HF 4246

as introduced - 90th Legislature (2017 - 2018) Posted on 03/26/2018 02:43pm

A bill for an act
relating to state government; lowering the percentage of gross profits that an
organization licensed to conduct lawful gambling must expend on lawful purposes;
amending Minnesota Statutes 2016, section 349.15, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, 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 50 percent or more of gross profits on lawful purposes
will receive a five-star rating;

(2) an organization that expends 40 percent or more but less than 50 percent of gross
profits on lawful purposes will receive a four-star rating;

(3) an organization that expends 30 percent or more but less than 40 percent of gross
profits on lawful purposes will receive a three-star rating;

(4) an organization that expends 20 percent or more but less than 30 percent of gross
profits on lawful purposes will receive a two-star rating; and

(5) an organization that expends less than 20 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 30 deleted text end new text begin 20 new text end percent annually of gross
profits on lawful purposes deleted text begin , or 20 percent annually for organizations that conduct lawful
gambling in a location where the primary business is bingo, deleted text end 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.