Minnesota Legislature
HF 2207
as introduced - 92nd Legislature (2021 - 2022) Posted on 03/17/2022 05:20pm
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A bill for an act
relating to taxation; lawful gambling; modifying the combined net receipts tax;
modifying the calculation for the stadium reserve; amending Minnesota Statutes
2020, sections 297E.02, subdivision 6; 297E.021, subdivision 2; 349.15, subdivision
1; 349.151, subdivision 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2020, section 297E.02, subdivision 6, is amended to read:
Subd. 6.
Combined net receipts tax.
(a) In addition to the taxes imposed under
subdivision 1, a tax is imposed on the combined net receipts of the organization. As used
in this section, "combined net receipts" is the sum of the organization's gross receipts from
lawful gambling less gross receipts directly derived from the conduct of paper bingo, raffles,
and paddlewheels, as defined in section 297E.01, subdivision 8, and less the net prizes
actually paid, other than prizes actually paid for paper bingo, raffles, and paddlewheels, for
the fiscal year. The combined net receipts of an organization are subject to a tax computed
according to the following schedule:
| If the combined net receipts for the fiscal year are: |
The tax is: |
|||
| Not over $87,500 |
deleted text begin ninedeleted text end new text begin eightnew text end percent |
|||
| Over $87,500, but not over $122,500 |
deleted text begin $7,875deleted text end new text begin $7,000new text end plus deleted text begin 18deleted text end new text begin 16new text end percent of the amount over $87,500, but not over $122,500 |
|||
| Over $122,500, but not over $157,500 |
deleted text begin $14,175deleted text end new text begin $12,600new text end plus deleted text begin 27deleted text end new text begin 24new text end percent of the amount over $122,500, but not over $157,500 |
|||
| Over $157,500 |
deleted text begin $23,625deleted text end new text begin $21,000new text end plus deleted text begin 36deleted text end new text begin 32new text end percent of the amount over $157,500 |
(b) Gross receipts derived from sports-themed tipboards are exempt from taxation under
this section. For purposes of this paragraph, a sports-themed tipboard means a sports-themed
tipboard as defined in section 349.12, subdivision 34, under which the winning numbers
are determined by the numerical outcome of a professional sporting event.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for games reported as played after June
30, 2021.
new text end
Sec. 2.
Minnesota Statutes 2020, section 297E.021, subdivision 2, is amended to read:
Subd. 2.
Determination of revenue increase.
By March 15 of each fiscal year, the
commissioner of management and budget, in consultation with the commissioner, shall
determine the estimated increase in revenues received from taxes imposed under this chapter
over deleted text begin the estimated revenues under the February 2012 state budget forecast for that fiscal
year. For fiscal years after fiscal year 2015, the commissioner of management and budget
shall use the February 2012 state budget forecast for fiscal year 2015 as thedeleted text end new text begin anew text end baselinenew text begin of:
(1) $....... in fiscal year 2022; (2) $....... in fiscal year 2023; and (3) $....... in fiscal year 2024
and thereafternew text end . All calculations under this subdivision must be made net of estimated refunds
of the taxes required to be paid.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2020, section 349.15, subdivision 1, is amended to read:
Subdivision 1.
Expenditure restrictions, requirements, and civil penalties.
(a) Gross
profits from lawful gambling may be expended only for lawful purposes or allowable
expenses as authorized by the membership of the conducting organization at a monthly
meeting of the organization's membership.
(b) For each 12-month period beginning July 1, a licensed organization will be evaluated
by the board to determine a rating based on the percentage of annual lawful purpose
expenditures when compared to available gross profits for the same period. The rating will
be used to determine the organization's profitability percent and is not a rating of the
organization's lawful gambling operation. An organization will be evaluated according to
the following criteria:
(1) an organization that expends deleted text begin 50deleted text end new text begin 70new text end percent or more of gross profits on lawful purposes
will receive a five-star rating;
(2) an organization that expends deleted text begin 40deleted text end new text begin 55new text end percent or more but less than deleted text begin 50deleted text end new text begin 70new text end percent of
gross profits on lawful purposes will receive a four-star rating;
(3) an organization that expends deleted text begin 30deleted text end new text begin 40new text end percent or more but less than deleted text begin 40deleted text end new text begin 55new text end percent of
gross profits on lawful purposes will receive a three-star rating;
(4) an organization that expends deleted text begin 20deleted text end new text begin 25new text end percent or more but less than deleted text begin 30deleted text end new text begin 40new text end percent of
gross profits on lawful purposes will receive a two-star rating; and
(5) an organization that expends less than deleted text begin 20deleted text end new text begin 25new text end percent of gross profits on lawful
purposes will receive a one-star rating.
(c) An organization that fails to expend a minimum of deleted text begin 30deleted text end new text begin 40new text end percent annually of gross
profits on lawful purposes, or deleted text begin 20deleted text end new text begin 25new text end percent annually for organizations that conduct lawful
gambling in a location where the primary business is bingo, is automatically on probation
effective July 1 for a period of one year. The organization must increase its rating to the
required minimum or be subject to sanctions by the board. If an organization fails to meet
the minimum after a one-year probation, the board may suspend the organization's license
or impose a civil penalty as follows:
(1) in determining any suspension or penalty for a violation of this paragraph, the board
must consider any unique factors or extraordinary circumstances that caused the organization
to not meet the minimum rate of profitability. Unique factors or extraordinary circumstances
include, but are not limited to, the purchase of capital assets necessary to conduct lawful
gambling; road or other construction causing impaired access to the lawful gambling
premises; and flood, tornado, or other catastrophe that had a direct impact on the continuing
lawful gambling operation; and
(2) notwithstanding section 349.151, subdivision 4, paragraph (a), clause (10), the board
may impose a civil penalty under this subdivision up to $10,000.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2021.
new text end
Sec. 4.
Minnesota Statutes 2020, section 349.151, subdivision 4, is amended to read:
Subd. 4.
Powers and duties.
(a) The board has the following powers and duties:
(1) to regulate lawful gambling to ensure it is conducted in the public interest;
(2) to issue licenses to organizations and gambling managers, and to issue licenses and
renewals to distributors, distributor salespersons, manufacturers, and linked bingo game
providers;
(3) to collect and deposit fees due under this chapter;
(4) to receive reports required by this chapter and inspect all premises, records, books,
and other documents of organizations, distributors, manufacturers, and linked bingo game
providers to insure compliance with all applicable laws and rules;
(5) to make rules authorized by this chapter;
(6) to register gambling equipment and issue registration stamps;
(7) to provide by rule for the mandatory posting by organizations conducting lawful
gambling of rules of play and the odds and/or house percentage on each form of lawful
gambling;
(8) to report annually to the governor and legislature on its activities and on recommended
changes in the laws governing gamblingnew text begin , including an annual report that provides: a tabulation
of the number of compliance reviews completed; the percentage of organizations reviewed;
an average of the number of months between reviews; the number, location, and organization
of site inspections; and the number of allegations awaiting investigation by the boardnew text end ;
(9) to report annually to the governor and legislature a financial summary for each
licensed organization identifying the gross receipts, prizes paid, allowable expenses, lawful
purpose expenditures including charitable contributions and all taxes and fees as per section
349.12, subdivision 25, paragraph (a), clauses (8) and (18), and the percentage of annual
gross profit used for lawful purposes;
(10) to impose civil penalties of not more than $1,000 per violation on organizations,
distributors, distributor salespersons, manufacturers, linked bingo game providers, and
gambling managers for violating or failing to comply with any provision of this chapter,
chapter 297E, or any rule or order of the board;
(11) to issue premises permits to organizations licensed to conduct lawful gambling;
(12) to delegate to the director the authority to issue or deny license and premises permit
applications and renewals under criteria established by the board;
(13) to delegate to the director the authority to approve or deny fund loss requests,
contribution of gambling funds to another licensed organization, and property expenditure
requests under criteria established by the board;
(14) to suspend or revoke licenses and premises permits of organizations, distributors,
distributor salespersons, manufacturers, linked bingo game providers, or gambling managers
as provided in this chapter;
(15) to approve or deny requests from licensees for:
(i) waivers from fee requirements as provided in section 349.16, subdivision 6; and
(ii) variances from Gambling Control Board rules under section 14.055; and
(16) to register employees of organizations licensed to conduct lawful gambling;
(17) to require fingerprints from persons determined by board rule to be subject to
fingerprinting;
(18) to delegate to a compliance review group of the board the authority to investigate
alleged violations, issue consent orders, and initiate contested cases on behalf of the board;
(19) to order organizations, distributors, distributor salespersons, manufacturers, linked
bingo game providers, and gambling managers to take corrective actions; and
(20) to take all necessary steps to ensure the integrity of and public confidence in lawful
gambling.
(b) The board, or director if authorized to act on behalf of the board, may by citation
assess any organization, distributor, distributor salesperson, manufacturer, linked bingo
game provider, or gambling manager a civil penalty of not more than $1,000 per violation
for a failure to comply with any provision of this chapter, chapter 297E, or any rule adopted
or order issued by the board. Any organization, distributor, distributor salesperson, gambling
manager, linked bingo game provider, or manufacturer assessed a civil penalty under this
paragraph may request a hearing before the board. Appeals of citations imposing a civil
penalty are not subject to the provisions of the Administrative Procedure Act.
(c) All penalties received by the board must be deposited in the general fund.
(d) All fees imposed by the board under sections 349.16 to 349.167 must be deposited
in the state treasury and credited to a lawful gambling regulation account in the special
revenue fund. Receipts in this account are available for the operations of the board up to
the amount authorized in biennial appropriations from the legislature.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2021.
new text end