60 days of the notification 
 29.25  under paragraph (a), the distributor or linked bingo game 
 29.26  provider must notify the board of the continuing delinquency. 
 29.27     (c) On receipt of a notice under paragraph (a), the board 
 29.28  shall order all distributors and linked bingo game providers 
 29.29  that until further notice from the board, they may sell gambling 
 29.30  equipment to the delinquent organizations only on a cash basis 
 29.31  with no credit extended.  On receipt of a notice under paragraph 
 29.32  (b), the board shall order all distributors and linked bingo 
 29.33  game providers not to sell any gambling equipment to the 
 29.34  delinquent organization. 
 29.35     (d) No distributor or linked bingo game provider may extend 
 29.36  credit or sell gambling equipment to an organization in 
 30.1   violation of an order under paragraph (c) until the board has 
 30.2   authorized such credit or sale. 
 30.3      Sec. 41.  Minnesota Statutes 2002, section 349.211, 
 30.4   subdivision 1, is amended to read: 
 30.5      Subdivision 1.  [BINGO.] Except as provided in 
 30.6   subdivision subdivisions 1a and 2, prizes for a single bingo 
 30.7   game may not exceed $200 except prizes for a cover-all game, 
 30.8   which may exceed $200 if the aggregate value of all cover-all 
 30.9   prizes in a bingo occasion does not exceed $1,000.  Total prizes 
 30.10  awarded at a bingo occasion may not exceed $2,500, unless a 
 30.11  cover-all game is played in which case the limit is $3,500.  A 
 30.12  prize may be determined based on the value of the bingo packet 
 30.13  sold to the player.  For purposes of this subdivision, a 
 30.14  cover-all game is one in which a player must cover all spaces 
 30.15  except a single free space to win. 
 30.16     Sec. 42.  Minnesota Statutes 2002, section 349.211, is 
 30.17  amended by adding a subdivision to read: 
 30.18     Subd. 1a.  [LINKED BINGO PRIZES.] Prizes for a linked bingo 
 30.19  game shall be limited as follows: 
 30.20     (1) no organization may contribute more than $300 per 
 30.21  occasion to a linked bingo game prize pool; and 
 30.22     (2) if an organization contributes to a linked bingo game 
 30.23  prize pool, the organization's aggregate value of cover-all 
 30.24  prizes available during the bingo occasion must be reduced by 
 30.25  the amount contributed to the linked bingo game prize pool. 
 30.26     Sec. 43.  Minnesota Statutes 2002, section 609.761, 
 30.27  subdivision 5, is amended to read: 
 30.28     Subd. 5.  [HIGH SCHOOL RAFFLES.] Sections 609.755 and 
 30.29  609.76 do not prohibit a raffle, as defined in section 349.12, 
 30.30  subdivision 33, conducted by a school district or a nonprofit 
 30.31  organization organized primarily to support programs of a school 
 30.32  district, if the following conditions are complied with: 
 30.33     (1) tickets for the raffle may only be sold and the drawing 
 30.34  conducted at a high school event sponsored by a school 
 30.35  district.  All tickets must be sold for the same price; 
 30.36     (2) tickets may only be sold to persons 18 years of age or 
 31.1   older attending the event; 
 31.2      (3) the drawing must be held during or immediately after 
 31.3   the conclusion of the event; and 
 31.4      (4) one-half of the gross receipts from the sale of tickets 
 31.5   must be awarded as prizes for the raffle, and the remaining 
 31.6   one-half may only be expended to defray the school district's 
 31.7   costs of sending event participants to high school activities 
 31.8   held at other locations; and 
 31.9      (5) if a school district's or nonprofit organization's 
 31.10  gross receipts from the conduct of raffles exceeds $12,000 in a 
 31.11  calendar year or $5,000 in a single raffle, the school district 
 31.12  or organization must report the following information to the 
 31.13  gambling control board annually:  the total amount of gross 
 31.14  receipts received, the total expenses for the raffles, the total 
 31.15  prizes awarded, and an accounting of the expenditures from the 
 31.16  gross receipts of the raffles.  
 31.17     Sec. 44.  [REPEALER.] 
 31.18     Minnesota Statutes 2002, section 349.168, subdivision 9, is 
 31.19  repealed.