SF 994

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 03/06/2012 02:44pm

A bill for an act
relating to lawful gambling; decreasing certain minimum lawful purpose
expenditure requirements; amending Minnesota Statutes 2010, section 349.15,
subdivision 1.

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

Section 1.

Minnesota Statutes 2010, 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) Provided that no more than 70 percent of the gross profit from bingo, and no
more than 60 percent of the gross profit from other forms of lawful gambling, may be
expended biennially during the term of the license for allowable expenses related to lawful
gambling, except that for the period of July 1, 2008, to June 30, 2009, no more than 75
percent of the gross profit from bingo, and no more than 65 percent of the gross profit
from other forms of lawful gambling, may be expended for allowable expenses related to
lawful gambling. This provision expires June 30, 2009.

(c) For each 12-month period beginning July 1, 2009, 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.

(d) An organization that fails to expend a minimum of 30 percent annually of gross
profits on lawful purposes new text begin , or 20 percent annually for organizations that conduct lawful
gambling in a location where the primary business is bingo, new text end is automatically on probation
effective July 1 for a period of one year. The organization must increase its rating to
deleted text begin a deleted text end new text begin the required new text end minimum deleted text begin of 30 percent deleted text end 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 the day following final enactment.
new text end