1.1                          A bill for an act 
  1.2             relating to gambling; making technical, clarifying, 
  1.3             and conforming changes; deleting obsolete language; 
  1.4             providing and modifying certain definitions and prize 
  1.5             amounts relating to lawful gambling; modifying 
  1.6             procedures for pull-tab dispensing devices; regulating 
  1.7             sales of certain gambling equipment; providing for the 
  1.8             drafting of model rules and a report to the 
  1.9             legislature; amending Minnesota Statutes 2000, 
  1.10            sections 299L.07, subdivision 2; 349.151, subdivision 
  1.11            4b; 349.161, subdivision 4; 349.162, subdivision 2; 
  1.12            349.163, subdivisions 1, 2, 3, 5; 349.164, subdivision 
  1.13            4; 349.165, subdivision 2; 349.167, subdivision 7; 
  1.14            349.168, subdivision 5; 349.19, subdivision 5; 
  1.15            349.191, subdivisions 1a, 1b; 349.211, subdivisions 2, 
  1.16            2a; Minnesota Statutes 2001 Supplement, sections 
  1.17            349.12, subdivision 25; 349.15, subdivision 1a; 
  1.18            349.168, subdivision 1; repealing Minnesota Statutes 
  1.19            2000, sections 349.12, subdivision 14; 349.163, 
  1.20            subdivision 6a; 349.17, subdivision 2a; 349.174. 
  1.21  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.22                             ARTICLE 1 
  1.23                        TECHNICAL AMENDMENTS 
  1.24     Section 1.  Minnesota Statutes 2000, section 349.162, 
  1.25  subdivision 2, is amended to read: 
  1.26     Subd. 2.  [RECORDS REQUIRED.] A distributor must maintain a 
  1.27  record of all gambling equipment which it sells to organizations 
  1.28  as required by section 297E.05, subdivision 2, and provide 
  1.29  copies of the record to the board upon demand.  ~~The record must~~ 
  1.30  ~~include:~~  
  1.31     ~~(1) the identity of the person from whom the distributor~~ 
  1.32  ~~purchased the equipment;~~ 
  1.33     ~~(2) the registration number of the equipment;~~ 
  2.1      ~~(3) the name, address, and license or exempt permit number~~ 
  2.2   ~~of the organization to which the sale was made;~~ 
  2.3      ~~(4) the date of the sale;~~ 
  2.4      ~~(5) the name of the person who ordered the equipment;~~ 
  2.5      ~~(6) the name of the person who received the equipment;~~ 
  2.6      ~~(7) the type of equipment;~~ 
  2.7      ~~(8) the serial number of the equipment;~~ 
  2.8      ~~(9) the name, form number, or other identifying information~~ 
  2.9   ~~for each game; and~~ 
  2.10     ~~(10) in the case of bingo hard cards or paper sheets sold~~ 
  2.11  ~~on and after January 1, 1991, the individual number of each card~~ 
  2.12  ~~or sheet.~~ 
  2.13     ~~The invoice for each sale must be retained for at least~~ 
  2.14  ~~3-1/2 years after the sale is completed and a copy of each~~ 
  2.15  ~~invoice is to be delivered to the board in the manner and time~~ 
  2.16  ~~prescribed by the board.  For purposes of this section, a sale~~ 
  2.17  ~~is completed when the gambling equipment is physically delivered~~ 
  2.18  ~~to the purchaser.~~  
  2.19     ~~Each distributor must report monthly to the board, in a~~ 
  2.20  ~~form the board prescribes, its sales of each type of gambling~~ 
  2.21  ~~equipment.~~  Employees of the board and the division of alcohol 
  2.22  and gambling enforcement may inspect the business premises, 
  2.23  books, records, and other documents of a distributor at any 
  2.24  reasonable time without notice and without a search warrant.  
  2.25     The board may require that a distributor submit the monthly 
  2.26  report and invoices required in this subdivision via magnetic 
  2.27  media or electronic data transfer. 
  2.28     Sec. 2.  Minnesota Statutes 2000, section 349.163, 
  2.29  subdivision 1, is amended to read: 
  2.30     Subdivision 1.  [LICENSE REQUIRED.] No manufacturer of 
  2.31  gambling equipment may sell any gambling equipment to any person 
  2.32  for use or resale within the state, unless the manufacturer has 
  2.33  a current and valid license issued by the board under this 
  2.34  section and has satisfied other criteria prescribed by the board 
  2.35  by rule. 
  2.36     A manufacturer licensed under this section may not also be 
  3.1   directly or indirectly licensed as a distributor under section 
  3.2   349.161 ~~unless the manufacturer (1) does not manufacture any~~ 
  3.3   ~~gambling equipment other than paddlewheels, and (2) was licensed~~ 
  3.4   ~~as both a manufacturer and distributor on May 1, 1990~~. 
  3.5      Sec. 3.  Minnesota Statutes 2000, section 349.163, 
  3.6   subdivision 3, is amended to read: 
  3.7      Subd. 3.  [PROHIBITED SALES.] (a) A manufacturer may not: 
  3.8      (1) sell gambling equipment for use or resale within the 
  3.9   state to any person not licensed as a distributor ~~unless the~~ 
  3.10  ~~manufacturer is also a licensed distributor~~; or 
  3.11     (2) sell gambling equipment to a distributor in this state 
  3.12  that has the same serial number as another item of gambling 
  3.13  equipment of the same type that is sold by that manufacturer for 
  3.14  use or resale in this state. 
  3.15     (b) A manufacturer, affiliate of a manufacturer, or person 
  3.16  acting as a representative or agent of a manufacturer may not 
  3.17  provide a lessor of gambling premises or an appointed official 
  3.18  any compensation, gift, gratuity, premium, contribution, or 
  3.19  other thing of value. 
  3.20     (c) A manufacturer may not sell or otherwise provide a 
  3.21  pull-tab or tipboard deal with the symbol required by 
  3.22  subdivision 5, paragraph (h), imprinted on the flare to any 
  3.23  person other than a licensed distributor unless the manufacturer 
  3.24  first renders the symbol permanently invisible. 
  3.25     Sec. 4.  Minnesota Statutes 2000, section 349.163, 
  3.26  subdivision 5, is amended to read: 
  3.27     Subd. 5.  [PULL-TAB AND TIPBOARD FLARES.] (a) A 
  3.28  manufacturer may not ship or cause to be shipped into this state 
  3.29  or sell for use or resale in this state any deal of pull-tabs or 
  3.30  tipboards that does not have its own individual flare as 
  3.31  required for that deal by this subdivision and rule of the 
  3.32  board.  A person other than a manufacturer may not manufacture, 
  3.33  alter, modify, or otherwise change a flare for a deal of 
  3.34  pull-tabs or tipboards except as allowed by this chapter or 
  3.35  board rules. 
  3.36     (b) ~~A manufacturer must comply with either paragraphs (c)~~ 
  4.1   ~~to (g) or (f) to (j) with respect to pull-tabs and tipboards~~ 
  4.2   ~~sold by the manufacturer before January 1, 1995, for use or~~ 
  4.3   ~~resale in Minnesota or shipped into or caused to be shipped into~~ 
  4.4   ~~Minnesota by the manufacturer before January 1, 1995.  A~~ 
  4.5   ~~manufacturer must comply with paragraphs (f) to (j) with respect~~ 
  4.6   ~~to pull-tabs and tipboards sold by the manufacturer on and after~~ 
  4.7   ~~January 1, 1995, for use or resale in Minnesota or shipped into~~ 
  4.8   ~~or caused to be shipped into Minnesota by the manufacturer on~~ 
  4.9   ~~and after January 1, 1995.  Paragraphs (c) to (e) expire January~~ 
  4.10  ~~1, 1995.~~ 
  4.11     ~~(c) The flare of each deal of pull-tabs and tipboards sold~~ 
  4.12  ~~by a manufacturer for use or resale in Minnesota must have the~~ 
  4.13  ~~Minnesota gambling stamp affixed.  The flare, with the stamp~~ 
  4.14  ~~affixed, must be placed inside the wrapping of the deal which~~ 
  4.15  ~~the flare describes.~~ 
  4.16     ~~(d) Each pull-tab and tipboard flare must bear the~~ 
  4.17  ~~following statement printed in letters large enough to be~~ 
  4.18  ~~clearly legible:~~ 
  4.19     ~~"Pull-tab (or tipboard) purchasers -- This pull-tab (or~~ 
  4.20  ~~tipboard) game is not legal in Minnesota unless:~~ 
  4.21     ~~-- a Minnesota gambling stamp is affixed to this sheet, and~~ 
  4.22     ~~-- the serial number handwritten on the gambling stamp is~~ 
  4.23  ~~the same as the serial number printed on this sheet and on the~~ 
  4.24  ~~pull-tab (or tipboard) ticket you have purchased."~~ 
  4.25     ~~(e) The flare of each pull-tab and tipboard game must bear~~ 
  4.26  ~~the serial number of the game, printed in numbers at least~~ 
  4.27  ~~one-half inch high and must be imprinted with the following:~~ 
  4.28     ~~(1) the name of the game;~~ 
  4.29     ~~(2) the name of the manufacturer;~~ 
  4.30     ~~(3) the number of tickets in the deal; and~~ 
  4.31     ~~(4) other information the board by rule requires.~~ 
  4.32     ~~(f)~~ The flare of each pull-tab and tipboard game must have 
  4.33  affixed to or imprinted at the bottom a bar code that provides 
  4.34  all information required by the commissioner of revenue under 
  4.35  section 297E.04, subdivision 2. 
  4.36     The serial number included in the bar code must be the same 
  5.1   as the serial number of the tickets included in the deal.  A 
  5.2   manufacturer who manufactures a deal of pull-tabs must affix to 
  5.3   the outside of the box containing that game the same bar code 
  5.4   that is affixed to or imprinted at the bottom of a flare for 
  5.5   that deal. 
  5.6      ~~(g)~~ (c) No person may alter the bar code that appears on 
  5.7   the outside of a box containing a deal of pull-tabs and 
  5.8   tipboards.  Possession of a box containing a deal of pull-tabs 
  5.9   and tipboards that has a bar code different from the bar code of 
  5.10  the deal inside the box is prima facie evidence that the 
  5.11  possessor has altered the bar code on the box. 
  5.12     ~~(h)~~ (d) The flare of each deal of pull-tabs and tipboards 
  5.13  sold by a manufacturer for use or resale in Minnesota must have 
  5.14  imprinted on it a symbol that is at least one inch high and one 
  5.15  inch wide consisting of an outline of the geographic boundaries 
  5.16  of Minnesota with the letters "MN" inside the outline.  The 
  5.17  flare must be placed inside the wrapping of the deal which the 
  5.18  flare describes.  
  5.19     ~~(i)~~ (e) Each pull-tab and tipboard flare must bear the 
  5.20  following statement printed in letters large enough to be 
  5.21  clearly legible: 
  5.22     "Pull-tab (or tipboard) purchasers -- This pull-tab (or 
  5.23  tipboard) game is not legal in Minnesota unless: 
  5.24     -- an outline of Minnesota with letters "MN" inside it is 
  5.25  imprinted on this sheet, and 
  5.26     -- the serial number imprinted on the bar code at the 
  5.27  bottom of this sheet is the same as the serial number on the 
  5.28  pull-tab (or tipboard) ticket you have purchased." 
  5.29     ~~(j)~~ (f) The flare of each pull-tab and tipboard game must 
  5.30  have the serial number of the game imprinted on the bar code at 
  5.31  the bottom of the flare in numerals at least one-half inch high. 
  5.32     Sec. 5.  Minnesota Statutes 2000, section 349.165, 
  5.33  subdivision 2, is amended to read: 
  5.34     Subd. 2.  [CONTENTS OF APPLICATION.] An application for a 
  5.35  premises permit must contain: 
  5.36     (1) the name and address of the applying organization ~~and~~ 
  6.1   ~~of the organization's gambling manager~~; 
  6.2      (2) a description of the site for which the permit is 
  6.3   sought, including its address and, where applicable, its 
  6.4   placement within another premises or establishment; 
  6.5      (3) if the site is leased, the name and address of the 
  6.6   lessor and information about the lease the board requires, 
  6.7   including all rents and other charges for the use of the site; 
  6.8   and 
  6.9      (4) other information the board deems necessary to carry 
  6.10  out its purposes. 
  6.11     An organization holding a premises permit must notify the 
  6.12  board in writing within ten days whenever any material change is 
  6.13  made in the above information. 
  6.14     Sec. 6.  Minnesota Statutes 2000, section 349.167, 
  6.15  subdivision 7, is amended to read: 
  6.16     Subd. 7.  [GAMBLING MANAGER EXAMINATION.] ~~(a) By January 1,~~ 
  6.17  ~~1996, each gambling manager must pass an examination prepared~~ 
  6.18  ~~and administered by the board that tests the gambling manager's~~ 
  6.19  ~~knowledge of the responsibilities of gambling managers and of~~ 
  6.20  ~~gambling procedures, laws, and rules.  The board shall revoke~~ 
  6.21  ~~the license of any gambling manager who has not passed the~~ 
  6.22  ~~examination by January 1, 1996.~~ 
  6.23     ~~(b) On and after January 1, 1996,~~ Each applicant for a new 
  6.24  gambling manager's license must pass ~~the~~ an examination ~~provided~~ 
  6.25  ~~for in paragraph (a)~~ prepared and administered by the board that 
  6.26  tests the applicant's knowledge of the responsibilities of 
  6.27  gambling managers, and of gambling procedures, laws, and rules 
  6.28  before being issued the license.  In the case of the death, 
  6.29  disability, or termination of a gambling manager, a replacement 
  6.30  gambling manager must pass the examination within 90 days of 
  6.31  being issued a gambling manager's license.  The board shall 
  6.32  revoke the replacement gambling manager's license if the 
  6.33  replacement gambling manager fails to pass the examination as 
  6.34  required in this paragraph. 
  6.35     Sec. 7.  Minnesota Statutes 2001 Supplement, section 
  6.36  349.168, subdivision 1, is amended to read: 
  7.1      Subdivision 1.  [REGISTRATION OF EMPLOYEES.] A person may 
  7.2   not receive compensation for participating in the conduct of 
  7.3   lawful gambling as an employee of a licensed organization unless 
  7.4   the person has first registered with the board on a form the 
  7.5   board prescribes.  The form must require each registrant to 
  7.6   provide:  (1) the person's name, address, date of birth, and 
  7.7   social security number; (2) a current photograph; and (3) the 
  7.8   name, address, and license number of the employing organization~~;~~ 
  7.9   ~~and (3) a listing of all employment in the conduct of lawful~~ 
  7.10  ~~gambling within the previous three years, including the name and~~ 
  7.11  ~~address of each employing organization and the circumstances~~ 
  7.12  ~~under which the employment was terminated~~. 
  7.13     Sec. 8.  Minnesota Statutes 2000, section 349.168, 
  7.14  subdivision 5, is amended to read: 
  7.15     Subd. 5.  [COMPENSATION RECORDS.] An organization paying 
  7.16  compensation to persons who participate in the conduct of lawful 
  7.17  gambling must maintain a compensation record.  ~~The record must~~ 
  7.18  ~~be retained for at least two years after the month in which the~~ 
  7.19  ~~compensation is paid.~~  The record must itemize each payment made 
  7.20  to each recipient of compensation and must include the amount 
  7.21  and the full name, address, and membership status of each 
  7.22  recipient. 
  7.23     Sec. 9.  Minnesota Statutes 2000, section 349.19, 
  7.24  subdivision 5, is amended to read: 
  7.25     Subd. 5.  [REPORTS.] A licensed organization must report to 
  7.26  the ~~board~~ the department of revenue and to its membership 
  7.27  monthly, or quarterly in the case of a class C licensee or 
  7.28  licensed organization which does not report more than $1,000 in 
  7.29  gross receipts from lawful gambling in any calendar quarter, on 
  7.30  its gross receipts, expenses, profits, and expenditure of 
  7.31  profits from lawful gambling.  The report must include a 
  7.32  reconciliation of the organization's profit carryover with its 
  7.33  cash balance on hand.  If the organization conducts both bingo 
  7.34  and other forms of lawful gambling, the figures for both must be 
  7.35  reported separately.  ~~In addition, a licensed organization must~~ 
  7.36  ~~report to the board monthly on its purchases of gambling~~ 
  8.1   ~~equipment and must include the type, quantity, and dollar amount~~ 
  8.2   ~~from each supplier separately.  The reports must be on a form~~ 
  8.3   ~~the board prescribes.  Submission of the report required by~~ 
  8.4   ~~section 349.154 satisfies the requirement for reporting monthly~~ 
  8.5   ~~to the board on expenditure of net profits.~~ 
  8.6      Sec. 10.  Minnesota Statutes 2000, section 349.191, 
  8.7   subdivision 1a, is amended to read: 
  8.8      Subd. 1a.  [CREDIT AND SALES TO DELINQUENT ORGANIZATIONS.] 
  8.9   (a) If a distributor does not receive payment in full from an 
  8.10  organization within 35 days of the ~~delivery of gambling~~ 
  8.11  ~~equipment~~ day immediately following the date of the invoice, the 
  8.12  distributor must notify the board in writing of the 
  8.13  delinquency on the next business day. 
  8.14     (b) If a distributor who has notified the board under 
  8.15  paragraph (a) has not received payment in full from the 
  8.16  organization within 60 days of the notification under paragraph 
  8.17  (a), the distributor must notify the board of the continuing 
  8.18  delinquency. 
  8.19     (c) On receipt of a notice under paragraph (a), the board 
  8.20  shall order all distributors that until further notice from the 
  8.21  board, they may sell gambling equipment to the delinquent 
  8.22  organizations only on a cash basis with no credit extended.  On 
  8.23  receipt of a notice under paragraph (b), the board shall order 
  8.24  all distributors not to sell any gambling equipment to the 
  8.25  delinquent organization. 
  8.26     (d) No distributor may extend credit or sell gambling 
  8.27  equipment to an organization in violation of an order under 
  8.28  paragraph (c) until the board has authorized such credit or sale.
  8.29     Sec. 11.  Minnesota Statutes 2000, section 349.191, 
  8.30  subdivision 1b, is amended to read: 
  8.31     Subd. 1b.  [CREDIT AND SALES TO DELINQUENT DISTRIBUTORS.] 
  8.32  (a) If a manufacturer does not receive payment in full from a 
  8.33  distributor within 35 days of the ~~delivery of gambling equipment~~ 
  8.34  day immediately following the date of invoice, the manufacturer 
  8.35  must notify the board in writing of the delinquency on the next 
  8.36  business day. 
  9.1      (b) If a manufacturer who has notified the board under 
  9.2   paragraph (a) has not received payment in full from the 
  9.3   distributor within 60 days of the notification under paragraph 
  9.4   (a), the manufacturer must notify the board of the continuing 
  9.5   delinquency. 
  9.6      (c) On receipt of a notice under paragraph (a), the board 
  9.7   shall order all manufacturers that until further notice from the 
  9.8   board, they may sell gambling equipment to the delinquent 
  9.9   distributor only on a cash basis with no credit extended.  On 
  9.10  receipt of a notice under paragraph (b), the board shall order 
  9.11  all manufacturers not to sell any gambling equipment to the 
  9.12  delinquent distributor. 
  9.13     (d) No manufacturer may extend credit or sell gambling 
  9.14  equipment to a distributor in violation of an order under 
  9.15  paragraph (c) until the board has authorized such credit or sale.
  9.16     Sec. 12.  [REPEALER.] 
  9.17     Minnesota Statutes 2000, sections 349.12, subdivision 14; 
  9.18  349.163, subdivision 6a; 349.17, subdivision 2a; and 349.174, 
  9.19  are repealed. 
  9.20                             ARTICLE 2 
  9.21                          BINGO; PULL-TABS 
  9.22     Section 1.  Minnesota Statutes 2001 Supplement, section 
  9.23  349.15, subdivision 1a, is amended to read: 
  9.24     Subd. 1a.  [~~NATURAL~~ DISASTER RELIEF.] An organization may 
  9.25  expend net profits from lawful gambling to relieve the effects 
  9.26  of a ~~natural~~ disaster as defined in section 12.03, subdivision 
  9.27  2, without the prior approval of its membership if: 
  9.28     (1) the contribution is a lawful purpose under section 
  9.29  349.12, subdivision 25; 
  9.30     (2) the contribution is authorized by the organization's 
  9.31  chief executive officer and gambling manager; and 
  9.32     (3) the contribution is approved by the membership of the 
  9.33  organization at its next regularly scheduled monthly meeting. 
  9.34  If the contribution is not approved by the membership of the 
  9.35  organization at its next regularly scheduled monthly meeting, 
  9.36  the organization shall reimburse its gambling account in the 
 10.1   amount of the contribution. 
 10.2      Sec. 2.  Minnesota Statutes 2000, section 349.151, 
 10.3   subdivision 4b, is amended to read: 
 10.4      Subd. 4b.  [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 
 10.5   The board may by rule authorize but not require the use of 
 10.6   pull-tab dispensing devices. 
 10.7      (b) Rules adopted under paragraph (a): 
 10.8      (1) must limit the number of pull-tab dispensing devices on 
 10.9   any permitted premises to three; and 
 10.10     (2) must limit the use of pull-tab dispensing devices to a 
 10.11  permitted premises which is (i) a licensed premises for on-sales 
 10.12  of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
 10.13  licensed bingo hall that allows gambling only by persons 18 
 10.14  years or older~~; and~~ 
 10.15     ~~(3) must prohibit the use of pull-tab dispensing devices at~~ 
 10.16  ~~any licensed premises where pull-tabs are sold other than~~ 
 10.17  ~~through a pull-tab dispensing device by an employee of the~~ 
 10.18  ~~organization who is also the lessor or an employee of the lessor~~.
 10.19     (c) Notwithstanding rules adopted under paragraph (b), 
 10.20  pull-tab dispensing devices may be used in establishments 
 10.21  licensed for the off-sale of intoxicating liquor, other than 
 10.22  drugstores and general food stores licensed under section 
 10.23  340A.405, subdivision 1. 
 10.24     (d) The director may charge a manufacturer a fee of up to 
 10.25  $5,000 per pull-tab dispensing device to cover the costs of 
 10.26  services provided by an independent testing laboratory to 
 10.27  perform testing and analysis of pull-tab dispensing devices.  
 10.28  The director shall deposit in a separate account in the state 
 10.29  treasury all money the director receives as reimbursement for 
 10.30  the costs of services provided by independent testing 
 10.31  laboratories that have entered into contracts with the state to 
 10.32  perform testing and analysis of pull-tab dispensing devices.  
 10.33  Money in the account is appropriated to the director to pay the 
 10.34  costs of services under those contracts. 
 10.35     Sec. 3.  Minnesota Statutes 2000, section 349.161, 
 10.36  subdivision 4, is amended to read: 
 11.1      Subd. 4.  [FEES.] The ~~annual~~ initial fee for a 
 11.2   distributor's license is $3,500.  The initial term of a 
 11.3   distributor's license is one year.  Renewal licenses under this 
 11.4   section are valid for two years and the fee for the renewal 
 11.5   license is $7,000. 
 11.6      Sec. 4.  Minnesota Statutes 2000, section 349.163, 
 11.7   subdivision 2, is amended to read: 
 11.8      Subd. 2.  [LICENSE; FEE.] ~~A~~ The initial license under this 
 11.9   section is valid for one year.  The ~~annual~~ fee for the initial 
 11.10  license is $5,000.  Renewal licenses under this section are 
 11.11  valid for two years and the fee for the renewal license is 
 11.12  $10,000. 
 11.13     Sec. 5.  Minnesota Statutes 2000, section 349.164, 
 11.14  subdivision 4, is amended to read: 
 11.15     Subd. 4.  [FEES; TERM OF LICENSE.] The ~~annual~~ initial fee 
 11.16  for a bingo hall license is $2,500.  An initial license under 
 11.17  this section is valid for one year.  Renewal licenses under this 
 11.18  section are valid for two years and the fee for the renewal 
 11.19  license is $5,000. 
 11.20     Sec. 6.  Minnesota Statutes 2000, section 349.211, 
 11.21  subdivision 2, is amended to read: 
 11.22     Subd. 2.  [PROGRESSIVE BINGO GAMES.] A prize of up to 
 11.23  $2,000 may be awarded for a progressive bingo game, including a 
 11.24  cover-all game.  The prize for a progressive bingo game may 
 11.25  start at ~~$300~~ $500 and be increased by up to $100 for each 
 11.26  occasion during which the progressive bingo game is played.  A 
 11.27  consolation prize of up to $200 for a progressive bingo game may 
 11.28  be awarded in each occasion during which the progressive bingo 
 11.29  game is played and the accumulated prize is not won.  The total 
 11.30  amount awarded in progressive bingo game prizes in any calendar 
 11.31  year may not exceed ~~$36,000~~ $48,000. 
 11.32     Sec. 7.  Minnesota Statutes 2000, section 349.211, 
 11.33  subdivision 2a, is amended to read: 
 11.34     Subd. 2a.  [PULL-TAB PRIZES.] The maximum prize which may 
 11.35  be awarded for any single pull-tab is ~~$500~~ $599.  An 
 11.36  organization may not sell any pull-tab for more than $2. 
 12.1      Sec. 8.  [MODEL RULES; REPORT TO LEGISLATURE.] 
 12.2      The gambling control board shall draft model rules relating 
 12.3   to linked bingo games and electronic bingo devices and report 
 12.4   the rules along with appropriate comments regarding the 
 12.5   implementation of the model rules to the legislature by February 
 12.6   1, 2003. 
 12.7                              ARTICLE 3 
 12.8                LAWFUL PURPOSE; VETERANS ORGANIZATIONS 
 12.9      Section 1.  Minnesota Statutes 2001 Supplement, section 
 12.10  349.12, subdivision 25, is amended to read: 
 12.11     Subd. 25.  [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 
 12.12  or more of the following:  
 12.13     (1) any expenditure by or contribution to a 501(c)(3) or 
 12.14  festival organization, as defined in subdivision 15a, provided 
 12.15  that the organization and expenditure or contribution are in 
 12.16  conformity with standards prescribed by the board under section 
 12.17  349.154, which standards must apply to both types of 
 12.18  organizations in the same manner and to the same extent; 
 12.19     (2) a contribution to an individual or family suffering 
 12.20  from poverty, homelessness, or physical or mental disability, 
 12.21  which is used to relieve the effects of that poverty, 
 12.22  homelessness, or disability; 
 12.23     (3) a contribution to an individual for treatment for 
 12.24  delayed posttraumatic stress syndrome or a contribution to a 
 12.25  program recognized by the Minnesota department of human services 
 12.26  for the education, prevention, or treatment of compulsive 
 12.27  gambling; 
 12.28     (4) a contribution to or expenditure on a public or private 
 12.29  nonprofit educational institution registered with or accredited 
 12.30  by this state or any other state; 
 12.31     (5) a contribution to a scholarship fund for defraying the 
 12.32  cost of education to individuals where the funds are awarded 
 12.33  through an open and fair selection process; 
 12.34     (6) activities by an organization or a government entity 
 12.35  which recognize humanitarian or military service to the United 
 12.36  States, the state of Minnesota, or a community, subject to rules 
 13.1   of the board, provided that the rules must not include mileage 
 13.2   reimbursements in the computation of the per occasion 
 13.3   reimbursement limit and must impose no aggregate annual limit on 
 13.4   the amount of reasonable and necessary expenditures made to 
 13.5   support: 
 13.6      (i) members of a military marching or color guard unit for 
 13.7   activities conducted within the state; 
 13.8      (ii) members of an organization solely for services 
 13.9   performed by the members at funeral services; or 
 13.10     (iii) members of military marching, color guard, or honor 
 13.11  guard units may be reimbursed for participating in color guard, 
 13.12  honor guard, or marching unit events within the state or states 
 13.13  contiguous to Minnesota at a per participant rate of up to $35 
 13.14  per occasion; 
 13.15     (7) recreational, community, and athletic facilities and 
 13.16  activities intended primarily for persons under age 21, provided 
 13.17  that such facilities and activities do not discriminate on the 
 13.18  basis of gender and the organization complies with section 
 13.19  349.154; 
 13.20     (8) payment of local taxes authorized under this chapter, 
 13.21  taxes imposed by the United States on receipts from lawful 
 13.22  gambling, the taxes imposed by section 297E.02, subdivisions 1, 
 13.23  4, 5, and 6, and the tax imposed on unrelated business income by 
 13.24  section 290.05, subdivision 3; 
 13.25     (9) payment of real estate taxes and assessments on 
 13.26  permitted gambling premises wholly owned by the licensed 
 13.27  organization paying the taxes, or wholly leased by a licensed 
 13.28  veterans organization under a national charter recognized under 
 13.29  section 501(c)(19) of the Internal Revenue Code, not to exceed: 
 13.30     (i) for premises used for bingo, the amount that an 
 13.31  organization may expend under board rules on rent for bingo; and 
 13.32     (ii) $35,000 per year for premises used for other forms of 
 13.33  lawful gambling; 
 13.34     (10) a contribution to the United States, this state or any 
 13.35  of its political subdivisions, or any agency or instrumentality 
 13.36  thereof other than a direct contribution to a law enforcement or 
 14.1   prosecutorial agency; 
 14.2      (11) a contribution to or expenditure by a nonprofit 
 14.3   organization which is a church or body of communicants gathered 
 14.4   in common membership for mutual support and edification in 
 14.5   piety, worship, or religious observances; 
 14.6      (12) payment of the reasonable costs of an audit required 
 14.7   in section 297E.06, subdivision 4, provided the annual audit is 
 14.8   filed in a timely manner with the department of revenue; 
 14.9      (13) a contribution to or expenditure on a wildlife 
 14.10  management project that benefits the public at-large, provided 
 14.11  that the state agency with authority over that wildlife 
 14.12  management project approves the project before the contribution 
 14.13  or expenditure is made; 
 14.14     (14) expenditures, approved by the commissioner of natural 
 14.15  resources, by an organization for grooming and maintaining 
 14.16  snowmobile trails and all-terrain vehicle trails that are (1) 
 14.17  grant-in-aid trails established under section 85.019, or (2) 
 14.18  other trails open to public use, including purchase or lease of 
 14.19  equipment for this purpose; or 
 14.20     (15) conducting nutritional programs, food shelves, and 
 14.21  congregate dining programs primarily for persons who are age 62 
 14.22  or older or disabled; ~~or~~ 
 14.23     (16) a contribution to a community arts organization, or an 
 14.24  expenditure to sponsor arts programs in the community, including 
 14.25  but not limited to visual, literary, performing, or musical 
 14.26  arts; 
 14.27     (17) payment of heat, water, sanitation, telephone, and 
 14.28  other utility bills for a building owned or leased by, and used 
 14.29  as the primary headquarters of, a veterans organization; or 
 14.30     (18) expenditure by a veterans organization of up to $5,000 
 14.31  in a calendar year in net costs to the organization for meals 
 14.32  and other membership events, limited to members and spouses, 
 14.33  held in recognition of military service. 
 14.34     (b) Notwithstanding paragraph (a), "lawful purpose" does 
 14.35  not include: 
 14.36     (1) any expenditure made or incurred for the purpose of 
 15.1   influencing the nomination or election of a candidate for public 
 15.2   office or for the purpose of promoting or defeating a ballot 
 15.3   question; 
 15.4      (2) any activity intended to influence an election or a 
 15.5   governmental decision-making process; 
 15.6      (3) the erection, acquisition, improvement, expansion, 
 15.7   repair, or maintenance of real property or capital assets owned 
 15.8   or leased by an organization, unless the board has first 
 15.9   specifically authorized the expenditures after finding that (i) 
 15.10  the real property or capital assets will be used exclusively for 
 15.11  one or more of the purposes in paragraph (a); (ii) with respect 
 15.12  to expenditures for repair or maintenance only, that the 
 15.13  property is or will be used extensively as a meeting place or 
 15.14  event location by other nonprofit organizations or community or 
 15.15  service groups and that no rental fee is charged for the use; 
 15.16  (iii) with respect to expenditures, including a mortgage payment 
 15.17  or other debt service payment, for erection or acquisition only, 
 15.18  that the erection or acquisition is necessary to replace with a 
 15.19  comparable building, a building owned by the organization and 
 15.20  destroyed or made uninhabitable by fire or natural disaster, 
 15.21  provided that the expenditure may be only for that part of the 
 15.22  replacement cost not reimbursed by insurance; (iv) with respect 
 15.23  to expenditures, including a mortgage payment or other debt 
 15.24  service payment, for erection or acquisition only, that the 
 15.25  erection or acquisition is necessary to replace with a 
 15.26  comparable building a building owned by the organization that 
 15.27  was acquired from the organization by eminent domain or sold by 
 15.28  the organization to a purchaser that the organization reasonably 
 15.29  believed would otherwise have acquired the building by eminent 
 15.30  domain, provided that the expenditure may be only for that part 
 15.31  of the replacement cost that exceeds the compensation received 
 15.32  by the organization for the building being replaced; or (v) with 
 15.33  respect to an expenditure to bring an existing building into 
 15.34  compliance with the Americans with Disabilities Act under item 
 15.35  (ii), an organization has the option to apply the amount of the 
 15.36  board-approved expenditure to the erection or acquisition of a 
 16.1   replacement building that is in compliance with the Americans 
 16.2   with Disabilities Act; 
 16.3      (4) an expenditure by an organization which is a 
 16.4   contribution to a parent organization, foundation, or affiliate 
 16.5   of the contributing organization, if the parent organization, 
 16.6   foundation, or affiliate has provided to the contributing 
 16.7   organization within one year of the contribution any money, 
 16.8   grants, property, or other thing of value; 
 16.9      (5) a contribution by a licensed organization to another 
 16.10  licensed organization unless the board has specifically 
 16.11  authorized the contribution.  The board must authorize such a 
 16.12  contribution when requested to do so by the contributing 
 16.13  organization unless it makes an affirmative finding that the 
 16.14  contribution will not be used by the recipient organization for 
 16.15  one or more of the purposes in paragraph (a); or 
 16.16     (6) a contribution to a statutory or home rule charter 
 16.17  city, county, or town by a licensed organization with the 
 16.18  knowledge that the governmental unit intends to use the 
 16.19  contribution for a pension or retirement fund. 
 16.20                             ARTICLE 4 
 16.21                           MISCELLANEOUS 
 16.22     Section 1.  Minnesota Statutes 2000, section 299L.07, 
 16.23  subdivision 2, is amended to read: 
 16.24     Subd. 2.  [EXCLUSIONS.] Notwithstanding subdivision 1, a 
 16.25  gambling device: 
 16.26     (1) may be sold by a person who is not licensed under this 
 16.27  section, if the person (i) is not engaged in the trade or 
 16.28  business of selling gambling devices, and (ii) does not sell 
 16.29  more than one gambling device in any calendar year; 
 16.30     (2) may be sold by the governing body of a federally 
 16.31  recognized Indian tribe described in subdivision 2a, paragraph 
 16.32  (b), clause (1), which is not licensed under this section, if 
 16.33  (i) the gambling device was operated by the Indian tribe, (ii) 
 16.34  the sale is to a distributor licensed under this section, and 
 16.35  (iii) the licensed distributor notifies the commissioner of the 
 16.36  purchase, in the same manner as is required when the licensed 
 17.1   distributor ships a gambling device into Minnesota; 
 17.2      (3) may be possessed by a person not licensed under this 
 17.3   section if the person holds a permit issued under section 
 17.4   299L.08; and 
 17.5      ~~(3)~~ (4) may be possessed by a state agency, with the 
 17.6   written authorization of the director, for display or evaluation 
 17.7   purposes only and not for the conduct of gambling. 
 17.8      <h>[EFFECTIVE DATE.]</h> This section is effective the day 
 17.9   following final enactment.