HF 1485

5th Engrossment - 87th Legislature (2011 - 2012) Posted on 04/24/2012 09:33am

A bill for an act
relating to gambling; modifying certain rates of tax on lawful gambling;
providing for electronic linked bingo games, electronic pull-tab games, and
sports-themed tipboard games; making clarifying, conforming, and technical
changes; appropriating money; amending Minnesota Statutes 2010, sections
297E.01, subdivisions 7, 8, 9; 297E.02, subdivisions 1, 3, 6, 7, 10, 11, by adding
a subdivision; 297E.13, subdivision 5; 349.12, subdivisions 3b, 3c, 5, 6a, 12a,
18, 25, 25b, 25c, 25d, 29, 31, 32, 34, 35, by adding subdivisions; 349.13;
349.151, subdivisions 4b, 4c, by adding subdivisions; 349.155, subdivisions 3, 4;
349.161, subdivisions 1, 5; 349.162, subdivision 5; 349.163, subdivisions 1, 5, 6;
349.1635, subdivisions 2, 3, by adding a subdivision; 349.165, subdivision 2;
349.17, subdivisions 6, 7, 8, by adding a subdivision; 349.1711, subdivisions 1,
2; 349.1721; 349.18, subdivision 1; 349.19, subdivisions 2, 3, 5, 10; 349.211,
subdivisions 1a, 2c; repealing Minnesota Statutes 2010, sections 297E.02,
subdivision 4; 349.15, subdivision 3; 349.19, subdivision 2a.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 297E.01, subdivision 7, is amended to read:

Subd. 7.

Gambling product.

"Gambling product" means bingo hard cards, bingo
paper sheets, deleted text begin or deleted text end linked bingo paper sheets new text begin , or electronic linked bingo games new text end ; pull-tabs;
new text begin electronic pull-tab games; new text end tipboards; paddle tickets and paddle ticket cards; raffle tickets;
or any other ticket, card, board, placard, device, or token that represents a chance, for
which consideration is paid, to win a prize.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 2.

Minnesota Statutes 2010, section 297E.01, subdivision 8, is amended to read:

Subd. 8.

Gross receipts.

"Gross receipts" means all receipts derived from lawful
gambling activity including, but not limited to, the following items:

(1) gross sales of bingo hard cards deleted text begin and deleted text end new text begin , new text end paper sheets new text begin , linked bingo paper sheets, and
electronic linked bingo games new text end before reduction for prizes, expenses, shortages, free plays,
or any other charges or offsets;

(2) the ideal gross of pull-tab new text begin , electronic pull-tab games, new text end and tipboard deals or games
less the value of unsold and defective tickets and before reduction for prizes, expenses,
shortages, free plays, or any other charges or offsets;

(3) gross sales of raffle tickets and paddle tickets before reduction for prizes,
expenses, shortages, free plays, or any other charges or offsets;

(4) admission, commission, cover, or other charges imposed on participants in
lawful gambling activity as a condition for or cost of participation; and

(5) interest, dividends, annuities, profit from transactions, or other income derived
from the accumulation or use of gambling proceeds.

Gross receipts does not include proceeds from rental under section 349.18,
subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 3.

Minnesota Statutes 2010, section 297E.01, subdivision 9, is amended to read:

Subd. 9.

Ideal gross.

"Ideal gross" means the total amount of receipts that would be
received if every individual ticket in the pull-tab new text begin , electronic pull-tab games new text end or tipboard
deal new text begin , paddle wheel game, and raffle ticket new text end was sold at its face value. In the calculation of
ideal gross and prizes, a free play ticket new text begin pull-tab or electronic pull-tab new text end shall be valued at
face value. new text begin "Ideal gross" also means the total amount of receipts that would be received
if every bingo paper sheet, linked bingo paper sheet, and electronic linked bingo games
were sold at face value.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 4.

Minnesota Statutes 2010, section 297E.02, subdivision 1, is amended to read:

Subdivision 1.

Imposition.

A tax is imposed on all lawful gambling other than (1)
new text begin paper or electronic new text end pull-tab deals or games; (2) tipboard deals or games; deleted text begin and deleted text end (3) new text begin electronic
linked bingo; and (4) new text end items listed in section 297E.01, subdivision 8, clauses (4) and (5), at
the rate of 8.5 percent on the gross receipts as defined in section 297E.01, subdivision 8,
less prizes actually paid. The tax imposed by this subdivision is in lieu of the tax imposed
by section 297A.62 and all local taxes and license fees except a fee authorized under
section 349.16, subdivision 8, or a tax authorized under subdivision 5.

The tax imposed under this subdivision is payable by the organization or party
conducting, directly or indirectly, the gambling.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for games reported as played after
June 30, 2012.
new text end

Sec. 5.

Minnesota Statutes 2010, section 297E.02, subdivision 3, is amended to read:

Subd. 3.

Collection; disposition.

new text begin (a) new text end Taxes imposed by this section deleted text begin other than in
subdivision 4 deleted text end are due and payable to the commissioner when the gambling tax return
is required to be filed. deleted text begin Taxes imposed by subdivision 4 are due and payable to the
commissioner on or before the last business day of the month following the month in
which the taxable sale was made. deleted text end new text begin Distributors must file their monthly sales figures with
the commissioner on a form prescribed by the commissioner. new text end Returns covering the taxes
imposed under this section must be filed with the commissioner on or before the 20th day
of the month following the close of the previous calendar month. The commissioner
may require that the returns be filed via magnetic media or electronic data transfer. The
proceeds, along with the revenue received from all license fees and other fees under
sections 349.11 to 349.191, 349.211, and 349.213, must be paid to the commissioner of
management and budget for deposit in the general fund.

new text begin (b) The sales tax imposed by chapter 297A on the sale of pull-tabs and tipboards by
the distributor is imposed on the retail sales price. The retail sale of pull-tabs or tipboards
by the organization is exempt from taxes imposed by chapter 297A and is exempt from all
local taxes and license fees except a fee authorized under section 349.16, subdivision 8.
new text end

new text begin (c) One-half of one percent of the revenue deposited in the general fund under
paragraph (a), is appropriated to the commissioner of human services for the compulsive
gambling treatment program established under section 245.98. One-half of one percent
of the revenue deposited in the general fund under paragraph (a), is appropriated to
the commissioner of human services for a grant to the state affiliate recognized by
the National Council on Problem Gambling to increase public awareness of problem
gambling, education and training for individuals and organizations providing effective
treatment services to problem gamblers and their families, and research relating to problem
gambling. Money appropriated by this paragraph must supplement and must not replace
existing state funding for these programs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 6.

Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read:

Subd. 6.

Combined new text begin net new text end receipts tax.

In addition to the taxes imposed under
deleted text begin subdivisions deleted text end new text begin subdivision new text end 1 deleted text begin and 4 deleted text end , a tax is imposed on the combined receipts of the
organization. As used in this section, "combined new text begin net new text end receipts" is the sum of the
organization's gross receipts from lawful gambling less gross receipts directly derived
from the conduct of new text begin paper new text end bingo, raffles, and paddle wheels, as defined in section 297E.01,
subdivision 8, new text begin and less the net prizes actually paid, other than prizes actually paid for
paper bingo, raffles, and paddle wheels, new text end for the fiscal year. The combined new text begin net new text end receipts of
an organization are subject to a tax computed according to the following schedule:

	If the combined new text begin net new text end receipts for the fiscal year are:		The tax is:
	Not over deleted text begin $500,000 deleted text end new text begin $87,500 new text end		deleted text begin zero deleted text end new text begin 6.89 percent new text end
	Over deleted text begin $500,000 deleted text end new text begin $87,500 new text end , but not over deleted text begin $700,000 deleted text end new text begin $122,500 new text end		deleted text begin 1.7 deleted text end new text begin $6,029 plus 13.78 new text end percent of the amount over deleted text begin $500,000 deleted text end new text begin $87,500 new text end , but not over deleted text begin $700,000 deleted text end new text begin $122,500 new text end
	Over deleted text begin $700,000 deleted text end new text begin $122,500 new text end , but not over deleted text begin $900,000 deleted text end new text begin $157,500 new text end		deleted text begin $3,400 deleted text end new text begin $10,852 new text end plus deleted text begin 3.4 deleted text end new text begin 20.67 new text end percent of the amount over deleted text begin $700,000 deleted text end new text begin $122,500 new text end , but not over deleted text begin $900,000 deleted text end new text begin $157,500 new text end
	Over deleted text begin $900,000 deleted text end new text begin $157,500 new text end		deleted text begin $10,200 deleted text end new text begin $18,086 new text end plus deleted text begin 5.1 deleted text end new text begin 27.56 new text end percent of the amount over deleted text begin $900,000 deleted text end new text begin $157,500 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 7.

Minnesota Statutes 2010, section 297E.02, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin Unaccounted games. new text end

new text begin If a licensed distributor cannot account for a
pull-tab game, an electronic pull-tab game, a tipboard deal, paddletickets, an electronic
linked bingo game, bingo paper sheets, or linked bingo paper sheets, the distributor must
report the sheets or games to the commissioner as lost and remit a tax of six percent
on the ideal gross of the sheets or games.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 8.

Minnesota Statutes 2010, section 297E.02, subdivision 7, is amended to read:

Subd. 7.

Untaxed gambling product.

(a) In addition to penalties or criminal
sanctions imposed by this chapter, a person, organization, or business entity possessing or
selling a pull-tab new text begin , electronic pull-tab game new text end or tipboard upon which the tax imposed by
deleted text begin subdivision 4 deleted text end new text begin this chapter new text end has not been paid is liable for a tax of six percent of the ideal
gross of each pull-tab new text begin , electronic pull-tab game, new text end or tipboard. The tax on a partial deal
must be assessed as if it were a full deal.

(b) In addition to penalties and criminal sanctions imposed by this chapter, a person
not licensed by the board who conducts bingo, new text begin linked bingo, electronic linked bingo,
new text end raffles, or paddle wheel games is liable for a tax of six percent of the gross receipts
from that activity.

(c) The tax must be assessed by the commissioner. An assessment must be
considered a jeopardy assessment or jeopardy collection as provided in section 270C.36.
The commissioner shall assess the tax based on personal knowledge or information
available to the commissioner. The commissioner shall mail to the taxpayer at the
taxpayer's last known address, or serve in person, a written notice of the amount of tax,
demand its immediate payment, and, if payment is not immediately made, collect the tax
by any method described in chapter 270C, except that the commissioner need not await the
expiration of the times specified in chapter 270C. The tax assessed by the commissioner
is presumed to be valid and correctly determined and assessed. The burden is upon the
taxpayer to show its incorrectness or invalidity. The tax imposed under this subdivision
does not apply to gambling that is exempt from taxation under subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 9.

Minnesota Statutes 2010, section 297E.02, subdivision 10, is amended to read:

Subd. 10.

Refunds; appropriation.

A person who has, under this chapter, paid
to the commissioner an amount of tax for a period in excess of the amount legally due
for that period, may file with the commissioner a claim for a refund of the excess. The
amount necessary to pay the refunds under this subdivision deleted text begin and subdivision 4, paragraph
(d), deleted text end is appropriated from the general fund to the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 10.

Minnesota Statutes 2010, section 297E.02, subdivision 11, is amended to read:

Subd. 11.

deleted text begin Unplayed or deleted text end Defective deleted text begin pull-tabs or tipboards deleted text end new text begin gambling products new text end .

deleted text begin If a
deal of pull-tabs or tipboards registered with the board or bar coded in accordance with this
chapter and chapter 349 and upon which the tax imposed by subdivision 4 has been paid is
returned unplayed to the distributor, the commissioner shall allow a refund of the tax paid.
deleted text end

If a defective deal registered with the board or bar coded in accordance with this
chapter and chapter 349 deleted text begin and upon which the taxes have been paid deleted text end is returned to the
manufacturer, the distributor shall submit to the commissioner of revenue certification
from the manufacturer that the deal was returned and in what respect it was defective.
The certification must be on a form prescribed by the commissioner and must contain
additional information the commissioner requires.

The commissioner may require deleted text begin that no refund deleted text end under this subdivision deleted text begin be made
unless the deleted text end new text begin that all defective and new text end returned pull-tabs deleted text begin or deleted text end new text begin , new text end tipboards deleted text begin have been deleted text end new text begin , paddle tickets,
paper bingo sheets, and linked bingo paper sheets be new text end set aside for inspection by the
commissioner's employee.

Reductions in previously paid taxes authorized by this subdivision must be made
when and in the manner prescribed by the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for games sold by a licensed
distributor after June 30, 2012.
new text end

Sec. 11.

Minnesota Statutes 2010, section 297E.13, subdivision 5, is amended to read:

Subd. 5.

Untaxed gambling equipment.

It is a gross misdemeanor for a person to
possess gambling equipment for resale in this state that has not been stamped or bar-coded
in accordance with this chapter and chapter 349 and upon which the taxes imposed by
chapter 297A or section 297E.02 deleted text begin , subdivision 4 deleted text end deleted text begin , deleted text end have not been paid. The director of
alcohol and gambling enforcement or the commissioner or the designated inspectors
and employees of the director or commissioner may seize in the name of the state of
Minnesota any unregistered or untaxed gambling equipment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for actions occurring after June
30, 2012.
new text end

Sec. 12.

Minnesota Statutes 2010, section 349.12, subdivision 3b, is amended to read:

Subd. 3b.

Bar operation.

"Bar operation" means a method of selling and redeeming
new text begin disposable new text end gambling equipment new text begin by an employee of the lessor new text end within a leased premises
which is licensed for the on-sale of alcoholic beverages deleted text begin where such sales and redemptions
are made by an employee of the lessor from a common area where food and beverages
are also sold deleted text end .

Sec. 13.

Minnesota Statutes 2010, section 349.12, subdivision 3c, is amended to read:

Subd. 3c.

Bar bingo.

"Bar bingo" is a bingo occasion conducted at a permitted
premises in an area where intoxicating liquor or 3.2 percent malt beverages are sold and
where the licensed organization conducts another form of lawful gambling. new text begin Bar bingo
does not include bingo games linked to other permitted premises.
new text end

Sec. 14.

Minnesota Statutes 2010, section 349.12, subdivision 5, is amended to read:

Subd. 5.

Bingo occasion.

"Bingo occasion" means a single gathering or session at
which a series of one or more successive bingo games is played. There is no limit on the
number of games conducted during a bingo occasion deleted text begin but deleted text end new text begin . new text end A bingo occasion must not last
longer than eight consecutive hours deleted text begin . deleted text end new text begin , except that linked bingo games played on electronic
bingo devices may be played during regular business hours of the permitted premises,
and all play during this period is considered a bingo occasion for reporting purposes. For
permitted premises where the primary business is bingo, regular business hours shall be
defined as the hours between 8:00 a.m. and 2:00 a.m.
new text end

Sec. 15.

Minnesota Statutes 2010, section 349.12, subdivision 6a, is amended to read:

Subd. 6a.

Booth operation.

"Booth operation" means a method of selling and
redeeming new text begin disposable new text end gambling equipment by an employee of a licensed organization in
a premises the organization leases or owns deleted text begin where such sales and redemptions are made
within a separate enclosure that is distinct from areas where food and beverages are sold deleted text end .

Sec. 16.

Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read:

Subd. 12a.

Electronic bingo device.

"Electronic bingo device" means deleted text begin an deleted text end new text begin a
handheld and portable new text end electronic device new text begin that:
new text end

new text begin (a) is new text end used by a bingo player to new text begin :
new text end

new text begin (1) new text end monitor bingo paper sheets or a facsimile of a bingo paper sheet deleted text begin when deleted text end purchased
new text begin and played new text end at the time and place of an organization's bingo occasion deleted text begin and which (1)
provides a means for bingo players to deleted text end new text begin , or to play an electronic bingo game that is linked
with other permitted premises;
new text end

new text begin (2) new text end activate numbers announced deleted text begin by a bingo caller; (2) compares deleted text end new text begin or displayed, and
to compare new text end the numbers deleted text begin entered by the player deleted text end to the bingo faces previously stored in
the memory of the device; deleted text begin and
deleted text end

(3) deleted text begin identifies deleted text end new text begin identify new text end a winning bingo pattern deleted text begin . deleted text end new text begin or game requirement; and
new text end

new text begin (4) play against other bingo players;
new text end

new text begin (b) limits the play of bingo faces to 36 faces per game;
new text end

new text begin (c) requires coded entry to activate play but does not allow the use of a coin,
currency, or tokens to be inserted to activate play;
new text end

new text begin (d) may only be used for play against other bingo players in a bingo game;
new text end

new text begin (e) has no additional function as an amusement or gambling device other than as an
electronic pull-tab game defined under section 349.12, subdivision 12c;
new text end

new text begin (f) has the capability to ensure adequate levels of security and internal controls; new text end

new text begin (g) has the capability to permit the board to electronically monitor the operation of
the device and the internal accounting systems; and
new text end

new text begin (h) has the capability to allow use by a player who is visually impaired.
new text end

deleted text begin Electronic bingo device does not mean any device into which coin, currency, or tokens are
inserted to activate play.
deleted text end

Sec. 17.

Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:

new text begin Subd. 12b. new text end

new text begin Electronic pull-tab device. new text end

new text begin "Electronic pull-tab device" means a
handheld and portable electronic device that:
new text end

new text begin (a) is used to play one or more electronic pull-tab games;
new text end

new text begin (b) requires coded entry to activate play but does not allow the use of coin, currency,
or tokens to be inserted to activate play;
new text end

new text begin (c) requires that a player must activate or open each electronic pull-tab ticket and
each individual line, row, or column of each electronic pull-tab ticket;
new text end

new text begin (d) maintains information pertaining to accumulated win credits that may be applied
to games in play or redeemed upon termination of play;
new text end

new text begin (e) has no spinning symbols or other representations that mimic a video slot machine;
new text end

new text begin (f) has no additional function as a gambling device other than as an electronic linked
bingo game played on a device defined under section 349.12, subdivision 12a;
new text end

new text begin (g) may incorporate an amusement game feature as part of the pull-tab game but
may not require additional consideration for that feature or award any prize, or other
benefit for that feature;
new text end

new text begin (h) may have auditory or visual enhancements to promote or provide information
about the game being played, provided the component does not affect the outcome of
a game or display the results of a game;
new text end

new text begin (i) maintains, on nonresettable meters, a printable, permanent record of all
transactions involving each device and electronic pull-tab games played on the device; new text end

new text begin (j) is not a pull-tab dispensing device as defined under subdivision 32a; and
new text end

new text begin (k) has the capability to allow use by a player who is visually impaired.
new text end

Sec. 18.

Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:

new text begin Subd. 12c. new text end

new text begin Electronic pull-tab game. new text end

new text begin "Electronic pull-tab game" means a pull-tab
game containing:
new text end

new text begin (a) facsimiles of pull-tab tickets that are played on an electronic pull-tab device;
new text end

new text begin (b) a predetermined, finite number of winning and losing tickets, not to exceed
7,500 tickets;
new text end

new text begin (c) the same price for each ticket in the game;
new text end

new text begin (d) a price paid by the player of not less than 25 cents per ticket;
new text end

new text begin (e) tickets that are in conformance with applicable board rules for pull-tabs;
new text end

new text begin (f) winning tickets that comply with prize limits under section 349.211;
new text end

new text begin (g) a unique serial number that may not be regenerated;
new text end

new text begin (h) an electronic flare that displays the game name, form number, predetermined,
finite number of tickets in the game, and prize tier; and
new text end

new text begin (i) no spinning symbols or other representations that mimic a video slot machine.
new text end

Sec. 19.

Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:

new text begin Subd. 12d. new text end

new text begin Electronic pull-tab game system. new text end

new text begin "Electronic pull-tab game system"
means the equipment leased from a licensed distributor and used by a licensed organization
to conduct, manage, and record electronic pull-tab games, and to report and transmit the
game results as prescribed by the board and the Department of Revenue. The system must
provide security and access levels sufficient so that internal control objectives are met as
prescribed by the board. The system must contain a point of sale station.
new text end

Sec. 20.

Minnesota Statutes 2010, section 349.12, subdivision 18, is amended to read:

Subd. 18.

Gambling equipment.

"Gambling equipment" means deleted text begin : deleted text end new text begin gambling
equipment that is either disposable or permanent gambling equipment.
new text end

new text begin (a) Disposable gambling equipment includes the following:
new text end

new text begin (1) new text end bingo hard cards or paper sheets, new text begin including new text end linked bingo paper sheets deleted text begin , devices for
selecting bingo numbers, electronic bingo devices, deleted text end new text begin ;
new text end

new text begin (2) paper and electronic new text end pull-tabs deleted text begin , deleted text end new text begin ;
new text end

new text begin (3) new text end jar tickets deleted text begin , paddle wheels, paddle wheel tables, deleted text end new text begin ;
new text end

new text begin (4) new text end paddle tickets deleted text begin , deleted text end new text begin and new text end paddle ticket cards deleted text begin , deleted text end new text begin ;
new text end

new text begin (5) new text end tipboards deleted text begin , deleted text end new text begin and new text end tipboard tickets deleted text begin , deleted text end new text begin ; and new text end

new text begin (6) new text end promotional tickets that mimic a pull-tab or tipboard deleted text begin , pull-tab dispensing devices,
and programmable electronic devices that have no effect on the outcome of a game and
are used to provide a visual or auditory enhancement of a game deleted text end .

new text begin (b) Permanent gambling equipment includes the following:
new text end

new text begin (1) devices for selecting bingo numbers;
new text end

new text begin (2) electronic bingo devices;
new text end

new text begin (3) electronic pull-tab devices;
new text end

new text begin (4) pull-tab dispensing devices;
new text end

new text begin (5) programmable electronic devices that have no effect on the outcome of a game
and are used to provide a visual or auditory enhancement of a game;
new text end

new text begin (6) paddle wheels; and
new text end

new text begin (7) paddle wheel tables.
new text end

Sec. 21.

Minnesota Statutes 2010, section 349.12, subdivision 25, is amended to read:

Subd. 25.

Lawful purpose.

(a) "Lawful purpose" means one or more of the
following:

(1) any expenditure by or contribution to a 501(c)(3) or festival organization, as
defined in subdivision 15a, provided that the organization and expenditure or contribution
are in conformity with standards prescribed by the board under section 349.154, which
standards must apply to both types of organizations in the same manner and to the same
extent;

(2) a contribution to or expenditure for goods and services for an individual or
family suffering from poverty, homelessness, or disability, which is used to relieve the
effects of that suffering;

(3) a contribution to a program recognized by the Minnesota Department of Human
Services for the education, prevention, or treatment of problem gambling;

(4) a contribution to or expenditure on a public or private nonprofit educational
institution registered with or accredited by this state or any other state;

(5) a contribution to an individual, public or private nonprofit educational institution
registered with or accredited by this state or any other state, or to a scholarship fund of a
nonprofit organization whose primary mission is to award scholarships, for defraying the
cost of education to individuals where the funds are awarded through an open and fair
selection process;

(6) activities by an organization or a government entity which recognize military
service to the United States, the state of Minnesota, or a community, subject to rules
of the board, provided that the rules must not include mileage reimbursements in the
computation of the per diem reimbursement limit and must impose no aggregate annual
limit on the amount of reasonable and necessary expenditures made to support:

(i) members of a military marching or color guard unit for activities conducted
within the state;

(ii) members of an organization solely for services performed by the members at
funeral services;

(iii) members of military marching, color guard, or honor guard units may be
reimbursed for participating in color guard, honor guard, or marching unit events within
the state or states contiguous to Minnesota at a per participant rate of up to $35 per diem; or

(iv) active military personnel and their immediate family members in need of
support services;

(7) recreational, community, and athletic facilities and activities intended primarily
for persons under age 21, provided that such facilities and activities do not discriminate on
the basis of gender and the organization complies with section 349.154, subdivision 3a;

(8) payment of local taxes authorized under this chapter, taxes imposed by the
United States on receipts from lawful gambling, the taxes imposed by section 297E.02,
subdivisions 1, deleted text begin 4, deleted text end 5, and 6, and the tax imposed on unrelated business income by section
290.05, subdivision 3;

(9) payment of real estate taxes and assessments on permitted gambling premises
owned by the licensed organization paying the taxes, or wholly leased by a licensed
veterans organization under a national charter recognized under section 501(c)(19) of the
Internal Revenue Code;

(10) a contribution to the United States, this state or any of its political subdivisions,
or any agency or instrumentality thereof other than a direct contribution to a law
enforcement or prosecutorial agency;

(11) a contribution to or expenditure by a nonprofit organization which is a church
or body of communicants gathered in common membership for mutual support and
edification in piety, worship, or religious observances;

(12) an expenditure for citizen monitoring of surface water quality by individuals
or nongovernmental organizations that is consistent with section 115.06, subdivision 4,
and Minnesota Pollution Control Agency guidance on monitoring procedures, quality
assurance protocols, and data management, provided that the resulting data is submitted
to the Minnesota Pollution Control Agency for review and inclusion in the state water
quality database;

(13) a contribution to or expenditure on projects or activities approved by the
commissioner of natural resources for:

(i) wildlife management projects that benefit the public at large;

(ii) grant-in-aid trail maintenance and grooming established under sections 84.83
and 84.927, and other trails open to public use, including purchase or lease of equipment
for this purpose; and

(iii) supplies and materials for safety training and educational programs coordinated
by the Department of Natural Resources, including the Enforcement Division;

(14) conducting nutritional programs, food shelves, and congregate dining programs
primarily for persons who are age 62 or older or disabled;

(15) a contribution to a community arts organization, or an expenditure to sponsor
arts programs in the community, including but not limited to visual, literary, performing,
or musical arts;

(16) an expenditure by a licensed fraternal organization or a licensed veterans
organization for payment of water, fuel for heating, electricity, and sewer costs for:

(i) up to 100 percent for a building wholly owned or wholly leased by and used as
the primary headquarters of the licensed veteran or fraternal organization; or

(ii) a proportional amount subject to approval by the director and based on the
portion of a building used as the primary headquarters of the licensed veteran or fraternal
organization;

(17) expenditure by a licensed veterans organization of up to $5,000 in a calendar
year in net costs to the organization for meals and other membership events, limited to
members and spouses, held in recognition of military service. No more than $5,000 can be
expended in total per calendar year under this clause by all licensed veterans organizations
sharing the same veterans post home;

(18) payment of fees authorized under this chapter imposed by the state of Minnesota
to conduct lawful gambling in Minnesota;

(19) a contribution or expenditure to honor an individual's humanitarian service
as demonstrated through philanthropy or volunteerism to the United States, this state,
or local community;

(20) a contribution by a licensed organization to another licensed organization with
prior board approval, with the contribution designated to be used for one or more of the
following lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25);

(21) an expenditure that is a contribution to a parent organization, if the parent
organization: (i) has not provided to the contributing organization within one year of the
contribution any money, grants, property, or other thing of value, and (ii) has received
prior board approval for the contribution that will be used for a program that meets one or
more of the lawful purposes under subdivision 7a;

(22) an expenditure for the repair, maintenance, or improvement of real property
and capital assets owned by an organization, or for the replacement of a capital asset that
can no longer be repaired, with a fiscal year limit of five percent of gross profits from
the previous fiscal year, with no carryforward of unused allowances. The fiscal year is
July 1 through June 30. Total expenditures for the fiscal year may not exceed the limit
unless the board has specifically approved the expenditures that exceed the limit due to
extenuating circumstances beyond the organization's control. An expansion of a building
or bar-related expenditures are not allowed under this provision.

(i) The expenditure must be related to the portion of the real property or capital asset
that must be made available for use free of any charge to other nonprofit organizations,
community groups, or service groups, or is used for the organization's primary mission or
headquarters.

(ii) An expenditure may be made to bring an existing building that the organization
owns into compliance with the Americans with Disabilities Act.

(iii) An organization may apply the amount that is allowed under item (ii) to the
erection or acquisition of a replacement building that is in compliance with the Americans
with Disabilities Act if the board has specifically approved the amount. The cost of
the erection or acquisition of a replacement building may not be made from gambling
proceeds, except for the portion allowed under this item;

(23) an expenditure for the acquisition or improvement of a capital asset with a cost
greater than $2,000, excluding real property, that will be used exclusively for lawful
purposes under this section if the board has specifically approved the amount;

(24) an expenditure for the acquisition, erection, improvement, or expansion of real
property, if the board has first specifically authorized the expenditure after finding that the
real property will be used exclusively for lawful purpose under this section; or

(25) an expenditure, including a mortgage payment or other debt service payment,
for the erection or acquisition of a comparable building to replace an organization-owned
building that was destroyed or made uninhabitable by fire or catastrophe or to replace an
organization-owned building that was taken or sold under an eminent domain proceeding.
The expenditure may be only for that part of the replacement cost not reimbursed by
insurance for the fire or catastrophe or compensation not received from a governmental
unit under the eminent domain proceeding, if the board has first specifically authorized
the expenditure.

(b) Expenditures authorized by the board under clauses (24) and (25) must be
51 percent completed within two years of the date of board approval; otherwise the
organization must reapply to the board for approval of the project. "Fifty-one percent
completed" means that the work completed must represent at least 51 percent of the value
of the project as documented by the contractor or vendor.

(c) Notwithstanding paragraph (a), "lawful purpose" does not include:

(1) any expenditure made or incurred for the purpose of influencing the nomination
or election of a candidate for public office or for the purpose of promoting or defeating a
ballot question;

(2) any activity intended to influence an election or a governmental decision-making
process;

(3) a contribution to a statutory or home rule charter city, county, or town by a
licensed organization with the knowledge that the governmental unit intends to use the
contribution for a pension or retirement fund; or

(4) a contribution to a 501(c)(3) organization or other entity with the intent or effect
of not complying with lawful purpose restrictions or requirements.

Sec. 22.

Minnesota Statutes 2010, section 349.12, subdivision 25b, is amended to read:

Subd. 25b.

Linked bingo game provider.

"Linked bingo game provider" means
any person who provides the means to link bingo deleted text begin prizes in a linked bingo game, who
provides linked bingo paper sheets to the participating organizations deleted text end new text begin games new text end , who provides
linked bingo prize management, and who provides the linked bingo game system.

Sec. 23.

Minnesota Statutes 2010, section 349.12, subdivision 25c, is amended to read:

Subd. 25c.

Linked bingo game system.

"Linked bingo game system" means the
equipment used by the linked bingo provider to conduct, transmit, and track a linked
bingo game. The system must be approved by the board before its use in this state and
it must have deleted text begin dial-up or other deleted text end new text begin the new text end capability to permit the board to new text begin electronically new text end monitor
its operation remotely. new text begin For linked electronic bingo games, the system includes electronic
bingo devices.
new text end

Sec. 24.

Minnesota Statutes 2010, section 349.12, subdivision 25d, is amended to read:

Subd. 25d.

Linked bingo prize pool.

"Linked bingo prize pool" means the total
of all prize money that each participating organization has contributed to a linked bingo
game prize and includes any portion of the prize pool that is carried over from one
deleted text begin occasion deleted text end new text begin game new text end to another in a progressive linked bingo game.

Sec. 25.

Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read:

Subd. 29.

Paddle wheel.

"Paddle wheel" means a new text begin vertical new text end wheel marked off into
sections containing one or more numbers, and which, after being turned or spun, uses a
pointer or marker to indicate winning chances new text begin , and may only be used to determine a
winning number or numbers matching a winning paddle ticket purchased by a player. A
paddle wheel may be an electronic device that simulates a paddle wheel new text end .

Sec. 26.

Minnesota Statutes 2010, section 349.12, subdivision 31, is amended to read:

Subd. 31.

Promotional ticket.

A new text begin paper new text end pull-tab new text begin ticket new text end or new text begin paper new text end tipboard ticket
created and printed by a licensed manufacturer with the words "no purchase necessary" and
"for promotional use only" and for which no consideration is given is a promotional ticket.

Sec. 27.

Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read:

Subd. 32.

Pull-tab.

"Pull-tab" means a single folded or banded new text begin paper new text end ticket deleted text begin or a deleted text end new text begin , new text end
multi-ply card with perforated break-open tabs, new text begin or a facsimile of a paper pull-tab ticket
used in conjunction with an electronic pull-tab device, new text end the face of which is initially
covered to conceal one or more numbers or symbols, new text begin and new text end where one or more of each set of
tickets deleted text begin or deleted text end new text begin , new text end cards new text begin , or facsimiles new text end has been designated in advance as a winner.

Sec. 28.

Minnesota Statutes 2010, section 349.12, subdivision 34, is amended to read:

Subd. 34.

Tipboard.

"Tipboard" means a board, placard or other device containing
a seal that conceals the winning number or symbol, and that serves as the game flare for a
tipboard game. new text begin A sports-themed tipboard is a board, placard, or other device that contains a
grid of predesignated numbers for which the winning numbers are determined in whole or
in part by the numerical outcome of one or more professional sporting events, serves as the
game flare for player registration, but is not required to contain a seal. For a sports-themed
tipboard, the winning numbers must be determined solely by the numerical outcome.
new text end

Sec. 29.

Minnesota Statutes 2010, section 349.12, subdivision 35, is amended to read:

Subd. 35.

Tipboard ticket.

"Tipboard ticket" is a single folded or banded ticket,
or multi-ply card, the face of which is initially covered or otherwise hidden from view
to conceal a number, symbol, or set of symbols, some of which have been designated in
advance and at random as prize winners. new text begin For a sports-themed tipboard, the tipboard ticket
contains a set of numbers used to determine the winner based on the numerical outcome
of a professional sporting event.
new text end

Sec. 30.

Minnesota Statutes 2010, section 349.13, is amended to read:

349.13 LAWFUL GAMBLING.

Lawful gambling is not a lottery or gambling within the meaning of sections 609.75
to 609.76 if it is conducted under this chapter. A pull-tab dispensing device new text begin , electronic
bingo device, and electronic pull-tab device new text end permitted new text begin under this chapter and new text end by board
rule is not a gambling device within the meaning of sections 609.75 to 609.76 and chapter
299L. new text begin An electronic game device allowed under this chapter may not be a slot machine.
Electronic game devices, including but not limited to electronic bingo devices, electronic
paddle wheels, and electronic pull-tab devices authorized under this chapter, may only
be used in the conduct of lawful gambling permitted under this chapter and board rule
and may not display or simulate any other form of gambling or entertainment, except
as otherwise allowed under this chapter.
new text end

Sec. 31.

Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read:

Subd. 4b.

Pull-tab sales from dispensing devices.

deleted text begin (a) deleted text end The board may by rule
authorize but not require the use of pull-tab dispensing devices.

deleted text begin (b) Rules adopted under paragraph (a):
deleted text end

deleted text begin (1) must limit the number of pull-tab dispensing devices on any permitted premises
to three; and
deleted text end

deleted text begin (2) must limit the use of pull-tab dispensing devices to a permitted premises which is
(i) a licensed premises for on-sales of intoxicating liquor or 3.2 percent malt beverages;
or (ii) a premises where bingo is conducted and admission is restricted to persons 18
years or older.
deleted text end

deleted text begin (c) Notwithstanding rules adopted under paragraph (b), pull-tab dispensing devices
may be used in establishments licensed for the off-sale of intoxicating liquor, other than
drugstores and general food stores licensed under section 340A.405, subdivision 1.
deleted text end

Sec. 32.

Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read:

Subd. 4c.

Electronic bingo new text begin devices new text end .

(a) The board may by rule authorize but not
require the use of electronic bingo devices.

deleted text begin (b) Rules adopted under paragraph (a):
deleted text end

deleted text begin (1) must limit the number of bingo faces that can be played using an electronic
bingo device to 36;
deleted text end

deleted text begin (2) must require that an electronic bingo device be used with corresponding bingo
paper sheets or a facsimile, printed at the point of sale, as approved by the board;
deleted text end

deleted text begin (3) must require that the electronic bingo device site system have dial-up capability
to permit the board to remotely monitor the operation of the device and the internal
accounting systems; and
deleted text end

deleted text begin (4) must prohibit the price of a face played on an electronic bingo device from being
less than the price of a face on a bingo paper sheet sold at the same occasion.
deleted text end

new text begin (b) The board, or the director if authorized by the board, may require the deactivation
of an electronic bingo device for violation of a law or rule and to implement any other
controls deemed necessary to ensure and maintain the integrity of electronic bingo devices
and the electronic bingo games played on the devices.
new text end

Sec. 33.

Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
to read:

new text begin Subd. 4d. new text end

new text begin Electronic pull-tab devices and electronic pull-tab game system. new text end

new text begin (a)
The board may adopt rules it deems necessary to ensure the integrity of electronic pull-tab
devices, the electronic pull-tab games played on the devices, and the electronic pull-tab
game system necessary to operate them.
new text end

new text begin (b) The board may not require an organization to use electronic pull-tab devices.
new text end

new text begin (c) Before authorizing the lease or sale of electronic pull-tab devices and the
electronic pull-tab game system, the board shall examine electronic pull-tab devices
allowed under section 349.12, subdivision 12b. The board may contract for the
examination of the game system and electronic pull-tab devices and may require a working
model to be transported to locations the board designates for testing, examination, and
analysis. The manufacturer must pay all costs of any testing, examination, analysis, and
transportation of the model. The system must be approved by the board before its use in
the state and must have the capability to permit the board to electronically monitor its
operation and internal accounting systems.
new text end

new text begin (d) The board may require a manufacturer to submit a certificate from an independent
testing laboratory approved by the board to perform testing services, stating that the
equipment has been tested, analyzed, and meets the standards required in this chapter
and any applicable board rules.
new text end

new text begin (e) The board, or the director if authorized by the board, may require the deactivation
of an electronic pull-tab device for violation of a law or rule and to implement any other
controls deemed necessary to ensure and maintain the integrity of electronic pull-tab
devices and the electronic pull-tab games played on the devices.
new text end

Sec. 34.

Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
to read:

new text begin Subd. 4e. new text end

new text begin Sports-themed tipboard rules. new text end

new text begin The board may adopt rules for the
conduct of tipboards for which the winning numbers are determined in whole or in part
by the numerical outcome of one or more professional sporting events. The rules must
provide for operation procedures, internal control standards, posted information, records,
and reports. The rules must provide for the award of prizes, method of payout, wagers,
determination of winners, and the specifications of these tipboards.
new text end

Sec. 35.

Minnesota Statutes 2010, section 349.155, subdivision 3, is amended to read:

Subd. 3.

Mandatory disqualifications.

(a) In the case of licenses for manufacturers,
distributors, distributor salespersons, linked bingo game providers, and gambling
managers, the board may not issue or renew a license under this chapter, and shall revoke
a license under this chapter, if the applicant or licensee, or a director, officer, partner,
governor, or person in a supervisory or management position of the applicant or licensee:

(1) has ever been convicted of a felony or a crime involving gambling;

(2) has ever been convicted of (i) assault, (ii) a criminal violation involving the use
of a firearm, or (iii) making terroristic threats;

(3) is or has ever been connected with or engaged in an illegal business;

(4) owes $500 or more in delinquent taxes as defined in section 270C.72;

(5) had a sales and use tax permit revoked by the commissioner of revenue within
the past two years; or

(6) after demand, has not filed tax returns required by the commissioner of revenue.
The board may deny or refuse to renew a license under this chapter, and may revoke a
license under this chapter, if any of the conditions in this paragraph are applicable to
an affiliate or direct or indirect holder of more than a five percent financial interest in
the applicant or licensee.

(b) In the case of licenses for organizations, the board may not issue a license under
this chapter, and shall revoke a license under this chapter, if the organization, or an officer
or member of the governing body of the organization:

(1) has been convicted of a felony or gross misdemeanor involving theft or fraud; new text begin or
new text end

(2) has ever been convicted of a crime involving gambling deleted text begin ; or deleted text end new text begin .
new text end

deleted text begin (3) has had a license issued by the board or director permanently revoked for
violation of law or board rule.
deleted text end

Sec. 36.

Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read:

Subd. 4.

License revocation, suspension, denial; censure.

new text begin (a) new text end The board may by
order (i) deny, suspend, revoke, or refuse to renew a license or premises permit, or (ii)
censure a licensee or applicant, if it finds that the order is in the public interest and that the
applicant or licensee, or a director, officer, partner, governor, person in a supervisory or
management position of the applicant or licensee, an employee eligible to make sales on
behalf of the applicant or licensee, or direct or indirect holder of more than a five percent
financial interest in the applicant or licensee:

(1) has violated or failed to comply with any provision of this chapter or chapter
297E or 299L, or any rule adopted or order issued thereunder;

(2) has filed an application for a license that is incomplete in any material respect, or
contains a statement that, in light of the circumstances under which it was made, is false,
misleading, fraudulent, or a misrepresentation;

(3) has made a false statement in a document or report required to be submitted to
the board or the commissioner of revenue, or has made a false statement to the board, the
compliance review group, or the director;

(4) has been convicted of a crime in another jurisdiction that would be a felony if
committed in Minnesota;

(5) is permanently or temporarily enjoined by any gambling regulatory agency from
engaging in or continuing any conduct or practice involving any aspect of gambling;

(6) has had a gambling-related license revoked or suspended, or has paid or been
required to pay a monetary penalty of $2,500 or more, by a gambling regulator in another
state or jurisdiction;

(7) has been the subject of any of the following actions by the director of alcohol
and gambling enforcement or commissioner of public safety: (i) had a license under
chapter 299L denied, suspended, or revoked, (ii) been censured, reprimanded, has paid or
been required to pay a monetary penalty or fine, or (iii) has been the subject of any other
discipline by the director or commissioner;

(8) has engaged in conduct that is contrary to the public health, welfare, or safety, or
to the integrity of gambling; or

(9) based on past activities or criminal record poses a threat to the public interest or
to the effective regulation and control of gambling, or creates or enhances the dangers of
unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gambling
or the carrying on of the business and financial arrangements incidental to the conduct of
gambling.

new text begin (b) The revocation or suspension of an organization's license may not exceed a
period of ten years, including any revocation or suspension imposed by the board prior to
the effective date of this paragraph, except that:
new text end

new text begin (1) any prohibition placed by the board on who may be involved in the conduct,
oversight, or management of the revoked organization's lawful gambling activity is
permanent; and
new text end

new text begin (2) a revocation or suspension will remain in effect until any taxes, fees, and fines
that are delinquent have been paid by the organization to the satisfaction of the board.
new text end

Sec. 37.

Minnesota Statutes 2010, section 349.161, subdivision 1, is amended to read:

Subdivision 1.

Prohibited acts; licenses required.

(a) No person may:

(1) sell, offer for sale, or furnish gambling equipment for use within the state other
than for lawful gambling exempt or excluded from licensing, except to an organization
licensed for lawful gambling;

(2) sell, offer for sale, or furnish gambling equipment for use within the state without
having obtained a distributor license or a distributor salesperson license under this section
except that an organization authorized to conduct bingo by the board may loan bingo
hard cards and devices for selecting bingo numbers to another organization authorized to
conduct bingo new text begin and a linked bingo game provider may provide electronic bingo devices for
linked electronic bingo games new text end ;

(3) sell, offer for sale, or furnish gambling equipment for use within the state that is
not purchased or obtained from a manufacturer or distributor licensed under this chapter; or

(4) sell, offer for sale, or furnish gambling equipment for use within the state that
has the same serial number as another item of gambling equipment of the same type sold
or offered for sale or furnished for use in the state by that distributor.

(b) No licensed distributor salesperson may sell, offer for sale, or furnish gambling
equipment for use within the state without being employed by a licensed distributor or
owning a distributor license.

new text begin (c) No distributor or distributor salesperson may also be licensed as a linked bingo
game provider under section 349.1635.
new text end

Sec. 38.

Minnesota Statutes 2010, section 349.161, subdivision 5, is amended to read:

Subd. 5.

Prohibition.

(a) No distributor, distributor salesperson, or other employee
of a distributor, may also be a wholesale distributor of alcoholic beverages or an employee
of a wholesale distributor of alcoholic beverages.

(b) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor, may: (1) be involved in the conduct of lawful gambling
by an organization; (2) keep or assist in the keeping of an organization's financial records,
accounts, and inventories; or (3) prepare or assist in the preparation of tax forms and other
reporting forms required to be submitted to the state by an organization.

(c) No distributor, distributor salesperson, or any representative, agent, affiliate,
or other employee of a distributor may provide a lessor of gambling premises any
compensation, gift, gratuity, premium, or other thing of value.

(d) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may provide an employee or agent of the organization
any compensation, gift, gratuity, premium, or other thing of value greater than $25 per
organization in a calendar year.

(e) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may participate in any gambling activity at any gambling
site or premises where gambling equipment purchased new text begin or leased new text end from that distributor or
distributor salesperson is being used in the conduct of lawful gambling.

(f) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may alter or modify any gambling equipment, except to
add a "last ticket sold" prize sticker new text begin for a paper pull-tab game new text end .

(g) No distributor, distributor salesperson, or any representative, agent, affiliate, or
other employee of a distributor may: (1) recruit a person to become a gambling manager
of an organization or identify to an organization a person as a candidate to become
gambling manager for the organization; or (2) identify for an organization a potential
gambling location.

(h) No distributor or distributor salesperson may purchase new text begin or lease new text end gambling
equipment for resale new text begin or lease new text end to a person for use within the state from any person not
licensed as a manufacturer under section 349.163, except for gambling equipment
returned from an organization licensed under section 349.16, or exempt or excluded from
licensing under section 349.166.

(i) No distributor or distributor salesperson may sell gambling equipment, except
gambling equipment identified as a promotional ticket, to any person for use in Minnesota
other than (i) a licensed organization or organization excluded or exempt from licensing,
or (ii) the governing body of an Indian tribe.

(j) No distributor or distributor salesperson may sell or otherwise provide a new text begin paper new text end
pull-tab or tipboard deal with the symbol required by section 349.163, subdivision 5,
paragraph (d), visible on the flare to any person other than in Minnesota to a licensed
organization or organization exempt from licensing.

Sec. 39.

Minnesota Statutes 2010, section 349.162, subdivision 5, is amended to read:

Subd. 5.

Sales from facilities.

(a) All gambling equipment purchased or possessed
by a licensed distributor for resale new text begin or lease new text end to any person for use in Minnesota must, prior
to the equipment's resale new text begin or lease new text end , be unloaded into a storage facility located in Minnesota
which the distributor owns or leases; and which has been registered, in advance and in
writing, with the Division of Alcohol and Gambling Enforcement as a storage facility of
the distributor. All unregistered gambling equipment and all unaffixed registration stamps
owned by, or in the possession of, a licensed distributor in the state of Minnesota shall be
stored at a storage facility which has been registered with the Division of Alcohol and
Gambling Enforcement. No gambling equipment may be moved from the facility unless
the gambling equipment has been first registered with the board or the Department of
Revenue. new text begin A distributor must notify the board of the method that it will use to sell and
transfer electronic pull-tab games to licensed organizations, and must receive approval of
the board before implementing or making changes to the approved method.
new text end

(b) Notwithstanding section 349.163, subdivisions 5, 6, and 8, a licensed
manufacturer may ship into Minnesota approved or unapproved gambling equipment if the
licensed manufacturer ships the gambling equipment to a Minnesota storage facility that
is: (1) owned or leased by the licensed manufacturer; and (2) registered, in advance and
in writing, with the Division of Alcohol and Gambling Enforcement as a manufacturer's
storage facility. No gambling equipment may be shipped into Minnesota to the
manufacturer's registered storage facility unless the shipment of the gambling equipment
is reported to the Department of Revenue in a manner prescribed by the department.
No gambling equipment may be moved from the storage facility unless the gambling
equipment is sold to a licensed distributor and is otherwise in conformity with this chapter,
is shipped to an out-of-state site and the shipment is reported to the Department of
Revenue in a manner prescribed by the department, or is otherwise sold and shipped as
permitted by board rule. new text begin A manufacturer must notify the board of the method that it will
use to sell and transfer electronic pull-tab games to licensed distributors, and must receive
approval of the board before implementing or making changes to the approved method.
new text end

(c) All storage facilities owned, leased, used, or operated by a licensed distributor
or manufacturer may be entered upon and inspected by the employees of the Division of
Alcohol and Gambling Enforcement, the Division of Alcohol and Gambling Enforcement
director's authorized representatives, employees of the Gambling Control Board or its
authorized representatives, employees of the Department of Revenue, or authorized
representatives of the director of the Division of Special Taxes of the Department of
Revenue during reasonable and regular business hours. Obstruction of, or failure to
permit, entry and inspection is cause for revocation or suspension of a manufacturer's or
distributor's licenses and permits issued under this chapter.

(d) Unregistered gambling equipment found at any location in Minnesota other than
the manufacturing plant of a licensed manufacturer or a registered storage facility are
contraband under section 349.2125. This paragraph does not apply:

(1) to unregistered gambling equipment being transported in interstate commerce
between locations outside this state, if the interstate shipment is verified by a bill of lading
or other valid shipping document; and

(2) to gambling equipment registered with the Department of Revenue for
distribution to the tribal casinos.

Sec. 40.

Minnesota Statutes 2010, section 349.163, subdivision 1, is amended to read:

Subdivision 1.

License required.

No manufacturer of gambling equipment may
sell any gambling equipment to any person for use or resale within the state, unless the
manufacturer has a current and valid license issued by the board under this section and has
satisfied other criteria prescribed by the board by rule. new text begin A manufacturer licensed under this
section may also be licensed as a linked bingo game provider under section 349.1635.
new text end

A manufacturer licensed under this section may not also be directly or indirectly
licensed as a distributor under section 349.161.

Sec. 41.

Minnesota Statutes 2010, section 349.163, subdivision 5, is amended to read:

Subd. 5.

new text begin Paper new text end pull-tab and tipboard flares.

(a) A manufacturer may not ship or
cause to be shipped into this state or sell for use or resale in this state any deal of new text begin paper new text end
pull-tabs or tipboards that does not have its own individual flare as required for that deal
by this subdivision and rule of the board. A person other than a manufacturer may not
manufacture, alter, modify, or otherwise change a flare for a deal of new text begin paper new text end pull-tabs or
tipboards except as allowed by this chapter or board rules.

(b) The flare of each new text begin paper new text end pull-tab and tipboard game must have affixed to
or imprinted at the bottom a bar code that provides all information required by the
commissioner of revenue under section 297E.04, subdivision 2.

The serial number included in the bar code must be the same as the serial number
of the tickets included in the deal. A manufacturer who manufactures a deal of new text begin paper new text end
pull-tabs must affix to the outside of the box containing that game the same bar code that
is affixed to or imprinted at the bottom of a flare for that deal.

(c) No person may alter the bar code that appears on the outside of a box containing
a deal of new text begin paper new text end pull-tabs and tipboards. Possession of a box containing a deal of new text begin paper new text end
pull-tabs and tipboards that has a bar code different from the bar code of the deal inside
the box is prima facie evidence that the possessor has altered the bar code on the box.

(d) The flare of each deal of new text begin paper new text end pull-tabs and tipboards sold by a manufacturer for
use or resale in Minnesota must have imprinted on it a symbol that is at least one inch high
and one inch wide consisting of an outline of the geographic boundaries of Minnesota
with the letters "MN" inside the outline. The flare must be placed inside the wrapping of
the deal which the flare describes.

(e) Each new text begin paper new text end pull-tab and tipboard flare must bear the following statement printed
in letters large enough to be clearly legible:

"Pull-tab (or tipboard) purchasers -- This pull-tab (or tipboard) game is not legal in
Minnesota unless:

-- an outline of Minnesota with letters "MN" inside it is imprinted on this sheet, and

-- the serial number imprinted on the bar code at the bottom of this sheet is the same
as the serial number on the pull-tab (or tipboard) ticket you have purchased."

(f) The flare of each new text begin paper new text end pull-tab and tipboard game must have the serial number
of the game imprinted on the bar code at the bottom of the flare in numerals at least
one-half inch high.

Sec. 42.

Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read:

Subd. 6.

Samples of gambling equipment.

new text begin (a) new text end The board shall require each
licensed manufacturer to submit to the board one or more samples of each item of gambling
equipment deleted text begin the manufacturer manufactures deleted text end new text begin manufactured new text end for use or resale in this state. new text begin
For purposes of this subdivision, a manufacturer is also required to submit the applicable
version of any software necessary to operate electronic devices and related systems.
new text end

new text begin (b) new text end The board shall inspect and test all the equipment new text begin , including software and
software upgrades, new text end it deems necessary to determine the equipment's compliance with
law and board rules. Samples required under this subdivision must be approved by the
board before the equipment being sampled is shipped into or sold for use or resale in this
state. The board shall impose a fee of $25 for each item of gambling equipment that the
manufacturer submits for approval or for which the manufacturer requests approval. The
board shall impose a fee of $100 for each sample of gambling equipment that it tests.

new text begin (c) new text end The board may require samples of gambling equipment to be tested by an
independent testing laboratory prior to submission to the board for approval. All costs
of testing by an independent testing laboratory must be borne by the manufacturer. An
independent testing laboratory used by a manufacturer to test samples of gambling
equipment must be approved by the board before the equipment is submitted to the
laboratory for testing.

new text begin (d) new text end The board may request the assistance of the commissioner of public safety and
the director of the State Lottery in performing the tests.

Sec. 43.

Minnesota Statutes 2010, section 349.1635, subdivision 2, is amended to read:

Subd. 2.

License application.

The board may issue a license to a linked bingo game
provider new text begin or to a manufacturer licensed under section 349.163 new text end who meets the qualifications
of this chapter and the rules promulgated by the board. The application shall be on a form
prescribed by the board. The license is valid for two years and the fee for a linked bingo
game provider license is $5,000 per year.

Sec. 44.

Minnesota Statutes 2010, section 349.1635, subdivision 3, is amended to read:

Subd. 3.

Attachments to application.

An applicant for a linked bingo game
provider license must attach to its application:

(1) evidence of a bond in the principal amount of $100,000 payable to the state of
Minnesota conditioned on the payment of all linked bingo prizes and any other money due
and payable under this chapter;

(2) detailed plans and specifications for the operation of the linked bingo game and
the linked bingo system, along with a proposed fee schedule for the cost of providing
services and equipment to licensed organizations new text begin which may not exceed 15 percent of
gross profits, unless a higher percentage, not to exceed 20 percent, is authorized by the
board. The fee schedule must incorporate costs paid to distributors for services provided
under subdivision 5 new text end ; and

(3) any other information required by the board by rule.

Sec. 45.

Minnesota Statutes 2010, section 349.1635, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Linked bingo game services requirements. new text end

new text begin (a) A linked bingo game
provider must contract with licensed distributors for linked bingo game services including,
but not limited to, the solicitation of agreements with licensed organizations, and
installation, repair, or maintenance of the linked bingo game system.
new text end

new text begin (b) A distributor may not charge a fee to licensed organizations for services
authorized and rendered under paragraph (a).
new text end

new text begin (c) A linked bingo game provider may not contract with any distributor on an
exclusive basis.
new text end

new text begin (d) A linked bingo game provider may refuse to contract with a licensed distributor
if the linked bingo game provider demonstrates that the licensed distributor is not capable
of performing the services under the contract.
new text end

Sec. 46.

Minnesota Statutes 2010, section 349.165, subdivision 2, is amended to read:

Subd. 2.

Contents of application.

An application for a premises permit must
contain:

(1) the name and address of the applying organization;

(2) a description of the site for which the permit is sought, including its address and,
where applicable, its placement within another premises or establishment;

(3) if the site is leased, the name and address of the lessor and information about the
lease the board requires, including all rents and other charges for the use of the site. The
lease term is concurrent with the term of the premises permit. The lease must contain a
deleted text begin 30-day deleted text end termination clause. No lease is required for the conduct of a raffle; and

(4) other information the board deems necessary to carry out its purposes.

An organization holding a premises permit must notify the board in writing within
ten days whenever any material change is made in the above information.

Sec. 47.

Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read:

Subd. 6.

Conduct of bingo.

new text begin The price of a face played on an electronic bingo
device may not be less than the price of a face on a bingo paper sheet sold for the same
game at the same occasion. new text end A game of bingo begins with the first letter and number called new text begin
or displayed new text end . Each player must cover, mark, or activate the numbers when bingo numbers
are randomly selected deleted text begin , deleted text end new text begin and new text end announced deleted text begin , and deleted text end new text begin or new text end displayed to the players deleted text begin , either manually
or with a flashboard and monitor deleted text end . The game is won when a player, using bingo paper,
bingo hard card, or a facsimile of a bingo paper sheet, has completed, as described in the
bingo program, a previously designated pattern or previously determined requirements
of the game and declared bingo. The game is completed when a winning card, sheet, or
facsimile is verified and a prize awarded pursuant to subdivision 3.

Sec. 48.

Minnesota Statutes 2010, section 349.17, subdivision 7, is amended to read:

Subd. 7.

Bar bingo.

An organization may conduct bar bingo subject to the
following restrictions:

(1) the bingo is conducted at a site the organization owns or leases and which has a
license for the sale of intoxicating beverages on the premises under chapter 340A; new text begin and
new text end

(2) the bingo is conducted using only bingo paper sheets or facsimiles of bingo paper
sheets purchased from a licensed distributor or licensed linked bingo game provider deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (3) no rent may be paid for a bar bingo occasion.
deleted text end

Sec. 49.

Minnesota Statutes 2010, section 349.17, subdivision 8, is amended to read:

Subd. 8.

Linked bingo games.

(a) A licensed organization may conduct or
participate in deleted text begin not more than two deleted text end linked bingo games deleted text begin per occasion, one of which may be a deleted text end new text begin ,
including new text end progressive deleted text begin game deleted text end new text begin games new text end in which a portion of the prize is carried over from
one deleted text begin occasion deleted text end new text begin game new text end to another until won by a player achieving a new text begin valid new text end bingo deleted text begin within a
predetermined amount of bingo numbers called deleted text end new text begin based upon a predetermined and posted
win determination new text end .

(b) deleted text begin Each participating licensed organization shall contribute to each prize awarded in
a linked bingo game in an amount not to exceed $300. deleted text end new text begin Linked bingo games may only be
conducted by licensed organizations who have a valid agreement with the linked bingo
game provider.
new text end

(c) An electronic bingo device as defined in section 349.12, subdivision 12a, may
be used for a linked bingo game.

(d) The board may adopt rules to:

(1) specify the manner in which a linked bingo game must be played and how the
linked bingo prizes must be awarded;

(2) specify the records to be maintained by a linked bingo game provider;

(3) require the submission of periodic reports by the linked bingo game provider and
specify the content of the reports;

(4) establish the qualifications required to be licensed as a linked bingo game
provider; and

(5) any other matter involving the operation of a linked bingo game.

Sec. 50.

Minnesota Statutes 2010, section 349.17, is amended by adding a subdivision
to read:

new text begin Subd. 9. new text end

new text begin Linked bingo games played exclusively on electronic bingo devices. new text end

new text begin In
addition to the requirements of subdivision 8, the following requirements and restrictions
apply when linked bingo games are played exclusively on electronic bingo devices.
new text end

new text begin (a) The permitted premises must be:
new text end

new text begin (1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent
malt beverages, except for a general food store or drug store permitted to sell alcoholic
beverages under section 340A.405, subdivision 1; or
new text end

new text begin (2) a premises where bingo is conducted as the primary business and has a seating
capacity of at least 100.
new text end

new text begin (b) The number of electronic bingo devices is limited to:
new text end

new text begin (1) no more than six devices in play for permitted premises with 200 seats or less;
new text end

new text begin (2) no more than 12 devices in play for permitted premises with 201 seats or more;
and
new text end

new text begin (3) no more than 50 devices in play for permitted premises where bingo is the
primary business.
new text end

new text begin Seating capacity is determined as specified under the local fire code.
new text end

new text begin (c) Prior to a bingo occasion, the linked bingo game provider, on behalf of the
participating organizations, must provide to the board a bingo program in a format
prescribed by the board.
new text end

new text begin (d) Before participating in the play of a linked bingo game, a player must present
and register a valid picture identification card that includes the player's address and
date of birth.
new text end

new text begin (e) An organization may remove from play a device that a player has not maintained
in an activated mode for a specified period of time determined by the organization. The
organization must provide the notice in its house rules.
new text end

Sec. 51.

Minnesota Statutes 2010, section 349.1711, subdivision 1, is amended to read:

Subdivision 1.

Sale of tickets.

new text begin (a) new text end Tipboard games must be played using only
tipboard tickets that are either (1) attached to a placard and arranged in columns or rows,
or (2) separate from the placard and contained in a receptacle while the game is in play.
The placard serves as the game flare.

new text begin (b) Except for a sports-themed tipboard, new text end the placard must contain a seal that conceals
the winning number or symbol. When a tipboard ticket is purchased and opened from a
game containing more than 32 tickets, each player having a tipboard ticket with one or
more predesignated numbers or symbols must sign the placard at the line indicated by the
number or symbol on the tipboard ticket.

Sec. 52.

Minnesota Statutes 2010, section 349.1711, subdivision 2, is amended to read:

Subd. 2.

Determination of winners.

When the predesignated numbers or symbols
have all been purchased, or all of the tipboard tickets for that game have been sold,
the seal must be removed to reveal a number or symbol that determines which of the
predesignated numbers or symbols is the winning number or symbol. A tipboard may also
contain consolation winners new text begin , or winning chances that are determined in whole or in part
by the numerical outcome of one or more professional sporting events, new text end that need not be
determined by the use of the seal.

Sec. 53.

Minnesota Statutes 2010, section 349.1721, is amended to read:

349.1721 CONDUCT OF PULL-TABS.

Subdivision 1.

Cumulative or carryover games.

The board shall by rule permit
pull-tab games with multiple seals. The board shall also adopt rules for pull-tab games with
cumulative or carryover prizes. new text begin The rules shall also apply to electronic pull-tab games.
new text end

Subd. 2.

Event games.

The board shall by rule permit pull-tab games in which
certain winners are determined by the random selection of one or more bingo numbers
or by another method approved by the board. new text begin The rules shall also apply to electronic
pull-tab games.
new text end

new text begin Subd. 3. new text end

new text begin Pull-tab dispensing device location restrictions and requirements.
new text end

new text begin The following pertain to pull-tab dispensing devices as defined under section 349.12,
subdivision 32a.
new text end

new text begin (a) The use of any pull-tab dispensing device must be at a permitted premises
which is:
new text end

new text begin (1) a licensed premises for on-sale of intoxicating liquor or 3.2 percent malt
beverages;
new text end

new text begin (2) a premises where bingo is conducted as the primary business; or
new text end

new text begin (3) an establishment licensed for the off-sale of intoxicating liquor, other than drug
stores and general food stores licensed under section 340A.405, subdivision 1.
new text end

new text begin (b) The number of pull-tab dispensing devices located at any permitted premises
is limited to three.
new text end

new text begin Subd. 4. new text end

new text begin Electronic pull-tab device requirements and restrictions. new text end

new text begin The following
pertain to the use of electronic pull-tab devices as defined under section 349.12,
subdivision 12b.
new text end

new text begin (a) The use of any electronic pull-tab device may only be at a permitted premises
that is:
new text end

new text begin (1) a premises licensed for the on-sale or off-sale of intoxicating liquor or 3.2 percent
malt beverages, except for a general food store or drug store permitted to sell alcoholic
beverages under section 340A.405, subdivision 1; or
new text end

new text begin (2) a premises where bingo is conducted as the primary business and has a seating
capacity of at least 100; and
new text end

new text begin (3) where the licensed organization sells paper pull-tabs.
new text end

new text begin (b) The number of electronic pull-tab devices is limited to:
new text end

new text begin (1) no more than six devices in play at any permitted premises with 200 seats or less;
new text end

new text begin (2) no more than 12 devices in play at any permitted premises with 201 seats
or more; and
new text end

new text begin (3) no more than 50 devices in play at any permitted premises where the primary
business is bingo.
new text end

new text begin Seating capacity is determined as specified under the local fire code.
new text end

new text begin (c) The hours of operation for the devices are limited to 8:00 a.m. to 2:00 a.m.
new text end

new text begin (d) All electronic pull-tab games must be sold and played on the permitted premises
and may not be linked to other permitted premises.
new text end

new text begin (e) Electronic pull-tab games may not be transferred electronically or otherwise to
any other location by the licensed organization.
new text end

new text begin (f) Electronic pull-tab games may be commingled if the games are from the same
family of games and manufacturer and contain the same game name, form number, type
of game, ticket count, prize amounts, and prize denominations. Each commingled game
must have a unique serial number.
new text end

new text begin (g) An organization may remove from play a device that a player has not maintained
in an activated mode for a specified period of time determined by the organization. The
organization must provide the notice in its house rules.
new text end

new text begin (h) Before participating in the play of an electronic pull-tab game, a player must
present and register a valid picture identification card that includes the player's address
and date of birth.
new text end

new text begin (i) Each player is limited to the use of one device at a time.
new text end

new text begin Subd. 5. new text end

new text begin Multiple chance games. new text end

new text begin The board may permit pull-tab games in which
the holders of certain predesignated winning tickets, with a prize value not to exceed $75
each, have the option of turning in the winning tickets for the chance to win a prize of
greater value.
new text end

Sec. 54.

Minnesota Statutes 2010, section 349.18, subdivision 1, is amended to read:

Subdivision 1.

Lease or ownership required; rent limitations.

(a) An organization
may conduct lawful gambling only on premises it owns or leases. Leases must be on a
form prescribed by the board. The term of the lease is concurrent with the premises permit.
Leases approved by the board must specify that the board may authorize an organization
to withhold rent from a lessor for a period of up to 90 days if the board determines that
illegal gambling occurred on the premises or that the lessor or its employees participated
in the illegal gambling or knew of the gambling and did not take prompt action to stop the
gambling. The lease must authorize the continued tenancy of the organization without
the payment of rent during the time period determined by the board under this paragraph.
Copies of all leases must be made available to employees of the board and the Division of
Alcohol and Gambling Enforcement on request.

(b) Rent paid by an organization for leased premises for the conduct of deleted text begin pull-tabs,
tipboards, and paddle wheels deleted text end new text begin lawful gambling new text end is subject to the following limits new text begin and
restrictions new text end :

(1) For booth operations, deleted text begin including booth operations where a pull-tab dispensing
device is located, booth operations where a bar operation is also conducted, and booth
operations where both a pull-tab dispensing device is located and a bar operation is also
conducted, the maximum rent is: deleted text end new text begin monthly rent may not exceed ten percent of gross profits
for that month. Total rent paid to a lessor from all organizations from leases governed by
this clause may not exceed $1,750 per month.
new text end

deleted text begin (i) in any month where the organization's gross profit at those premises does not
exceed $4,000, up to $400; and
deleted text end

deleted text begin (ii) in any month where the organization's gross profit at those premises exceeds
$4,000, up to $400 plus not more than ten percent of the gross profit for that month in
excess of $4,000;
deleted text end

(2) For bar operations, deleted text begin including bar operations where a pull-tab dispensing device
is located but not including bar operations subject to clause (1), and for locations where
only a pull-tab dispensing device is located: deleted text end new text begin monthly rent may not exceed:
new text end

new text begin (i) 15 percent of the gross profits for that month from pull-tabs sold from a pull-tab
dispensing device, electronic pull-tab games, and electronic linked bingo games; and
new text end

new text begin (ii) more than 20 percent of gross profits from all other forms of lawful gambling.
new text end

deleted text begin (i) in any month where the organization's gross profit at those premises does not
exceed $1,000, up to $200; and
deleted text end

deleted text begin (ii) in any month where the organization's gross profit at those premises exceeds
$1,000, up to $200 plus not more than 20 percent of the gross profit for that month
in excess of $1,000;
deleted text end

(3) deleted text begin a lease not governed by clauses (1) and (2) must be approved by the board before
becoming effective; deleted text end new text begin For electronic linked bingo games and electronic pull-tab games that
are operated for separate time periods within a business day by an organization and the
lessor, monthly rent may not be more than:
new text end

new text begin (i) 15 percent of the gross profits for that month for the time periods operated by
the lessor. The lessor is responsible for cash shortages that occur during the time periods
the games are operated by the lessor; and
new text end

new text begin (ii) ten percent of gross profits for that month for the time periods operated by the
organization. The organization is responsible for cash shortages that occur during the time
periods the games are operated by the organization.
new text end

deleted text begin (4) total rent paid to a lessor from all organizations from leases governed by clause
(1) may not exceed $1,750 per month.
deleted text end

deleted text begin (c) Rent paid by an organization for leased premises for the conduct of bingo is
subject to either of the following limits at the option of the parties to the lease:
deleted text end

deleted text begin (1) deleted text end new text begin (4) For bingo conducted at a leased premises where the primary business is
bingo, rent is limited to either new text end not more than ten percent of the monthly gross profit from
all lawful gambling activities held during bingo occasions new text begin , new text end excluding bar bingo or at a
rate based on a cost per square foot not to exceed 110 percent of a comparable cost per
square foot for leased space as approved by the director deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (2) deleted text end new text begin (5) new text end No rent may be paid for bar bingo new text begin as defined in section 349.12, subdivision 3c new text end .

new text begin (6) A lease not governed by clauses (1) to (5) must be approved by the director
before becoming effective.
new text end

deleted text begin (d) deleted text end new text begin (c) new text end Amounts paid as rent under leases are all-inclusive. No other services or
expenses provided or contracted by the lessor may be paid by the organization, including,
but not limited to, trash removal, janitorial and cleaning services, snow removal, lawn
services, electricity, heat, security, security monitoring, storage, new text begin and new text end other utilities or
services, deleted text begin and, in the case of bar operations, cash shortages, deleted text end unless approved by the
director. new text begin The lessor shall be responsible for the cost of any communications network or
service required to conduct electronic pull-tab games or electronic bingo games. new text end Any
other expenditure made by an organization that is related to a leased premises must be
approved by the director. new text begin For bar operations, the lessor is responsible for cash shortages. new text end
An organization may not provide any compensation or thing of value to a lessor or the
lessor's employees from any fund source other than its gambling account. Rent payments
may not be made to an individual.

deleted text begin (e) deleted text end new text begin (d) new text end Notwithstanding paragraph (b), an organization may pay a lessor for food
or beverages or meeting room rental if the charge made is comparable to similar charges
made to other individuals or groups.

deleted text begin (f) No entity other than the deleted text end new text begin (e) A new text end licensed organization may new text begin not new text end conduct any activity
deleted text begin within a booth operation deleted text end new text begin on behalf of the lessor new text end on a leased premises.

Sec. 55.

Minnesota Statutes 2010, section 349.19, subdivision 2, is amended to read:

Subd. 2.

Accounts.

(a) Gross receipts from lawful gambling by each organization
must be segregated from all other revenues of the conducting organization and placed in a
separate gambling bank account.

(b) All expenditures for allowable expenses, taxes, and lawful purposes must be
made from the separate account except (1) in the case of expenditures previously approved
by the organization's membership for emergencies as defined by board rule, (2) as provided
in subdivision 2a, or (3) when restricted to one electronic fund transaction for the payment
of taxes for the organization as a whole, the organization may transfer the amount of taxes
related to the conduct of gambling to the general account at the time when due and payable.

(c) The name and address of the bank, the account number for the separate account,
and the names of organization members authorized as signatories on the separate account
must be provided to the board when the application is submitted. Changes in the
information must be submitted to the board at least ten days before the change is made.

(d) new text begin Except for gambling receipts from electronic pull-tab games and linked
electronic bingo games, new text end gambling receipts must be deposited into the gambling bank
account within four business days of completion of the bingo occasion, deal, or game from
which they are received.

new text begin (1) new text end A deal of new text begin paper new text end pull-tabs is considered complete when either the last pull-tab of
the deal is sold or the organization does not continue the play of the deal during the next
scheduled period of time in which the organization will conduct pull-tabs.

new text begin (2) new text end A tipboard game is considered complete when the seal on the game flare is
uncovered or the organization does not continue the play of the deal during the next
scheduled period of time in which the organization will conduct tipboards.

new text begin (e) Gambling receipts from all electronic pull-tab games and all linked electronic
bingo games must be recorded on a daily basis and deposited into the gambling bank
account within two business days.
new text end

deleted text begin (e) deleted text end new text begin (f) new text end Deposit records must be sufficient to allow determination of deposits made
from each bingo occasion, deal, or game at each permitted premises.

deleted text begin (f) deleted text end new text begin (g) new text end The person who accounts for gambling gross receipts and profits may not be
the same person who accounts for other revenues of the organization.

Sec. 56.

Minnesota Statutes 2010, section 349.19, subdivision 3, is amended to read:

Subd. 3.

Expenditures.

(a) All expenditures of gross profits from lawful gambling
must be itemized as to payee, purpose, amount, and date of payment.

(b) Each licensed organization must report monthly to the board deleted text begin on a form deleted text end new text begin in an
electronic format new text end prescribed by the board each expenditure or contribution of net profits
from lawful gambling. The reports must provide for each expenditure or contribution:

(1) the name of the recipient of the expenditure or contribution;

(2) the date the expenditure or contribution was approved by the organization;

(3) the date, amount, and check number or electronic transfer confirmation number
of the expenditure or contribution;

(4) a brief description of how the expenditure or contribution meets one or more of
the purposes in section 349.12, subdivision 25; and

(5) in the case of expenditures authorized under section 349.12, subdivision 25,
paragraph (a), clause (7), whether the expenditure is for a facility or activity that primarily
benefits male or female participants.

(c) Authorization of the expenditures must be recorded in the monthly meeting
minutes of the licensed organization.

(d) Checks or authorizations for electronic fund transfers for expenditures of gross
profits must be signed by at least two persons authorized by board rules to sign the
checks or authorizations.

(e) Expenditures of gross profits from lawful gambling for local, state, and federal
taxes as identified in section 349.12, subdivision 25, paragraph (a), clause (8), may be
transferred electronically from the organization's gambling account directly to bank
accounts identified by local, state, or federal agencies if the organization's gambling
account monthly bank statement specifically identifies the payee by name, the amount
transferred, and the date of the transaction.

(f) Expenditures of gross profits from lawful gambling for payments for lawful
purpose expenditures and allowable expenses may be transferred electronically from the
organization's gambling account directly to bank accounts identified by the vendor if the
organization's gambling account monthly bank statement specifically identifies the payee
by name, the amount transferred, the account number of the account into which the funds
were transferred, and the date of the transaction.

(g) Expenditures of gross profits from lawful gambling for payroll compensation
to an employee's account and for the payment of local, state, and federal withholding
taxes may be transferred electronically to and from the account of a payroll processing
firm provided that the firm:

(1) is currently registered with and meets the criteria of the Department of Revenue
as a third-party bulk filer under section 290.92, subdivision 30;

(2) is able to provide proof of a third-party audit and an annual report and statement
of financial condition;

(3) is able to provide evidence of a fidelity bond; and

(4) can provide proof of having been in business as a third-party bulk filer for the
most recent three years.

(h) Electronic payments of taxes, lawful purpose expenditures, and allowable
expenses are permitted only if they have been authorized by the membership, the
organization maintains supporting documentation, and the expenditures can be verified.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 57.

Minnesota Statutes 2010, section 349.19, subdivision 5, is amended to read:

Subd. 5.

Reports.

new text begin (a) new text end A licensed organization must report new text begin monthly new text end to the
deleted text begin Department of Revenue deleted text end new text begin board in an electronic format prescribed by the board new text end and to its
membership deleted text begin monthly, or quarterly in the case of a licensed organization which does not
report more than $1,000 in gross receipts from lawful gambling in any calendar quarter, deleted text end
on its gross receipts, expenses, profits, and expenditure of profits from lawful gambling new text begin
for each permitted premises. The organization must account for and report on each form
of lawful gambling conducted new text end . The deleted text begin report deleted text end new text begin organization new text end must include a reconciliation of
the organization's profit carryover with its cash balance on hand. deleted text begin If the organization
conducts both bingo and other forms of lawful gambling, the figures for both must be
reported separately.
deleted text end

new text begin (b) new text end The organization must report deleted text begin annually to its membership and annually file with
the board a financial summary report in a format prescribed by the board that identifies the
organization's receipts and use of lawful gambling proceeds, including: deleted text end new text begin monthly to the
commissioner of revenue as required under section 297E.06.
new text end

deleted text begin (1) gross receipts;
deleted text end

deleted text begin (2) prizes paid;
deleted text end

deleted text begin (3) allowable expenses;
deleted text end

deleted text begin (4) lawful purpose expenditures, including annual totals for types of charitable
contributions and all taxes and fees as per section 349.12, subdivision 25, paragraph
(a), clauses (8) and (18);
deleted text end

deleted text begin (5) the percentage of annual gross profits used for charitable contributions; and
deleted text end

deleted text begin (6) the percentage of annual gross profits used for all taxes and fees as per section
349.12, subdivision 25, paragraph (a), clauses (8) and (18).
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012.
new text end

Sec. 58.

Minnesota Statutes 2010, section 349.19, subdivision 10, is amended to read:

Subd. 10.

Pull-tab records.

(a) The board shall by rule require a licensed
organization to require each winner of a new text begin paper new text end pull-tab prize of $50 or more to present
identification in the form of a driver's license, Minnesota identification card, or other
identification the board deems sufficient to allow the identification and tracking of the
winner. The rule must require the organization to retain winning new text begin paper new text end pull-tabs of $50 or
more, and the identification of the winner of the pull-tab, for 3-1/2 years.

(b) An organization must maintain separate cash banks for each deal of new text begin paper new text end
pull-tabs unless (1) the licensed organization uses a pull-tab dispensing device, or (2) the
organization uses a cash register, of a type approved by the board, which records all
sales of new text begin paper new text end pull-tabs by separate deals.

(c) The board shall:

(1) by rule adopt minimum technical standards for cash registers that may be used
by organizations, and shall approve for use by organizations any cash register that meets
the standards; and

(2) before allowing an organization to use a cash register that commingles receipts
from several different new text begin paper new text end pull-tab games in play, adopt rules that define how cash
registers may be used and that establish a procedure for organizations to reconcile all
pull-tab games in play at the end of each month.

Sec. 59.

Minnesota Statutes 2010, section 349.211, subdivision 1a, is amended to read:

Subd. 1a.

Linked bingo prizes.

Prizes for a linked bingo game shall be limited
as follows:

(1) deleted text begin no organization may contribute more than $300 per linked bingo game to a
linked bingo prize pool deleted text end new text begin for linked bingo games played without electronic bingo devices,
an organization may not contribute to a linked bingo game prize pool more than $300
per linked bingo game per site new text end ;

new text begin (2) for linked bingo games played exclusively with electronic bingo devices, an
organization may not contribute more than 85 percent of the gross receipts per permitted
premises to a linked bingo game prize pool;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end no organization may award more than $200 for a linked bingo game
consolation prize. For purposes of this subdivision, a linked bingo game consolation
prize is a prize awarded by an organization after a prize from the linked bingo prize pool
has been won; deleted text begin and
deleted text end

deleted text begin (3) deleted text end new text begin (4) new text end for a progressive linked bingo game, if no player declares a valid bingo
deleted text begin within the deleted text end new text begin for a progressive prize or prizes based on a new text end predetermined deleted text begin amount of bingo
numbers called deleted text end new text begin and posted win determination new text end , a portion of the deleted text begin prize is deleted text end new text begin gross receipts
may be new text end carried over to another deleted text begin occasion deleted text end new text begin game new text end until the accumulated new text begin progressive new text end prize
is won. The portion of the prize that is not carried over must be awarded to the first
player or players who declares a valid bingo as additional numbers are called. If a valid
bingo is declared deleted text begin within the predetermined amount of bingo numbers called deleted text end , the entire
prize pool for that game is awarded to the winner deleted text begin . The annual limit for progressive bingo
game prizes contained in subdivision 2 must be reduced by the amount an organization
contributes to progressive linked bingo games during the same calendar year. deleted text end new text begin ; and
new text end

new text begin (5) for linked bingo games played exclusively with electronic bingo devices, linked
bingo prizes in excess of $599 shall be paid by the linked bingo game provider to the
player within three business days. Winners of linked bingo prizes in excess of $599 will
be given a receipt or claim voucher as proof of a win.
new text end

Sec. 60.

Minnesota Statutes 2010, section 349.211, subdivision 2c, is amended to read:

Subd. 2c.

Tipboard prizes.

new text begin (a) new text end The maximum prize which may be awarded for
a tipboard ticket is $599 for $2 and under tipboard tickets, $899 for $3 tipboard tickets,
$1,199 for $4 tipboard tickets, and $1,499 for $5 tipboard tickets, not including any
cumulative or carryover prizes. Cumulative or carryover prizes in tipboard games shall
not exceed $2,500. An organization may not sell any tipboard ticket for more than $5.

new text begin (b) For sports-themed tipboards, the total prize payout may not exceed the amount in
section 349.2113, and each chance or ticket may not be sold for more than $10.
new text end

Sec. 61. new text begin APPROPRIATION.
new text end

new text begin $880,000 in fiscal year 2013 is appropriated from the lawful gambling regulation
account in the special revenue fund to the Gambling Control Board for operating expenses
related to the regulatory oversight of lawful gambling for electronic pull-tabs and
electronic linked bingo.
new text end

Sec. 62. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, sections 297E.02, subdivision 4; 349.15, subdivision 3;
and 349.19, subdivision 2a, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for games sold by a licensed
distributor after June 30, 2012, and the commissioner of revenue retains the authority to
issue refunds under Minnesota Statutes 2010, section 297E.02, subdivision 4, paragraph
(d), for games sold before July 1, 2012.
new text end

Sec. 63. new text begin SEVERABILITY.
new text end

new text begin If any provision of this act is found to be invalid because it is in conflict with a
provision of the Minnesota Constitution or the Constitution of the United States, or for any
other reason, all other provisions of this act shall remain valid and any rights, remedies,
and privileges that have been otherwise accrued by this act, shall remain in effect and may
be proceeded with and concluded under this act.
new text end

Sec. 64. new text begin EFFECTIVE DATE.
new text end

new text begin Unless otherwise specifically provided, this act is effective the day following final
enactment.
new text end