Minnesota Session Laws - 1996, Regular Session

  
    
KEY: stricken = old language to be removed
     underscored = new language to be added
    
                            CHAPTER 467-H.F.No. 2318 
                  An act relating to gambling; regulating the imposition 
                  of certain taxes on pari-mutuel racing; providing for 
                  the handling of claims on unredeemed tickets; 
                  regulating expenditures from lawful gambling; 
                  providing enforcement powers; removing the restriction 
                  on compensation to persons who participate in the 
                  conduct of lawful gambling; regulating leased 
                  premises; requiring a report; amending Minnesota 
                  Statutes 1994, sections 240.15, subdivisions 1 and 5; 
                  349.151, subdivision 4; 349.166, subdivisions 2 and 3; 
                  349.18, subdivision 1; and 349.19, subdivision 3; 
                  repealing Minnesota Statutes 1994, section 349.168, 
                  subdivision 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 240.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TAXES IMPOSED.] (a) From July 1, 1996, 
        until July 1, 1999, there is imposed a tax at the rate of six 
        percent of the total amount in excess of $12,000,000 annually 
        withheld from all pari-mutuel pools by the licensee, including 
        breakage and amounts withheld under section 240.13, subdivision 
        4.  After June 30, 1999, the tax is imposed on the total amount 
        withheld from all pari-mutuel pools.  For the purpose of this 
        subdivision, "annually" is the period from July 1 to June 30 of 
        the next year. 
           In addition to the above tax, the licensee must designate 
        and pay to the commission a tax of one percent of the total 
        amount bet on each racing day, for deposit in the Minnesota 
        breeders fund.  
           The taxes imposed by this clause must be paid from the 
        amounts permitted to be withheld by a licensee under section 
        240.13, subdivision 4.  
           (b) The commission may impose an admissions tax of not more 
        than ten cents on each paid admission at a licensed racetrack on 
        a racing day if:  
           (1) the tax is requested by a local unit of government 
        within whose borders the track is located; 
           (2) a public hearing is held on the request; and 
           (3) the commission finds that the local unit of government 
        requesting the tax is in need of its revenue to meet 
        extraordinary expenses caused by the racetrack. 
           Sec. 2.  Minnesota Statutes 1994, section 240.15, 
        subdivision 5, is amended to read: 
           Subd. 5.  [UNREDEEMED TICKETS.] Not later than 100 days 
        after the end of a racing meeting a licensee who sells 
        pari-mutuel tickets must remit to the commission or its 
        representative an amount equal to the total value of unredeemed 
        tickets from the racing meeting.  The remittance must be 
        accompanied by a detailed statement of the money on a form the 
        commission prescribes.  
           (a) Notwithstanding any provision to the contrary in 
        chapter 345, unredeemed pari-mutuel tickets shall not be 
        considered unclaimed funds and shall be handled in accordance 
        with the provisions of this subdivision.  
           (b) Until the end of calendar year 1999, any person 
        claiming to be entitled to the proceeds of any unredeemed ticket 
        who fails to claim said proceeds prior to their being remitted 
        to the commission, may within one year after the date of 
        remittance to the commission conclusion of each race meet file 
        with the commission licensee a verified claim for such proceeds 
        on such form as the commission licensee prescribes along with 
        the pari-mutuel ticket.  Unless the claimant satisfactorily 
        establishes the right to the proceeds, the claim shall be 
        rejected.  If the claim is allowed, the commission licensee 
        shall pay the proceeds without interest to the claimant.  There 
        is hereby appropriated from the general fund to the commission 
        an amount sufficient to make payment to persons entitled to such 
        proceeds. 
           (c) Beginning January 1, 2000, not later than 100 days 
        after the end of a race meet a licensee who sells pari-mutuel 
        tickets must remit to the commission or its representative an 
        amount equal to the total value of unredeemed tickets from the 
        race meet.  The remittance must be accompanied by a detailed 
        statement of the money on a form the commission prescribes.  Any 
        person claiming to be entitled to the proceeds of any unredeemed 
        ticket who fails to claim said proceeds prior to their being 
        remitted to the commission, may within one year after the date 
        of remittance to the commission file with the commission a 
        verified claim for such proceeds on such form as the commission 
        prescribes along with the pari-mutuel ticket.  Unless the 
        claimant satisfactorily establishes the right to the proceeds, 
        the claim shall be rejected.  If the claim is allowed, the 
        commission shall pay the proceeds without interest to the 
        claimant.  There is hereby appropriated from the general fund to 
        the commission an amount sufficient to make payment to persons 
        entitled to such proceeds. 
           Sec. 3.  Minnesota Statutes 1994, 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, distributors, bingo 
        halls, manufacturers, and gambling managers; 
           (3) to collect and deposit license, permit, and 
        registration 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 bingo halls 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 
        gambling; 
           (9) to impose civil penalties of not more than $500 per 
        violation on organizations, distributors, employees eligible to 
        make sales on behalf of a distributor, manufacturers, bingo 
        halls, and gambling managers for failure to comply with any 
        provision of this chapter or any rule or order of the board; 
           (10) to issue premises permits to organizations licensed to 
        conduct lawful gambling; 
           (11) to delegate to the director the authority to issue or 
        deny license and premises permit applications and renewals under 
        criteria established by the board; 
           (12) to suspend or revoke licenses and premises permits of 
        organizations, distributors, manufacturers, bingo halls, or 
        gambling managers as provided in this chapter; 
           (13) to register employees of organizations licensed to 
        conduct lawful gambling; 
           (14) to require fingerprints from persons determined by 
        board rule to be subject to fingerprinting; 
           (15) 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; 
           (16) to order organizations, distributors, manufacturers, 
        bingo halls, and gambling managers to take corrective actions; 
        and 
           (17) 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, employee eligible to make sales on behalf of a 
        distributor, manufacturer, bingo hall licensee, or gambling 
        manager a civil penalty of not more than $500 per violation for 
        a failure to comply with any provision of this chapter or any 
        rule adopted or order issued by the board.  Any organization, 
        distributor, bingo hall licensee, gambling manager, 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 fees and penalties received by the board must be 
        deposited in the general fund. 
           Sec. 4.  Minnesota Statutes 1994, section 349.166, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXEMPTIONS.] (a) Lawful gambling may be 
        conducted by an organization without a license and without 
        complying with sections 349.168, subdivisions 1 and 2; 349.17, 
        subdivisions 4 and 5; 349.18, subdivision 1; and 349.19 if: 
           (1) the organization conducts lawful gambling on five or 
        fewer days in a calendar year; 
           (2) the organization does not award more than $50,000 in 
        prizes for lawful gambling in a calendar year; 
           (3) the organization pays a fee of $25 to the board, 
        notifies the board in writing not less than 30 days before each 
        lawful gambling occasion of the date and location of the 
        occasion, or 60 days for an occasion held in the case of a city 
        of the first class, the types of lawful gambling to be 
        conducted, the prizes to be awarded, and receives an exemption 
        identification number; 
           (4) the organization notifies the local government unit 30 
        days before the lawful gambling occasion, or 60 days for an 
        occasion held in a city of the first class; 
           (5) the organization purchases all gambling equipment and 
        supplies from a licensed distributor; and 
           (6) the organization reports to the board, on a single-page 
        form prescribed by the board, within 30 days of each gambling 
        occasion, the gross receipts, prizes, expenses, expenditures of 
        net profits from the occasion, and the identification of the 
        licensed distributor from whom all gambling equipment was 
        purchased.  
           (b) If the organization fails to file a timely report as 
        required by paragraph (a), clause (3) or (6), a $250 penalty is 
        imposed on the organization.  Failure to file a timely report 
        does not disqualify the organization as exempt under this 
        subdivision if a report is later filed and the penalty paid. the 
        board shall not issue any authorization, license, or permit to 
        the organization to conduct lawful gambling on an exempt, 
        excluded, or licensed basis until the report has been filed. 
           (c) Merchandise prizes must be valued at their fair market 
        value. 
           (d) Unused pull-tab and tipboard deals must be returned to 
        the distributor within seven working days after the end of the 
        lawful gambling occasion.  The distributor must accept and pay a 
        refund for all returns of unopened and undamaged deals returned 
        under this paragraph. 
           (e) An organization that is exempt from taxation on 
        purchases of pull-tabs and tipboards under section 297E.02, 
        subdivision 4, paragraph (b), clause (4), must return to the 
        distributor any tipboard or pull-tab deal no part of which is 
        used at the lawful gambling occasion for which it was purchased 
        by the organization. 
           (f) The organization must maintain all required records of 
        exempt gambling activity for 3-1/2 years. 
           Sec. 5.  Minnesota Statutes 1994, section 349.166, 
        subdivision 3, is amended to read: 
           Subd. 3.  [RAFFLES; CERTAIN ORGANIZATIONS.] Sections 
        349.168, subdivisions 3 and subdivision 4; and 349.211, 
        subdivision 3, and the membership requirements of section 
        349.16, subdivision 2, paragraph (c), do not apply to raffles 
        conducted by an organization that directly or under contract to 
        the state or a political subdivision delivers health or social 
        services and that is a 501(c)(3) organization if the prizes 
        awarded in the raffles are real or personal property donated by 
        an individual, firm, or other organization.  The person who 
        accounts for the gross receipts, expenses, and profits of the 
        raffles may be the same person who accounts for other funds of 
        the organization.  
           Sec. 6.  Minnesota Statutes 1994, section 349.18, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED.] (a) An 
        organization may conduct lawful gambling only on premises it 
        owns or leases.  Leases must be on a form prescribed by the 
        board.  Except for leases entered into before the effective date 
        of this section, the term of the lease may not begin before the 
        effective date of the premises permit and must expire on the 
        same day that the premises permit expires.  Copies of all leases 
        must be made available to employees of the board and the 
        division of gambling enforcement on request.  A lease may not 
        provide for payments determined directly or indirectly by the 
        receipts or profits from lawful gambling.  The board may 
        prescribe by rule limits on the amount of rent which an 
        organization may pay to a lessor for premises leased for lawful 
        gambling provided that no rule of the board may prescribe a 
        limit of less than $1,000 per month on rent paid for premises 
        used for lawful gambling other than bingo.  Any rule adopted by 
        the board limiting the amount of rent to be paid may only be 
        effective for leases entered into, or renewed, after the 
        effective date of the rule. 
           (b) No person, distributor, manufacturer, lessor, or 
        organization other than the licensed organization leasing the 
        space may conduct any activity other than the sale or serving of 
        food and beverages on the leased premises during times when 
        lawful gambling is being conducted on the premises. 
           (c) At a site where the leased premises consists of an area 
        on or behind a bar at which alcoholic beverages are sold and 
        employees of the lessor are employed by the organization as 
        pull-tab sellers at the site, pull-tabs and tipboard tickets may 
        be sold and redeemed by those employees at any place on or 
        behind the bar, but the tipboards and receptacles for pull-tabs 
        and cash drawers for lawful gambling receipts must be maintained 
        only within the leased premises. 
           (d)  Employees of a lessor may participate in lawful 
        gambling on the premises provided (1) if pull-tabs or tipboards 
        are sold, the organization voluntarily posts, or is required to 
        post, the major prizes as specified in section 349.172; and (2) 
        any employee of the lessor participating in lawful gambling is 
        not a gambling employee for the organization conducting lawful 
        gambling on the premises. 
           Sec. 7.  Minnesota Statutes 1994, section 349.19, 
        subdivision 3, is amended to read: 
           Subd. 3.  [EXPENDITURES.] (a) All expenditures of gross 
        profits from lawful gambling must be itemized as to payee, 
        purpose, amount, and date of payment, and must be in compliance 
        with section 349.154.  Authorization of the expenditures must be 
        recorded in the monthly meeting minutes of the licensed 
        organization.  Checks for expenditures of gross profits must be 
        signed by at least two persons authorized by board rules to sign 
        the checks. 
           (b) Expenditures authorized by the board according to 
        section 349.12, subdivision 25, paragraph (b), clause (3), must 
        be 51 percent completed within two years of the date of board 
        approval.  "Fifty-one percent completed" means that the work 
        completed must represent at least 51 percent of the value of the 
        project as documented by the contractor or vendor.  An 
        organization that fails to comply with this paragraph shall 
        reapply to the board for approval of the project. 
           Sec. 8.  [REPORT.] 
           The commissioner of human services must report to the 
        senate committee on gaming regulation, the house of 
        representatives committee on governmental operations and 
        gambling, and the governor by June 1, 1996, on the results of 
        its negotiations of the agreement provided for in Minnesota 
        Statutes, section 245.98, subdivision 4.  The commissioner must 
        also issue a follow-up report on January 15, 1997. 
           Sec. 9.  [REPEALER.] 
           Minnesota Statutes 1994, section 349.168, subdivision 3, is 
        repealed. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Section 1 is effective July 1, 1996. 
           Section 2 is effective the day after final enactment and 
        applies to unredeemed tickets whenever sold.  Sections 3, 4, 5, 
        6, 7, 8, and 9 are effective the day following final enactment. 
           Presented to the governor April 4, 1996 
           Signed by the governor April 11, 1996, 11:45 a.m.