1.1                          A bill for an act 
  1.2             relating to gambling; changing paddlewheel location 
  1.3             and prize requirements; allowing lawful gambling 
  1.4             organizations to pay for premises; amending Minnesota 
  1.5             Statutes 1998, sections 349.12, subdivision 19; 
  1.6             349.15, by adding a subdivision; 349.18, subdivisions 
  1.7             1 and 2; 349.19, subdivision 10; 349.211, subdivision 
  1.8             4; and 349.213, subdivision 1. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 349.12, 
  1.11  subdivision 19, is amended to read: 
  1.12     Subd. 19.  [GAMBLING MANAGER.] "Gambling manager" means a 
  1.13  person who has been designated by the organization to supervise 
  1.14  the lawful gambling conducted by it and who: 
  1.15     (1) has been an active member of the organization for at 
  1.16  least two years and has been designated by the organization to 
  1.17  supervise lawful gambling conducted by it; or 
  1.18     (2) meets such other qualifications as prescribed by the 
  1.19  board by rule. 
  1.20     Sec. 2.  Minnesota Statutes 1998, section 349.15, is 
  1.21  amended by adding a subdivision to read: 
  1.22     Subd. 4.  [ALTERNATIVE PREMISES PAYMENT.] An organization 
  1.23  eligible to expend gross profits on real estate taxes and 
  1.24  assessments under section 349.12, subdivision 25, paragraph (a), 
  1.25  clause (9), may in the alternative, elect on a calendar year 
  1.26  basis to pay itself up to $1,000 per month for the use of its 
  1.27  premises for lawful gambling.  Any payments made under this 
  2.1   subdivision shall be considered an allowable expense. 
  2.2      Sec. 3.  Minnesota Statutes 1998, section 349.18, 
  2.3   subdivision 1, is amended to read: 
  2.4      Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED.] (a) An 
  2.5   organization may conduct lawful gambling only on premises it 
  2.6   owns or leases.  Leases must be on a form prescribed by the 
  2.7   board.  Except for leases entered into before August 1, 1994, 
  2.8   the term of the lease may not begin before the effective date of 
  2.9   the premises permit and must expire on the same day that the 
  2.10  premises permit expires.  Copies of all leases must be made 
  2.11  available to employees of the board and the division of alcohol 
  2.12  and gambling enforcement on request.  A lease may not provide 
  2.13  for payments determined directly or indirectly by the receipts 
  2.14  or profits from lawful gambling.  The board may prescribe by 
  2.15  rule limits on the amount of rent which an organization may pay 
  2.16  to a lessor for premises leased for lawful gambling provided 
  2.17  that no rule of the board may prescribe a limit of less than 
  2.18  $1,000 per month on rent paid for premises used for lawful 
  2.19  gambling other than bingo.  Any rule adopted by the board 
  2.20  limiting the amount of rent to be paid may only be effective for 
  2.21  leases entered into, or renewed, after the effective date of the 
  2.22  rule. 
  2.23     (b) No person, distributor, manufacturer, lessor, or 
  2.24  organization other than the licensed organization leasing the 
  2.25  space may conduct any activity other than the sale or serving of 
  2.26  food and beverages on the leased premises during times when 
  2.27  lawful gambling is being conducted on the premises. 
  2.28     (c) At a site where the leased premises consists of an area 
  2.29  on or behind a bar at which alcoholic beverages are sold and 
  2.30  employees of the lessor are employed by the organization as 
  2.31  pull-tab sellers at the site, pull-tabs and tipboard tickets may 
  2.32  be sold and redeemed by those employees at any place on or 
  2.33  behind the bar, but the tipboards and receptacles for pull-tabs 
  2.34  and cash drawers for lawful gambling receipts must be maintained 
  2.35  only within the leased premises. 
  2.36     (d) Employees of a lessor may participate in lawful 
  3.1   gambling on the premises provided (1) if pull-tabs or tipboards 
  3.2   are sold, the organization voluntarily posts, or is required to 
  3.3   post, the major prizes as specified in section 349.172; and (2) 
  3.4   any employee of the lessor participating in lawful gambling is 
  3.5   not a gambling employee for the organization conducting lawful 
  3.6   gambling on the premises. 
  3.7      (e) A gambling employee may purchase pull-tabs at the site 
  3.8   of the employee's place of employment provided: 
  3.9      (1) the organization voluntarily posts, or is required to 
  3.10  post, the major prizes for pull-tab or tipboard games as 
  3.11  specified in section 349.172; and 
  3.12     (2) the employee is not involved in the sale of pull-tabs 
  3.13  at that site. 
  3.14     (f) At a leased site where an organization uses a 
  3.15  paddlewheel consisting of 30 numbers or less or a tipboard 
  3.16  consisting of 30 tickets or less, tickets may be sold throughout 
  3.17  the permitted premises, but winning tickets must be redeemed, 
  3.18  the paddlewheel must be located, and the tipboard seal must be 
  3.19  opened within the leased premises. 
  3.20     Sec. 4.  Minnesota Statutes 1998, section 349.18, 
  3.21  subdivision 2, is amended to read: 
  3.22     Subd. 2.  [EXCEPTIONS.] (a) An organization may conduct 
  3.23  raffles on a premise it does not own or lease.  
  3.24     (b) An organization may, with the permission of the board, 
  3.25  conduct bingo on premises it does not own or lease for up to 12 
  3.26  consecutive days in a calendar year, in connection with a county 
  3.27  fair, the state fair, or a civic celebration.  
  3.28     (c) A licensed organization may, after compliance with 
  3.29  section 349.213, conduct lawful gambling on premises other than 
  3.30  the organization's permitted premises for one day per calendar 
  3.31  year for not more than 12 hours that day or up to 12 consecutive 
  3.32  days in a calendar year in connection with a county fair, the 
  3.33  state fair, a church festival, or a civic celebration.  A lease 
  3.34  for that time period for the exempted premises must accompany 
  3.35  the request to the board. 
  3.36     Sec. 5.  Minnesota Statutes 1998, section 349.19, 
  4.1   subdivision 10, is amended to read: 
  4.2      Subd. 10.  [PULL-TAB RECORDS.] (a) The board shall by rule 
  4.3   require A licensed organization to shall require each winner of 
  4.4   a pull-tab prize of $50 $100 or more to present identification 
  4.5   in the form of a driver's license, Minnesota identification 
  4.6   card, or other identification the board deems sufficient to 
  4.7   allow the identification and tracing of the winner.  The rule 
  4.8   must require The organization to must retain winning pull-tabs 
  4.9   of $50 $100 or more, and the identification of the winner of the 
  4.10  pull-tab, for 3-1/2 years. 
  4.11     (b) An organization must maintain separate cash banks for 
  4.12  each deal of pull-tabs unless (1) two or more deals are 
  4.13  commingled in a single receptacle, or (2) the organization uses 
  4.14  a cash register, of a type approved by the board, which records 
  4.15  all sales of pull-tabs by separate deals.  The board shall (1) 
  4.16  by rule adopt minimum technical standards for cash registers 
  4.17  that may be used by organizations, and shall approve for use by 
  4.18  organizations any cash register that meets the standards, and 
  4.19  (2) before allowing an organization to use a cash register that 
  4.20  commingles receipts from several different pull-tab games in 
  4.21  play, adopt rules that define how cash registers may be used and 
  4.22  that establish a procedure for organizations to reconcile all 
  4.23  pull-tab games in play at the end of each month. 
  4.24     Sec. 6.  Minnesota Statutes 1998, section 349.211, 
  4.25  subdivision 4, is amended to read: 
  4.26     Subd. 4.  [PRIZE VALUE.] (a) Merchandise prizes must be 
  4.27  valued at their fair market value.  For purposes of sections 
  4.28  349.11 to 349.22 "prizes" do not include free plays awarded. 
  4.29     (b) Merchandise prizes for a paddlewheel consisting of 30 
  4.30  numbers or less or a tipboard consisting of 30 tickets or less 
  4.31  may be paid for by the organization up to 30 days after the 
  4.32  prize is received by the organization.  
  4.33     Sec. 7.  Minnesota Statutes 1998, section 349.213, 
  4.34  subdivision 1, is amended to read: 
  4.35     Subdivision 1.  [LOCAL REGULATION.] (a) A statutory or home 
  4.36  rule city or county has the authority to adopt more stringent 
  5.1   regulation of lawful gambling within its jurisdiction, including 
  5.2   the prohibition of lawful gambling, and may require a permit for 
  5.3   the conduct of gambling exempt from licensing under section 
  5.4   349.166.  The fee for a permit issued under this subdivision may 
  5.5   not exceed $100.  The authority granted by this subdivision does 
  5.6   not include the authority to require a license or permit to 
  5.7   conduct gambling by organizations or sales by distributors 
  5.8   licensed by the board.  The authority granted by this 
  5.9   subdivision does not include the authority to require an 
  5.10  organization to make specific expenditures of more than ten 
  5.11  percent from its net profits derived from lawful gambling.  For 
  5.12  the purposes of this subdivision, net profits are gross profits 
  5.13  less amounts expended for allowable expenses and paid in taxes 
  5.14  assessed on lawful gambling.  A statutory or home rule charter 
  5.15  city or a county may not require an organization conducting 
  5.16  lawful gambling within its jurisdiction to make an expenditure 
  5.17  to the city or county as a condition to operate within that city 
  5.18  or county, except as authorized under section 349.16, 
  5.19  subdivision 8, or 297E.02; provided, however, that an ordinance 
  5.20  requirement that such organizations must contribute ten percent 
  5.21  of their net profits derived from lawful gambling conducted at 
  5.22  premises within the city's or county's jurisdiction to a fund 
  5.23  administered and regulated by the responsible local unit of 
  5.24  government without cost to such fund, for disbursement by the 
  5.25  responsible local unit of government of the receipts for (i) 
  5.26  lawful purposes, or (ii) police, fire, and other emergency or 
  5.27  public safety-related services, equipment, and training, 
  5.28  excluding pension obligations, is not considered an expenditure 
  5.29  to the city or county nor a tax under section 297E.02, and is 
  5.30  valid and lawful.  A city or county making expenditures 
  5.31  authorized under this paragraph must by March 15 of each year 
  5.32  file a report with the board, on a form the board prescribes, 
  5.33  that lists all such revenues collected and expenditures for the 
  5.34  previous calendar year. 
  5.35     (b) A statutory or home rule city or county may by 
  5.36  ordinance require that a licensed organization conducting lawful 
  6.1   gambling within its jurisdiction expend all or a portion of its 
  6.2   expenditures for lawful purposes on lawful purposes conducted or 
  6.3   located within the city's or county's trade area.  Such an 
  6.4   ordinance must be limited to lawful purpose expenditures of 
  6.5   gross profits derived from lawful gambling conducted at premises 
  6.6   within the city's or county's jurisdiction, must define the 
  6.7   city's or county's trade area, and must specify the percentage 
  6.8   of lawful purpose expenditures which must be expended within the 
  6.9   trade area.  A trade area defined by a city under this 
  6.10  subdivision must include each city and township contiguous to 
  6.11  the defining city. 
  6.12     (c) A more stringent regulation or prohibition of lawful 
  6.13  gambling adopted by a political subdivision under this 
  6.14  subdivision must apply equally to all forms of lawful gambling 
  6.15  within the jurisdiction of the political subdivision, except a 
  6.16  political subdivision may prohibit the use of paddlewheels.