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Chapter 349

Section 349.19

Recent History

    Subdivision 1. Required record of receipts. A licensed organization must keep a record of
each occasion on which it conducts gambling, including each bingo occasion and each day on
which other forms of lawful gambling are conducted. The record must include gross receipts,
quantities of free plays if any, expenses, prizes, and gross profit. The board may by rule provide
for the methods by which expenses are documented. In the case of bingo, gross receipts must
be compared to the checkers' records for the occasion by a person who did not sell cards for the
occasion. Separate records must be kept for bingo and all other forms of lawful gambling.
    Subd. 2. Accounts. Gross receipts from lawful gambling by each organization must be
segregated from all other revenues of the conducting organization and placed in a separate
account. All expenditures for 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. 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. 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. A
deal of 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. A tipboard game is considered complete when the
seal on the game flare is uncovered. Deposit records must be sufficient to allow determination of
deposits made from each bingo occasion, deal, or game at each permitted premises. The person
who accounts for gambling gross receipts and profits may not be the same person who accounts
for other revenues of the organization.
    Subd. 2a. Tax refund or credit. (a) Each organization that receives a refund or credit under
section 297E.02, subdivision 4, paragraph (d), must within four business days of receiving a
refund under that paragraph deposit the refund in the organization's gambling account.
(b) The organization may expend the tax refund or credit issued under section 297E.02,
subdivision 4
, paragraph (d), only for lawful purposes, other than lawful purposes described in
section 349.12, subdivision 25, paragraph (a), clauses (8), (9), and (12). Amounts subject to this
paragraph must be spent for qualifying lawful purposes no later than one year after the refund
or credit is received.
    Subd. 2b. Linked bingo prize pool account. A licensed organization participating in a
linked bingo game must maintain a separate account in a bank for the deposit of the organization's
portion of the linked bingo game prize pool. The name of the bank, the account number, and
authorization for electronic funds transfer must be provided by the organization to the linked
bingo game provider. Deposits must be made into the account by the organization as designated
by the linked bingo game provider. Money in the account must be available to the linked bingo
game provider at all times by electronic funds transfer, unless the linked bingo provider agrees
to the transfer of the funds by other means.
    Subd. 3. Expenditures. (a) All expenditures of gross profits from lawful gambling must be
itemized as to payee, purpose, amount, and date of payment, and must be in compliance with
section 349.154. Authorization of the expenditures must be recorded in the monthly meeting
minutes of the licensed organization. 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. 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:
(1) 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; or (2) transferred electronically to and from the account of a payroll processing
firm that meets the criteria for such a firm established under section 349.168, subdivision 6.
Expenditures of gross profits from lawful gambling as identified in section 349.12, subdivision
, and as authorized by section 349.15, subdivision 1, for payments for taxes 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. Electronic
payments of taxes 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.
(b) Expenditures authorized by the board according to section 349.12, subdivision 25,
paragraph (b), clause (3), must be 51 percent completed within two years of the date of board
approval. "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. An organization
that fails to comply with this paragraph shall reapply to the board for approval of the project.
    Subd. 4. Discrepancies. If at a bingo occasion a discrepancy of more than $50 is found
between the gross receipts as reported by the checkers and the gross receipts determined by
adding the cash receipts, the discrepancy must be reported to the board within five days of the
bingo occasion.
    Subd. 5. Reports. A licensed organization must report to the Department of Revenue and to
its membership 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, on its gross
receipts, expenses, profits, and expenditure of profits from lawful gambling. The report must
include a reconciliation of the organization's profit carryover with its cash balance on hand. If the
organization conducts both bingo and other forms of lawful gambling, the figures for both must
be reported separately. The organization must report 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:
(1) gross receipts;
(2) prizes paid;
(3) allowable expenses;
(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);
(5) the percentage of annual gross profits used for charitable contributions; and
(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).
    Subd. 6. Preservation of records. Records required to be kept by this section must be
preserved by a licensed organization for at least 3-1/2 years and may be inspected by the
commissioner of revenue, the board, or the commissioner of public safety at any reasonable time
without notice or a search warrant.
    Subd. 7. Tax records. The board may by rule require each licensed organization to provide
copies of forms it files with the United States Department of the Treasury which are required
for organizations exempt from income tax.
    Subd. 8. Termination plan. Upon termination of a license for any reason, a licensed
organization must notify the board in writing within 30 calendar days of the license termination
date of its plan for disposal of gambling equipment and distribution of remaining gambling
proceeds. Before implementation, a plan must be approved by the board as provided in board rule.
The board may accept or reject a plan and order submission of a new plan or amend a proposed
plan. The board may specify a time for submission of new or amended plans or for completion
of an accepted plan.
    Subd. 9. Annual audit; filing requirement. An organization licensed under this chapter
must have an annual financial audit or financial review when required by section 297E.06,
subdivision 4
    Subd. 9a. Records. An organization licensed under this chapter must maintain records that
account for the assets, liabilities, and fund balance of the organization. The records must also
account for the revenues, taxes, prize payouts, expenses, and lawful purpose expenditures of the
organization. The records must include a perpetual inventory of games purchased but not yet
played and games in play.
    Subd. 9b. Accounting manual. The board must prepare and distribute to each organization
licensed under this chapter a manual designed to facilitate compliance with section 349.19,
subdivision 9a
. The manual must include a clear description of the processes needed to maintain
the records required in section 349.19, subdivision 9a. The board may contract for preparation
of the manual.
    Subd. 10. Pull-tab records. (a) The board shall by rule require a licensed organization to
require each winner of a 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 tracing of the winner. The rule must require the organization to
retain winning 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 pull-tabs unless
(1) two or more deals are commingled in 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 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 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.
    Subd. 11. Information made part of organization minutes. A licensed organization which
receives a copy of a written audit under subdivision 9, or an audit or compliance report prepared
by an agency of the state, must place the audit report or compliance report in the minutes of the
next meeting of the organization following receipt of the report. Copies of such minutes must be
made available to all members of the organization upon request.
History: 1976 c 261 s 9; 1984 c 502 art 12 s 13; 1986 c 467 s 19,20; 1987 c 327 s 19; 1988
c 596 s 5; 1989 c 334 art 2 s 29-33; 1Sp1989 c 1 art 13 s 11; 1990 c 590 art 1 s 32; 1991 c 336
art 2 s 28-32; 1993 c 13 art 1 s 4; 1994 c 633 art 5 s 77-81; 1996 c 467 s 7; 1996 c 471 art 13
s 18,19; 1997 c 7 art 1 s 128; 1997 c 231 art 7 s 34; 1998 c 322 s 5; 1998 c 389 art 13 s 6;
1Sp2001 c 5 art 13 s 13; 2002 c 386 art 1 s 9; 2003 c 110 s 37,38; 2004 c 172 s 8; 2005 c 166
art 1 s 31-33; 2006 c 205 s 25,26

Official Publication of the State of Minnesota
Revisor of Statutes