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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 155-S.F.No. 566 
                  An act relating to lawful gambling; authorizing 
                  certain groupings of paddleticket cards; authorizing 
                  certain lawful purpose expenditures; increasing 
                  percentage of lawful gambling gross profits that may 
                  be spent for expenses; restricting authority of 
                  gambling control board to impose sanctions against 
                  lawful gambling premises permits for illegal gambling; 
                  increasing maximum bingo prices; authorizing certain 
                  social skill games; amending Minnesota Statutes 1996, 
                  sections 297E.04, subdivision 3; 349.12, subdivisions 
                  25 and 26a; 349.15, subdivision 1; 349.155, by adding 
                  a subdivision; 349.16, by adding a subdivision; 
                  349.163, subdivision 8; 349.211, subdivisions 1 and 2; 
                  and 609.761, by adding a subdivision. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1996, section 297E.04, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
        grouping of 100 or fewer paddleticket cards must have its own 
        individual master flare.  The manufacturer of the paddleticket 
        cards must affix to or imprint at the bottom of each master 
        flare a bar code that provides: 
           (1) the name of the manufacturer; 
           (2) the first paddleticket card number in the group; 
           (3) the number of paddletickets attached to each 
        paddleticket card in the group; and 
           (4) all other information required by the commissioner.  
        This subdivision applies to paddleticket cards (i) sold by a 
        manufacturer after June 30, 1995, for use or resale in Minnesota 
        or (ii) shipped into or caused to be shipped into Minnesota by a 
        manufacturer after June 30, 1995.  Paddleticket cards that are 
        subject to this subdivision may not have a registration stamp 
        affixed to the master flare. 
           Sec. 2.  Minnesota Statutes 1996, 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 occasion 
        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 colorguard unit for 
        activities conducted within the state; or 
           (ii) members of an organization solely for services 
        performed by the members at funeral services; 
           (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 wholly owned by the licensed 
        organization paying the taxes, 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 one-half of the reasonable costs of an 
        audit required in section 297E.06, subdivision 4; 
           (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; or 
           (14) expenditures, approved by the commissioner of natural 
        resources, by an organization for grooming and maintaining 
        snowmobile 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; or 
           (15) conducting nutritional programs, food shelves, and 
        congregate dining programs primarily for persons who are age 62 
        or older or disabled. 
           (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; or (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; 
           (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. 
           Sec. 3.  Minnesota Statutes 1996, section 349.12, 
        subdivision 26a, is amended to read: 
           Subd. 26a.  [MASTER FLARE.] "Master flare" is the posted 
        display, with registration stamp affixed or bar code imprinted 
        or affixed, that is used in conjunction with sealed groupings of 
        100 or fewer sequentially numbered paddleticket cards. 
           Sec. 4.  Minnesota Statutes 1996, section 349.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXPENDITURE RESTRICTIONS.] 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.  Provided that no more than 60 65 
        percent of the gross profit less the tax imposed under section 
        297E.02, subdivision 1, from bingo, and no more than 50 55 
        percent of the gross profit from other forms of lawful gambling, 
        may be expended for allowable expenses related to lawful 
        gambling.  
           Sec. 5.  Minnesota Statutes 1996, section 349.155, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [ILLEGAL GAMBLING.] The board may not deny, 
        suspend, revoke, or refuse to renew an organization's premises 
        permit because illegal gambling occurred at the site for which 
        the premises permit was issued, unless the board determines that:
        (1) the organization knowingly participated in the illegal 
        gambling; or (2) the organization or any of its agents knew or 
        reasonably should have known of the illegal gambling and the 
        organization did not notify the lessor of the premises, in 
        writing and with specificity, that illegal gambling was being 
        conducted on the premises and requesting that the lessor take 
        appropriate action. 
           Sec. 6.  Minnesota Statutes 1996, section 349.16, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [LICENSE RENEWAL TO MERGED FIRE RELIEF 
        ASSOCIATIONS.] A new relief association formed from the merger 
        of the relief associations of two separate city fire 
        departments, mandated under Laws 1995, chapter 262, article 11, 
        may apply for a license renewal under this section.  The board 
        shall consider the application as a license renewal of one of 
        the relief associations that is a licensed organization and was 
        merged to form the new relief association. 
           Sec. 7.  Minnesota Statutes 1996, section 349.163, 
        subdivision 8, is amended to read: 
           Subd. 8.  [PADDLETICKET CARD MASTER FLARES.] Each sealed 
        grouping of 100 or fewer paddleticket cards must have its own 
        individual master flare.  The manufacturer must affix to or 
        imprint at the bottom of the master flare a bar code that 
        provides all information required by the commissioner of revenue 
        under section 297E.04, subdivision 3. 
           This subdivision applies to paddleticket cards sold by a 
        manufacturer after June 30, 1995, for use or resale in Minnesota 
        or shipped into or caused to be shipped into Minnesota by a 
        manufacturer after June 30, 1995.  Paddleticket cards which are 
        subject to this subdivision shall not have a registration stamp 
        affixed to the master flare. 
           Sec. 8.  Minnesota Statutes 1996, section 349.211, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BINGO.] Except as provided in subdivision 
        2, prizes for a single bingo game may not exceed $100 $200 
        except prizes for a cover-all game, which may exceed $100 $200 
        if the aggregate value of all cover-all prizes in a bingo 
        occasion does not exceed $1,000.  Total prizes awarded at a 
        bingo occasion may not exceed $2,500, unless a cover-all game is 
        played in which case the limit is $3,500.  A prize may be 
        determined based on the value of the bingo packet sold to the 
        player.  For purposes of this subdivision, a cover-all game is 
        one in which a player must cover all spaces except a single free 
        space to win. 
           Sec. 9.  Minnesota Statutes 1996, section 349.211, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROGRESSIVE BINGO GAMES.] A prize of up to 
        $1,000 $2,000 may be awarded for a progressive bingo game, 
        including a cover-all game.  The prize for a progressive bingo 
        game may start at $300 and be increased by up to $100 for each 
        occasion during which the progressive bingo game is played.  A 
        consolation prize of up to $100 for a progressive bingo game may 
        be awarded in each occasion during which the progressive bingo 
        game is played and the accumulated prize is not won.  The total 
        amount awarded in progressive bingo game prizes in any calendar 
        year may not exceed $36,000. 
           Sec. 10.  Minnesota Statutes 1996, section 609.761, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [SOCIAL SKILL GAME.] Sections 609.755 and 609.76 
        do not prohibit tournaments or contests that satisfy all of the 
        following requirements: 
           (1) the tournament or contest consists of the card games of 
        chance commonly known as cribbage, skat, sheephead, bridge, 
        euchre, pinochle, gin, 500, smear, or whist; 
           (2) the tournament or contest does not provide any direct 
        financial benefit to the promoter or organizer; and 
           (3) the sum of all prizes awarded for each tournament or 
        contest does not exceed $200. 
           Sec. 11.  [EFFECTIVE DATE.] 
           Sections 1 to 10 are effective the day following final 
        enactment. 
           Presented to the governor May 14, 1997 
           Signed by the governor May 15, 1997, 3:35 p.m.