SF 1104

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to lawful gambling; modifying definition of
lawful purpose; amending Minnesota Statutes 2004,
section 349.12, subdivision 25.

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

Section 1.

Minnesota Statutes 2004, section 349.12,
subdivision 25, is amended to read:

Subd. 25.

Lawful purpose.

(a) "Lawful purpose" means one
or more of the following:

(1) any expenditure by or contribution to a 501(c)(3) or
festival organization, as defined in subdivision 15a, provided
that the organization and expenditure or contribution are in
conformity with standards prescribed by the board under section
349.154, which standards must apply to both types of
organizations in the same manner and to the same extent;

(2) a contribution to an individual or family suffering
from poverty, homelessness, or physical or mental disability,
which is used to relieve the effects of that poverty,
homelessness, or disability;

(3) a contribution to an individual for treatment for
delayed posttraumatic stress syndrome or a contribution to a
program recognized by the Minnesota Department of Human Services
for the education, prevention, or treatment of compulsive
gambling;

(4) a contribution to or expenditure on a public or private
nonprofit educational institution registered with or accredited
by this state or any other state;

(5) a contribution to a scholarship fund for defraying the
cost of education to individuals where the funds are awarded
through an open and fair selection process;

(6) activities by an organization or a government entity
which recognize humanitarian or military service to the United
States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage
reimbursements in the computation of the per diem reimbursement
limit and must impose no aggregate annual limit on the amount of
reasonable and necessary expenditures made to support:

(i) members of a military marching or color guard unit for
activities conducted within the state;

(ii) members of an organization solely for services
performed by the members at funeral services; or

(iii) members of military marching, color guard, or honor
guard units may be reimbursed for participating in color guard,
honor guard, or marching unit events within the state or states
contiguous to Minnesota at a per participant rate of up to $35
per diem;

(7) recreational, community, and athletic facilities and
activities intended primarily for persons under age 21, provided
that such facilities and activities do not discriminate on the
basis of gender and the organization complies with section
349.154;

(8) payment of local taxes authorized under this chapter,
taxes imposed by the United States on receipts from lawful
gambling, the taxes imposed by section 297E.02, subdivisions 1,
4, 5, and 6, and the tax imposed on unrelated business income by
section 290.05, subdivision 3;

(9) payment of real estate taxes and assessments on
permitted gambling premises deleted text begin wholly deleted text end owned by the licensed
organization paying the taxes, or wholly leased by a licensed
veterans organization under a national charter recognized under
section 501(c)(19) of the Internal Revenue Code, not to exceed:

(i) for premises used for bingo, the amount that an
organization may expend under board rules on rent for bingo; and

(ii) $35,000 per year for premises used for other forms of
lawful gambling;

(10) a contribution to the United States, this state or any
of its political subdivisions, or any agency or instrumentality
thereof other than a direct contribution to a law enforcement or
prosecutorial agency;

(11) a contribution to or expenditure by a nonprofit
organization which is a church or body of communicants gathered
in common membership for mutual support and edification in
piety, worship, or religious observances;

(12) payment of the reasonable costs of an audit required
in section 297E.06, subdivision 4, provided the annual audit is
filed in a timely manner with the Department of Revenue;

(13) a contribution to or expenditure on a wildlife
management project that benefits the public at-large, provided
that the state agency with authority over that wildlife
management project approves the project before the contribution
or expenditure is made;

(14) expenditures, approved by the commissioner of natural
resources, by an organization for grooming and maintaining
snowmobile trails and all-terrain vehicle trails that are (1)
grant-in-aid trails established under section 85.019, or (2)
other trails open to public use, including purchase or lease of
equipment for this purpose;

(15) conducting nutritional programs, food shelves, and
congregate dining programs primarily for persons who are age 62
or older or disabled;

(16) a contribution to a community arts organization, or an
expenditure to sponsor arts programs in the community, including
but not limited to visual, literary, performing, or musical
arts;

(17) an expenditure by a licensed veterans organization for
payment of water, fuel for heating, electricity, and sewer costs
for a building wholly owned or wholly leased by and used as the
primary headquarters of the licensed veterans organization;

(18) expenditure by a licensed veterans organization of up
to $5,000 in a calendar year in net costs to the organization
for meals and other membership events, limited to members and
spouses, held in recognition of military service. No more than
$5,000 can be expended in total per calendar year under this
clause by all licensed veterans organizations sharing the same
veterans post home; or

(19) payment of fees authorized under this chapter imposed
by the state of Minnesota to conduct lawful gambling in
Minnesota.

(b) Notwithstanding paragraph (a), "lawful purpose" does
not include:

(1) any expenditure made or incurred for the purpose of
influencing the nomination or election of a candidate for public
office or for the purpose of promoting or defeating a ballot
question;

(2) any activity intended to influence an election or a
governmental decision-making process;

(3) the erection, acquisition, improvement, expansion,
repair, or maintenance of real property or capital assets owned
or leased by an organization, unless the board has first
specifically authorized the expenditures after finding that (i)
the real property or capital assets will be used exclusively for
one or more of the purposes in paragraph (a); (ii) with respect
to expenditures for repair or maintenance only, that the
property is or will be used extensively as a meeting place or
event location by other nonprofit organizations or community or
service groups and that no rental fee is charged for the use;
(iii) with respect to expenditures, including a mortgage payment
or other debt service payment, for erection or acquisition only,
that the erection or acquisition is necessary to replace with a
comparable building, a building owned by the organization and
destroyed or made uninhabitable by fire or natural disaster,
provided that the expenditure may be only for that part of the
replacement cost not reimbursed by insurance; (iv) with respect
to expenditures, including a mortgage payment or other debt
service payment, for erection or acquisition only, that the
erection or acquisition is necessary to replace with a
comparable building a building owned by the organization that
was acquired from the organization by eminent domain or sold by
the organization to a purchaser that the organization reasonably
believed would otherwise have acquired the building by eminent
domain, provided that the expenditure may be only for that part
of the replacement cost that exceeds the compensation received
by the organization for the building being replaced; or (v) with
respect to an expenditure to bring an existing building into
compliance with the Americans with Disabilities Act under item
(ii), an organization has the option to apply the amount of the
board-approved expenditure to the erection or acquisition of a
replacement building that is in compliance with the Americans
with Disabilities Act;

(4) an expenditure by an organization which is a
contribution to a parent organization, foundation, or affiliate
of the contributing organization, if the parent organization,
foundation, or affiliate has provided to the contributing
organization within one year of the contribution any money,
grants, property, or other thing of value;

(5) a contribution by a licensed organization to another
licensed organization unless the board has specifically
authorized the contribution. The board must authorize such a
contribution when requested to do so by the contributing
organization unless it makes an affirmative finding that the
contribution will not be used by the recipient organization for
one or more of the purposes in paragraph (a); or

(6) a contribution to a statutory or home rule charter
city, county, or town by a licensed organization with the
knowledge that the governmental unit intends to use the
contribution for a pension or retirement fund.