1.1 	A bill for an act
1.2 	relating to gambling; amending various provisions
1.3 	relating to lawful gambling; amending and providing
1.4 	definitions; making technical, clarifying, and
1.5 	conforming changes; amending Minnesota Statutes 2004,
1.6 	sections 349.12, subdivisions 5, 25, 33, by adding
1.7 	subdivisions; 349.15, subdivision 1; 349.151,
1.8 	subdivisions 4, 4b; 349.152, subdivision 2; 349.153;
1.9 	349.154, subdivision 1; 349.155, subdivision 3;
1.10 	349.16, subdivision 8; 349.161, subdivision 5;
1.11 	349.162, subdivisions 1, 4, 5; 349.163, subdivision 3;
1.12 	349.1635, subdivision 4; 349.166, subdivisions 1, 2;
1.13 	349.167, subdivision 1; 349.168, subdivision 8;
1.14 	349.17, subdivisions 5, 7; 349.1711, subdivision 1;
1.15 	349.173; 349.18, subdivision 1; 349.19, subdivisions
1.16 	4, 10; 349.211, subdivision 2c; 349.2125, subdivision
1.17 	1; 349.213; repealing Minnesota Statutes 2004,
1.18 	sections 349.162, subdivision 3; 349.164; 349.17,
1.19 	subdivision 1.
1.20 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.21 	Section 1. Minnesota Statutes 2004, section 349.12, is
1.22 	amended by adding a subdivision to read:
1.23 		Subd. 3c.Bar bingo. "Bar bingo" is a bingo occasion
1.24 	conducted at a permitted premises in an area where intoxicating
1.25 	liquor or 3.2 percent malt beverages are sold and where the
1.26 	licensed organization conducts another form of lawful gambling.

1.27 	Sec. 2. Minnesota Statutes 2004, section 349.12,
1.28 	subdivision 5, is amended to read:
1.29 		Subd. 5.Bingo occasion.  "Bingo occasion" means a single
1.30 	gathering or session at which a series of one or more successive
1.31 	bingo games is played. There is no limit on the number of games
1.32 	conducted during a bingo occasion but a bingo occasion must not
2.1 	last longer than eight consecutive hours.

2.2 	Sec. 3. Minnesota Statutes 2004, section 349.12,
2.3 	subdivision 25, is amended to read:
2.4 		Subd. 25.Lawful purpose.  (a) "Lawful purpose" means one
2.5 	or more of the following:
2.6 	(1) any expenditure by or contribution to a 501(c)(3) or
2.7 	festival organization, as defined in subdivision 15a, provided
2.8 	that the organization and expenditure or contribution are in
2.9 	conformity with standards prescribed by the board under section
2.10 	349.154, which standards must apply to both types of
2.11 	organizations in the same manner and to the same extent;
2.12 	(2) a contribution to or expenditure for goods and services
2.13 	for an individual or family suffering from poverty,
2.14 	homelessness, or physical or mental disability, which is used to
2.15 	relieve the effects of that poverty, homelessness, or disability 
2.16 	suffering;
2.17 	(3) a contribution to an individual for treatment for
2.18 	delayed posttraumatic stress syndrome or a contribution to a
2.19 	program recognized by the Minnesota Department of Human Services
2.20 	for the education, prevention, or treatment of compulsive 
2.21 	problem gambling;
2.22 	(4) a contribution to or expenditure on a public or private
2.23 	nonprofit educational institution registered with or accredited
2.24 	by this state or any other state;
2.25 	(5) a contribution to a scholarship fund for defraying the
2.26 	cost of education to individuals where the funds are awarded
2.27 	through an open and fair selection process;
2.28 	(6) activities by an organization or a government entity
2.29 	which recognize humanitarian or military service to the United
2.30 	States, the state of Minnesota, or a community, subject to rules
2.31 	of the board, provided that the rules must not include mileage
2.32 	reimbursements in the computation of the per diem reimbursement
2.33 	limit and must impose no aggregate annual limit on the amount of
2.34 	reasonable and necessary expenditures made to support:
2.35 	(i) members of a military marching or color guard unit for
2.36 	activities conducted within the state;
3.1 	(ii) members of an organization solely for services
3.2 	performed by the members at funeral services; or 
3.3 	(iii) members of military marching, color guard, or honor
3.4 	guard units may be reimbursed for participating in color guard,
3.5 	honor guard, or marching unit events within the state or states
3.6 	contiguous to Minnesota at a per participant rate of up to $35
3.7 	per diem; or 
3.8 	(iv) active military personnel and their immediate family
3.9 	members in need of support services;
3.10 	(7) recreational, community, and athletic facilities and
3.11 	activities intended primarily for persons under age 21, provided
3.12 	that such facilities and activities do not discriminate on the
3.13 	basis of gender and the organization complies with section
3.14 	349.154;
3.15 	(8) payment of local taxes authorized under this chapter,
3.16 	taxes imposed by the United States on receipts from lawful
3.17 	gambling, the taxes imposed by section 297E.02, subdivisions 1,
3.18 	4, 5, and 6, and the tax imposed on unrelated business income by
3.19 	section 290.05, subdivision 3;
3.20 	(9) payment of real estate taxes and assessments on
3.21 	permitted gambling premises wholly owned by the licensed
3.22 	organization paying the taxes, or wholly leased by a licensed
3.23 	veterans organization under a national charter recognized under
3.24 	section 501(c)(19) of the Internal Revenue Code, not to exceed:
3.25 	(i) for premises used for bingo, the amount that an
3.26 	organization may expend under board rules on rent for bingo; and 
3.27 	(ii) $35,000 per year for premises used for other forms of
3.28 	lawful gambling;
3.29 	(10) a contribution to the United States, this state or any
3.30 	of its political subdivisions, or any agency or instrumentality
3.31 	thereof other than a direct contribution to a law enforcement or
3.32 	prosecutorial agency;
3.33 	(11) a contribution to or expenditure by a nonprofit
3.34 	organization which is a church or body of communicants gathered
3.35 	in common membership for mutual support and edification in
3.36 	piety, worship, or religious observances;
4.1 	(12) payment of the reasonable costs of an audit required
4.2 	in section 297E.06, subdivision 4, provided the annual audit is
4.3 	filed in a timely manner with the Department of Revenue;
4.4 	(13) a contribution to or expenditure on a wildlife
4.5 	management project that benefits the public at-large, provided
4.6 	that the state agency with authority over that wildlife
4.7 	management project approves the project before the contribution
4.8 	or expenditure is made;
4.9 	(14) expenditures, approved by the commissioner of natural
4.10 	resources, by an organization for grooming and maintaining
4.11 	snowmobile trails and all-terrain vehicle trails that are (1)
4.12 	grant-in-aid trails established under section 85.019, or (2)
4.13 	other trails open to public use, including purchase or lease of
4.14 	equipment for this purpose;a contribution to or expenditure on
4.15 	projects or activities approved by the commissioner of natural
4.16 	resources for:
4.17 	(i) wildlife management projects that benefit the public at
4.18 	large;
4.19 	(ii) grant-in-aid trail maintenance and grooming
4.20 	established under sections 84.83 and 84.927 and other trails
4.21 	open to public use, including purchase or lease of equipment for
4.22 	this purpose; and 
4.23 	(iii) supplies and materials for safety training and
4.24 	educational programs coordinated by the Department of Natural
4.25 	Resources including the Enforcement Division;
4.26 	(15) (13) conducting nutritional programs, food shelves,
4.27 	and congregate dining programs primarily for persons who are age
4.28 	62 or older or disabled;
4.29 	(16) (14) a contribution to a community arts organization,
4.30 	or an expenditure to sponsor arts programs in the community,
4.31 	including but not limited to visual, literary, performing, or
4.32 	musical arts;
4.33 	(17) (15) an expenditure by a licensed veterans
4.34 	organization for payment of water, fuel for heating,
4.35 	electricity, and sewer costs for a building wholly owned or
4.36 	wholly leased by and used as the primary headquarters of the
5.1 	licensed veterans organization;
5.2 	(18) (16) expenditure by a licensed veterans organization
5.3 	of up to $5,000 in a calendar year in net costs to the
5.4 	organization for meals and other membership events, limited to
5.5 	members and spouses, held in recognition of military service.
5.6 	No more than $5,000 can be expended in total per calendar year
5.7 	under this clause by all licensed veterans organizations sharing
5.8 	the same veterans post home; or 
5.9 	(19) (17) payment of fees authorized under this chapter
5.10 	imposed by the state of Minnesota to conduct lawful gambling in
5.11 	Minnesota; or 
5.12 	(20) a contribution or expenditure to honor an individual's
5.13 	humanitarian service as demonstrated through philanthropy or
5.14 	volunteerism to the United States, this state, or local
5.15 	community.
5.16 	(b) Notwithstanding paragraph (a), "lawful purpose" does
5.17 	not include:
5.18 	(1) any expenditure made or incurred for the purpose of
5.19 	influencing the nomination or election of a candidate for public
5.20 	office or for the purpose of promoting or defeating a ballot
5.21 	question;
5.22 	(2) any activity intended to influence an election or a
5.23 	governmental decision-making process;
5.24 	(3) the erection, acquisition, improvement, expansion,
5.25 	repair, or maintenance of real property or capital assets owned
5.26 	or leased by an organization, unless the board has first
5.27 	specifically authorized the expenditures after finding that (i)
5.28 	the real property or capital assets will be used exclusively for
5.29 	one or more of the purposes in paragraph (a); (ii) with respect
5.30 	to expenditures for repair or maintenance only, that the
5.31 	property is or will be used extensively as a meeting place or
5.32 	event location by other nonprofit organizations or community or
5.33 	service groups and that no rental fee is charged for the use;
5.34 	(iii) with respect to expenditures, including a mortgage payment
5.35 	or other debt service payment, for erection or acquisition only,
5.36 	that the erection or acquisition is necessary to replace with a
6.1 	comparable building, a building owned by the organization and
6.2 	destroyed or made uninhabitable by fire or natural
6.3 	disaster catastrophe, provided that the expenditure may be only
6.4 	for that part of the replacement cost not reimbursed by
6.5 	insurance; (iv) with respect to expenditures, including a
6.6 	mortgage payment or other debt service payment, for erection or
6.7 	acquisition only, that the erection or acquisition is necessary
6.8 	to replace with a comparable building a building owned by the
6.9 	organization that was acquired from the organization by eminent
6.10 	domain or sold by the organization to a purchaser that the
6.11 	organization reasonably believed would otherwise have acquired
6.12 	the building by eminent domain, provided that the expenditure
6.13 	may be only for that part of the replacement cost that exceeds
6.14 	the compensation received by the organization for the building
6.15 	being replaced; or (v) with respect to an expenditure to bring
6.16 	an existing building into compliance with the Americans with
6.17 	Disabilities Act under item (ii), an organization has the option
6.18 	to apply the amount of the board-approved expenditure to the
6.19 	erection or acquisition of a replacement building that is in
6.20 	compliance with the Americans with Disabilities Act;
6.21 	(4) an expenditure by an organization which is a
6.22 	contribution to a parent organization, foundation, or affiliate
6.23 	of the contributing organization, if the parent organization,
6.24 	foundation, or affiliate has provided to the contributing
6.25 	organization within one year of the contribution any money,
6.26 	grants, property, or other thing of value;
6.27 	(5) a contribution by a licensed organization to another
6.28 	licensed organization unless the board has specifically
6.29 	authorized the contribution.  The board must authorize such a
6.30 	contribution when requested to do so by the contributing
6.31 	organization unless it makes an affirmative finding that the
6.32 	contribution will not be used by the recipient organization for
6.33 	one or more of the purposes in paragraph (a); or
6.34 	(6) a contribution to a statutory or home rule charter
6.35 	city, county, or town by a licensed organization with the
6.36 	knowledge that the governmental unit intends to use the
7.1 	contribution for a pension or retirement fund.

7.2 	Sec. 4. Minnesota Statutes 2004, section 349.12, is
7.3 	amended by adding a subdivision to read:
7.4 		Subd. 26b.Meat raffle. A "meat raffle" is defined as a
7.5 	raffle, paddlewheel, or tipboard game in which a package of meat
7.6 	or certificate for a package of meat is awarded as a merchandise
7.7 	prize.

7.8 	Sec. 5. Minnesota Statutes 2004, section 349.12,
7.9 	subdivision 33, is amended to read:
7.10 		Subd. 33.Raffle.  "Raffle" means a game in which a
7.11 	participant buys a ticket for a chance at a prize with the
7.12 	winner determined by a random drawing to take place at a
7.13 	location and date printed upon the ticket or other certificate
7.14 	of participation in an event where the prize determination is
7.15 	based on a method of random selection and all entries have an
7.16 	equal chance of selection.  The ticket or certificate of
7.17 	participation must include the location, date, and time of the
7.18 	selection of the winning entries.

7.19 	Sec. 6. Minnesota Statutes 2004, section 349.15,
7.20 	subdivision 1, is amended to read:
7.21 		Subdivision 1.Expenditure restrictions.  Gross profits
7.22 	from lawful gambling may be expended only for lawful purposes or
7.23 	allowable expenses as authorized by the membership of the
7.24 	conducting organization at a monthly meeting of the
7.25 	organization's membership.  Provided that no more than 70
7.26 	percent of the gross profit less the tax imposed under section
7.27 	297E.02, subdivision 1, from bingo, and no more than 55 60 
7.28 	percent of the gross profit from other forms of lawful gambling,
7.29 	may be expended annually for allowable expenses related to
7.30 	lawful gambling.
7.31 	
EFFECTIVE DATE. This section is effective for licenses
7.32 	issued after June 30, 2007.

7.33 	Sec. 7. Minnesota Statutes 2004, section 349.151,
7.34 	subdivision 4, is amended to read:
7.35 		Subd. 4.Powers and duties.  (a) The board has the
7.36 	following powers and duties:
8.1 	(1) to regulate lawful gambling to ensure it is conducted
8.2 	in the public interest;
8.3 	(2) to issue licenses to organizations, distributors,
8.4 	distributor salespersons, bingo halls,manufacturers, linked
8.5 	bingo game providers, and gambling managers;
8.6 	(3) to collect and deposit license, permit, and
8.7 	registration fees due under this chapter;
8.8 	(4) to receive reports required by this chapter and inspect
8.9 	all premises, records, books, and other documents of
8.10 	organizations, distributors, manufacturers, and linked bingo
8.11 	game providers, and bingo halls to insure compliance with all
8.12 	applicable laws and rules;
8.13 	(5) to make rules authorized by this chapter;
8.14 	(6) to register gambling equipment and issue registration
8.15 	stamps;
8.16 	(7) to provide by rule for the mandatory posting by
8.17 	organizations conducting lawful gambling of rules of play and
8.18 	the odds and/or house percentage on each form of lawful
8.19 	gambling;
8.20 	(8) to report annually to the governor and legislature on
8.21 	its activities and on recommended changes in the laws governing
8.22 	gambling;
8.23 	(9) to impose civil penalties of not more than $500 per
8.24 	violation on organizations, distributors, distributor
8.25 	salespersons, manufacturers, bingo halls,linked bingo game
8.26 	providers, and gambling managers for failure to comply with any
8.27 	provision of this chapter or any rule or order of the board;
8.28 	(10) to issue premises permits to organizations licensed to
8.29 	conduct lawful gambling;
8.30 	(11) to delegate to the director the authority to issue or
8.31 	deny license and premises permit applications and renewals under
8.32 	criteria established by the board;
8.33 	(12) to delegate to the director the authority to approve
8.34 	or deny fund loss requests, contribution of gambling funds to
8.35 	another licensed organization, and property expenditure requests
8.36 	under criteria established by the board;
9.1 	(13) to suspend or revoke licenses and premises permits of
9.2 	organizations, distributors, distributor salespersons,
9.3 	manufacturers, bingo halls,linked bingo game providers, or
9.4 	gambling managers as provided in this chapter;
9.5 	(13) (14) to register employees of organizations licensed
9.6 	to conduct lawful gambling;
9.7 	(14) (15) to require fingerprints from persons determined
9.8 	by board rule to be subject to fingerprinting;
9.9 	(15) (16) to delegate to a compliance review group of the
9.10 	board the authority to investigate alleged violations, issue
9.11 	consent orders, and initiate contested cases on behalf of the
9.12 	board;
9.13 	(16) (17) to order organizations, distributors, distributor
9.14 	salespersons, manufacturers, bingo halls,linked bingo game
9.15 	providers, and gambling managers to take corrective actions; and
9.16 	(17) (18) to take all necessary steps to ensure the
9.17 	integrity of and public confidence in lawful gambling.
9.18 	(b) The board, or director if authorized to act on behalf
9.19 	of the board, may by citation assess any organization,
9.20 	distributor, employee eligible to make sales on behalf of a 
9.21 	distributor salesperson, manufacturer, bingo hall licensee,
9.22 	linked bingo game provider, or gambling manager a civil penalty
9.23 	of not more than $500 per violation for a failure to comply with
9.24 	any provision of this chapter or any rule adopted or order
9.25 	issued by the board.  Any organization, distributor, bingo hall
9.26 	licensee distributor salesperson, gambling manager, linked bingo
9.27 	game provider, or manufacturer assessed a civil penalty under
9.28 	this paragraph may request a hearing before the board.  Appeals
9.29 	of citations imposing a civil penalty are not subject to the
9.30 	provisions of the Administrative Procedure Act.
9.31 	(c) All penalties received by the board must be deposited
9.32 	in the general fund.
9.33 	(d) All fees imposed by the board under sections 349.16 to
9.34 	349.167 must be deposited in the state treasury and credited to
9.35 	a lawful gambling regulation account in the special revenue
9.36 	fund.  Receipts in this account are available for the operations
10.1 	of the board up to the amount authorized in biennial
10.2 	appropriations from the legislature.

10.3 	Sec. 8. Minnesota Statutes 2004, section 349.151,
10.4 	subdivision 4b, is amended to read:
10.5 		Subd. 4b.Pull-tab sales from dispensing devices.  (a)
10.6 	The board may by rule authorize but not require the use of
10.7 	pull-tab dispensing devices.
10.8 	(b) Rules adopted under paragraph (a):
10.9 	(1) must limit the number of pull-tab dispensing devices on
10.10 	any permitted premises to three; and
10.11 	(2) must limit the use of pull-tab dispensing devices to a
10.12 	permitted premises which is (i) a licensed premises for on-sales
10.13 	of intoxicating liquor or 3.2 percent malt beverages; or (ii) a
10.14 	licensed bingo hall premises that allows gambling only by
10.15 	persons 18 years or older.
10.16 	(c) Notwithstanding rules adopted under paragraph (b),
10.17 	pull-tab dispensing devices may be used in establishments
10.18 	licensed for the off-sale of intoxicating liquor, other than
10.19 	drugstores and general food stores licensed under section
10.20 	340A.405, subdivision 1.

10.21 	Sec. 9. Minnesota Statutes 2004, section 349.152,
10.22 	subdivision 2, is amended to read:
10.23 		Subd. 2.Duties of director.  The director has the
10.24 	following duties:
10.25 	(1) to carry out gambling policy established by the board;
10.26 	(2) to employ and supervise personnel of the board;
10.27 	(3) to advise and make recommendations to the board on
10.28 	rules, policy, and legislative initiatives;
10.29 	(4) to approve or deny operational requests from licensees
10.30 	as delegated by the board;
10.31 	(5) to issue licenses and premises permits as authorized by
10.32 	the board;
10.33 	(5) (6) to issue cease and desist orders;
10.34 	(6) (7) to make recommendations to the board on license
10.35 	issuance, denial, censure, suspension and revocation, civil
10.36 	penalties, and corrective action the board imposes;
11.1 	(7) (8) to ensure that board rules, policy, and decisions
11.2 	are adequately and accurately conveyed to the board's licensees;
11.3 	(8) (9) to conduct investigations, inspections, compliance
11.4 	reviews, and audits under this chapter; and
11.5 	(9) (10) to issue subpoenas to compel the attendance of
11.6 	witnesses and the production of documents, books, records, and
11.7 	other evidence relating to an investigation, compliance review,
11.8 	or audit the director is authorized to conduct.

11.9 	Sec. 10. Minnesota Statutes 2004, section 349.153, is
11.10 	amended to read:
11.11 	349.153 CONFLICT OF INTEREST.
11.12 	(a) A person may not serve on the board, be the director,
11.13 	or be an employee of the board who has an interest in any
11.14 	corporation, association, limited liability company, or
11.15 	partnership that is licensed by the board as a distributor,
11.16 	manufacturer, or linked bingo game provider, or bingo hall under
11.17 	section 349.164.
11.18 	(b) A member of the board, the director, or an employee of
11.19 	the board may not accept employment with, receive compensation
11.20 	directly or indirectly from, or enter into a contractual
11.21 	relationship with an organization that conducts lawful gambling,
11.22 	a distributor, a linked bingo game provider, a bingo hall,or a
11.23 	manufacturer while employed with or a member of the board or
11.24 	within one year after terminating employment with or leaving the
11.25 	board.
11.26 	(c) A distributor, bingo hall,manufacturer, linked bingo
11.27 	game provider, or organization licensed to conduct lawful
11.28 	gambling may not hire a former employee, director, or member of
11.29 	the Gambling Control Board for one year after the employee,
11.30 	director, or member has terminated employment with or left the
11.31 	Gambling Control Board.

11.32 	Sec. 11. Minnesota Statutes 2004, section 349.154,
11.33 	subdivision 1, is amended to read:
11.34 		Subdivision 1.Standards for certain organizations. The
11.35 	board shall by rule prescribe Standards that must be met by any
11.36 	licensed organization that is a 501(c)(3) organization.  The
12.1 	standards must provide include:
12.2 	(1) operating standards for the organization, including a
12.3 	maximum percentage or percentages not to exceed 30 percent of
12.4 	the organization's total expenditures that may be expended for
12.5 	the organization's administration and operation as reported
12.6 	annually to and in a format prescribed by the Internal Revenue
12.7 	Service; and
12.8 	(2) standards for any expenditure by the organization of
12.9 	net profits from lawful gambling, including a requirement that
12.10 	the expenditure be related to the primary purpose of the
12.11 	organization or meet the criteria of a lawful purpose donation
12.12 	as defined in section 349.12, subdivision 25.

12.13 	Sec. 12. Minnesota Statutes 2004, section 349.155,
12.14 	subdivision 3, is amended to read:
12.15 		Subd. 3.Mandatory disqualifications.  (a) In the case of
12.16 	licenses for manufacturers, distributors, distributor
12.17 	salespersons, bingo halls,linked bingo game providers, and
12.18 	gambling managers, the board may not issue or renew a license
12.19 	under this chapter, and shall revoke a license under this
12.20 	chapter, if the applicant or licensee, or a director, officer,
12.21 	partner, governor, or person in a supervisory or management
12.22 	position of the applicant or licensee:
12.23 	(1) has ever been convicted of a felony or a crime
12.24 	involving gambling;
12.25 	(2) has ever been convicted of (i) assault, (ii) a criminal
12.26 	violation involving the use of a firearm, or (iii) making
12.27 	terroristic threats;
12.28 	(3) is or has ever been connected with or engaged in an
12.29 	illegal business;
12.30 	(4) owes $500 or more in delinquent taxes as defined in
12.31 	section 270.72;
12.32 	(5) had a sales and use tax permit revoked by the
12.33 	commissioner of revenue within the past two years; or
12.34 	(6) after demand, has not filed tax returns required by the
12.35 	commissioner of revenue.  The board may deny or refuse to renew
12.36 	a license under this chapter, and may revoke a license under
13.1 	this chapter, if any of the conditions in this paragraph are
13.2 	applicable to an affiliate or direct or indirect holder of more
13.3 	than a five percent financial interest in the applicant or
13.4 	licensee.
13.5 	(b) In the case of licenses for organizations, the board
13.6 	may not issue or renew a license under this chapter, and shall
13.7 	revoke a license under this chapter, if the organization, or an
13.8 	officer or member of the governing body of the organization:
13.9 	(1) has been convicted of a felony or gross misdemeanor
13.10 	within the five years before the issuance or renewal of the
13.11 	license involving theft or fraud;
13.12 	(2) has ever been convicted of a crime involving gambling;
13.13 	or
13.14 	(3) has had a license issued by the board or director
13.15 	permanently revoked for violation of law or board rule.

13.16 	Sec. 13. Minnesota Statutes 2004, section 349.16,
13.17 	subdivision 8, is amended to read:
13.18 		Subd. 8.Local investigation fee.  A statutory or home
13.19 	rule charter city or county notified under section 349.213,
13.20 	subdivision 2, may assess an investigation fee on organizations
13.21 	or bingo halls applying for or renewing a premises permit or a
13.22 	bingo hall license.  An investigation fee may not exceed the
13.23 	following limits:
13.24 	(1) for cities of the first class, $500;
13.25 	(2) for cities of the second class, $250;
13.26 	(3) for all other cities, $100; and
13.27 	(4) for counties, $375.

13.28 	Sec. 14. Minnesota Statutes 2004, section 349.161,
13.29 	subdivision 5, is amended to read:
13.30 		Subd. 5.Prohibition.  (a) No distributor, distributor
13.31 	salesperson, or other employee of a distributor, may also be a
13.32 	wholesale distributor of alcoholic beverages or an employee of a
13.33 	wholesale distributor of alcoholic beverages.
13.34 	(b) No distributor, distributor salesperson, or any
13.35 	representative, agent, affiliate, or other employee of a
13.36 	distributor, may:  (1) be involved in the conduct of lawful
14.1 	gambling by an organization; (2) keep or assist in the keeping
14.2 	of an organization's financial records, accounts, and
14.3 	inventories; or (3) prepare or assist in the preparation of tax
14.4 	forms and other reporting forms required to be submitted to the
14.5 	state by an organization.
14.6 	(c) No distributor, distributor salesperson, or any
14.7 	representative, agent, affiliate, or other employee of a
14.8 	distributor may provide a lessor of gambling premises any
14.9 	compensation, gift, gratuity, premium, or other thing of value.
14.10 	(d) No distributor, distributor salesperson, or any
14.11 	representative, agent, affiliate, or other employee of a
14.12 	distributor may provide an employee or agent of the organization
14.13 	any compensation, gift, gratuity, premium, or other thing of
14.14 	value greater than $25 per organization in a calendar year.
14.15 	(e) No distributor, distributor salesperson, or any
14.16 	representative, agent, affiliate, or other employee of a
14.17 	distributor may participate in any gambling activity at any
14.18 	gambling site or premises where gambling equipment purchased
14.19 	from that distributor or distributor salesperson is being used
14.20 	in the conduct of lawful gambling.
14.21 	(e) (f) No distributor, distributor salesperson, or any
14.22 	representative, agent, affiliate, or other employee of a
14.23 	distributor may alter or modify any gambling equipment, except
14.24 	to add a "last ticket sold" prize sticker.
14.25 	(f) (g) No distributor, distributor salesperson, or any
14.26 	representative, agent, affiliate, or other employee of a
14.27 	distributor may:  (1) recruit a person to become a gambling
14.28 	manager of an organization or identify to an organization a
14.29 	person as a candidate to become gambling manager for the
14.30 	organization; or (2) identify for an organization a potential
14.31 	gambling location.
14.32 	(g) (h) No distributor or distributor salesperson may
14.33 	purchase gambling equipment for resale to a person for use
14.34 	within the state from any person not licensed as a manufacturer
14.35 	under section 349.163, except for gambling equipment returned
14.36 	from an organization licensed under section 349.16, or exempt or
15.1 	excluded from licensing under section 349.166.
15.2 	(h) (i) No distributor or distributor salesperson may sell
15.3 	gambling equipment to any person for use in Minnesota other than
15.4 	(i) a licensed organization or organization excluded or exempt
15.5 	from licensing, or (ii) the governing body of an Indian tribe.
15.6 	(i) (j) No distributor or distributor salesperson may sell
15.7 	or otherwise provide a pull-tab or tipboard deal with the symbol
15.8 	required by section 349.163, subdivision 5, paragraph (h),
15.9 	visible on the flare to any person other than in Minnesota to a
15.10 	licensed organization or organization exempt from licensing.

15.11 	Sec. 15. Minnesota Statutes 2004, section 349.162,
15.12 	subdivision 1, is amended to read:
15.13 		Subdivision 1.stamp registration required. (a) A
15.14 	distributor may not sell, transfer, furnish, or otherwise
15.15 	provide to a person, and no person may purchase, borrow, accept,
15.16 	or acquire from a distributor gambling equipment for use within
15.17 	the state unless the equipment has been registered with the
15.18 	board and has a registration stamp affixed, except for gambling
15.19 	equipment not stamped by the manufacturer pursuant to section
15.20 	349.163, subdivision 5 or 8.  Each stamp must bear a
15.21 	registration number assigned by the board.
15.22 	(b) A manufacturer must return all unused registration
15.23 	stamps in its possession to the board by February 1, 1995.  No
15.24 	manufacturer may possess unaffixed registration stamps after
15.25 	February 1, 1995.
15.26 	(c) After February 1, 1996, no person may possess any
15.27 	unplayed pull-tab or tipboard deals with a registration stamp
15.28 	affixed to the flare or any unplayed paddleticket cards with a
15.29 	registration stamp affixed to the master flare.  This paragraph
15.30 	does not apply to unplayed pull-tab or tipboard deals with a
15.31 	registration stamp affixed to the flare, or to unplayed
15.32 	paddleticket cards with a registration stamp affixed to the
15.33 	master flare, if the deals or cards are identified on a list of
15.34 	existing inventory submitted by a licensed organization or a
15.35 	licensed distributor, in a format prescribed by the commissioner
15.36 	of revenue, to the commissioner of revenue on or before February
16.1 	1, 1996 or the Department of Revenue in a manner prescribed by
16.2 	the board or the Department of Revenue.  Gambling equipment kept
16.3 	in violation of this paragraph subdivision is contraband under
16.4 	section 349.2125.

16.5 	Sec. 16. Minnesota Statutes 2004, section 349.162,
16.6 	subdivision 4, is amended to read:
16.7 		Subd. 4.Prohibition.  (a) No person other than a
16.8 	licensed distributor or licensed manufacturer may possess
16.9 	unaffixed registration stamps issued by the board for the
16.10 	purpose of registering gambling equipment.
16.11 	(b) Unless otherwise provided in this chapter, no person
16.12 	may possess gambling equipment that has not been stamped and 
16.13 	registered.
16.14 	(c) On and after January 1, 1991, no distributor may:
16.15 	(1) sell a bingo hard card or paper sheet that does not
16.16 	bear an individual number; or
16.17 	(2) sell a package of bingo paper sheets that does not
16.18 	contain bingo paper sheets in numerical order.

16.19 	Sec. 17. Minnesota Statutes 2004, section 349.162,
16.20 	subdivision 5, is amended to read:
16.21 		Subd. 5.Sales from facilities.  (a) All gambling
16.22 	equipment purchased or possessed by a licensed distributor for
16.23 	resale to any person for use in Minnesota must, prior to the
16.24 	equipment's resale, be unloaded into a storage facility located
16.25 	in Minnesota which the distributor owns or leases; and which has
16.26 	been registered, in advance and in writing, with the Division of
16.27 	Alcohol and Gambling Enforcement as a storage facility of the
16.28 	distributor.  All unregistered gambling equipment and all
16.29 	unaffixed registration stamps owned by, or in the possession of,
16.30 	a licensed distributor in the state of Minnesota shall be stored
16.31 	at a storage facility which has been registered with the
16.32 	Division of Alcohol and Gambling Enforcement.  No gambling
16.33 	equipment may be moved from the facility unless the gambling
16.34 	equipment has been first registered with the board, except for
16.35 	gambling equipment not stamped by the manufacturer pursuant to
16.36 	section 349.163, subdivision 5 or 8 or the Department of Revenue.
17.1 	(b) Notwithstanding section 349.163, subdivisions 5, 6, and
17.2 	8, a licensed manufacturer may ship into Minnesota approved or
17.3 	unapproved gambling equipment if the licensed manufacturer ships
17.4 	the gambling equipment to a Minnesota storage facility that is:
17.5 	(1) owned or leased by the licensed manufacturer; and (2)
17.6 	registered, in advance and in writing, with the Division of
17.7 	Alcohol and Gambling Enforcement as a manufacturer's storage
17.8 	facility.  No gambling equipment may be shipped into Minnesota
17.9 	to the manufacturer's registered storage facility unless the
17.10 	shipment of the gambling equipment is reported to the Department
17.11 	of Revenue in a manner prescribed by the department.  No
17.12 	gambling equipment may be moved from the storage facility unless
17.13 	the gambling equipment is sold to a licensed distributor and is
17.14 	otherwise in conformity with this chapter, is shipped to an
17.15 	out-of-state site and the shipment is reported to the Department
17.16 	of Revenue in a manner prescribed by the department, or is
17.17 	otherwise sold and shipped as permitted by board rule.
17.18 	(c) All storage facilities owned, leased, used, or operated
17.19 	by a licensed distributor or manufacturer may be entered upon
17.20 	and inspected by the employees of the Division of Alcohol and
17.21 	Gambling Enforcement, the Division of Alcohol and Gambling
17.22 	Enforcement director's authorized representatives, employees of
17.23 	the Gambling Control Board or its authorized representatives,
17.24 	employees of the Department of Revenue, or authorized
17.25 	representatives of the director of the Division of Special Taxes
17.26 	of the Department of Revenue during reasonable and regular
17.27 	business hours.  Obstruction of, or failure to permit, entry and
17.28 	inspection is cause for revocation or suspension of a
17.29 	manufacturer's or distributor's licenses and permits issued
17.30 	under this chapter.
17.31 	(d) Unregistered gambling equipment and unaffixed
17.32 	registration stamps found at any location in Minnesota other
17.33 	than the manufacturing plant of a licensed manufacturer or a
17.34 	registered storage facility are contraband under section
17.35 	349.2125.  This paragraph does not apply:
17.36 	(1) to unregistered gambling equipment being transported in
18.1 	interstate commerce between locations outside this state, if the
18.2 	interstate shipment is verified by a bill of lading or other
18.3 	valid shipping document; and
18.4 	(2) to gambling equipment not stamped by the manufacturer
18.5 	pursuant to section 349.163, subdivision 5 or 8 registered with
18.6 	the Department of Revenue for distribution to the tribal casinos.

18.7 	Sec. 18. Minnesota Statutes 2004, section 349.163,
18.8 	subdivision 3, is amended to read:
18.9 		Subd. 3.Prohibited sales.  (a) A manufacturer may not:
18.10 	(1) sell gambling equipment for use or resale within the
18.11 	state to any person not licensed as a distributor, except that
18.12 	gambling equipment used exclusively in a linked bingo game may
18.13 	be sold to a licensed linked bingo provider; or
18.14 	(2) sell gambling equipment to a distributor in this state
18.15 	that has the same serial number as another item of gambling
18.16 	equipment of the same type that is sold by that manufacturer for
18.17 	use or resale in this state.
18.18 	(b) A manufacturer, affiliate of a manufacturer, or person
18.19 	acting as a representative or agent of a manufacturer may not
18.20 	provide a lessor of gambling premises or an appointed official
18.21 	any compensation, gift, gratuity, premium, contribution, or
18.22 	other thing of value.
18.23 	(c) A manufacturer may not sell or otherwise provide a
18.24 	pull-tab or tipboard deal with the symbol required by
18.25 	subdivision 5, paragraph (h) (d), imprinted on the flare to any
18.26 	person other than a licensed distributor unless the manufacturer
18.27 	first renders the symbol permanently invisible.

18.28 	Sec. 19. Minnesota Statutes 2004, section 349.1635,
18.29 	subdivision 4, is amended to read:
18.30 		Subd. 4.Prohibition.  (a) Except for services associated
18.31 	exclusively with a linked bingo game, a linked bingo game
18.32 	provider may not participate or assist in the conduct of lawful
18.33 	gambling by an organization.  No linked bingo game provider may:
18.34 	(1) also be licensed as a bingo hall or hold any financial
18.35 	or managerial interest in a premises leased for the conduct of 
18.36 	bingo hall;
19.1 	(2) also be licensed as a distributor or hold any financial
19.2 	or managerial interest in a distributor;
19.3 	(3) sell or lease linked bingo game equipment to any person
19.4 	not licensed as an organization;
19.5 	(4) purchase gambling equipment to be used exclusively in a
19.6 	linked bingo game from any person not licensed as a manufacturer
19.7 	under section 349.163; and
19.8 	(5) provide an organization, a lessor of gambling premises,
19.9 	or an appointed official any compensation, gift, gratuity,
19.10 	premium, or contribution.
19.11 	(b) Employees of the board and the Division of Alcohol and
19.12 	Gambling Enforcement may inspect the books, records, inventory,
19.13 	and business premises of a licensed linked bingo game provider
19.14 	without notice during the normal business hours of the linked
19.15 	bingo game provider.  The board may charge a linked bingo game
19.16 	provider for the actual cost of conducting scheduled or
19.17 	unscheduled inspections of the licensee's facilities.

19.18 	Sec. 20. Minnesota Statutes 2004, section 349.166,
19.19 	subdivision 1, is amended to read:
19.20 		Subdivision 1.Exclusions.  (a) Bingo, with the exception
19.21 	of linked bingo games, may be conducted without a license and
19.22 	without complying with sections 349.168, subdivisions 1 and 2;
19.23 	349.17, subdivisions 1, 4, and 5; 349.18, subdivision 1; and
19.24 	349.19, if it is conducted:
19.25 	(1) by an organization in connection with a county fair,
19.26 	the state fair, or a civic celebration and is not conducted for
19.27 	more than 12 consecutive days and is limited to no more than
19.28 	four separate applications for activities applied for and
19.29 	approved in a calendar year; or
19.30 	(2) by an organization that conducts four or fewer bingo
19.31 	occasions in a calendar year.
19.32 	An organization that holds a license to conduct lawful
19.33 	gambling under this chapter may not conduct bingo under this
19.34 	subdivision.
19.35 	(b) Bingo may be conducted within a nursing home or a
19.36 	senior citizen housing project or by a senior citizen
20.1 	organization if the prizes for a single bingo game do not exceed
20.2 	$10, total prizes awarded at a single bingo occasion do not
20.3 	exceed $200, no more than two bingo occasions are held by the
20.4 	organization or at the facility each week, only members of the
20.5 	organization or residents of the nursing home or housing project
20.6 	are allowed to play in a bingo game, no compensation is paid for
20.7 	any persons who conduct the bingo, and a manager is appointed to
20.8 	supervise the bingo.  Bingo conducted under this paragraph is
20.9 	exempt from sections 349.11 to 349.23, and the board may not
20.10 	require an organization that conducts bingo under this
20.11 	paragraph, or the manager who supervises the bingo, to register
20.12 	or file a report with the board.  The gross receipts from bingo
20.13 	conducted under the limitations of this subdivision are exempt
20.14 	from taxation under chapter 297A.
20.15 	(c) Raffles may be conducted by an organization without a
20.16 	license and without complying with sections 349.154 to 349.165
20.17 	and 349.167 to 349.213registering with the board if the value
20.18 	of all raffle prizes awarded by the organization in a calendar
20.19 	year does not exceed $1,500.
20.20 	(d) Except as provided in paragraph (b), the organization
20.21 	must maintain all required records of excluded gambling activity
20.22 	for 3-1/2 years.

20.23 	Sec. 21. Minnesota Statutes 2004, section 349.166,
20.24 	subdivision 2, is amended to read:
20.25 		Subd. 2.Exemptions.  (a) Lawful gambling, with the
20.26 	exception of linked bingo games, may be conducted by an
20.27 	organization without a license and without complying with
20.28 	sections 349.168, subdivisions 1 and 2; 349.17, subdivisions 4
20.29 	and 5; 349.18, subdivision 1; and 349.19 if:
20.30 	(1) the organization conducts lawful gambling on five or
20.31 	fewer days in a calendar year;
20.32 	(2) the organization does not award more than $50,000 in
20.33 	prizes for lawful gambling in a calendar year;
20.34 	(3) the organization pays a fee of $50 to the board,
20.35 	notifies the board in writing not less than 30 days before each
20.36 	lawful gambling occasion of the date and location of the
21.1 	occasion, or 60 days for an occasion held in the case of a city
21.2 	of the first class, the types of lawful gambling to be
21.3 	conducted, the prizes to be awarded, and receives an exemption
21.4 	identification number;
21.5 	(4) the organization notifies the local government unit 30
21.6 	days before the lawful gambling occasion, or 60 days for an
21.7 	occasion held in a city of the first class;
21.8 	(5) the organization purchases all gambling equipment and
21.9 	supplies from a licensed distributor; and
21.10 	(6) the organization reports to the board, on a single-page
21.11 	form prescribed by the board, within 30 days of each gambling
21.12 	occasion, the gross receipts, prizes, expenses, expenditures of
21.13 	net profits from the occasion, and the identification of the
21.14 	licensed distributor from whom all gambling equipment was
21.15 	purchased.
21.16 	(b) If the organization fails to file a timely report as
21.17 	required by paragraph (a), clause (3) or (6), the board shall
21.18 	not issue any authorization, license, or permit to the
21.19 	organization to conduct lawful gambling on an exempt, excluded,
21.20 	or licensed basis until the report has been filed and the
21.21 	organization may be subject to penalty as determined by the
21.22 	board.
21.23 	(c) Merchandise prizes must be valued at their fair market
21.24 	value.
21.25 	(d) Unused pull-tab and tipboard deals must be returned to
21.26 	the distributor within seven working days after the end of the
21.27 	lawful gambling occasion.  The distributor must accept and pay a
21.28 	refund for all returns of unopened and undamaged deals returned
21.29 	under this paragraph.
21.30 	(e) An organization that is exempt from taxation on
21.31 	purchases of pull-tabs and tipboards under section 297E.02,
21.32 	subdivision 4, paragraph (b), clause (4), must return to the
21.33 	distributor any tipboard or pull-tab deal no part of which is
21.34 	used at the lawful gambling occasion for which it was purchased
21.35 	by the organization.
21.36 	(f) The organization must maintain all required records of
22.1 	exempt gambling activity for 3-1/2 years.

22.2 	Sec. 22. Minnesota Statutes 2004, section 349.167,
22.3 	subdivision 1, is amended to read:
22.4 		Subdivision 1.Gambling manager required.  (a) All lawful
22.5 	gambling conducted by a licensed organization must be under the
22.6 	supervision of a gambling manager.  A gambling manager
22.7 	designated by an organization to supervise lawful gambling is
22.8 	responsible for the gross receipts of the organization and for
22.9 	its conduct in compliance with all laws and rules.  A person
22.10 	designated as a gambling manager shall maintain a fidelity 
22.11 	dishonesty bond in the sum of $10,000 in favor of the
22.12 	organization conditioned on the faithful performance of the
22.13 	manager's duties.  The terms of the bond must provide that
22.14 	notice be given to the board in writing not less than 30 days
22.15 	before its cancellation.
22.16 	(b) A person may not act as a gambling manager for more
22.17 	than one organization.
22.18 	(c) An organization may not conduct lawful gambling without
22.19 	having a gambling manager.
22.20 	(d) An organization may not have more than one gambling
22.21 	manager at any time.

22.22 	Sec. 23. Minnesota Statutes 2004, section 349.168,
22.23 	subdivision 8, is amended to read:
22.24 		Subd. 8.Percentage of gross profit paid. (a) A licensed
22.25 	organization may pay a percentage of the gross profit from
22.26 	raffle ticket sales to a nonprofit organization that sells
22.27 	raffle tickets for the licensed organization.
22.28 	(b) A licensed organization may pay a percentage of the
22.29 	gross profit from ticket sales held in conjunction with a meat
22.30 	raffle to an employee of the organization at a site classified
22.31 	as a bar operation if the frequency of the meat raffle is one
22.32 	day or less per week.  For purposes of this paragraph, an
22.33 	employee shall not be a lessor, employee of the lessor, or an
22.34 	immediate family member of the lessor.

22.35 	Sec. 24. Minnesota Statutes 2004, section 349.17,
22.36 	subdivision 5, is amended to read:
23.1 		Subd. 5.Bingo cards and sheets.  (a) The board shall by
23.2 	rule require that all licensed organizations:  (1) conduct bingo
23.3 	only using liquid daubers on bingo paper sheets that bear an
23.4 	individual number recorded by the distributor or linked bingo
23.5 	game provider; and (2) use each bingo paper sheet for no more
23.6 	than one bingo occasion.  In lieu of the requirements of clause
23.7 	(2), a licensed organization may electronically record the sale
23.8 	of each bingo hard card or paper sheet at each bingo occasion
23.9 	using an electronic recording system approved by the board.
23.10 	(b) The requirements of paragraph (a) shall only apply to a
23.11 	licensed organization that received gross receipts from bingo in
23.12 	excess of $150,000 in the organization's last fiscal year.

23.13 	Sec. 25. Minnesota Statutes 2004, section 349.17,
23.14 	subdivision 7, is amended to read:
23.15 		Subd. 7.noon hour bar bingo. Notwithstanding
23.16 	subdivisions 1 and 3,An organization may conduct bar bingo
23.17 	subject to the following restrictions:
23.18 	(1) the bingo is conducted only between the hours of 11:00
23.19 	a.m. and 2:00 p.m.;
23.20 	(2) the bingo is conducted at a site the organization owns
23.21 	or leases and which has a license for the sale of intoxicating
23.22 	beverages on the premises under chapter 340A;
23.23 	(3) the bingo is limited to one progressive bingo game per
23.24 	site as defined by section 349.211, subdivision 2;
23.25 	(4) (2) the bingo is conducted using only bingo paper
23.26 	sheets purchased from a licensed distributor;
23.27 	(5) if the premises are leased, the (3) no rent may not
23.28 	exceed $25 per day for each day bingo is conducted be paid for a
23.29 	bar bingo occasion; and
23.30 	(6) (4) linked bingo games may not be conducted at a noon
23.31 	hour bar bingo occasion.

23.32 	Sec. 26. Minnesota Statutes 2004, section 349.1711,
23.33 	subdivision 1, is amended to read:
23.34 		Subdivision 1.Sale of tickets.  Tipboard games must be
23.35 	played using only tipboard tickets that are either (1) attached
23.36 	to a placard and arranged in columns or rows, or (2) separate
24.1 	from the placard and contained in a receptacle while the game is
24.2 	in play.  The placard serves as the game flare.  The placard
24.3 	must contain a seal that conceals the winning number or symbol.
24.4 	When a tipboard ticket is purchased and opened from a game
24.5 	containing more than 30 tickets, each player having a tipboard
24.6 	ticket with one or more predesignated numbers or symbols must
24.7 	sign the placard at the line indicated by the number or symbol
24.8 	on the tipboard ticket.

24.9 	Sec. 27. Minnesota Statutes 2004, section 349.173, is
24.10 	amended to read:
24.11 	349.173 CONDUCT OF RAFFLES.
24.12 	(a) Raffle tickets or certificates of participation at a
24.13 	minimum must list the three most expensive prizes to be
24.14 	awarded.  If additional prizes will be awarded that are not
24.15 	contained on the raffle ticket, the raffle ticket must contain
24.16 	the statement "A complete list of additional prizes is available
24.17 	upon request." , a complete list of additional prizes must be
24.18 	publicly posted at the event and copies of the complete prize
24.19 	list made available upon request.Notwithstanding section
24.20 	349.12, subdivision 33, raffles conducted under the exemptions
24.21 	in section 349.166 may use tickets that contain only the
24.22 	sequential number of the raffle ticket and no other information
24.23 	if the organization makes a list of prizes and a statement of
24.24 	other relevant information required by rule available to persons
24.25 	purchasing tickets and if tickets are only sold at the event and
24.26 	on the date when the tickets are drawn.
24.27 	(b) Raffles must be conducted in a manner that ensures:
24.28 	(1) all entries in the raffle have an equal chance of
24.29 	selection;
24.30 	(2) entry is not conditional upon any other purchase;
24.31 	(3) the method of selection is conducted in a public forum;
24.32 	(4) the method of selection cannot be manipulated or based
24.33 	on the outcome of an event not under the control of the
24.34 	organization;
24.35 	(5) physical presence at the raffle is not a requirement to
24.36 	win; and 
25.1 	(6) all sold and unsold tickets or certificates of
25.2 	participation are accounted for.
25.3 	(c) Methods of selecting winning entries from a raffle
25.4 	other than prescribed in rule may be used with the prior written
25.5 	approval of the board.

25.6 	Sec. 28. Minnesota Statutes 2004, section 349.18,
25.7 	subdivision 1, is amended to read:
25.8 		Subdivision 1.Lease or ownership required; rent
25.9 	limitations.  (a) An organization may conduct lawful gambling
25.10 	only on premises it owns or leases.  Leases must be on a form
25.11 	prescribed by the board.  Except for leases entered into before
25.12 	August 1, 1994, the term of the lease may not begin before the
25.13 	effective date of the premises permit and must expire on the
25.14 	same day that the premises permit expires.  Copies of all leases
25.15 	must be made available to employees of the board and the
25.16 	Division of Alcohol and Gambling Enforcement on request.  The
25.17 	board may prescribe by rule limits on the amount of rent which
25.18 	an organization may pay to a lessor for premises leased for
25.19 	bingo.  Any rule adopted by the board limiting the amount of
25.20 	rent to be paid may only be effective for leases entered into,
25.21 	or renewed, after the effective date of the rule.
25.22 	(b) Rent paid by an organization for leased premises for
25.23 	the conduct of pull-tabs, tipboards, and paddlewheels is subject
25.24 	to the following limits:
25.25 	(1) for booth operations, including booth operations where
25.26 	a pull-tab dispensing device is located, booth operations where
25.27 	a bar operation is also conducted, and booth operations where
25.28 	both a pull-tab dispensing device is located and a bar operation
25.29 	is also conducted, the maximum rent is:
25.30 	(i) in any month where the organization's gross profit at
25.31 	those premises does not exceed $4,000, up to $400; and
25.32 	(ii) in any month where the organization's gross profit at
25.33 	those premises exceeds $4,000, up to $400 plus not more than ten
25.34 	percent of the gross profit for that month in excess of $4,000;
25.35 	(2) for bar operations, including bar operations where a
25.36 	pull-tab dispensing device is located but not including bar
26.1 	operations subject to clause (1), and for locations where only a
26.2 	pull-tab dispensing device is located:
26.3 	(i) in any month where the organization's gross profit at
26.4 	those premises does not exceed $1,000, up to $200; and
26.5 	(ii) in any month where the organization's gross profit at
26.6 	those premises exceeds $1,000, up to $200 plus not more than 20
26.7 	percent of the gross profit for that month in excess of $1,000;
26.8 	(3) a lease not governed by clauses (1) and (2) must be
26.9 	approved by the board before becoming effective;
26.10 	(4) total rent paid to a lessor from all organizations from
26.11 	leases governed by clause (1) may not exceed $1,750 per month.
26.12 	Total rent paid to a lessor from all organizations from leases
26.13 	governed by clause (2) may not exceed $2,500 per month.
26.14 	(c) Rent paid by an organization for leased premises for
26.15 	the conduct of bingo is subject to the following limits:
26.16 	(1) not more than 25 percent of the monthly gross profit
26.17 	from all bingo occasions excluding bar bingo; and 
26.18 	(2) no rent may be paid for bar bingo.
26.19 	(d) Amounts paid as rent under leases are all-inclusive.
26.20 	No other services or expenses provided or contracted by the
26.21 	lessor may be paid by the organization, including, but not
26.22 	limited to, trash removal, janitorial and cleaning services,
26.23 	snow removal, lawn services, electricity, heat, security,
26.24 	security monitoring, storage, other utilities or services, and,
26.25 	in the case of bar operations, cash shortages.  Any other
26.26 	expenditure made by an organization that is related to a leased
26.27 	premises must be approved by the director.  An organization may
26.28 	not provide any compensation or thing of value to a lessor or
26.29 	the lessor's employees from any fund source other than its
26.30 	gambling account.  Rent payments may not be made to an
26.31 	individual.
26.32 	(d) (e) Notwithstanding paragraph (b), an organization may
26.33 	pay a lessor for food or beverages or meeting room rental if the
26.34 	charge made is comparable to similar charges made to other
26.35 	individuals or groups.
26.36 	(e) (f) No person, distributor, manufacturer, lessor,
27.1 	linked bingo game provider, or organization other than the
27.2 	licensed organization leasing the space may conduct any activity
27.3 	other than the sale or serving of food and beverages on the
27.4 	leased premises during times when lawful gambling is being
27.5 	conducted on the premises.
27.6 	(f) (g) At a site where the leased premises consists of an
27.7 	area on or behind a bar at which alcoholic beverages are sold
27.8 	and employees of the lessor are employed by the organization as
27.9 	pull-tab sellers at the site, pull-tabs and tipboard tickets may
27.10 	be sold and redeemed by those employees at any place on or
27.11 	behind the bar, but the tipboards and receptacles for pull-tabs
27.12 	and cash drawers for lawful gambling receipts must be maintained
27.13 	only within the leased premises.
27.14 	(g) (h) Employees of a lessor or employees of an
27.15 	organization may participate in lawful gambling on the premises
27.16 	provided (1) if pull-tabs or tipboards are sold, the
27.17 	organization voluntarily posts, or is required to post, the
27.18 	major prizes as specified in section 349.172; and (2) any
27.19 	employee of the lessor participating in lawful gambling is not a
27.20 	gambling employee for the organization conducting lawful
27.21 	gambling on the premises.
27.22 	(h) (i) A gambling employee may purchase pull-tabs or
27.23 	tipboards at the site of the employee's place of employment
27.24 	provided:
27.25 	(1) the organization voluntarily posts, or is required to
27.26 	post, the major prizes for pull-tab or tipboard games as
27.27 	specified in section 349.172; and
27.28 	(2) the employee is not involved in the sale of pull-tabs
27.29 	or tipboards at that site.
27.30 	(i) (j) At a leased site where an organization uses a
27.31 	paddlewheel consisting of 30 numbers or less or a tipboard
27.32 	consisting of 30 tickets or less, tickets may be sold throughout
27.33 	the permitted premises, but winning tickets must be redeemed,
27.34 	the paddlewheel must be located, and the tipboard seal must be
27.35 	opened within the leased premises.
27.36 	(j) (k) A member of the lessor's immediate family may not
28.1 	be a compensated employee of an organization leasing space at
28.2 	the premises.  For purposes of this paragraph, a "member of the
28.3 	immediate family" is a spouse, parent, child, or sibling.

28.4 	Sec. 29. Minnesota Statutes 2004, section 349.19,
28.5 	subdivision 4, is amended to read:
28.6 		Subd. 4.Discrepancies.  If at a bingo occasion a
28.7 	discrepancy of more than $20 $50 is found between the gross
28.8 	receipts as reported by the checkers and the gross receipts
28.9 	determined by adding the cash receipts, the discrepancy must be
28.10 	reported to the board within five days of the bingo occasion.

28.11 	Sec. 30. Minnesota Statutes 2004, section 349.19,
28.12 	subdivision 10, is amended to read:
28.13 		Subd. 10.Pull-tab records.  (a) The board shall by rule
28.14 	require a licensed organization to require each winner of a
28.15 	pull-tab prize of $50 or more to present identification in the
28.16 	form of a driver's license, Minnesota identification card, or
28.17 	other identification the board deems sufficient to allow the
28.18 	identification and tracing of the winner.  The rule must require
28.19 	the organization to retain winning pull-tabs of $50 or more, and
28.20 	the identification of the winner of the pull-tab, for 3-1/2
28.21 	years.
28.22 	(b) An organization must maintain separate cash banks for
28.23 	each deal of pull-tabs unless (1) two or more deals are
28.24 	commingled in a single receptacle pull-tab dispensing device, or
28.25 	(2) the organization uses a cash register, of a type approved by
28.26 	the board, which records all sales of pull-tabs by separate
28.27 	deals.
28.28 	(c) The board shall:
28.29 	(1) by rule adopt minimum technical standards for cash
28.30 	registers that may be used by organizations, and shall approve
28.31 	for use by organizations any cash register that meets the
28.32 	standards,;and
28.33 	(2) before allowing an organization to use a cash register
28.34 	that commingles receipts from several different pull-tab games
28.35 	in play, adopt rules that define how cash registers may be used
28.36 	and that establish a procedure for organizations to reconcile
29.1 	all pull-tab games in play at the end of each month.

29.2 	Sec. 31. Minnesota Statutes 2004, section 349.211,
29.3 	subdivision 2c, is amended to read:
29.4 		Subd. 2c.Tipboard prizes.  The maximum prize which may
29.5 	be awarded for a tipboard ticket is $500 $599, not including any
29.6 	cumulative or carryover prizes.  Cumulative or carryover prizes
29.7 	in tipboard games shall not exceed $2,500.

29.8 	Sec. 32. Minnesota Statutes 2004, section 349.2125,
29.9 	subdivision 1, is amended to read:
29.10 		Subdivision 1.Contraband defined.  The following are
29.11 	contraband:
29.12 	(1) all pull-tab or tipboard deals or paddleticket cards
29.13 	not stamped or bar coded in accordance with this chapter or
29.14 	chapter 297E;
29.15 	(2) all pull-tab or tipboard deals in the possession of any
29.16 	unlicensed person, firm, or organization, whether stamped or
29.17 	unstamped;
29.18 	(3) any container used for the storage and display of any
29.19 	contraband pull-tab or tipboard deals as defined in clauses (1)
29.20 	and (2);
29.21 	(4) all currency, checks, and other things of value used
29.22 	for pull-tab or tipboard transactions not expressly permitted
29.23 	under this chapter, and any cash drawer, cash register, or any
29.24 	other container used for illegal pull-tab or tipboard
29.25 	transactions including its contents;
29.26 	(5) any device including, but not limited to, motor
29.27 	vehicles, trailers, snowmobiles, airplanes, and boats used, with
29.28 	the knowledge of the owner or of a person operating with the
29.29 	consent of the owner, for the storage or transportation of more
29.30 	than five pull-tab or tipboard deals that are contraband under
29.31 	this subdivision.  When pull-tabs and tipboards are being
29.32 	transported in the course of interstate commerce between
29.33 	locations outside this state, the pull-tab and tipboard deals
29.34 	are not contraband, notwithstanding the provisions of clauses
29.35 	(1) and (12);
29.36 	(6) any unaffixed registration stamps except as provided in
30.1 	section 349.162, subdivision 4;
30.2 	(7) any prize used or offered in a game utilizing
30.3 	contraband as defined in this subdivision;
30.4 	(8) any altered, modified, or counterfeit pull-tab or
30.5 	tipboard ticket;
30.6 	(9) any unregistered gambling equipment except as permitted
30.7 	by this chapter;
30.8 	(10) any gambling equipment kept in violation of section
30.9 	349.18;
30.10 	(11) any gambling equipment not in conformity with law or
30.11 	board rule;
30.12 	(12) any pull-tab or tipboard deal in the possession of a
30.13 	person other than a licensed distributor or licensed
30.14 	manufacturer for which the person, upon demand of a licensed
30.15 	peace officer or authorized agent of the commissioner of revenue
30.16 	or director of alcohol and gambling enforcement, does not
30.17 	immediately produce for inspection the invoice or a true and
30.18 	correct copy of the invoice for the acquisition of the deal from
30.19 	a licensed distributor;
30.20 	(13) any pull-tab or tipboard deals or portions of deals on
30.21 	which the tax imposed under chapter 297E has not been paid; and
30.22 	(14) any device prohibited by section 609.76, subdivisions
30.23 	4 to 6.

30.24 	Sec. 33. Minnesota Statutes 2004, section 349.213, is
30.25 	amended to read:
30.26 	349.213 LOCAL AUTHORITY.
30.27 		Subdivision 1.Local regulation. (a) A statutory or home
30.28 	rule city or county has the authority to adopt more stringent
30.29 	regulation of lawful gambling within its jurisdiction, including
30.30 	the prohibition of lawful gambling, and may require a permit for
30.31 	the conduct of gambling exempt from licensing under section
30.32 	349.166.  The fee for a permit issued under this subdivision may
30.33 	not exceed $100.  The authority granted by this subdivision does
30.34 	not include the authority to require a license or permit to
30.35 	conduct gambling by organizations or sales by distributors or
30.36 	linked bingo game providers licensed by the board.  The
31.1 	authority granted by this subdivision does not include the
31.2 	authority to require an organization to make specific
31.3 	expenditures of more than ten percent per year from its net
31.4 	profits derived from lawful gambling.  For the purposes of this
31.5 	subdivision, net profits are gross profits less amounts expended
31.6 	for allowable expenses and paid in taxes assessed on lawful
31.7 	gambling.  A statutory or home rule charter city or a county may
31.8 	not require an organization conducting lawful gambling within
31.9 	its jurisdiction to make an expenditure to the city or county as
31.10 	a condition to operate within that city or county, except as
31.11 	authorized under section 349.16, subdivision 8, or 297E.02;
31.12 	provided, however, that an ordinance requirement that such
31.13 	organizations must contribute ten percent per year of their net
31.14 	profits derived from lawful gambling conducted at premises
31.15 	within the city's or county's jurisdiction to a fund
31.16 	administered and regulated by the responsible local unit of
31.17 	government without cost to such fund, for disbursement by the
31.18 	responsible local unit of government of the receipts for (i)
31.19 	lawful purposes, or (ii) police, fire, and other emergency or
31.20 	public safety-related services, equipment, and training,
31.21 	excluding pension obligations, is not considered an expenditure
31.22 	to the city or county nor a tax under section 297E.02, and is
31.23 	valid and lawful.  A city or county making expenditures
31.24 	authorized under this paragraph must by March 15 of each year
31.25 	file a report with the board, on a form the board prescribes,
31.26 	that lists all such revenues collected and expenditures for the
31.27 	previous calendar year.
31.28 	(b) A statutory or home rule city or county may by
31.29 	ordinance require that a licensed organization conducting lawful
31.30 	gambling within its jurisdiction expend all or a portion of its
31.31 	expenditures for lawful purposes on lawful purposes conducted or
31.32 	located within the city's or county's trade area.  Such an
31.33 	ordinance must be limited to lawful purpose expenditures of
31.34 	gross profits derived from lawful gambling conducted at premises
31.35 	within the city's or county's jurisdiction, must define the
31.36 	city's or county's trade area, and must specify the percentage
32.1 	of lawful purpose expenditures which must be expended within the
32.2 	trade area.  A trade area defined by a city under this
32.3 	subdivision must include each city and township contiguous to
32.4 	the defining city.
32.5 	(c) A more stringent regulation or prohibition of lawful
32.6 	gambling adopted by a political subdivision under this
32.7 	subdivision must apply equally to all forms of lawful gambling
32.8 	within the jurisdiction of the political subdivision, except a
32.9 	political subdivision may prohibit the use of paddlewheels.
32.10 		Subd. 2.Local approval. Before issuing or renewing a
32.11 	premises permit or bingo hall license, the board must notify the
32.12 	city council of the statutory or home rule city in which the
32.13 	organization's premises or the bingo hall is located or, if the
32.14 	premises or hall is located outside a city, the county board of
32.15 	the county and the town board of the town where the premises or
32.16 	hall is located.  The board may require organizations or bingo
32.17 	halls to notify the appropriate local government at the time of
32.18 	application.  This required notification is sufficient to
32.19 	constitute the notice required by this subdivision.  The board
32.20 	may not issue or renew a premises permit or bingo hall license 
32.21 	unless the organization submits a resolution from the city
32.22 	council or county board approving the premises permit or bingo
32.23 	hall license.  The resolution must have been adopted within 90
32.24 	days of the date of application for the new or renewed permit or
32.25 	license.
32.26 		Subd. 3.Local gambling tax. A statutory or home rule
32.27 	charter city that has one or more licensed organizations
32.28 	operating lawful gambling, and a county that has one or more
32.29 	licensed organizations outside incorporated areas operating
32.30 	lawful gambling, may impose a local gambling tax on each
32.31 	licensed organization within the city's or county's
32.32 	jurisdiction.  The tax may be imposed only if the amount to be
32.33 	received by the city or county is necessary to cover the costs
32.34 	incurred by the city or county to regulate lawful gambling.  The
32.35 	tax imposed by this subdivision may not exceed three percent per
32.36 	year of the gross receipts of a licensed organization from all
33.1 	lawful gambling less prizes actually paid out by the
33.2 	organization.  A city or county may not use money collected
33.3 	under this subdivision for any purpose other than to regulate
33.4 	lawful gambling. All documents pertaining to site inspections,
33.5 	fines, penalties, or other corrective action involving local
33.6 	lawful gambling regulation must be shared with the board within
33.7 	30 days of filing at the city or county of jurisdiction.A tax
33.8 	imposed under this subdivision is in lieu of all other local
33.9 	taxes and local investigation fees on lawful gambling.  A city
33.10 	or county that imposes a tax under this subdivision shall
33.11 	annually, by March 15, file a report with the board in a form
33.12 	prescribed by the board showing (1) the amount of revenue
33.13 	produced by the tax during the preceding calendar year, and (2)
33.14 	the use of the proceeds of the tax.

33.15 	Sec. 34. REPEALER.
 33.16 	Minnesota Statutes 2004, sections 349.162, subdivision 3;
33.17 	349.164; and 349.17, subdivision 1, are repealed.