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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 386-H.F.No. 3073 
                  An act relating to gambling; making technical, 
                  clarifying, and conforming changes; deleting obsolete 
                  language; providing and modifying certain definitions 
                  and prize amounts relating to lawful gambling; 
                  modifying procedures for pull-tab dispensing devices; 
                  regulating sales of certain gambling equipment; 
                  providing for the drafting of model rules and a report 
                  to the legislature; amending Minnesota Statutes 2000, 
                  sections 299L.07, subdivision 2; 349.151, subdivision 
                  4b; 349.161, subdivision 4; 349.162, subdivision 2; 
                  349.163, subdivisions 1, 2, 3, 5; 349.164, subdivision 
                  4; 349.165, subdivision 2; 349.167, subdivision 7; 
                  349.168, subdivision 5; 349.19, subdivision 5; 
                  349.191, subdivisions 1a, 1b; 349.211, subdivisions 2, 
                  2a; Minnesota Statutes 2001 Supplement, sections 
                  349.12, subdivision 25; 349.15, subdivision 1a; 
                  349.168, subdivision 1; repealing Minnesota Statutes 
                  2000, sections 349.12, subdivision 14; 349.163, 
                  subdivision 6a; 349.17, subdivision 2a; 349.174. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                              TECHNICAL AMENDMENTS 
           Section 1.  Minnesota Statutes 2000, section 349.162, 
        subdivision 2, is amended to read: 
           Subd. 2.  [RECORDS REQUIRED.] A distributor must maintain a 
        record of all gambling equipment which it sells to organizations 
        as required by section 297E.05, subdivision 2, and provide 
        copies of the record to the board upon demand.  The record must 
        include:  
           (1) the identity of the person from whom the distributor 
        purchased the equipment; 
           (2) the registration number of the equipment; 
           (3) the name, address, and license or exempt permit number 
        of the organization to which the sale was made; 
           (4) the date of the sale; 
           (5) the name of the person who ordered the equipment; 
           (6) the name of the person who received the equipment; 
           (7) the type of equipment; 
           (8) the serial number of the equipment; 
           (9) the name, form number, or other identifying information 
        for each game; and 
           (10) in the case of bingo hard cards or paper sheets sold 
        on and after January 1, 1991, the individual number of each card 
        or sheet. 
           The invoice for each sale must be retained for at least 
        3-1/2 years after the sale is completed and a copy of each 
        invoice is to be delivered to the board in the manner and time 
        prescribed by the board.  For purposes of this section, a sale 
        is completed when the gambling equipment is physically delivered 
        to the purchaser.  
           Each distributor must report monthly to the board, in a 
        form the board prescribes, its sales of each type of gambling 
        equipment.  Employees of the board and the division of alcohol 
        and gambling enforcement may inspect the business premises, 
        books, records, and other documents of a distributor at any 
        reasonable time without notice and without a search warrant.  
           The board may require that a distributor submit the monthly 
        report and invoices required in this subdivision via magnetic 
        media or electronic data transfer. 
           Sec. 2.  Minnesota Statutes 2000, section 349.163, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LICENSE REQUIRED.] No manufacturer of 
        gambling equipment may sell any gambling equipment to any person 
        for use or resale within the state, unless the manufacturer has 
        a current and valid license issued by the board under this 
        section and has satisfied other criteria prescribed by the board 
        by rule. 
           A manufacturer licensed under this section may not also be 
        directly or indirectly licensed as a distributor under section 
        349.161 unless the manufacturer (1) does not manufacture any 
        gambling equipment other than paddlewheels, and (2) was licensed 
        as both a manufacturer and distributor on May 1, 1990. 
           Sec. 3.  Minnesota Statutes 2000, section 349.163, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROHIBITED SALES.] (a) A manufacturer may not: 
           (1) sell gambling equipment for use or resale within the 
        state to any person not licensed as a distributor unless the 
        manufacturer is also a licensed distributor; or 
           (2) sell gambling equipment to a distributor in this state 
        that has the same serial number as another item of gambling 
        equipment of the same type that is sold by that manufacturer for 
        use or resale in this state. 
           (b) A manufacturer, affiliate of a manufacturer, or person 
        acting as a representative or agent of a manufacturer may not 
        provide a lessor of gambling premises or an appointed official 
        any compensation, gift, gratuity, premium, contribution, or 
        other thing of value. 
           (c) A manufacturer may not sell or otherwise provide a 
        pull-tab or tipboard deal with the symbol required by 
        subdivision 5, paragraph (h), imprinted on the flare to any 
        person other than a licensed distributor unless the manufacturer 
        first renders the symbol permanently invisible. 
           Sec. 4.  Minnesota Statutes 2000, section 349.163, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PULL-TAB AND TIPBOARD FLARES.] (a) A 
        manufacturer may not ship or cause to be shipped into this state 
        or sell for use or resale in this state any deal of pull-tabs or 
        tipboards that does not have its own individual flare as 
        required for that deal by this subdivision and rule of the 
        board.  A person other than a manufacturer may not manufacture, 
        alter, modify, or otherwise change a flare for a deal of 
        pull-tabs or tipboards except as allowed by this chapter or 
        board rules. 
           (b) A manufacturer must comply with either paragraphs (c) 
        to (g) or (f) to (j) with respect to pull-tabs and tipboards 
        sold by the manufacturer before January 1, 1995, for use or 
        resale in Minnesota or shipped into or caused to be shipped into 
        Minnesota by the manufacturer before January 1, 1995.  A 
        manufacturer must comply with paragraphs (f) to (j) with respect 
        to pull-tabs and tipboards sold by the manufacturer on and after 
        January 1, 1995, for use or resale in Minnesota or shipped into 
        or caused to be shipped into Minnesota by the manufacturer on 
        and after January 1, 1995.  Paragraphs (c) to (e) expire January 
        1, 1995. 
           (c) The flare of each deal of pull-tabs and tipboards sold 
        by a manufacturer for use or resale in Minnesota must have the 
        Minnesota gambling stamp affixed.  The flare, with the stamp 
        affixed, must be placed inside the wrapping of the deal which 
        the flare describes. 
           (d) Each pull-tab and tipboard flare must bear the 
        following statement printed in letters large enough to be 
        clearly legible: 
           "Pull-tab (or tipboard) purchasers -- This pull-tab (or 
        tipboard) game is not legal in Minnesota unless: 
           -- a Minnesota gambling stamp is affixed to this sheet, and 
           -- the serial number handwritten on the gambling stamp is 
        the same as the serial number printed on this sheet and on the 
        pull-tab (or tipboard) ticket you have purchased." 
           (e) The flare of each pull-tab and tipboard game must bear 
        the serial number of the game, printed in numbers at least 
        one-half inch high and must be imprinted with the following: 
           (1) the name of the game; 
           (2) the name of the manufacturer; 
           (3) the number of tickets in the deal; and 
           (4) other information the board by rule requires. 
           (f) The flare of each pull-tab and tipboard game must have 
        affixed to or imprinted at the bottom a bar code that provides 
        all information required by the commissioner of revenue under 
        section 297E.04, subdivision 2. 
           The serial number included in the bar code must be the same 
        as the serial number of the tickets included in the deal.  A 
        manufacturer who manufactures a deal of pull-tabs must affix to 
        the outside of the box containing that game the same bar code 
        that is affixed to or imprinted at the bottom of a flare for 
        that deal. 
           (g) (c) No person may alter the bar code that appears on 
        the outside of a box containing a deal of pull-tabs and 
        tipboards.  Possession of a box containing a deal of pull-tabs 
        and tipboards that has a bar code different from the bar code of 
        the deal inside the box is prima facie evidence that the 
        possessor has altered the bar code on the box. 
           (h) (d) The flare of each deal of pull-tabs and tipboards 
        sold by a manufacturer for use or resale in Minnesota must have 
        imprinted on it a symbol that is at least one inch high and one 
        inch wide consisting of an outline of the geographic boundaries 
        of Minnesota with the letters "MN" inside the outline.  The 
        flare must be placed inside the wrapping of the deal which the 
        flare describes.  
           (i) (e) Each pull-tab and tipboard flare must bear the 
        following statement printed in letters large enough to be 
        clearly legible: 
           "Pull-tab (or tipboard) purchasers -- This pull-tab (or 
        tipboard) game is not legal in Minnesota unless: 
           -- an outline of Minnesota with letters "MN" inside it is 
        imprinted on this sheet, and 
           -- the serial number imprinted on the bar code at the 
        bottom of this sheet is the same as the serial number on the 
        pull-tab (or tipboard) ticket you have purchased." 
           (j) (f) The flare of each pull-tab and tipboard game must 
        have the serial number of the game imprinted on the bar code at 
        the bottom of the flare in numerals at least one-half inch high. 
           Sec. 5.  Minnesota Statutes 2000, section 349.165, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTENTS OF APPLICATION.] An application for a 
        premises permit must contain: 
           (1) the name and address of the applying organization and 
        of the organization's gambling manager; 
           (2) a description of the site for which the permit is 
        sought, including its address and, where applicable, its 
        placement within another premises or establishment; 
           (3) if the site is leased, the name and address of the 
        lessor and information about the lease the board requires, 
        including all rents and other charges for the use of the site; 
        and 
           (4) other information the board deems necessary to carry 
        out its purposes. 
           An organization holding a premises permit must notify the 
        board in writing within ten days whenever any material change is 
        made in the above information. 
           Sec. 6.  Minnesota Statutes 2000, section 349.167, 
        subdivision 7, is amended to read: 
           Subd. 7.  [GAMBLING MANAGER EXAMINATION.] (a) By January 1, 
        1996, each gambling manager must pass an examination prepared 
        and administered by the board that tests the gambling manager's 
        knowledge of the responsibilities of gambling managers and of 
        gambling procedures, laws, and rules.  The board shall revoke 
        the license of any gambling manager who has not passed the 
        examination by January 1, 1996. 
           (b) On and after January 1, 1996, Each applicant for a new 
        gambling manager's license must pass the an examination provided 
        for in paragraph (a) prepared and administered by the board that 
        tests the applicant's knowledge of the responsibilities of 
        gambling managers, and of gambling procedures, laws, and rules 
        before being issued the license.  In the case of the death, 
        disability, or termination of a gambling manager, a replacement 
        gambling manager must pass the examination within 90 days of 
        being issued a gambling manager's license.  The board shall 
        revoke the replacement gambling manager's license if the 
        replacement gambling manager fails to pass the examination as 
        required in this paragraph. 
           Sec. 7.  Minnesota Statutes 2001 Supplement, section 
        349.168, subdivision 1, is amended to read: 
           Subdivision 1.  [REGISTRATION OF EMPLOYEES.] A person may 
        not receive compensation for participating in the conduct of 
        lawful gambling as an employee of a licensed organization unless 
        the person has first registered with the board on a form the 
        board prescribes.  The form must require each registrant to 
        provide:  (1) the person's name, address, date of birth, and 
        social security number; (2) a current photograph; and (3) the 
        name, address, and license number of the employing organization; 
        and (3) a listing of all employment in the conduct of lawful 
        gambling within the previous three years, including the name and 
        address of each employing organization and the circumstances 
        under which the employment was terminated. 
           Sec. 8.  Minnesota Statutes 2000, section 349.168, 
        subdivision 5, is amended to read: 
           Subd. 5.  [COMPENSATION RECORDS.] An organization paying 
        compensation to persons who participate in the conduct of lawful 
        gambling must maintain a compensation record.  The record must 
        be retained for at least two years after the month in which the 
        compensation is paid.  The record must itemize each payment made 
        to each recipient of compensation and must include the amount 
        and the full name, address, and membership status of each 
        recipient. 
           Sec. 9.  Minnesota Statutes 2000, section 349.19, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REPORTS.] A licensed organization must report to 
        the board the department of revenue and to its membership 
        monthly, or quarterly in the case of a class C licensee or 
        licensed organization which does not report more than $1,000 in 
        gross receipts from lawful gambling in any calendar quarter, on 
        its gross receipts, expenses, profits, and expenditure of 
        profits from lawful gambling.  The report must include a 
        reconciliation of the organization's profit carryover with its 
        cash balance on hand.  If the organization conducts both bingo 
        and other forms of lawful gambling, the figures for both must be 
        reported separately.  In addition, a licensed organization must 
        report to the board monthly on its purchases of gambling 
        equipment and must include the type, quantity, and dollar amount 
        from each supplier separately.  The reports must be on a form 
        the board prescribes.  Submission of the report required by 
        section 349.154 satisfies the requirement for reporting monthly 
        to the board on expenditure of net profits. 
           Sec. 10.  Minnesota Statutes 2000, section 349.191, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [CREDIT AND SALES TO DELINQUENT ORGANIZATIONS.] 
        (a) If a distributor does not receive payment in full from an 
        organization within 35 days of the delivery of gambling 
        equipment day immediately following the date of the invoice, the 
        distributor must notify the board in writing of the 
        delinquency on the next business day. 
           (b) If a distributor who has notified the board under 
        paragraph (a) has not received payment in full from the 
        organization within 60 days of the notification under paragraph 
        (a), the distributor must notify the board of the continuing 
        delinquency. 
           (c) On receipt of a notice under paragraph (a), the board 
        shall order all distributors that until further notice from the 
        board, they may sell gambling equipment to the delinquent 
        organizations only on a cash basis with no credit extended.  On 
        receipt of a notice under paragraph (b), the board shall order 
        all distributors not to sell any gambling equipment to the 
        delinquent organization. 
           (d) No distributor may extend credit or sell gambling 
        equipment to an organization in violation of an order under 
        paragraph (c) until the board has authorized such credit or sale.
           Sec. 11.  Minnesota Statutes 2000, section 349.191, 
        subdivision 1b, is amended to read: 
           Subd. 1b.  [CREDIT AND SALES TO DELINQUENT DISTRIBUTORS.] 
        (a) If a manufacturer does not receive payment in full from a 
        distributor within 35 days of the delivery of gambling equipment 
        day immediately following the date of invoice, the manufacturer 
        must notify the board in writing of the delinquency on the next 
        business day. 
           (b) If a manufacturer who has notified the board under 
        paragraph (a) has not received payment in full from the 
        distributor within 60 days of the notification under paragraph 
        (a), the manufacturer must notify the board of the continuing 
        delinquency. 
           (c) On receipt of a notice under paragraph (a), the board 
        shall order all manufacturers that until further notice from the 
        board, they may sell gambling equipment to the delinquent 
        distributor only on a cash basis with no credit extended.  On 
        receipt of a notice under paragraph (b), the board shall order 
        all manufacturers not to sell any gambling equipment to the 
        delinquent distributor. 
           (d) No manufacturer may extend credit or sell gambling 
        equipment to a distributor in violation of an order under 
        paragraph (c) until the board has authorized such credit or sale.
           Sec. 12.  [REPEALER.] 
           Minnesota Statutes 2000, sections 349.12, subdivision 14; 
        349.163, subdivision 6a; 349.17, subdivision 2a; and 349.174, 
        are repealed. 

                                   ARTICLE 2 
                                BINGO; PULL-TABS 
           Section 1.  Minnesota Statutes 2001 Supplement, section 
        349.15, subdivision 1a, is amended to read: 
           Subd. 1a.  [NATURAL DISASTER RELIEF.] An organization may 
        expend net profits from lawful gambling to relieve the effects 
        of a natural disaster as defined in section 12.03, subdivision 
        2, without the prior approval of its membership if: 
           (1) the contribution is a lawful purpose under section 
        349.12, subdivision 25; 
           (2) the contribution is authorized by the organization's 
        chief executive officer and gambling manager; and 
           (3) the contribution is approved by the membership of the 
        organization at its next regularly scheduled monthly meeting. 
        If the contribution is not approved by the membership of the 
        organization at its next regularly scheduled monthly meeting, 
        the organization shall reimburse its gambling account in the 
        amount of the contribution. 
           Sec. 2.  Minnesota Statutes 2000, section 349.151, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 
        The board may by rule authorize but not require the use of 
        pull-tab dispensing devices. 
           (b) Rules adopted under paragraph (a): 
           (1) must limit the number of pull-tab dispensing devices on 
        any permitted premises to three; and 
           (2) must limit the use of pull-tab dispensing devices to a 
        permitted premises which is (i) a licensed premises for on-sales 
        of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
        licensed bingo hall that allows gambling only by persons 18 
        years or older; and 
           (3) must prohibit the use of pull-tab dispensing devices at 
        any licensed premises where pull-tabs are sold other than 
        through a pull-tab dispensing device by an employee of the 
        organization who is also the lessor or an employee of the lessor.
           (c) Notwithstanding rules adopted under paragraph (b), 
        pull-tab dispensing devices may be used in establishments 
        licensed for the off-sale of intoxicating liquor, other than 
        drugstores and general food stores licensed under section 
        340A.405, subdivision 1. 
           (d) The director may charge a manufacturer a fee of up to 
        $5,000 per pull-tab dispensing device to cover the costs of 
        services provided by an independent testing laboratory to 
        perform testing and analysis of pull-tab dispensing devices.  
        The director shall deposit in a separate account in the state 
        treasury all money the director receives as reimbursement for 
        the costs of services provided by independent testing 
        laboratories that have entered into contracts with the state to 
        perform testing and analysis of pull-tab dispensing devices.  
        Money in the account is appropriated to the director to pay the 
        costs of services under those contracts. 
           Sec. 3.  Minnesota Statutes 2000, section 349.161, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FEES.] The annual initial fee for a 
        distributor's license is $3,500.  The initial term of a 
        distributor's license is one year.  Renewal licenses under this 
        section are valid for two years and the fee for the renewal 
        license is $7,000. 
           Sec. 4.  Minnesota Statutes 2000, section 349.163, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LICENSE; FEE.] A The initial license under this 
        section is valid for one year.  The annual fee for the initial 
        license is $5,000.  Renewal licenses under this section are 
        valid for two years and the fee for the renewal license is 
        $10,000. 
           Sec. 5.  Minnesota Statutes 2000, section 349.164, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FEES; TERM OF LICENSE.] The annual initial fee 
        for a bingo hall license is $2,500.  An initial license under 
        this section is valid for one year.  Renewal licenses under this 
        section are valid for two years and the fee for the renewal 
        license is $5,000. 
           Sec. 6.  Minnesota Statutes 2000, section 349.211, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PROGRESSIVE BINGO GAMES.] A prize of up to 
        $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 $500 and be increased by up to $100 for each 
        occasion during which the progressive bingo game is played.  A 
        consolation prize of up to $200 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 $48,000. 
           Sec. 7.  Minnesota Statutes 2000, section 349.211, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [PULL-TAB PRIZES.] The maximum prize which may 
        be awarded for any single pull-tab is $500 $599.  An 
        organization may not sell any pull-tab for more than $2. 
           Sec. 8.  [MODEL RULES; REPORT TO LEGISLATURE.] 
           The gambling control board shall draft model rules relating 
        to linked bingo games and electronic bingo devices and report 
        the rules along with appropriate comments regarding the 
        implementation of the model rules to the legislature by February 
        1, 2003. 

                                   ARTICLE 3 
                     LAWFUL PURPOSE; VETERANS ORGANIZATIONS 
           Section 1.  Minnesota Statutes 2001 Supplement, 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 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 occasion; 
           (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, 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; or 
           (15) conducting nutritional programs, food shelves, and 
        congregate dining programs primarily for persons who are age 62 
        or older or disabled; or 
           (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) payment of heat, water, sanitation, telephone, and 
        other utility bills for a building owned or leased by, and used 
        as the primary headquarters of, a veterans organization; or 
           (18) expenditure by a 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. 
           (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. 

                                   ARTICLE 4 
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2000, section 299L.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXCLUSIONS.] Notwithstanding subdivision 1, a 
        gambling device: 
           (1) may be sold by a person who is not licensed under this 
        section, if the person (i) is not engaged in the trade or 
        business of selling gambling devices, and (ii) does not sell 
        more than one gambling device in any calendar year; 
           (2) may be sold by the governing body of a federally 
        recognized Indian tribe described in subdivision 2a, paragraph 
        (b), clause (1), which is not licensed under this section, if 
        (i) the gambling device was operated by the Indian tribe, (ii) 
        the sale is to a distributor licensed under this section, and 
        (iii) the licensed distributor notifies the commissioner of the 
        purchase, in the same manner as is required when the licensed 
        distributor ships a gambling device into Minnesota; 
           (3) may be possessed by a person not licensed under this 
        section if the person holds a permit issued under section 
        299L.08; and 
           (3) (4) may be possessed by a state agency, with the 
        written authorization of the director, for display or evaluation 
        purposes only and not for the conduct of gambling. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Presented to the governor May 18, 2002 
           Signed by the governor May 21, 2002, 3:16 p.m.