Bill Text: MN SF2391 | 2011-2012 | 87th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: National football league (NFL) stadium in Minneapolis; Minnesota sports facilities authority establishment; legislative commission on Minnesota sports facilities establishment; metropolitan sports facilities commission abolishment; local tax revenue use; electronic pull-tabs and electronic themed bingo games use; conditional imposition of certain taxes and collection of other revenues authorization; tax rates on lawful gambling modification; state appropriation bonds sale; solicitor definition for federal nexus and Internet sales tax purposes; Minnesota Education, Retraining, and Investment in Talent Act establishment

Sponsorship: Slight Partisan Bill (Republican 2-1)

Status: (Introduced - Dead) 2012-05-08 - Laid on table [SF2391 Detail]

Download: Minnesota-2011-SF2391-Engrossed.html

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A bill for an act

relating to stadiums; providing for a new National Football League stadium in
Minnesota; establishing a Minnesota Sports Facilities Authority; authorizing
the sale and issuance of state appropriation bonds; abolishing the Metropolitan
Sports Facilities Commission; providing for use of certain local tax revenue;
providing for electronic pull-tab games, electronic linked bingo games, and
sports-themed tipboard games; providing for the conditional imposition of
certain taxes and collection of other revenues; modifying certain rates of tax on
lawful gambling; authorizing the director of the State Lottery to establish gaming
machines at a licensed racetrack; appropriating money;amending Minnesota
Statutes 2010, sections 3.971, subdivision 6; 3.9741, by adding a subdivision;
13.55, subdivision 1; 240.03; 240.13, by adding a subdivision; 240.14, by adding
a subdivision; 297E.01, subdivisions 7, 8, 9; 297E.02, subdivisions 1, 3, 6, 7,
10, 11, by adding a subdivision; 297E.13, subdivision 5; 299L.07, subdivisions
2, 2a; 349.12, subdivisions 3b, 3c, 5, 6a, 12a, 18, 25, 25b, 25c, 25d, 29, 31,
32, by adding subdivisions; 349.13; 349.151, subdivisions 4b, 4c, by adding a
subdivision; 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; 349.1721; 349.18, subdivision 1; 349.19, subdivisions 2, 3,
5, 10; 349.211, subdivision 1a; 349A.01, subdivision 10, by adding subdivisions;
349A.10, subdivision 3; 349A.13; 352.01, subdivision 2a; 473.121, subdivision
5a; 473.164; 473.565, subdivision 1; Minnesota Statutes 2011 Supplement,
section 10A.01, subdivision 35; Laws 1986, chapter 396, sections 4, as amended;
5, as amended; proposing coding for new law in Minnesota Statutes, chapters
16A; 47; 297A; 349A; proposing coding for new law as Minnesota Statutes,
chapter 473J; repealing Minnesota Statutes 2010, sections 240.30, subdivisions
3, 8; 297E.02, subdivision 4; 349.12, subdivision 2; 473.551; 473.552; 473.553,
subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13; 473.556, subdivisions 1, 2, 3,
4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17; 473.561; 473.564, subdivisions 2, 3;
473.572; 473.581; 473.592, subdivision 1; 473.595; 473.598; 473.599; 473.76.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MINNESOTA SPORTS FACILITIES AUTHORITY

    Section 1. Minnesota Statutes 2010, section 3.971, subdivision 6, is amended to read:
    Subd. 6. Financial audits. The legislative auditor shall audit the financial
statements of the state of Minnesota required by section 16A.50 and, as resources permit,
shall audit Minnesota State Colleges and Universities, the University of Minnesota,
state agencies, departments, boards, commissions, courts, and other state organizations
subject to audit by the legislative auditor, including the State Agricultural Society,
Agricultural Utilization Research Institute, Enterprise Minnesota, Inc., Minnesota
Historical Society, Labor Interpretive Center, Minnesota Partnership for Action Against
Tobacco, Metropolitan Sports Facilities Commission, Minnesota Sports Facilities
Authority, Metropolitan Airports Commission, and Metropolitan Mosquito Control
District. Financial audits must be conducted according to generally accepted government
auditing standards. The legislative auditor shall see that all provisions of law respecting
the appropriate and economic use of public funds are complied with and may, as part of a
financial audit or separately, investigate allegations of noncompliance.

    Sec. 2. Minnesota Statutes 2010, section 3.9741, is amended by adding a subdivision
to read:
    Subd. 4. Minnesota Sports Facilities Authority. Upon the audit of the financial
accounts and affairs of the Minnesota Sports Facilities Authority, the authority is liable
to the state for the total cost and expenses of the audit, including the salaries paid to the
examiners while actually engaged in making the examination. The legislative auditor may
bill the authority either monthly or at the completion of the audit. All collections received
for the audits must be deposited in the general fund.

    Sec. 3. Minnesota Statutes 2011 Supplement, section 10A.01, subdivision 35, is
amended to read:
    Subd. 35. Public official. "Public official" means any:
    (1) member of the legislature;
    (2) individual employed by the legislature as secretary of the senate, legislative
auditor, chief clerk of the house of representatives, revisor of statutes, or researcher,
legislative analyst, or attorney in the Office of Senate Counsel and Research or House
Research;
    (3) constitutional officer in the executive branch and the officer's chief administrative
deputy;
    (4) solicitor general or deputy, assistant, or special assistant attorney general;
    (5) commissioner, deputy commissioner, or assistant commissioner of any state
department or agency as listed in section 15.01 or 15.06, or the state chief information
officer;
    (6) member, chief administrative officer, or deputy chief administrative officer of a
state board or commission that has either the power to adopt, amend, or repeal rules under
chapter 14, or the power to adjudicate contested cases or appeals under chapter 14;
    (7) individual employed in the executive branch who is authorized to adopt, amend,
or repeal rules under chapter 14 or adjudicate contested cases under chapter 14;
    (8) executive director of the State Board of Investment;
    (9) deputy of any official listed in clauses (7) and (8);
    (10) judge of the Workers' Compensation Court of Appeals;
    (11) administrative law judge or compensation judge in the State Office of
Administrative Hearings or unemployment law judge in the Department of Employment
and Economic Development;
    (12) member, regional administrator, division director, general counsel, or operations
manager of the Metropolitan Council;
    (13) member or chief administrator of a metropolitan agency;
    (14) director of the Division of Alcohol and Gambling Enforcement in the
Department of Public Safety;
    (15) member or executive director of the Higher Education Facilities Authority;
    (16) member of the board of directors or president of Enterprise Minnesota, Inc.;
    (17) member of the board of directors or executive director of the Minnesota State
High School League;
    (18) member of the Minnesota Ballpark Authority established in section 473.755;
    (19) citizen member of the Legislative-Citizen Commission on Minnesota Resources;
    (20) manager of a watershed district, or member of a watershed management
organization as defined under section 103B.205, subdivision 13;
    (21) supervisor of a soil and water conservation district;
(22) director of Explore Minnesota Tourism;
    (23) citizen member of the Lessard-Sams Outdoor Heritage Council established in
section 97A.056; or
(24) a citizen member of the Clean Water Council established in section 114D.30.; or
(25) member or chief executive of the Minnesota Sports Facilities Authority
established in section 473J.07.

    Sec. 4. Minnesota Statutes 2010, section 352.01, subdivision 2a, is amended to read:
    Subd. 2a. Included employees. (a) "State employee" includes:
    (1) employees of the Minnesota Historical Society;
    (2) employees of the State Horticultural Society;
    (3) employees of the Minnesota Crop Improvement Association;
    (4) employees of the adjutant general whose salaries are paid from federal funds and
who are not covered by any federal civilian employees retirement system;
    (5) employees of the Minnesota State Colleges and Universities who are employed
under the university or college activities program;
    (6) currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently contributing
employee employed for any special service as defined in subdivision 2b, clause (8);
    (7) employees of the legislature who are appointed without a limit on the duration
of their employment and persons employed or designated by the legislature or by a
legislative committee or commission or other competent authority to conduct a special
inquiry, investigation, examination, or installation;
    (8) trainees who are employed on a full-time established training program
performing the duties of the classified position for which they will be eligible to receive
immediate appointment at the completion of the training period;
    (9) employees of the Minnesota Safety Council;
    (10) any employees who are on authorized leave of absence from the Transit
Operating Division of the former Metropolitan Transit Commission and who are employed
by the labor organization which is the exclusive bargaining agent representing employees
of the Transit Operating Division;
    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito
Control Commission unless excluded under subdivision 2b or are covered by another
public pension fund or plan under section 473.415, subdivision 3;
    (12) judges of the Tax Court;
    (13) personnel who were employed on June 30, 1992, by the University of
Minnesota in the management, operation, or maintenance of its heating plant facilities,
whose employment transfers to an employer assuming operation of the heating plant
facilities, so long as the person is employed at the University of Minnesota heating plant
by that employer or by its successor organization;
    (14) personnel who are employed as seasonal employees in the classified or
unclassified service;
    (15) persons who are employed by the Department of Commerce as a peace officer
in the Insurance Fraud Prevention Division under section 45.0135 who have attained the
mandatory retirement age specified in section 43A.34, subdivision 4;
    (16) employees of the University of Minnesota unless excluded under subdivision
2b, clause (3);
    (17) employees of the Middle Management Association whose employment began
after July 1, 2007, and to whom section 352.029 does not apply; and
    (18) employees of the Minnesota Government Engineers Council to whom section
352.029 does not apply.; and
(19) employees of the Minnesota Sports Facilities Authority.
    (b) Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the
amounts required by section 352.04. Employee contributions must be deducted from
salary. Employer contributions are the sole obligation of the employer assuming operation
of the University of Minnesota heating plant facilities or any successor organizations to
that employer.

    Sec. 5. [473J.01] PURPOSE.
The purpose of this chapter is to provide for the construction, financing, and
long-term use of a stadium and related stadium infrastructure as a venue for professional
football and a broad range of other civic, community, athletic, educational, cultural,
and commercial activities. The legislature finds and declares that the expenditure of
public money for this purpose is necessary and serves a public purpose, and that property
acquired by the Minnesota Sports Facilities Authority for the construction of the stadium
and related stadium infrastructure is acquired for a public use or public purpose under
chapter 117. The legislature further finds and declares that any provision in a lease or use
agreement with a professional football team that requires the team to play all of its home
games in a publicly funded stadium for the duration of the lease or use agreement, serves
a unique public purpose for which the remedies of specific performance and injunctive
relief are essential to its enforcement. The legislature further finds and declares that
government assistance to facilitate the presence of professional football provides to the
state of Minnesota and its citizens highly valued intangible benefits that are virtually
impossible to quantify and, therefore, not recoverable even if the government receives
monetary damages in the event of a team's breach of contract. Minnesota courts are,
therefore, charged with protecting those benefits through the use of specific performance
and injunctive relief as provided in this chapter and in the lease and use agreements.

    Sec. 6. [473J.03] DEFINITIONS.
    Subdivision 1. Application. For the purposes of this chapter, the terms defined in
this section have the meanings given them, except as otherwise expressly provided or
indicated by the context.
    Subd. 2. Annual adjustment factor. "Annual adjustment factor" means the annual
adjustment factor under section 297A.994, subdivision 4, paragraph (b).
    Subd. 3. Authority. "Authority" means the Minnesota Sports Facilities Authority
established under section 473J.07.
    Subd. 4. City. "City" means the city of Minneapolis.
    Subd. 5. NFL. The "NFL" means the National Football League.
    Subd. 6. NFL team. "NFL team" means the owner and operator of the NFL
professional football team known, as of the effective date of this chapter, as the Minnesota
Vikings or any team owned and operated by someone who purchases or otherwise takes
ownership or control of or reconstitutes the NFL team known as the Minnesota Vikings.
    Subd. 7. Stadium. "Stadium" means the stadium suitable for professional football
to be designed, constructed, and financed under this chapter. A stadium must have a roof
that covers the stadium, as set forth in section 473J.11, subdivision 3.
    Subd. 8. Stadium costs. "Stadium costs" means the costs of acquiring land, the
costs of stadium infrastructure, and of designing, constructing, equipping, and financing a
stadium suitable for professional football.
    Subd. 9. Stadium infrastructure. "Stadium infrastructure" means plazas, parking
structures, rights of way, connectors, skyways and tunnels, and other such property,
facilities, and improvements, owned by the authority or determined by the authority to
facilitate the use and development of the stadium.
    Subd. 10. Stadium plaza. "Stadium plaza" means the open air portion of the
stadium adjacent to the stadium.
    Subd. 11. Stadium site. "Stadium site" means all or portions of the current site of
the existing football stadium and adjacent areas, bounded generally by Park and Eleventh
Avenues and Third and Sixth Streets in the city of Minneapolis, the definitive boundaries
of which shall be determined by the authority and agreed to by the NFL team.

    Sec. 7. [473J.07] MINNESOTA SPORTS FACILITIES AUTHORITY.
    Subdivision 1. Established. The Minnesota Sports Facilities Authority is
established as a public body, corporate and politic, and political subdivision of the state.
The authority is not a joint powers entity or an agency or instrumentality of the city.
    Subd. 2. Membership. (a) The authority shall consist of five members.
(b) The chair and two members shall be appointed by the governor. One member
appointed by the governor shall serve until December 31 of the third year following
appointment and one member shall serve until December 31 of the fourth year following
appointment. Thereafter, members appointed by the governor shall serve four-year terms,
beginning January 1. Each member serves until a successor is appointed and takes office.
The chair serves at the pleasure of the governor.
(c) The mayor of the city shall appoint two members to the authority. One member
appointed by the mayor of the city shall serve until December 31 of the third year
following appointment and one member shall serve until December 31 of the fourth year
following appointment. Thereafter, members appointed under this paragraph shall serve
four-year terms beginning January 1. Each member serves until a successor is appointed
and takes office. Members appointed under this paragraph may reside within the city and
may be appointed officials of a political subdivision.
(d) The initial members of the authority must be appointed not later than 30 days
after the date of enactment of this chapter.
    Subd. 3. Compensation. The authority may compensate its members, other than the
chair, as provided in section 15.0575. The chair shall receive, unless otherwise provided
by other law, a salary in an amount fixed by the authority, and shall be reimbursed for
reasonable expenses to the same extent as a member.
    Subd. 4. Chair. The chair presides at all meetings of the authority, if present, and
performs all other assigned duties and functions. The authority may appoint from among
its members a vice-chair to act for the chair during the temporary absence or disability of
the chair, and any other officers the authority determines are necessary or convenient.
    Subd. 5. Removal. A member, other than the chair, may be removed by the
appointing authority only for misfeasance, malfeasance, or nonfeasance in office, upon
written charges, and after an opportunity to be heard in defense of the charges.
    Subd. 6. Bylaws. The authority shall adopt bylaws to establish rules of procedure,
the powers and duties of its officers, and other matters relating to the governance of the
authority and the exercise of its powers. Except as provided in this section, the bylaws
adopted under this subdivision must be similar in form and substance to bylaws adopted
by the Minnesota Ballpark Authority pursuant to section 473.755.
    Subd. 7. Audit. The legislative auditor shall audit the books and accounts of the
authority once each year or as often as the legislative auditor's funds and personnel permit.
The authority shall pay the total cost of the audit pursuant to section 3.9741.
    Subd. 8. Executive director; employees. The authority may appoint an executive
director to serve as the chief executive officer of the authority. The executive director
serves at the pleasure of the authority and receives compensation as determined by the
authority. The executive director may be responsible for the operation, management, and
promotion of activities of the authority, as prescribed by the authority. The executive
director has the powers necessarily incident to the performance of duties required and
powers granted by the authority, but does not have authority to incur liability or make
expenditures on behalf of the authority without general or specific directions by the
authority, as shown by the bylaws or minutes of a meeting of the authority. The executive
director is responsible for hiring, supervision, and dismissal of all other employees of
the authority.
    Subd. 9. Web site. The authority shall establish a Web site for purposes of providing
information to the public concerning all actions taken by the authority. At a minimum, the
Web site must contain a current version of the authority's bylaws, notices of upcoming
meetings, minutes of the authority's meetings, and contact telephone, electronic mail, and
facsimile numbers for public comments.
    Subd. 10. Quorum; approvals. Any three members shall constitute a quorum for
the conduct of business and action may be taken upon the vote of a majority of members
present at a meeting duly called and held. During the design and construction stages of the
stadium, a four-fifths vote of the authority is required for authority decisions related to
zoning, land use, exterior design of the stadium, related parking, the plaza area, and the
selection of the authority's lead representative during design and construction.

    Sec. 8. [473J.075] SPORTS FACILITIES OF THE AUTHORITY.
    Subdivision 1. General. This section describes the sports facilities that the
Minnesota Sports Facilities Authority controls, operates, and has responsibility over
pursuant to this chapter and as directed by law.
    Subd. 2. Sports facilities. (a) The following sports facilities are part of the
Minnesota Sports Facilities Authority:
(1) the professional football stadium constructed under this chapter; and
(2) any other sports facility constructed or acquired by the authority.
(b) The Target Center in Minneapolis, Xcel Energy Center in St. Paul, and Target
Field in Minneapolis may join the facilities of the authority upon satisfaction of the
following factors and upon the approval of the authority:
(1) the governing body of the facility must make the request to the authority to
become a sports facility under this section;
(2) the governing body and the authority must negotiate an agreement with respect to
the transfer of all obligations and responsibilities, including, but not limited to, outstanding
debt, revenue sources, finance, funding, operations, equipment, repair and replacements,
capital improvements, reserves, contracts, and agreements;
(3) the governing body and the professional sports team who is the primary user of
the facility must make a joint recommendation to the authority;
(4) the authority must find that the inclusion of a facility under the authority will not
have a negative impact on the authority, the general fund, or become an obligation of the
state of Minnesota; and
(5) any other information or requirements requested by the authority.

    Sec. 9. [473J.08] LOCATION.
The stadium to be constructed under this chapter shall be located at the stadium
site in the city of Minneapolis.

    Sec. 10. [473J.09] POWERS, DUTIES OF THE AUTHORITY.
    Subdivision 1. Actions. The authority may sue and be sued. The authority is a public
body and the stadium and stadium infrastructure are public improvements within the
meaning of chapter 562. The authority is a municipality within the meaning of chapter 466.
    Subd. 2. Acquisition of property. The authority may acquire from any public or
private entity by lease, purchase, gift, or devise all necessary right, title, and interest in
and to real property, air rights, and personal property deemed necessary to the purposes
contemplated by this chapter. The authority may acquire, by the exercise of condemnation
powers under chapter 117, land, other real property, air rights, personal property, and other
right, title, and interest in property, within the stadium site and stadium infrastructure.
    Subd. 3. Disposition of property. The authority may sell, lease, or otherwise
dispose of any real or personal property acquired by the authority that is no longer required
for accomplishment of the authority's purposes. The property may be sold in accordance
with the procedures provided by section 469.065, except subdivisions 6 and 7, to the
extent the authority deems it to be practical and consistent with this chapter. Title to the
stadium must not be transferred or sold by the authority prior to the effective date of
enactment of any legislation approving such transfer or sale.
    Subd. 4. Data practices; open meetings. Except as otherwise provided in this
chapter, the authority is subject to chapters 13 and 13D.
    Subd. 5. Facility operation. The authority may develop, construct, equip, improve,
own, operate, manage, maintain, finance, and control the stadium, stadium infrastructure,
and related facilities constructed or acquired under this chapter, or may delegate such
duties through an agreement, subject to the rights and obligations transferred to and
assumed by the authority, the NFL team, other user, third-party manager, or program
manager, under the terms of a lease, use agreement, or development agreement.
    Subd. 6. Employees; contracts for services. The authority may employ persons
and contract for services necessary to carry out its functions, including the utilization of
employees and consultants retained by other governmental entities. The authority shall
enter into an agreement with the city regarding traffic control for the stadium.
    Subd. 7. Gifts, grants, loans. The authority may accept monetary contributions,
property, services, and grants or loans of money or other property from the United States,
the state, any subdivision of the state, any agency of those entities, or any person for any
of its purposes, and may enter into any agreement required in connection with the gifts,
grants, or loans. The authority shall hold, use, and dispose of the money, property, or
services according to the terms of the monetary contributions, grant, loan, or agreement.
    Subd. 8. Use agreements. The authority may lease, license, or enter into use
agreements and may fix, alter, charge, and collect rents, fees, and charges for the use,
occupation, and availability of part or all of any premises, property, or facilities under
its ownership, operation, or control for purposes that will provide athletic, educational,
cultural, commercial, or other entertainment, instruction, or activity for the citizens of
Minnesota and visitors. The use agreements may provide that the other contracting party
has exclusive use of the premises at the times agreed upon, as well as the right to retain
some or all revenues from ticket sales, suite licenses, concessions, advertising, naming
rights, NFL team designated broadcast/media, club seats, signage, and other revenues
derived from the stadium. The lease or use agreement with an NFL team must provide for
the payment by the NFL team of an agreed-upon portion of operating and maintenance
costs and expenses and provide other terms in which the authority and NFL team agree. In
no case may a lease or use agreement permit smoking in the stadium.
    Subd. 9. Research. The authority may conduct research studies and programs;
collect and analyze data; prepare reports, maps, charts, and tables; and conduct all
necessary hearings and investigations in connection with its functions.
    Subd. 10. Insurance. The authority may require any employee to obtain and file
with the authority an individual bond or fidelity insurance policy. The authority may
procure insurance in the amounts the authority considers necessary against liability of the
authority or its officers and employees for personal injury or death and property damage or
destruction, consistent with chapter 466, and against risks of damage to or destruction of
any of its facilities, equipment, or other property.
    Subd. 11. Exemption from Metropolitan Council review; Business Subsidy Act.
The acquisition and betterment of a stadium and stadium infrastructure by the authority
must be conducted pursuant to this chapter and are not subject to sections 473.165 and
473.173. Section 116J.994 does not apply to any transactions of the authority or other
governmental entity related to the stadium or stadium infrastructure or to any tenant or
other users of the stadium or stadium infrastructure.
    Subd. 12. Incidental powers. In addition to the powers expressly granted in this
chapter, the authority has all powers necessary or incidental thereto.
    Subd. 13. Transfers to the authority. In addition to any other payments required
under this act, for operating years 2016 to 2020, the NFL team shall annually transfer to
the authority amounts equal to the city of Minneapolis share of operating costs and capital
reserves. These amounts shall be repaid to the NFL team by the state on behalf of the city
of Minneapolis through a repayment schedule to be specified in law, and agreed to in all
subsequent agreements between the state, city and the NFL team.
    Subd. 14. Legislative report. The authority must report to the legislature by
January 15 of each year on the following:
(a) any recommended increases in the rate or dollar amount of tax;
(b) any recommended increases in the debt of the authority;
(c) the overall work and role of the authority;
(d) the authority's proposed operating and capital budgets; and
(e) the authority's implementation of the operating and capital budgets.

    Sec. 11. [473J.11] STADIUM DESIGN AND CONSTRUCTION.
    Subdivision 1. Contracts. (a) The design, development, and construction of the
stadium shall be a collaborative process between the authority and the NFL team. The
authority and the NFL team shall establish a process to reach consensus on key elements
of the stadium program and design, development, and construction.
(b) Unless the authority and the NFL team agree otherwise:
(1) the authority shall create a stadium design and construction group, including
representatives of the authority and the NFL team, to manage the design of the stadium
and oversee construction;
(2) this group shall engage an owner's representative to act on behalf of the group.
The cost of the owner's representative shall be a stadium cost; and
(3) the authority and the NFL team shall enter into a development administration
agreement providing for rights and responsibilities of the authority and the NFL team, the
design and construction group, and the owner's representative for design and construction
of the stadium, including, but not limited to, establishment of minimum design standards.
This development administration agreement shall provide for binding arbitration in
the event that the authority and the NFL team are unable to agree on minimum design
standards or other material aspects of the design.
(c) The authority may enter into an agreement with the NFL team and any other
entity relating to the design, construction, financing, operation, maintenance, and use of
the stadium and related facilities and stadium infrastructure if in doing so, the tax-exempt
status of the bonds is not affected. The authority may contract for materials, supplies, and
equipment in accordance with section 471.345, except that the authority may employ or
contract with persons, firms, or corporations to perform one or more or all of the functions
of architect, engineer, construction manager, or program manager with respect to all or any
part of the design, construction, financing, operation, maintenance, and use of the stadium
and stadium infrastructure under the traditional separate design and build, integrated
design-build, construction manager at risk, or public/private partnership (P3) structures, or
a combination thereof if in doing so, the tax-exempt status of the bonds is not affected.
(d) The authority and the NFL team shall prepare a request for proposals for one or
more of the functions described in paragraph (c). The request must be published in the
State Register and shall include, at a minimum, such requirements that are agreed to by
the authority and the NFL team. The authority and the NFL team may prequalify offerors
by issuing a request for qualifications, in advance of the request for proposals, and select a
short list of responsible offerors prior to discussions and evaluations.
(e) As provided in the request for proposals, the authority, and the NFL team, may
conduct discussions and negotiations with responsible offerors in order to determine
which proposal is most advantageous to the authority and the NFL team and to negotiate
the terms of an agreement. In conducting discussions, there shall be no disclosure of any
information derived from proposals submitted by competing offerors and the content of all
proposals is nonpublic data under chapter 13 until such time as a notice to award a contract
is given by the authority. The agreement shall be subject to the approval of the NFL team.
(f) Prior to the time the authority enters into a construction contract with a
construction manager or program manager certifying a maximum price and a completion
date as provided in paragraph (h), at the request of the NFL team, the authority may
authorize, such authorization not to be unreasonably withheld or delayed, the NFL team
to provide for management of the construction of the stadium and related stadium
infrastructure, in which event the NFL team must assume the role and responsibilities
of the authority for completion of construction in a manner consistent with the agreed
minimum design standards and design documents, subject to the terms of this act,
including responsibility for cost overruns.
(g) The construction manager or program manager may enter into contracts with
contractors for labor, materials, supplies, and equipment for the construction of the
stadium and related stadium infrastructure through the process of public bidding, except
that the construction manager or program manager may, with the consent of the authority
or the NFL team if the NFL team has assumed responsibility for construction:
(1) narrow the listing of eligible bidders to those which the construction manager
or program manager determines to possess sufficient expertise to perform the intended
functions;
(2) award contracts to the contractors that the construction manager or program
manager determines provide the best value under a request for proposals as described in
section 16C.28, subdivision 1, paragraphs (a), clause (2), and (c), which are not required
to be the lowest responsible bidder; and
(3) for work the construction manager or program manager determines to be critical
to the completion schedule, award contracts on the basis of competitive proposals, or
perform work with its own forces without soliciting competitive bids if the construction
manager or program manager provides evidence of competitive pricing.
(h) The authority and the NFL team shall require that the construction manager or
program manager certify, before the contract is signed, a fixed and stipulated construction
price and completion date to the authority and post a performance bond in an amount
at least equal to 100 percent of the certified price or such other security satisfactory to
the authority, to cover any costs which may be incurred in excess of the certified price
including, but not limited to, costs incurred by the authority or loss of revenues resulting
from incomplete construction on the completion date. The authority may secure surety
bonds as provided in section 574.26, securing payment of just claims in connection with
all public work undertaken by the authority. Persons entitled to the protection of the
bonds may enforce them as provided in sections 574.28 to 574.32 and are not entitled to a
lien on any property of the authority under the provisions of sections 514.01 to 514.16.
The construction of the stadium is a project as that term is defined in section 177.42,
subdivision 2, and is subject to the prevailing wage law under sections 177.41 to 177.43.
    Subd. 2. Changes. Unless otherwise agreed to by the authority and the NFL team,
if either party requests an agreed upon change in minimum design standards, and this
change is responsible for requiring the project to exceed the stated budget, the requesting
party is liable for any cost overruns or associated liabilities.
    Subd. 3. Stadium design. The stadium and stadium infrastructure shall be designed
and constructed incorporating the following general program and design elements:
(1) unless otherwise agreed to by the authority and the NFL team, the stadium
shall comprise approximately 1,500,000 square feet with approximately 65,000 seats,
expandable to 72,000, shall meet or exceed NFL program requirements, and include
approximately 150 suites and approximately 7,500 club seats or other such components as
agreed to by the authority and the NFL team;
(2) space for NFL team-related exhibitions and sales, which shall include the
following: NFL team museum and Hall of Fame, retail merchandise and gift shop retail
venues, and themed concessions and restaurants;
(3) year-round space for the NFL team administrative operations, sales, and
marketing, including a ticket office, team meeting space, locker, and training rooms;
(4) space for administrative offices of the authority;
(5) 2,000 parking spaces within one block of the stadium, connected by skyway or
tunnel to the stadium, and 500 parking spaces within two blocks of the stadium, with a
dedicated walkway on game days;
(6) elements sufficient to provide community and civic uses as determined by the
authority; and
(7) a roof that is fixed or retractable, provided that if the roof is retractable, it is
accomplished without any increase to the funding provided by the state or the city.
    Subd. 4. Cost overruns, savings. The authority may accept financial obligations
relating to cost overruns associated with acquisition of the stadium site, stadium
infrastructure, and stadium design, development, and construction, provided that the
authority shall not accept responsibility for cost overruns and shall not be responsible for
cost overruns if the authority has authorized the NFL team to provide for management of
construction of the stadium under subdivision 1. Cost savings or additional funds obtained
by the authority or the NFL team for the stadium or stadium infrastructure may be used
first to fund additional stadium or stadium infrastructure, as agreed to by the authority and
the NFL team, if any, and then to fund capital reserves.

    Sec. 12. [473J.112] COMMEMORATIVE BRICKS.
The authority shall sell commemorative bricks to be displayed at a prominent
location in the new stadium, for an amount to be determined by the authority. The
authority shall work with the commissioner to ensure that purchase of a brick is a tax
deductible donation on the part of the donating person or organization. Funds raised
through this section shall be appropriated to the commissioner of management and budget
for a grant to the Minnesota Sports Facilities Authority.

    Sec. 13. [473J.12] EMPLOYMENT.
    Subdivision 1. Hiring and recruitment. In the design, development, construction,
management, operation, maintenance and capital repair, replacement and improvement of
the stadium and stadium infrastructure, the authority shall make every effort to employ,
and cause the NFL team, the construction manager and other subcontractors, vendors, and
concessionaires to employ women and members of minority communities when hiring.
In addition, the authority shall contract with an employment assistance firm, preferably
minority-owned, to create an employment program to recruit, hire, and retain minorities
for the stadium facility. The authority shall hold a job fair and recruit and advertise at
Minneapolis Urban League, Sabathani, American Indian OIC, Youthbuild organizations,
and other such organizations. Further, goals for construction contracts to be awarded
to women- and minority-owned businesses will be in a percentage at least equal to the
minimum used for city of Minneapolis development projects, and the other construction
workforce will establish workforce utilization goals at least equal to current city goals and
include workers from city zip codes that have high rates of poverty and unemployment.
    Subd. 2. Other required agreements. The NFL team or the authority shall give
food, beverage, retail, and concession workers presently employed by the NFL team or
the Metropolitan Sports Facilities Commission or its vendors at the existing football
stadium the opportunity to continue their employment in comparable positions at the new
stadium. Workers who are presently represented under a collective bargaining agreement
may seek to continue such representation in the facility and designate such, or another
collective bargaining unit, as their representative. Volunteers cannot be prohibited from
working at non-NFL events.

    Sec. 14. [473J.13] STADIUM OPERATIONS; CAPITAL IMPROVEMENTS.
    Subdivision 1. Stadium operation. The stadium shall be operated in a first-class
manner, similar to and consistent with other comparable NFL stadiums, such as the
stadium in Indianapolis, Indiana, currently known as Lucas Oil Field. The authority and
the team will mutually agree on a third-party management company or individual to
manage the stadium and on certain major vendors to the stadium. The authority, with the
approval of the NFL team, may enter into an agreement with a program manager for
management of the stadium, for a maximum of 40 years.
    Subd. 2. Operating expenses. (a) The authority must pay or cause to be paid
all operating expenses of the stadium. The authority must require in the lease or use
agreement with the NFL team that the NFL team pay the authority, beginning January 1,
2016, or other date as mutually agreed upon by the parties, toward operating costs of the
stadium, $8,500,000 each year, increased by a three percent annual inflation rate.
(b) Beginning January 1, 2016, or other date as mutually agreed upon by the
parties, and continuing through 2020, the NFL team shall pay the authority operating
expenses, $6,000,000 each year, increased by an annual adjustment factor. The payment
of $6,000,000 per year beginning in 2016 is a payment by the team, which shall be repaid
to the team by the state, using funds as provided under section 297A.994, subdivision 4,
paragraph (a), clause (4). After 2020, the state shall assume this payment, using funds
generated in accordance with the city of Minneapolis as specified under section 297A.994.
(c) The authority may establish an operating reserve to cover operating expense
shortfalls and may accept funds from any source for deposit in the operating reserve. The
establishment or funding of an authority operating reserve must not decrease the amounts
required to be paid to the authority toward operating costs under this subdivision unless
agreed to by the authority.
(d) The authority will be responsible for operating cost overruns.
(e) After the joint selection of the third-party manager or program manager, the
authority may agree with a program manager or other third-party manager of the stadium
on a fixed cost operating, management, or employment agreement with operating
cost protections under which the program manager or third-party manager assumes
responsibility for stadium operating costs and shortfalls. The agreement with the manager
must require the manager to prepare an initial and ongoing operating plan and operating
budgets for approval by the authority in consultation with the NFL team. The manager
must agree to operate the stadium in accordance with the approved operating plan and
operating budget.
    Subd. 3. Public access. The authority will work to maximize access for public and
amateur sports, community, and civic events, and other public events in type and on terms
consistent with those currently held at the existing football stadium, as defined in section
473.551, subdivision 9. The authority may provide that these events have exclusive use
of the premises at agreed-upon times subject to the scheduling rights of the NFL team
under the lease or use agreement.
    Subd. 4. Capital improvements. (a) The authority shall establish a capital
reserve fund. The authority shall be responsible for making, or for causing others to
make, all capital repairs, replacements, and improvements for the stadium and stadium
infrastructure. The authority shall maintain, or cause others to maintain, the stadium and
stadium infrastructure in a safe, clean, attractive, and first-class manner so as to cause
them to remain in a condition comparable to that of other comparable NFL facilities of
similar design and age. The authority shall make, or cause others to make, all necessary
or appropriate repairs, renewals, and replacements, whether structural or nonstructural,
interior or exterior, ordinary or extraordinary, foreseen or unforeseen, in a prompt and
timely manner. In addition, the authority, with approval of the NFL team, may enter into
an agreement with a program manager to perform some or all of the responsibilities of the
authority in this subdivision and to assume and accept financial liability for the cost of
performing the responsibilities.
(b) The NFL team must contribute $1,500,000 each year, beginning in 2016 or as
otherwise determined for the term of the lease or use agreement to the operating reserve
fund, increased by a three percent annual inflation rate.
(c) The state shall contribute $1,500,000 each year, beginning in 2016 or as
otherwise determined for the term of the lease to the operating reserve fund. The
contributions of the state are subject to increase by an annual adjustment factor. The
contribution under this paragraph shall be assumed by the team from 2016 through 2020,
and repaid to the team by the state using funds in accordance with section 297A.994,
subdivision 4, paragraph (a), clause (4).
(d) The authority, with input from the NFL team, shall develop short-term and
long-term capital funding plans and shall use those plans to guide the future capital needs
of the stadium and stadium infrastructure. The authority shall make the final determination
with respect to funding capital needs. Any capital improvement proposed by the NFL
team intended primarily to provide revenue enhancements to the NFL team shall be paid
for by the NFL team, unless otherwise agreed to with the authority.
    Subd. 5. Game-day payments. In addition to operating expense contributions
of the NFL team under subdivision 2, the NFL team shall pay all NFL game day, NFL
team-owned major league soccer, as provided in section 473J.15, subdivision 15, and
other NFL team-sponsored event expenses within the stadium and stadium plaza areas.
    Subd. 6. Cooperation with financing. The authority will cooperate with the
NFL team to facilitate the financing of the NFL team's contribution. Such agreement to
cooperate shall not require the authority to incur any additional costs or provide conduit
financing. The lease, license, and other transaction documents shall include provisions
customarily required by lenders in stadium financings.

    Sec. 15. [473J.15] CRITERIA AND CONDITIONS.
    Subdivision 1. Binding and enforceable. In developing the stadium and entering
into related contracts, the authority must follow and enforce the criteria and conditions in
this section, provided that a determination by the authority that those criteria or conditions
have been met under any agreement or otherwise shall be conclusive.
    Subd. 2. NFL team/private contribution; timing of expenditures. (a) The NFL
team/private contribution, including stadium builder license proceeds, for stadium costs
must be made in cash in the amount of at least $427,000,000.
(b) Prior to the initial deposit of funds under this section, the team must provide
security or other credit worthiness in the amount of $50,000,000, subject to the satisfaction
of the authority. Prior to the first issuance of bonds under section 16A.965, the first portion
of the NFL team/private contribution in the amount of $50,000,000 must be deposited as
costs are incurred to the construction fund to pay for the initial stadium costs.
(c) After the first $50,000,000 of stadium costs have been paid from the initial
NFL team/private contribution, state funds shall be deposited as costs are incurred to the
construction fund to pay for the next $50,000,000 of costs of the project. Prior to any state
funds being deposited in the construction fund, the NFL team must provide security or a
financing commitment reasonably satisfactory to the authority for the balance of the
required NFL team/private contribution and for payment of cost overruns if the NFL
team assumes responsibility for stadium construction under section 473J.11. Thereafter,
budgeted project costs shall be borne by the authority and the NFL team/private
contributions in amounts proportionate to their remaining funding commitments.
(d) In the event the project terminates before the initial $100,000,000 in contributions
are expended by the parties under this subdivision, the parties shall be reimbursed in the
amounts they have deposited to the construction fund proportionate to project funding
percentages, in the amounts of 56 percent by the authority and 44 percent by the NFL
team/private contributions.
    Subd. 3. Lease or use agreements; 40-year term. The authority must enter into
a long-term lease or use agreement with the NFL team for the NFL team's use of the
stadium. The NFL team must agree to play all preseason, regular season, and postseason
home games at the stadium. Training facilities must remain in Minnesota during the term
of the lease or use agreement. The lease or use agreement must be for a term of at least
40 years from the date of substantial completion of the stadium for professional football
games. The lease or use agreement may provide options for the NFL team to extend the
term for up to four additional periods of five years. The lease or use agreement must
include terms for default, termination, and breach of the agreement. Recognizing that
the presence of professional football provides to the state of Minnesota and its citizens
highly valued, intangible benefits that are virtually impossible to quantify and, therefore,
not recoverable in the event of the NFL team owner's breach of contract, the lease and
use agreements must provide for specific performance and injunctive relief to enforce
provisions relating to use of the stadium for professional football and must not include
escape clauses or buyout provisions. The NFL team must not enter into or accept any
agreement or requirement with or from any entity that is inconsistent with the NFL team's
binding commitment to the 40-year term of the lease or use agreement or that would in
any manner dilute, interfere with, or negate the provisions of the lease or use agreement,
providing for specific performance or injunctive relief. The legislature conclusively
determines, as a matter of public policy, that the lease or use agreement, and any grant
agreement under this chapter that includes a specific performance clause:
(1) explicitly authorizes specific performance as a remedy for breach;
(2) is made for adequate consideration and upon terms which are otherwise fair
and reasonable;
(3) has not been included through sharp practice, misrepresentation, or mistake;
(4) if specifically enforced, does not cause unreasonable or disproportionate hardship
or loss to the NFL team or to third parties; and
(5) involves performance in a manner and the rendering of services of a nature and
under circumstances that the beneficiary cannot be adequately compensated in damages.
    Subd. 4. Lease or use agreements; revenues, payments. A lease or use agreement
shall include rent and other fees and expenses to be paid by the NFL team. The authority
shall agree to provide in the lease or use agreement for the NFL team to receive all NFL
and team event related revenues, including, but not limited to, suite revenues, advertising,
concessions, signage, broadcast and media, and club seat revenue. The agreement shall
also provide that all naming rights to the stadium are retained by the NFL team, subject to
the approval of the name or names by the authority consistent with those criteria set out
in the lease or use agreement. The agreement shall provide for the authority to receive
all general ticket revenues and other event revenues other than from NFL team games,
NFL team-owned major league soccer games, and other NFL team events agreed to by
the authority.
    Subd. 5. Notice of breach or default. Until 40 years from the date of stadium
completion, the NFL team must provide written notice to the authority not less than 180
days prior to any action, including any action imposed upon the NFL team by the NFL,
which would result in a breach or default of provisions of the lease or use agreements
required to be included under subdivision 3. If this notice provision is violated and the
NFL team has already breached or been in default under the required provisions, the
authority or the state of Minnesota may specifically enforce the lease or use agreement
and Minnesota courts shall fashion equitable remedies so that the NFL team fulfills the
conditions of the lease and use agreements.
    Subd. 6. Enforceable financial commitments. The authority must determine before
stadium construction begins that all public and private funding sources for construction,
operating expenses, and capital improvements and repairs of the stadium are included in
written agreements. The committed funds must be adequate to design, construct, furnish,
and equip the stadium, and pay projected operating expenses and the costs of capital
improvements and repairs during the term of the lease or use agreement with the NFL
team. The NFL team must provide the authority access to NFL team financial or other
information, which the authority deems necessary for such determination. Any financial
information obtained by the authority under this subdivision is nonpublic data under
section 13.02, subdivision 9.
    Subd. 7. Environmental requirements. The authority must comply with all
environmental requirements imposed by regulatory agencies for the stadium, site, and
structure, except as provided by section 473J.09, subdivision 11, or by section 473J.17.
    Subd. 8. Public share on sale of NFL team. The lease or use agreement must
provide that, if the NFL team is sold or an interest in the NFL team is sold after the
effective date of this chapter, a portion of the sale price must be used to pay down the
remaining debt service. If any portion remains after debt service is paid, that amount is
paid to the authority and deposited in a reserve fund for improvements to the stadium or
expended as the authority may otherwise direct. The portion required to be so paid to the
authority is 25 percent of the amount in excess of the purchase price of the NFL team
by the selling owner or owners for the first ten years declining to zero 15 years after
commencement of stadium construction, declining to 15 percent for the next ten years,
and further declining to ten percent for the next ten years. The agreement must provide
exceptions for sales to members of the owners' family and entities and trusts beneficially
owned by family members, sales to employees of equity interests aggregating up to ten
percent, sales related to capital infusions not distributed to the owners, and sales amongst
existing owners not exceeding 20 percent equity interest in the NFL team.
    Subd. 9. Authority's access to NFL team financial information. A notice
provision for a material breach shall be agreed to between the authority and the NFL team.
In the event there is a material breach by the NFL team under the lease or use agreement,
the lease or use agreement must provide the authority access to audited financial statements
of the NFL team and other financial information that the authority deems necessary to
enforce the terms of any lease or use agreements. Any financial information obtained by
the authority under this subdivision is nonpublic data under section 13.02, subdivision 9.
    Subd. 10. NFL team name retained. The lease or use agreement must provide
that the NFL team and NFL will transfer to the state of Minnesota the Minnesota Vikings'
heritage and records, including the name, logo, colors, history, playing records, trophies,
and memorabilia in the event of relocation of the NFL team in violation of the lease
or use agreement.
    Subd. 11. Stadium design. (a) The authority and the NFL team will build a stadium
that is environmentally and energy efficient and will make an effort to build a stadium
that is eligible to receive the Leadership in Energy and Environmental Design (LEED)
certification or the Green Building Initiative Green Globes certification for environmental
design, and to the extent practicable, will strive to make the stadium design architecturally
significant.
(b) The stadium design must, to the extent feasible, follow sustainable building
guidelines established under section 16B.325.
(c) The authority and the team must ensure that the stadium be constructed with
steel made in the USA.
    Subd. 12. Necessary approvals. The authority and the NFL team must secure
any necessary approvals to the terms of the lease and use agreement and the design and
construction plans for the stadium, including prior approval of the NFL.
    Subd. 13. Affordable access. The lease or use agreement must provide for an
agreed-upon number of affordable tickets to the professional sporting events held in the
stadium.
    Subd. 14. Stadium builder's licenses. The authority shall own and retain the
exclusive right to sell stadium builder's licenses in the stadium. The authority will retain
the NFL team to act as the authority's agent in marketing and selling such licenses.
    Subd. 15. Major league soccer. The authority shall, for five years after the first
NFL team home game is played in the stadium, grant the NFL team the exclusive right to
establish major league soccer at the stadium. The authority and the NFL team may enter
into an agreement providing the terms and conditions of such an arrangement, provided:
(1) if any of the NFL team owners whose family owns at least three percent of
the NFL team purchases full or partial ownership in a major league soccer franchise,
such franchise may play in the stadium under a use agreement with similar terms as are
applicable to the NFL team at no additional rent, but including a provision of payment
of game-day costs and reasonable marginal costs incurred by the authority as a result of
the major league soccer team; and
(2) capital improvements required by a major league soccer franchise must be
financed by the owners of the major league soccer team, unless otherwise agreed to by
the authority.
    Subd. 16. NFL team-related entities. Subject to the prior approval of the authority,
which shall not be unreasonably withheld, any of the obligations by the NFL team may
be performed by the NFL team, a related entity, or a third party, and the NFL team, any
entity related to the NFL team or third party may receive any revenues to which the NFL
team is entitled hereunder; provided, however, the NFL team shall remain liable if any
obligations are assigned to a related entity or third party.

    Sec. 16. [473J.17] MUNICIPAL ACTIVITIES.
    Subdivision 1. Property acquisition and disposition. The city may, to the extent
legally permissible, acquire land, air rights, and other property interests within the
development area for the stadium site and stadium infrastructure and convey it to the
authority with or without consideration, prepare a site for development as a stadium, and
acquire and construct any related stadium infrastructure. To the extent property parcels or
interests acquired are more extensive than the stadium infrastructure requirements, the city
may sell or otherwise dispose of the excess.
    Subd. 2. Claims. Except as may be mutually agreed to by the city and the authority,
the city has no interest in or claim to any assets or revenues of the authority.
    Subd. 3. Environmental; planning and zoning. The authority is the responsible
governmental unit for an environmental impact statement for the stadium prepared under
section 116D.04, if an environmental impact statement is necessary. Notwithstanding
section 116D.04, subdivision 2b, and implementing rules: (1) the environmental
impact statement shall not be required to consider alternative stadium sites; and (2) the
environmental impact statement must be determined to be adequate before commencing
work on the foundation of the stadium, but the stadium and stadium infrastructure may
otherwise be started and all preliminary and final government decisions and actions may
be made and taken including, but not limited to, acquiring land; obtaining financing;
granting permits or other land use approvals; entering into grant, lease, or use agreements;
or preparing the site or related stadium infrastructure prior to a determination of the
adequacy of the environmental impact statement.
    Subd. 4. Local government expenditure. The city may make expenditures or
grants for other costs incidental and necessary to further the purposes of this chapter and
may, by agreement, reimburse in whole or in part, any entity that has granted, loaned, or
advanced funds to the city to further the purposes of this chapter. The city may reimburse
the authority or a local governmental entity or make a grant to the authority or such a
governmental unit or be reimbursed by the authority or local governmental entity for site
acquisition, preparation of the site for stadium development, and stadium infrastructure.
    Subd. 5. Municipal authority. The legislature intends that, except as expressly
limited herein, the city may acquire and develop stadium infrastructure, enter into contracts
with the authority and other governmental or nongovernmental entities, appropriate funds,
and make employees, consultants, and other revenues available for those purposes.
    Subd. 6. Stadium Implementation Committee; city review. In order to accomplish
the objectives of this act within the required time frame, it is necessary to establish an
alternative process for municipal land use and development review. It is hereby found
and declared that the construction of a stadium within the development area is consistent
with the adopted area plan, is the preferred stadium location, and is a permitted land use.
This subdivision establishes a procedure for all land use and development reviews and
approvals by the city of Minneapolis for the stadium and related stadium infrastructure
and supersedes all land use and development rules and restrictions and procedures
imposed by other law, charter, or ordinance, including without limitation section 15.99.
No later than 30 days after timely compliance of the city as provided in article 4, section 5,
of this act, the city of Minneapolis shall establish a stadium implementation committee
to make recommendations on the design plans submitted for the stadium, and stadium
infrastructure, and related improvements. The implementation committee must take
action to issue its recommendations within the time frames established in the planning
and construction timetable issued by the authority which shall provide for no less than 60
days for the committee's review. The recommendations of the implementation committee
shall be forwarded to the city of Minneapolis Planning Commission for an advisory
recommendation and then to the city council for final action in a single resolution, which
final action must be taken within 45 days of the submission of the recommendations to the
planning commission. The city council shall not impose any unreasonable conditions on
the recommendations of the implementation committee, nor take any action or impose
any conditions that will result in delay from the time frames established in the planning
and construction timetable or in additional overall costs. Failure of the city council to act
within the 45-day period shall be deemed to be approval. The authority may seek de novo
review in the district court of any city council action. The district court or any appellate
court shall expedite review to the maximum extent possible and timely issue relief, orders,
or opinions as necessary to give effect to the provisions and objectives in this act.

    Sec. 17. [473J.23] LOCAL TAXES.
No new or additional local sales or use tax shall be imposed on sales at the
stadium site unless the tax is applicable throughout the taxing jurisdiction. No new or
additional local tax shall be imposed on sales of tickets and admissions to NFL team,
NFL team-owned major league soccer, or other team related events at the stadium,
notwithstanding any law or ordinance, unless the tax is applicable throughout the taxing
jurisdiction. The admissions and amusements tax currently imposed by the city of
Minneapolis pursuant to Laws 1969, chapter 1092, may apply to admissions for football
and NFL team related events, including NFL team-owned major league soccer, as
provided in section 473J.15, subdivision 15, at the stadium.

    Sec. 18. [473J.25] METROPOLITAN SPORTS FACILITIES COMMISSION
ASSETS; LIABILITIES TO AUTHORITY.
    Subdivision 1. Authority expenses. The Metropolitan Sports Facilities Commission
shall pay the operating expenses of the authority including salaries, compensation, and
other personnel, office, equipment, consultant and any other costs, until the commission is
abolished pursuant to subdivision 3.
    Subd. 2. Transfer. Within 90 days of the enactment of this chapter, the Metropolitan
Sports Facilities Commission shall pay its outstanding obligations, settle its accounts, and
transfer its remaining assets, liabilities, and obligations to the authority, for its purposes.
    Subd. 3. Metropolitan Sports Facilities Commission abolished; interim powers
conferred on authority. Upon transfer to the authority of all remaining assets, liabilities,
and obligations of the Metropolitan Sports Facilities Commission, in subdivision 2, the
Metropolitan Sports Facilities Commission is abolished. When the remaining assets,
liabilities, and obligations of the Metropolitan Sports Facilities Commission have been
transferred to the authority and the commission has been abolished, the powers and duties
of the commission under sections 473.551 to 473.599, and any other law shall devolve
upon the authority, in addition to the powers and duties of the authority under this chapter,
until the first NFL home game is played at the stadium.
    Subd. 4. Employees. Upon transfer of ownership all persons employed by the
Metropolitan Sports Facilities Commission shall be transferred to the Minnesota Sports
Facilities Authority without loss of right or privilege. Nothing in this section shall be
construed to give any such person the right or privilege to continue in the same level or
classification of employment previously held. The Minnesota Sports Facilities Authority
may assign any such person to an employment level and classification which it deems
appropriate and desirable in accordance with its personnel code.

    Sec. 19. EFFECTIVE DATE.
Except as otherwise provided, this article is effective the day following final
enactment.

ARTICLE 2

STATE STADIUM FUNDING

    Section 1. [16A.965] STADIUM APPROPRIATION BONDS.
    Subdivision 1. Definitions. (a) The definitions in this subdivision and in chapter
473J apply to this section.
(b) "Appropriation bond" means a bond, note, or other similar instrument of the state
payable during a biennium from one or more of the following sources:
(1) money appropriated by law from the general fund, including, without limitation,
revenues deposited in the general fund as provided in articles 4 and 5, in any biennium for
debt service due with respect to obligations described in subdivision 2, paragraph (b);
(2) proceeds of the sale of obligations described in subdivision 2, paragraph (b);
(3) payments received for that purpose under agreements and ancillary arrangements
described in subdivision 2, paragraph (d); and
(4) investment earnings on amounts in clauses (1) to (3).
(c) "Debt service" means the amount payable in any biennium of principal, premium,
if any, and interest on appropriation bonds.
    Subd. 2. Authorization to issue appropriation bonds. (a) Subject to the
limitations of this subdivision, the commissioner may sell and issue appropriation bonds
of the state under this section for public purposes as provided by law, including, in
particular, the financing of all or a portion of the acquisition, construction, improving,
and equipping of the stadium project of the Minnesota Sports Facilities Authority as
provided by chapter 473J. Proceeds of the appropriation bonds must be credited to a
special appropriation stadium bond proceeds fund in the state treasury. Net income from
investment of the proceeds, as estimated by the commissioner, must be credited to the
special appropriation stadium bond proceeds fund.
(b) Appropriation bonds may be sold and issued in amounts that, in the opinion of
the commissioner, are necessary to provide sufficient funds, not to exceed $548,000,000
net of costs of issuance, deposits for debt service reserve funds, and costs of credit
enhancement for achieving the purposes authorized as provided under paragraph (a), and
pay debt service, pay costs of issuance, make deposits to reserve funds, pay the costs
of credit enhancement, or make payments under other agreements entered into under
paragraph (d); provided, however, that appropriation bonds issued and unpaid shall not
exceed $650,000,000 in principal amount, excluding refunding bonds sold and issued
under subdivision 4.
(c) Appropriation bonds may be issued from time to time in one or more series on
the terms and conditions the commissioner determines to be in the best interests of the
state, but the term on any series of appropriation bonds may not exceed 30 years. The
appropriation bonds of each issue and series thereof shall be dated and bear interest,
and may be includable in or excludable from the gross income of the owners for federal
income tax purposes.
(d) At the time of, or in anticipation of, issuing the appropriation bonds, and at any
time thereafter, so long as the appropriation bonds are outstanding, the commissioner may
enter into agreements and ancillary arrangements relating to the appropriation bonds,
including, but not limited to, trust indentures, grant agreements, lease or use agreements,
operating agreements, management agreements, liquidity facilities, remarketing or
dealer agreements, letter of credit agreements, insurance policies, guaranty agreements,
reimbursement agreements, indexing agreements, or interest exchange agreements. Any
payments made or received according to the agreement or ancillary arrangement shall be
made from or deposited as provided in the agreement or ancillary arrangement. The
determination of the commissioner included in an interest exchange agreement that the
agreement relates to an appropriation bond shall be conclusive.
(e) The commissioner may enter into written agreements or contracts relating to the
continuing disclosure of information necessary to comply with, or facilitate the issuance
of appropriation bonds in accordance with federal securities laws, rules, and regulations,
including Securities and Exchange Commission rules and regulations in Code of Federal
Regulations, title 17, section 240.15c 2-12. An agreement may be in the form of covenants
with purchasers and holders of appropriation bonds set forth in the order or resolution
authorizing the issuance of the appropriation bonds, or a separate document authorized
by the order or resolution.
(f) The appropriation bonds are not subject to chapter 16C.
    Subd. 3. Form; procedure. (a) Appropriation bonds may be issued in the form
of bonds, notes, or other similar instruments, and in the manner provided in section
16A.672. In the event that any provision of section 16A.672 conflicts with this section,
this section shall control.
(b) Every appropriation bond shall include a conspicuous statement of the limitation
established in subdivision 6.
(c) Appropriation bonds may be sold at either public or private sale upon such terms
as the commissioner shall determine are not inconsistent with this section and may be sold
at any price or percentage of par value. Any bid received may be rejected.
(d) Appropriation bonds must bear interest at a fixed or variable rate.
(e) Notwithstanding any other law, appropriation bonds issued under this section
shall be fully negotiable.
    Subd. 4. Refunding bonds. The commissioner from time to time may issue
appropriation bonds for the purpose of refunding any appropriation bonds then
outstanding, including the payment of any redemption premiums on the bonds, any
interest accrued or to accrue to the redemption date, and costs related to the issuance and
sale of the refunding bonds. The proceeds of any refunding bonds may, in the discretion of
the commissioner, be applied to the purchase or payment at maturity of the appropriation
bonds to be refunded, to the redemption of the outstanding appropriation bonds on any
redemption date, or to pay interest on the refunding bonds and may, pending application,
be placed in escrow to be applied to the purchase, payment, retirement, or redemption. Any
escrowed proceeds, pending such use, may be invested and reinvested in obligations that
are authorized investments under section 11A.24. The income earned or realized on the
investment may also be applied to the payment of the appropriation bonds to be refunded
or interest or premiums on the refunded appropriation bonds, or to pay interest on the
refunding bonds. After the terms of the escrow have been fully satisfied, any balance of the
proceeds and any investment income may be returned to the general fund or, if applicable,
the special appropriation stadium bond proceeds fund for use in any lawful manner. All
refunding bonds issued under this subdivision must be prepared, executed, delivered, and
secured by appropriations in the same manner as the appropriation bonds to be refunded.
    Subd. 5. Appropriation bonds as legal investments. Any of the following entities
may legally invest any sinking funds, money, or other funds belonging to them or under
their control in any appropriation bonds issued under this section:
(1) the state, the investment board, public officers, municipal corporations, political
subdivisions, and public bodies;
(2) banks and bankers, savings and loan associations, credit unions, trust companies,
savings banks and institutions, investment companies, insurance companies, insurance
associations, and other persons carrying on a banking or insurance business; and
(3) personal representatives, guardians, trustees, and other fiduciaries.
    Subd. 6. No full faith and credit; state not required to make appropriations.
The appropriation bonds are not public debt of the state, and the full faith, credit, and
taxing powers of the state are not pledged to the payment of the appropriation bonds or to
any payment that the state agrees to make under this section. Appropriation bonds shall
not be obligations paid directly, in whole or in part, from a tax of statewide application
on any class of property, income, transaction, or privilege. Appropriation bonds shall be
payable in each fiscal year only from amounts that the legislature may appropriate for debt
service for any fiscal year, provided that nothing in this section shall be construed to
require the state to appropriate funds sufficient to make debt service payments with respect
to the appropriation bonds in any fiscal year. Appropriation bonds shall be canceled and
shall no longer be outstanding on the earlier of (1) the first day of a fiscal year for which
the legislature shall not have appropriated amounts sufficient for debt service, or (2) the
date of final payment of the principal of and interest on the appropriation bonds.
    Subd. 7. Appropriation of proceeds. The proceeds of appropriation bonds and
interest credited to the special appropriation stadium bond proceeds fund are appropriated
to the commissioner for payment of capital expenses, debt service on outstanding
indebtedness of the state, operating and capital reserves of the authority, and the funding
of debt service reserves for the appropriation bonds, each as permitted by state and federal
law, and nonsalary expenses incurred in conjunction with the sale of the appropriation
bonds, and such proceeds may be granted, loaned, or otherwise provided to the authority
for the public purpose provided by subdivision 2, paragraph (a).
    Subd. 8. Commissioner; determination of available revenues. (a) By March 15
of each fiscal year, the commissioner, in consultation with the commissioner of revenue,
shall determine the estimated increase in revenues received from taxes imposed under
chapter 297E over the estimated revenues under the February 2012 revenue forecast for
that fiscal year. For fiscal years after fiscal year 2015, the commissioner shall use the
February 2012 revenue forecast for fiscal year 2015 as the baseline. All calculations under
this paragraph must be made net of estimated refunds of the taxes required to be paid.
(b) Available revenues for purposes of subdivision 9, equal the amount determined
under paragraph (a), less the following amounts for the fiscal year:
(1) the appropriation to principal and interest on appropriation bonds under
subdivision 9, paragraph (a);
(2) the appropriations under article 5, section 44, paragraph (a), for administration
and any successor appropriation;
(3) reimbursements authorized by section 473J.15, subdivision 2;
(4) payment of compulsive gambling appropriations under article 5, section 44,
paragraph (b), and any successor appropriation;
    (5) the appropriations under article 2, section 3, paragraphs (a) to (c); and
    (6) the appropriations under article 2, section 3, paragraph (f).
(c) The provisions of this subdivision apply only after the issuance of appropriation
bonds under subdivision 2.
    Subd. 9. Appropriation for debt service and other purposes. (a) The amount
needed to pay principal and interest on appropriation bonds issued under this section is
appropriated each year from the general fund to the commissioner, subject to repeal,
unallotment under section 16A.152, or cancellation otherwise pursuant to subdivision 6,
for deposit into the bond payment accounts established for such purpose in the special
appropriation stadium bond proceeds fund.
(b) To the extent the commissioner determines revenues are available under the
provisions of subdivision 8, paragraph (b), for the fiscal year, the following amounts
are appropriated from the general fund:
(1) to replenish the amount on deposit in any debt service reserve account established
with respect to the appropriation bonds to the debt service reserve requirement amount as
determined by order of the commissioner;
(2) to the extent not required under clause (1), for deposit to any general reserve
account established by order of the commissioner for application against any shortfall in
the amounts deposited to the general fund pursuant to section 297A.994; and
(3) to the extent not required under clauses (1) and (2), to be applied to early payoff
of bonds issued under this section.
    Subd. 10. Waiver of immunity. The waiver of immunity by the state provided for
by section 3.751, subdivision 1, shall be applicable to the appropriation bonds and any
ancillary contracts to which the commissioner is a party.

    Sec. 2. SUITES SURCHARGE.
A ten percent surcharge is imposed on the sale or rental of suites for NFL team
games and events at the stadium. The commissioner of revenue shall determine annually
the amount of the proceeds resulting from the surcharge each year and shall annually
remit that amount to pay for bond debt service, notwithstanding the requirements of
Minnesota Statutes, section 16A.965. The commissioner may charge a reasonable amount
necessary for the calculation, collection, and remittance of the surcharge proceeds. The
authority to impose the surcharge expires the day after all stadium bonds, including fees
and interest, have been paid.

    Sec. 3. APPROPRIATION.
(a) $6,000,000 plus an amount calculated in paragraph (c) is annually appropriated
from the general fund for fiscal years 2016 to 2021 to the commissioner of management
and budget for a grant to the Minnesota Sports Facilities Authority for the operating costs
of the stadium under Minnesota Statutes, chapter 473J.
(b) $1,500,000 plus an amount calculated in paragraph (c) is annually appropriated
from the general fund for fiscal years 2016 to 2021 to the commissioner of management
and budget for a grant to the Minnesota Sports Facilities Authority for capital costs of the
stadium under Minnesota Statutes, chapter 473J.
(c) The appropriations in paragraphs (a) and (b) are subject to an annual adjustment
specified in Minnesota Statutes, section 473J.03, subdivision 2.
(d) If state appropriation bonds have not been issued under Minnesota Statutes,
section 16A.965, amounts not to exceed the increased revenues estimated by the
commissioner of management and budget under Minnesota Statutes, section 16A.965,
subdivision 8, paragraph (a), are appropriated to the commissioner of management and
budget to make grants to the Minnesota Sports Facilities Authority for stadium costs as
defined under Minnesota Statutes, section 473J.03, subdivision 8.
(e) The amount deposited in the general fund by the commissioner of revenue under
Minnesota Statutes, section 297A.994, subdivision 3, clause (3), is annually appropriated
from the general fund for calendar years 2021 to 2056 to the commissioner of management
and budget for a grant to the Minnesota Sports Facilities Authority.
(f) $1,300,000 is annually appropriated from the general fund for fiscal years 2014
to 2034 to the commissioner of management and budget for a grant to the city of St. Paul
for the operating or capital costs of existing or new sports facilities.

ARTICLE 3

CONFORMING CHANGES

    Section 1. Minnesota Statutes 2010, section 3.971, subdivision 6, is amended to read:
    Subd. 6. Financial audits. The legislative auditor shall audit the financial
statements of the state of Minnesota required by section 16A.50 and, as resources permit,
shall audit Minnesota State Colleges and Universities, the University of Minnesota, state
agencies, departments, boards, commissions, courts, and other state organizations subject
to audit by the legislative auditor, including the State Agricultural Society, Agricultural
Utilization Research Institute, Enterprise Minnesota, Inc., Minnesota Historical
Society, Labor Interpretive Center, Minnesota Partnership for Action Against Tobacco,
Metropolitan Sports Facilities Commission, Metropolitan Airports Commission, and
Metropolitan Mosquito Control District. Financial audits must be conducted according to
generally accepted government auditing standards. The legislative auditor shall see that
all provisions of law respecting the appropriate and economic use of public funds are
complied with and may, as part of a financial audit or separately, investigate allegations
of noncompliance.

    Sec. 2. Minnesota Statutes 2010, section 13.55, subdivision 1, is amended to read:
    Subdivision 1. Not public classification. The following data received, created, or
maintained by or for publicly owned and operated convention facilities, or civic center
authorities, or the Metropolitan Sports Facilities Commission are classified as nonpublic
data pursuant to section 13.02, subdivision 9; or private data on individuals pursuant
to section 13.02, subdivision 12:
(a) a letter or other documentation from any person who makes inquiry to or who is
contacted by the facility regarding the availability of the facility for staging events;
(b) identity of firms and corporations which contact the facility;
(c) type of event which they wish to stage in the facility;
(d) suggested terms of rentals; and
(e) responses of authority staff to these inquiries.

    Sec. 3. Minnesota Statutes 2010, section 352.01, subdivision 2a, is amended to read:
    Subd. 2a. Included employees. (a) "State employee" includes:
    (1) employees of the Minnesota Historical Society;
    (2) employees of the State Horticultural Society;
    (3) employees of the Minnesota Crop Improvement Association;
    (4) employees of the adjutant general whose salaries are paid from federal funds and
who are not covered by any federal civilian employees retirement system;
    (5) employees of the Minnesota State Colleges and Universities who are employed
under the university or college activities program;
    (6) currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently contributing
employee employed for any special service as defined in subdivision 2b, clause (8);
    (7) employees of the legislature who are appointed without a limit on the duration
of their employment and persons employed or designated by the legislature or by a
legislative committee or commission or other competent authority to conduct a special
inquiry, investigation, examination, or installation;
    (8) trainees who are employed on a full-time established training program
performing the duties of the classified position for which they will be eligible to receive
immediate appointment at the completion of the training period;
    (9) employees of the Minnesota Safety Council;
    (10) any employees who are on authorized leave of absence from the Transit
Operating Division of the former Metropolitan Transit Commission and who are employed
by the labor organization which is the exclusive bargaining agent representing employees
of the Transit Operating Division;
    (11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito
Control Commission unless excluded under subdivision 2b or are covered by another
public pension fund or plan under section 473.415, subdivision 3;
    (12) judges of the Tax Court;
    (13) personnel who were employed on June 30, 1992, by the University of
Minnesota in the management, operation, or maintenance of its heating plant facilities,
whose employment transfers to an employer assuming operation of the heating plant
facilities, so long as the person is employed at the University of Minnesota heating plant
by that employer or by its successor organization;
    (14) personnel who are employed as seasonal employees in the classified or
unclassified service;
    (15) persons who are employed by the Department of Commerce as a peace officer
in the Insurance Fraud Prevention Division under section 45.0135 who have attained the
mandatory retirement age specified in section 43A.34, subdivision 4;
    (16) employees of the University of Minnesota unless excluded under subdivision
2b, clause (3);
    (17) employees of the Middle Management Association whose employment began
after July 1, 2007, and to whom section 352.029 does not apply; and
    (18) employees of the Minnesota Government Engineers Council to whom section
352.029 does not apply.
    (b) Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the
amounts required by section 352.04. Employee contributions must be deducted from
salary. Employer contributions are the sole obligation of the employer assuming operation
of the University of Minnesota heating plant facilities or any successor organizations to
that employer.

    Sec. 4. Minnesota Statutes 2010, section 473.121, subdivision 5a, is amended to read:
    Subd. 5a. Metropolitan agency. "Metropolitan agency" means the Metropolitan
Parks and Open Space Commission, and the Metropolitan Airports Commission, and
Metropolitan Sports Facilities Commission.

    Sec. 5. Minnesota Statutes 2010, section 473.164, is amended to read:
473.164 SPORTS, AIRPORT COMMISSIONS TO PAY COUNCIL COSTS.
    Subdivision 1. Annually reimburse. The Metropolitan Sports Facilities
Commission and the Metropolitan Airports Commission shall annually reimburse the
council for costs incurred by the council in the discharge of its responsibilities relating to
the commission. The costs may be charged against any revenue sources of the commission
as determined by the commission.
    Subd. 2. Estimates, budget, transfer. On or before May 1 of each year, the council
shall transmit to each the commission an estimate of the costs which the council will
incur in the discharge of its responsibilities related to the commission in the next budget
year including, without limitation, costs in connection with the preparation, review,
implementation and defense of plans, programs and budgets of the commission. Each The
commission shall include the estimates in its budget for the next budget year and may
transmit its comments concerning the estimated amount to the council during the budget
review process. Prior to December 15 of each year, the amount budgeted by each the
commission for the next budget year may be changed following approval by the council.
During each budget year, the commission shall transfer budgeted funds to the council in
advance when requested by the council.
    Subd. 3. Final statement. At the conclusion of each budget year, the council, in
cooperation with each the commission, shall adopt a final statement of costs incurred by the
council for each the commission. Where costs incurred in the budget year have exceeded
the amount budgeted, each the commission shall transfer to the council the additional
moneys needed to pay the amount of the costs in excess of the amount budgeted, and shall
include a sum in its next budget. Any excess of budgeted costs over actual costs may be
retained by the council and applied to the payment of budgeted costs in the next year.

    Sec. 6. Minnesota Statutes 2010, section 473.565, subdivision 1, is amended to read:
    Subdivision 1. In MSRS; exceptions. All employees of the former commission
shall be members of the Minnesota State Retirement System with respect to service
rendered on or after May 17, 1977, except as provided in this section.

    Sec. 7. REPEALER.
Minnesota Statutes 2010, sections 473.551; 473.552; 473.553, subdivisions 1, 2, 3,
4, 5, 6, 7, 8, 9, 10, 11, 12, and 13; 473.556, subdivisions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,
13, 14, 16, and 17; 473.561; 473.564, subdivisions 2 and 3; 473.572; 473.581; 473.592,
subdivision 1; 473.595; 473.598; 473.599; and 473.76, are repealed.

    Sec. 8. EFFECTIVE DATE.
This article is effective June 30, 2016.

ARTICLE 4

MINNEAPOLIS CONVENTION CENTER

    Section 1. [297A.994] CITY OF MINNEAPOLIS SALES TAX; ALLOCATION
OF REVENUES.
    Subdivision 1. Scope. Notwithstanding the provisions of section 297A.99,
subdivision 11, the provisions of this section govern the remittance of the proceeds of
taxes imposed by the city of Minneapolis under the special law.
    Subd. 2. Definitions. (a) For purposes of this section, the following definitions
apply.
(b) "City" means the city of Minneapolis.
(c) "Special law" means Laws 1986, chapter 396, sections 4 and 5, as amended.
(d) "Tax" means the sales taxes imposed by the city under the special law.
(e) The terms defined under section 473J.03 apply for purposes of this section.
    Subd. 3. General allocation of revenues. The commissioner shall apply the
revenues from the taxes as follows:
(1) the commissioner must deduct the costs of collecting and administering the taxes,
according to the applicable law and agreements between the commissioner and the city.
For revenues from the general sales tax, the commissioner must deduct a proportionate
share of the cost of collection, as described in section 297A.99, subdivision 11;
(2) after deducting the costs in clause (1), the commissioner must deduct refunds of
any of these taxes due to taxpayers, if any;
(3) after making the deductions provided in clause (2), notwithstanding the
provisions of any agreement between the commissioner and the city providing for
collection and remittance of these taxes, the commissioner must deposit to the general
fund the amounts specified in subdivision 4; and
(4) after depositing to the general fund under clause (3) as specified in subdivision
4, the commissioner must remit the remainder to the city for the uses provided in the
special law.
    Subd. 4. General fund allocations. (a) The commissioner must deposit to the
general fund the following amounts, as required by subdivision 3, clause (3):
(1) for state bond debt service support beginning in calendar year 2021, and for each
calendar year thereafter through calendar year 2046, proportionate amounts periodically
so that not later than December 31, 2046, an aggregate annual amount equal to a present
value of $150,000,000 has been deposited in the general fund. To determine aggregate
present value, the commissioner must consult with the commissioner of management and
budget regarding the present value dates, discount rate or rates, and schedules of annual
amounts. The present value date or dates must be based on the date or dates bonds are
sold under section 16A.965, or the date or dates other state funds, if any, are deposited
into the construction fund. The discount rate or rates must be based on the true interest
cost of the bonds issued under section 16A.965, or an equivalent 30-year bond index, as
determined by the commissioner of management and budget. The schedule of annual
amounts must be certified to the commissioner by the commissioner of management and
budget and the finance officer of the city;
(2) for the capital improvement reserve appropriation to the sports facilities authority
beginning in calendar year 2021, and for each calendar year thereafter through calendar
year 2046, so that not later than January 1, 2022, and as of January 1 of each following
year, an aggregate annual amount equal to the amount paid by the state for calendar year
2021, under section 473J.13, subdivision 4, increased each year by an annual adjustment
factor;
(3) for the operating expense appropriation to the sports facilities authority beginning
in calendar year 2021, and for each calendar year thereafter through calendar year 2046,
so that not later than January 1, 2022, and as of January 1 of each following year, an
aggregate annual amount equal to the amount paid by the state for calendar year 2021
under section 473J.13, subdivision 2, increased each year by an annual adjustment factor;
(4) for recapture of NFL team advances for capital improvements and operating
expenses for calendar years 2016 through 2020 beginning in calendar year 2021, and
for each calendar year thereafter until all amounts under this clause have been paid,
proportionate amounts periodically until an aggregate amount equal to the present value of
all amounts paid by the NFL team have been deposited in the general fund. To determine
the present value of the amounts paid by the NFL team to the authority and the present
value of amounts deposited to the general fund under this clause, the commissioner shall
consult with the commissioner of management and budget and the NFL team regarding
the present value dates, discount rate or rates, and schedule of annual amounts. The
present value dates must be based on the dates NFL team funds are paid to the authority,
or the dates the commissioner of revenue deposits taxes for purposes of this clause to the
general fund. The discount rates must be based on the reasonably equivalent cost of state
funds as determined by the commissioner of management and budget after consulting with
the NFL team. The schedule of annual amounts must be revised to reflect amounts paid
under section 473J.09, subdivision 13, and taxes deposited to the general fund from time
to time under this clause, and the schedule and revised schedules must be certified to the
commissioner by the commissioner of management and budget and the finance officer
of the city, and are transferred as accrued from the general fund to the NFL team, for
repayment of advances made by the NFL team to the city of Minneapolis; and
(5) to capture increases in taxes imposed under the special law, for the benefit of
the sports facilities authority, beginning in calendar year 2013 and for each calendar year
thereafter through 2056, there shall be deposited to the general fund by February 15 of
each following year, amounts calculated by the commissioner under this clause. For
each year, the commissioner shall determine the excess, if any, of the taxes received
by the commissioner over the benchmark scheduled amounts of the taxes, as described
in this section. The benchmark scheduled amounts for each year must be based on the
actual amount of the taxes for calendar year 2011 inflated for each subsequent year at an
annual rate of two percent, according to a schedule certified to the commissioner by the
commissioner of management and budget and the finance officer of the city. The amounts
to be deposited to the general fund by the commissioner for each year equal:
(i) zero for the amount of the taxes for the year up to a scheduled benchmark of
$1,000,000, inflated at two percent per year, in excess of the taxes for calendar year 2011;
(ii) 50 percent times the difference, if any, by which the amount of the taxes for
the year exceeds the scheduled benchmark in item (i), as inflated, but not greater than a
scheduled benchmark of $3,000,000, inflated at two percent per year, in excess of the
taxes for calendar year 2011; and
(iii) 25 percent times the difference, if any, by which the amount of the taxes for the
year exceeds the scheduled benchmark of $3,000,000, inflated at two percent per year, in
excess of the taxes for calendar year 2011.
(b) The annual adjustment factor for purposes of this section and the special law
for any year equals the increase, if any, in the amount of these taxes received by the
commissioner in the preceding year over the amount received in the year prior to the
preceding year, expressed as a percentage of the amount received in the year prior to the
preceding year; provided, that the adjustment factor for any year must not be less than
zero percent nor more than five percent.

    Sec. 2. Laws 1986, chapter 396, section 4, as amended by Laws 1987, chapter 55,
sections 5 and 6, and Laws 2009, chapter 88, article 4, sections 11 and 12, is amended to
read:
    Sec. 4. SALES AND USE TAX.
    Subdivision 1. Imposition. Notwithstanding Minnesota Statutes, section 477A.016,
or any other contrary provision of law, ordinance, or city charter, upon approval by
the city's board of estimate and taxation by a vote of at least five members, the city of
Minneapolis may by ordinance impose an additional sales tax of up to one-half of one
percent on sales taxable pursuant to Minnesota Statutes, chapter 297A that occur within
the city, and may also by ordinance impose an additional compensating use tax of up to
one-half of one percent on uses of property within the city, the sale of which would be
subject to the additional sales tax but for the fact such property was sold outside the city.
The tax may not be imposed on gross receipts from sales of intoxicating liquor that are
exempt from taxation under sections 297A.25 to 297A.257 or other any provision of
chapter 297A exempting sales of intoxicating liquor and use from taxation, including
amendments adopted after enactment of this act.
    For purposes of this subdivision, sales that occur within the city shall not include (a)
the sale of tangible personal property (i) which, without intermediate use, is shipped or
transported outside Minneapolis by the purchaser and thereafter used in a trade or business
or is stored, processed, fabricated or manufactured into, attached to or incorporated into
other tangible personal property transported or shipped outside Minneapolis and thereafter
used in a trade or business outside Minneapolis, and which is not thereafter returned to a
point within Minneapolis, except in the course of interstate or intrastate commerce (storage
shall not constitute intermediate use); or (ii) which the seller delivers to a common carrier
for delivery outside Minneapolis, places in the United States mail or parcel post directed
to the purchaser outside Minneapolis, or delivers to the purchaser outside Minneapolis by
means of the seller's own delivery vehicles, and which is not thereafter returned to a point
within Minneapolis, except in the course of interstate or intrastate commerce; or (b) sales
which would be described in clause (e) or (u) of Minnesota Statutes, section 297A.25,
subdivision 1 297A.68, subdivision 11 or 16, if the word "Minneapolis" were substituted
for the words "Minnesota" or "state of Minnesota" in such clauses subdivisions. A tax
may be imposed under this section only if the taxes imposed under section 5 are imposed
at the maximum rate allowed under that section. The tax authorized by this section shall
be imposed, until December 31, 2056. The tax may be imposed and may be adjusted
periodically by the city council in conformity with Minnesota Statutes, section 297A.99,
subdivision 12, such that the rate imposed, rounded to the next highest one-tenth of one
percent, does not exceed the rate estimated to be required to produce produces revenue
sufficient to finance the costs purposes described in subdivision subdivisions 3 and 4, but
in no case may the rate exceed one-half of one percent.
    Subd. 2. Enforcement; collection. (a) Except as provided in paragraph (b),
these taxes shall be subject to the same interest penalties and other rules imposed
under Minnesota Statutes, chapter 297A. The commissioner of revenue may enter into
appropriate agreements with the city to provide for collection of these taxes by the state
on behalf of the city. The commissioner may charge the city a reasonable fee for its
collection from the proceeds of any taxes, as provided in Minnesota Statutes, section
297A.99, subdivision 9.
    (b) A taxpayer located outside of the city of Minneapolis who collects use tax under
this section in an amount that does not exceed $10 in a reporting period is not required to
remit that tax until the amount of use tax collected is $10.
    Subd. 3. Use of property. Revenues received from the tax may only be used:
    (1) to pay costs of collection;
    (2) (1) to pay or secure the payment of any principal of, premium or interest on
bonds issued in accordance with this act;
    (3) (2) to pay costs to acquire, design, equip, construct, improve, maintain, operate,
administer, or promote the convention center or related facilities, and other capital projects
or economic developments under subdivision 4, including financing costs related to them;
    (4) (3) to pay reasonable and appropriate costs determined by the city to replace
housing and the ice arena removed from the site;
    (5) (4) to maintain reserves for the foregoing purposes deemed reasonable and
appropriate by the city; and
(6) (5) to fund projects and for other purposes under subdivision 4.
    Money for replacement housing shall be made available by the city only for new
construction, conversion of nonresidential buildings, and for rehabilitation of vacant
residential structures, only if all of the units in the newly constructed building, converted
nonresidential building, or rehabilitated residential structure are to be used for replacement
housing.
    Subd. 4. Minneapolis downtown and neighborhood projects. (a) For revenues
collected in calendar years 2009 and 2010, to the extent that revenues from the tax
authorized in subdivision 1 exceeds the amount needed to fund the purposes in subdivision
3, the city may use the excess revenue to fund any city services. The total amount used in
both years for this purpose may not exceed the total amount of aid and credit reductions
under Minnesota Statutes, sections 273.1384 and 477A.011 to 477A.014 in calendar years
2008, 2009, and 2010 due to a governor's unallotment or due to statutory reductions.
(b) Beginning with revenues collected in calendar year 2011, to the extent that
revenues from the tax taxes authorized in subdivision 1 exceeds or in section 5 exceed
the amount needed to fund the purposes in subdivision 3, the city may use the excess
revenue in any year to fund capital projects to further residential, cultural, commercial,
and economic development in both downtown Minneapolis and the Minneapolis
neighborhoods, to fund other city expenditures in support of the capital projects, or
for other economic development, provided the city may direct excess revenue first to
convention center debt, operations, capital improvements, and marketing. The city may
issue bonds to fund any such projects or improvements using these taxes or any other
available city resources to finance or secure the bonds.

    Sec. 3. Laws 1986, chapter 396, section 5, as amended by Laws 2001, First Special
Session chapter 5, article 12, section 87, is amended to read:
    Sec. 5. LIQUOR, LODGING, AND RESTAURANT TAXES.
    The city may, by resolution, levy in addition to taxes authorized by other law:
    (1) a sales tax of not more than three percent on the gross receipts on retail on-sales
of intoxicating liquor and fermented malt beverages described in section 473.592
occurring in the when sold at licensed on-sale liquor establishments located within the
downtown taxing area, provided that this tax may not be imposed if sales of intoxicating
liquor and fermented malt beverages are exempt from taxation under chapter 297A;
    (2) a sales tax of not more than three percent on the gross receipts from the furnishing
for consideration of lodging described in section 473.592 for a period of less than 30 days
at a hotel, motel, rooming house, tourist court, or trailer camp located within the city by a
hotel or motel which has more than 50 rooms available for lodging; the tax imposed under
this clause shall be at a rate that, when added to the sum of the rate of the sales tax imposed
under Minnesota Statutes, chapter 297A, the rate of the sales tax imposed under section 4,
and the rate of any other taxes on lodging in the city of Minneapolis, equals 13 percent; and
    (3) a sales tax of not more than three percent on the gross receipts on all sales of food
primarily for consumption on or off the premises by restaurants and places of refreshment
as defined by resolution of the city that occur within the downtown taxing area.
The taxes authorized by this section shall be imposed until December 31, 2056. The taxes
shall be imposed and may be adjusted periodically by the city council such that the rates
imposed, produce revenue sufficient, together with the tax imposed under section 4, to
finance the purposes described in section 4, subdivisions 3 and 4. These taxes shall be
applied, first, as provided in Minnesota Statutes, section 297A.994, subdivision 3, clauses
(1) to (3), and then, solely to pay costs of collection and to pay or, secure, maintain, and
fund the payment of any principal of, premium on, and interest on any bonds or any
costs referred to other purposes in section 4, subdivision 3 or 4. The commissioner of
revenue may enter into appropriate agreements with the city to provide for the collection
of these taxes by the state on behalf of the city. The commissioner may charge the city
a reasonable fee for its collection from the proceeds of any taxes. These taxes shall be
subject to the same interest penalties and enforcement provisions as the taxes imposed
under section 473.592 Minnesota Statutes, chapter 297A.

    Sec. 4. CHARTER LIMITATIONS NOT TO APPLY.
Any amounts expended, indebtedness or obligation incurred including, but not
limited to, the issuance of bonds, or actions taken by the city under this article are not
deemed an expenditure or other use of city resources within the meaning of any law or
charter limitation. The city may exercise any of its powers under this article to spend,
borrow, tax, or incur any form of indebtedness or other obligation, for the improvement,
including, but not limited to, acquisition, development, construction, or betterment, of
any public building, stadium, or other capital improvement project, without regard to any
charter limitation or provision. Any tax exemption established under this article shall
not be deemed an expenditure or other use of city resources within the meaning of any
charter limitation.

    Sec. 5. EFFECTIVE DATE; LOCAL APPROVAL.
This article is effective the day after the governing body of the city of Minneapolis
and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions
2 and 3. Notwithstanding any law to the contrary, the city of Minneapolis and its chief
clerical officer have 30 calendar days following final enactment of this act, to comply with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.

    Sec. 6. SEVERABILITY; SAVINGS.
If any part of this article is found to be invalid because it is in conflict with a
provision of the Minnesota Constitution or for any other reason, all other provisions of
this article shall remain valid and any rights, remedies, and privileges that have been
otherwise accrued by this article, shall remain in effect and may be proceeded with and
concluded under the provisions of this article.

    Sec. 7. LOCAL SALES TAX REQUIREMENTS NOT TO APPLY.
The taxes authorized under Laws 1986, chapter 396, sections 4 and 5, as amended,
are exempt from the requirements of Minnesota Statutes, section 297A.99, subdivisions
2 and 3.

ARTICLE 5

LAWFUL GAMBLING

    Section 1. 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
disposable gambling equipment by an employee of the lessor within a leased premises
which is licensed for the on-sale of alcoholic beverages where such sales and redemptions
are made by an employee of the lessor from a common area where food and beverages
are also sold.

    Sec. 2. 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. Bar bingo
does not include bingo games linked to other permitted premises.

    Sec. 3. 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 but. A bingo occasion must not last
longer than eight consecutive hours, 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.

    Sec. 4. 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 disposable gambling equipment by an employee of a licensed organization in
a premises the organization leases or owns where such sales and redemptions are made
within a separate enclosure that is distinct from areas where food and beverages are sold.

    Sec. 5. Minnesota Statutes 2010, section 349.12, subdivision 12a, is amended to read:
    Subd. 12a. Electronic bingo device. "Electronic bingo device" means an a
handheld and portable electronic device that:
(1) is used by a bingo player to:
(i) monitor bingo paper sheets or a facsimile of a bingo paper sheet when purchased
and played at the time and place of an organization's bingo occasion and which (1)
provides a means for bingo players to, or to play an electronic bingo game that is linked
with other permitted premises;
(ii) activate numbers announced by a bingo caller; (2) compares or displayed, and
to compare the numbers entered by the player to the bingo faces previously stored in
the memory of the device; and
(3) identifies(iii) identify a winning bingo pattern. or game requirement; and
(iv) play against other bingo players;
(2) limits the play of bingo faces to 36 faces per game;
(3) requires coded entry to activate play but does not allow the use of a coin,
currency, or tokens to be inserted to activate play;
(4) may only be used for play against other bingo players in a bingo game;
(5) has no additional function as an amusement or gambling device other than as an
electronic pull-tab game as defined under section 349.12, subdivision 12c;
(6) has the capability to ensure adequate levels of security and internal controls;
(7) has the capability to permit the board to electronically monitor the operation of
the device and the internal accounting systems; and
    (8) has the capability to allow use by a player who is visually impaired.
Electronic bingo device does not mean any device into which coin, currency, or tokens are
inserted to activate play.

    Sec. 6. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:
    Subd. 12b. Electronic pull-tab device. "Electronic pull-tab device" means a
handheld and portable electronic device that:
(1) is used to play one or more electronic pull-tab games;
(2) requires coded entry to activate play but does not allow the use of coin, currency,
or tokens to be inserted to activate play;
(3) requires that a player must activate or open each electronic pull-tab ticket and
have the option to open all tabs of a ticket at the same time or open each individual line,
row, or column of each electronic pull-tab ticket;
(4) maintains information pertaining to accumulated win credits that may be applied
to games in play or redeemed upon termination of play;
(5) has no spinning symbols or other representations that mimic a video slot machine;
(6) 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;
(7) 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;
(8) 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;
(9) maintains, on nonresettable meters, a printable, permanent record of all
transactions involving each device and electronic pull-tab games played on the device;
(10) is not a pull-tab dispensing device as defined under subdivision 32a; and
    (11) has the capability to allow use by a player who is visually impaired.

    Sec. 7. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:
    Subd. 12c. Electronic pull-tab game. "Electronic pull-tab game" means a pull-tab
game containing:
(1) facsimiles of pull-tab tickets that are played on an electronic pull-tab device;
(2) a predetermined, finite number of winning and losing tickets, not to exceed
7,500 tickets;
(3) the same price for each ticket in the game;
(4) a price paid by the player of not less than 25 cents per ticket;
(5) tickets that are in conformance with applicable board rules for pull-tabs;
(6) winning tickets that comply with prize limits under section 349.211;
(7) a unique serial number that may not be regenerated;
(8) an electronic flare that displays the game name, form number, predetermined,
finite number of tickets in the game, and prize tier; and
(9) no spinning symbols or other representations that mimic a video slot machine.

    Sec. 8. Minnesota Statutes 2010, section 349.12, is amended by adding a subdivision
to read:
    Subd. 12d. Electronic pull-tab game system. "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.

    Sec. 9. Minnesota Statutes 2010, section 349.12, subdivision 18, is amended to read:
    Subd. 18. Gambling equipment. "Gambling equipment" means: gambling
equipment that is either disposable or permanent gambling equipment.
(a) Disposable gambling equipment includes the following:
(1) bingo hard cards or paper sheets, including linked bingo paper sheets, devices for
selecting bingo numbers, electronic bingo devices,;
(2) paper and electronic pull-tabs,;
(3) jar tickets, paddle wheels, paddle wheel tables,;
(4) paddle tickets, and paddle ticket cards,;
(5) tipboards, and tipboard tickets,; and
(6) promotional tickets that mimic a pull-tab or tipboard, 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.
(b) Permanent gambling equipment includes the following:
(1) devices for selecting bingo numbers;
(2) electronic bingo devices;
(3) electronic pull-tab devices;
(4) pull-tab dispensing devices;
(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;
(6) paddle wheels; and
(7) paddle wheel tables.

    Sec. 10. 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, 4, 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. 11. 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 prizes in a linked bingo game, who
provides linked bingo paper sheets to the participating organizations games, who provides
linked bingo prize management, and who provides the linked bingo game system.

    Sec. 12. 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 dial-up or other the capability to permit the board to electronically monitor
its operation remotely. For linked electronic bingo games, the system includes electronic
bingo devices.

    Sec. 13. 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
occasion game to another in a progressive linked bingo game.

    Sec. 14. Minnesota Statutes 2010, section 349.12, subdivision 29, is amended to read:
    Subd. 29. Paddle wheel. "Paddle wheel" means a vertical 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, 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.

    Sec. 15. Minnesota Statutes 2010, section 349.12, subdivision 31, is amended to read:
    Subd. 31. Promotional ticket. A paper pull-tab ticket or paper 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. 16. Minnesota Statutes 2010, section 349.12, subdivision 32, is amended to read:
    Subd. 32. Pull-tab. "Pull-tab" means a single folded or banded paper ticket or a,
multi-ply card with perforated break-open tabs, or a facsimile of a paper pull-tab ticket
used in conjunction with an electronic pull-tab device, the face of which is initially
covered to conceal one or more numbers or symbols, and where one or more of each set of
tickets or, cards, or facsimiles has been designated in advance as a winner.

    Sec. 17. 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, electronic
bingo device, and electronic pull-tab device permitted under this chapter and by board
rule is not a gambling device within the meaning of sections 609.75 to 609.76 and chapter
299L. 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.

    Sec. 18. Minnesota Statutes 2010, section 349.151, subdivision 4b, is amended to read:
    Subd. 4b. Pull-tab sales from dispensing devices. (a) The board may by rule
authorize but not require the use of pull-tab dispensing devices.
(b) Rules adopted under paragraph (a):
(1) must limit the number of pull-tab dispensing devices on any permitted premises
to three; and
(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.
(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.

    Sec. 19. Minnesota Statutes 2010, section 349.151, subdivision 4c, is amended to read:
    Subd. 4c. Electronic bingo devices. (a) The board may by rule authorize but not
require the use of electronic bingo devices.
(b) Rules adopted under paragraph (a):
(1) must limit the number of bingo faces that can be played using an electronic
bingo device to 36;
(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;
(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
(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.
(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.

    Sec. 20. Minnesota Statutes 2010, section 349.151, is amended by adding a subdivision
to read:
    Subd. 4d. Electronic pull-tab devices and electronic pull-tab game system. (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.
(b) The board may not require an organization to use electronic pull-tab devices.
(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.
(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.
(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.

    Sec. 21. 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; or
    (2) has ever been convicted of a crime involving gambling; or
    (3) has had a license issued by the board or director permanently revoked for
violation of law or board rule.

    Sec. 22. Minnesota Statutes 2010, section 349.155, subdivision 4, is amended to read:
    Subd. 4. License revocation, suspension, denial; censure. (a) 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.
    (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:
    (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
    (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.

    Sec. 23. 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 and a linked bingo game provider may provide electronic bingo devices for
linked electronic bingo games;
    (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.
(c) No distributor or distributor salesperson may also be licensed as a linked bingo
game provider under section 349.1635.

    Sec. 24. 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 or leased 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 for a paper pull-tab game.
    (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 or lease gambling
equipment for resale or lease 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 paper
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. 25. 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 or lease to any person for use in Minnesota must, prior
to the equipment's resale or lease, 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. 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.
(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. 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.
(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. 26. 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. A manufacturer licensed under this
section may also be licensed as a linked bingo game provider under section 349.1635.
A manufacturer licensed under this section may not also be directly or indirectly
licensed as a distributor under section 349.161.

    Sec. 27. Minnesota Statutes 2010, section 349.163, subdivision 5, is amended to read:
    Subd. 5. Paper 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 paper
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 paper pull-tabs or
tipboards except as allowed by this chapter or board rules.
(b) The flare of each paper 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 paper
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 paper pull-tabs and tipboards. Possession of a box containing a deal of paper
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 paper 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 paper 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 paper 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. 28. Minnesota Statutes 2010, section 349.163, subdivision 6, is amended to read:
    Subd. 6. Samples of gambling equipment. (a) The board shall require each
licensed manufacturer to submit to the board one or more samples of each item of gambling
equipment the manufacturer manufactures manufactured for use or resale in this state.
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.
(b) The board shall inspect and test all the equipment, including software and
software upgrades, 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.
(c) 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.
(d) The board may request the assistance of the commissioner of public safety and
the director of the State Lottery in performing the tests.

    Sec. 29. 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 or to a manufacturer licensed under section 349.163 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. 30. 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 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; and
(3) any other information required by the board by rule.

    Sec. 31. Minnesota Statutes 2010, section 349.1635, is amended by adding a
subdivision to read:
    Subd. 5. Linked bingo game services requirements. (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.
(b) A distributor may not charge a fee to licensed organizations for services
authorized and rendered under paragraph (a).
(c) A linked bingo game provider may not contract with any distributor on an
exclusive basis.
(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.

    Sec. 32. 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
30-day 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. 33. Minnesota Statutes 2010, section 349.17, subdivision 6, is amended to read:
    Subd. 6. Conduct of bingo. 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. A game of bingo begins with the first letter and number called
or displayed. Each player must cover, mark, or activate the numbers when bingo numbers
are randomly selected, and announced, and or displayed to the players, either manually
or with a flashboard and monitor. 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. 34. 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; and
    (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; and
    (3) no rent may be paid for a bar bingo occasion.

    Sec. 35. 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 not more than two linked bingo games per occasion, one of which may be,
including a progressive games game in which a portion of the prize is carried over from
one occasion game to another until won by a player achieving a valid bingo within a
predetermined amount of bingo numbers called based upon a predetermined and posted
win determination.
    (b) Each participating licensed organization shall contribute to each prize awarded in
a linked bingo game in an amount not to exceed $300. Linked bingo games may only be
conducted by licensed organizations who have a valid agreement with the linked bingo
game provider.
    (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. 36. Minnesota Statutes 2010, section 349.17, is amended by adding a subdivision
to read:
    Subd. 9. Linked bingo games played exclusively on electronic bingo devices. 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.
(a) The permitted premises must be:
(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
(2) a premises where bingo is conducted as the primary business and has a seating
capacity of at least 100.
(b) Until July 1, 2013, the number of electronic bingo devices is limited to:
(1) no more than six devices in play for permitted premises with 200 seats or less;
(2) no more than 12 devices in play for permitted premises with 201 seats or more;
and
(3) no more than 50 devices in play for permitted premises where bingo is the
primary business.
Seating capacity is determined as specified under the local fire code.
(c) After July 1, 2013, the Gambling Control Board may increase the limits on
the number of electronic bingo devices.
(d) 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.
(e) 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.
(f) 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.

    Sec. 37. 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. The rules shall also apply to electronic pull-tab games.
    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. The rules shall also apply to electronic
pull-tab games.
    Subd. 3. Pull-tab dispensing device location restrictions and requirements.
The following pertain to pull-tab dispensing devices as defined under section 349.12,
subdivision 32a.
(a) The use of any pull-tab dispensing device must be at a permitted premises
which is:
(1) a licensed premises for on-sale of intoxicating liquor or 3.2 percent malt
beverages;
(2) a premises where bingo is conducted as the primary business; or
(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.
(b) The number of pull-tab dispensing devices located at any permitted premises
is limited to three.
    Subd. 4. Electronic pull-tab device requirements and restrictions. The following
pertain to the use of electronic pull-tab devices as defined under section 349.12,
subdivision 12b.
(a) The use of any electronic pull-tab device may only be at a permitted premises
that is:
(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
(2) a premises where bingo is conducted as the primary business and has a seating
capacity of at least 100; and
(3) where the licensed organization sells paper pull-tabs.
(b) Until July 1, 2013, the number of electronic pull-tab devices is limited to:
(1) no more than six devices in play at any permitted premises with 200 seats or less;
(2) no more than 12 devices in play at any permitted premises with 201 seats
or more; and
(3) no more than 50 devices in play at any permitted premises where the primary
business is bingo.
Seating capacity is determined as specified under the local fire code.
(c) After July 1, 2013, the Gambling Control Board may increase the limits on
the number of electronic pull-tab devices.
(d) The hours of operation for the devices are limited to 8:00 a.m. to 2:00 a.m.
(e) All electronic pull-tab games must be sold and played on the permitted premises
and may not be linked to other permitted premises.
(f) Electronic pull-tab games may not be transferred electronically or otherwise to
any other location by the licensed organization.
(g) 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.
(h) 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.
(i) 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.
(j) Each player is limited to the use of one device at a time.
    Subd. 5. Multiple chance games. 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.

    Sec. 38. 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 pull-tabs,
tipboards, and paddle wheels lawful gambling is subject to the following limits and
restrictions:
    (1) For booth operations, 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: 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.
    (i) in any month where the organization's gross profit at those premises does not
exceed $4,000, up to $400; and
    (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;
    (2) For bar operations, 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: monthly rent may not exceed 15 percent of
the gross profits for that month from electronic pull-tab games and electronic linked
bingo games and not more than 20 percent of gross profits for that month from all other
forms of lawful gambling.
    (i) in any month where the organization's gross profit at those premises does not
exceed $1,000, up to $200; and
    (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;
    (3) a lease not governed by clauses (1) and (2) must be approved by the board before
becoming effective; 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:
(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
(ii) ten percent of the 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.
    (4) total rent paid to a lessor from all organizations from leases governed by clause
(1) may not exceed $1,750 per month.
    (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:
    (1) (4) For bingo conducted at a leased premises where the primary business is
bingo, rent is limited to either not more than ten percent of the monthly gross profit from
all lawful gambling activities held during bingo occasions, 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; and.
    (2) (5) No rent may be paid for bar bingo as defined in section 349.12, subdivision 3c.
(6) A lease not governed by clauses (1) to (5) must be approved by the director
before becoming effective.
    (d) (c) 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, and other utilities or
services, and, in the case of bar operations, cash shortages, unless approved by the
director. 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. Any
other expenditure made by an organization that is related to a leased premises must be
approved by the director. For bar operations, the lessor is responsible for cash shortages.
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.
    (e) (d) 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.
    (f) No entity other than the (e) A licensed organization may not conduct any activity
within a booth operation on behalf of the lessor on a leased premises.

    Sec. 39. 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) Except for gambling receipts from electronic pull-tab games and linked
electronic bingo games, 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.
(1) A deal of paper 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.
(2) 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.
(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.
(e) (f) Deposit records must be sufficient to allow determination of deposits made
from each bingo occasion, deal, or game at each permitted premises.
(f) (g) 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. 40. 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 on a form in an
electronic format 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.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 41. Minnesota Statutes 2010, section 349.19, subdivision 5, is amended to read:
    Subd. 5. Reports. (a) A licensed organization must report monthly to the
Department of Revenue board in an electronic format prescribed by the board 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
for each permitted premises. The organization must account for and report on each form
of lawful gambling conducted. The report organization 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.
(b) 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: monthly to the
commissioner of revenue as required under section 297E.06.
(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).
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 42. 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 paper 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 paper 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 paper
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 paper 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 paper 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. 43. 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) no organization may contribute more than $300 per linked bingo game to a
linked bingo prize pool 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;
(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;
(2) (3) 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; and
    (3) (4) for a progressive linked bingo game, if no player declares a valid bingo
within the for a progressive prize or prizes based on a predetermined amount of bingo
numbers called and posted win determination, a portion of the prize is gross receipts
may be carried over to another occasion game until the accumulated progressive 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 within the predetermined amount of bingo numbers called, the entire
prize pool for that game is awarded to the winner. 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.; and
(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.

    Sec. 44. APPROPRIATION.
(a) $779,000 in fiscal year 2013 and $779,000 in fiscal year 2014 and $779,000 in
fiscal year 2015 are appropriated from the lawful gambling regulation account in the
special revenue fund to the commissioner of human services for operating expenses
related to the regulatory oversight of lawful gambling for electronic pull-tabs and
electronic linked bingo.
    (b) An amount equal to one-half of one percent of the estimated increase in revenue,
determined by the commissioner of management and budget under Minnesota Statutes,
section 16A.965, subdivision 8, paragraph (a), for the fiscal year is appropriated from
the general fund to the:
    (1) commissioner of human services for the compulsive gambling treatment program
established under Minnesota Statutes, section 245.98; and
    (2) Gambling Control Board 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.

    Sec. 45. EFFECTIVE DATE.
Except as otherwise explicitly provided, this article is effective the day following
final enactment.

ARTICLE 6

RACINO

    Section 1. [47.522] PROHIBITION NEAR RACINO.
No detached facility may be located on the premises of a racetrack referenced in
section 349A.17, subdivision 1, paragraph (a).

    Sec. 2. Minnesota Statutes 2010, section 240.03, is amended to read:
240.03 COMMISSION POWERS AND DUTIES.
The commission has the following powers and duties:
(1) to regulate horse racing in Minnesota to ensure that it is conducted in the public
interest;
(2) to issue licenses as provided in this chapter;
(3) to enforce all laws and rules governing horse racing;
(4) to collect and distribute all taxes provided for in this chapter;
(5) to conduct necessary investigations and inquiries and compel the submission of
information, documents, and records it deems necessary to carry out its duties;
(6) to supervise the conduct of pari-mutuel betting on horse racing;
(7) to employ and supervise personnel under this chapter;
(8) to determine the number of racing days to be held in the state and at each
licensed racetrack;
(9) to take all necessary steps to ensure the integrity of racing in Minnesota; and
(10) to impose fees on the racing and card playing industries sufficient to recover the
operating costs of the commission with the approval of the legislature according to section
16A.1283 . Notwithstanding section 16A.1283, when the legislature is not in session, the
commissioner of management and budget may grant interim approval for any new fees
or adjustments to existing fees that are not statutorily specified, until such time as the
legislature reconvenes and acts upon the new fees or adjustments. As part of its biennial
budget request, the commission must propose changes to its fees that will be sufficient to
recover the operating costs of the commission; and
(11) to take all necessary steps to ensure the security of all activities in a class A
licensed racetrack. The duties and responsibilities of the commission include but are not
limited to licensing employees of a class A licensee and vendors to the class A licensee
involved in the conduct of gaming machines authorized by a location contract with the
director of the State Lottery under section 349A.17 and overall surveillance and security
of all conduct on all facilities of a licensed racetrack. The commission shall require that
a class A licensed racetrack reimburse it for the commission's actual costs, including
personnel costs, for conducting activities provided in this clause and amounts received
must be deposited as provided in section 240.155, subdivision 1. The commission shall
review procedures of the class A licensee to ensure compliance with section 240.13,
subdivision 5a.

    Sec. 3. Minnesota Statutes 2010, section 240.13, is amended by adding a subdivision
to read:
    Subd. 5a. Equine industry improvement fund. (a) To compensate the horse
racing industry for the presence of lottery gaming machines at class A racing facilities,
the commission shall establish and maintain an equine industry improvement fund.
Each licensee holding a location contract with the lottery director shall, as directed
by the commission, transmit an amount equal to 12 percent of the location contract
compensation received from the lottery director to the commission for deposit into the
equine industry improvement fund. Seventy-five percent of the funds shall be allocated
for purse supplements. The commission shall routinely transfer 80 percent of the fund
allocated for purse supplements to a licensee conducting live racing for more than one
breed of horse and 20 percent to a licensee conducting live racing for only one breed of
horse and direct the licensee to use the funds to supplement purses offered for live races.
Purse supplements required under this subdivision are in addition to purse payments
otherwise established by law or contract. The location contract holder and the organization
representing the majority of horsepersons racing at the location contract holder's racetrack
may, by written contract, agree to use a portion of the transferred funds for racing-related
purposes other than purse supplementation.
(b) The commission shall allocate 20 percent of the fund for breeder's fund purposes
and shall transmit that amount to the breeder's fund for the benefit of each breed racing at
a class A licensed facility hosting lottery gaming machines. Amounts transferred shall
be in the same proportions established, under this subdivision, for purse supplements.
Amounts transferred to a breeder's fund shall be used for the purposes of section 240.18,
subdivisions 2, paragraph (d), and 3, paragraph (b), subject to the proportionality
requirement in section 240.18, subdivision 1.
(c) Five percent of the fund shall be placed in an equine industry enhancement fund
established by the commission. The commission shall award grants from this account
designed to support and improve the nonracing equine industry including, but not limited
to, construction of facilities and trails, production of shows, and issues related to retired
horses.

    Sec. 4. Minnesota Statutes 2010, section 240.14, is amended by adding a subdivision
to read:
    Subd. 5. Lottery contract holder; minimum racing days. Licensees holding
location contracts with the director of the lottery, who are authorized to conduct live racing
for more than one breed of horse, shall conduct thoroughbred and quarter horse racing.
In any year the licensee shall offer the equivalent of at least two quarter horse races for
each racing day granted to the licensee by the commission, however, the licensee and the
organization representing the majority of quarter horses owners licensed to race in the
state may agree to a different number of live races to be offered. Scheduling of quarter
horse races shall be as approved by the commission pursuant to section 240.03, clause (8).
Willful failure to offer the races required by this subdivision shall subject the licensee to
disciplinary action as deemed appropriate by the commission.

    Sec. 5. [297A.651] LOTTERY GAMING MACHINES; IN-LIEU FEE.
Adjusted gross revenue from the operation of gaming machines authorized under
chapter 349A is exempt from the tax imposed under section 297A.62 and chapter 297E and
any other tax, license, permit, or assessment for conducting a gambling activity that is not
imposed by this section. The State Lottery must, on or before the 20th day of each month,
transmit to the commissioner an amount equal to the adjusted gross gaming machine
revenue from the operation of gaming machines, as defined in section 349A.01, for the
previous month multiplied by: (1) 25 percent of annual adjusted gross gaming machine
revenue generated by each person that has a location contract under section 349A.17,
subdivision 1, up to $150,000,000; (2) 30 percent of annual adjusted gross gaming
machine revenue generated by each person that has a location contract under section
349A.17, subdivision 1, between $150,000,000 and $200,000,000; and (3) 40 percent
of annual adjusted gross gaming machine revenue generated by each person that has a
location contract under section 349A.17, subdivision 1, in excess of $200,000,000. The
commissioner shall deposit the money transmitted under this section in the state treasury.

    Sec. 6. Minnesota Statutes 2010, section 299L.07, subdivision 2, is amended to read:
    Subd. 2. Exclusions. Notwithstanding subdivision 1, a gambling device:
(1) may be sold by a person who is not licensed under this section, if the person (i) is
not engaged in the trade or business of selling gambling devices, and (ii) does not sell
more than one gambling device in any calendar year;
(2) may be sold by the governing body of a federally recognized Indian tribe
described in subdivision 2a, paragraph (b), clause (1), which is not licensed under this
section, if (i) the gambling device was operated by the Indian tribe, (ii) the sale is to
a distributor licensed under this section, and (iii) the licensed distributor notifies the
commissioner of the purchase, in the same manner as is required when the licensed
distributor ships a gambling device into Minnesota;
(3) may be possessed by a person not licensed under this section if the person holds
a permit issued under section 299L.08; and
(4) may be possessed by a state agency, with the written authorization of the director,
for display or evaluation purposes only and not for the conduct of gambling; and
(5) may be possessed by the State Lottery or a person who has entered into a location
contract with the State Lottery as authorized under chapter 349A.

    Sec. 7. Minnesota Statutes 2010, section 299L.07, subdivision 2a, is amended to read:
    Subd. 2a. Restrictions. (a) A manufacturer licensed under this section may sell,
offer to sell, lease, or rent, in whole or in part, a gambling device only to a distributor
licensed under this section or to the State Lottery as authorized under chapter 349A.
(b) A distributor licensed under this section may sell, offer to sell, market, rent,
lease, or otherwise provide, in whole or in part, a gambling device only to:
(1) the governing body of a federally recognized Indian tribe that is authorized
to operate the gambling device under a tribal state compact under the Indian Gaming
Regulatory Act, Public Law 100-497, and future amendments to it;
(2) a person for use in the person's dwelling for display or amusement purposes in a
manner that does not afford players an opportunity to obtain anything of value;
(3) another distributor licensed under this section; or
(4) a person in another state who is authorized under the laws of that state to possess
the gambling device; or
(5) the State Lottery as authorized under chapter 349A.

    Sec. 8. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:
    Subd. 1a. Adjusted gross gaming machine revenue. "Adjusted gross gaming
machine revenue" means the sum of all money received by the lottery for gaming machine
plays, other than promotional plays, less the amount paid out in prizes for gaming machine
games.

    Sec. 9. Minnesota Statutes 2010, section 349A.01, is amended by adding a subdivision
to read:
    Subd. 6a. Gaming machine. "Gaming machine" means any electronic device
which, upon insertion of money, coin, token, voucher, electronic card, or other
consideration, allows the play of a game, authorized by the director, the outcome of which
is determined entirely or partly by chance. A gaming machine may award a player a prize
in the form of money, tokens, prize slips, or other authorized consideration.

    Sec. 10. Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:
    Subd. 6b. Gaming machine area. "Gaming machine area" means an area within
ten feet of a gaming machine.

    Sec. 11. Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:
    Subd. 6c. Gaming machine game. "Gaming machine game" means a game
operated by a gaming machine as authorized by the director.

    Sec. 12. Minnesota Statutes 2010, section 349A.01, is amended by adding a
subdivision to read:
    Subd. 6d. Gaming machine play. "Gaming machine play" means an electronic
record that proves participation in a gaming machine game.

    Sec. 13. Minnesota Statutes 2010, section 349A.01, subdivision 10, is amended to read:
    Subd. 10. Lottery procurement contract. "Lottery procurement contract" means a
contract to provide lottery products, gaming machines, maintenance of gaming machines,
computer hardware and software used to monitor sales of lottery tickets and gaming
machine plays, and lottery tickets. "Lottery procurement contract" does not include
a contract to provide an annuity or prize payment agreement or materials, supplies,
equipment, or services common to the ordinary operation of a state agency.

    Sec. 14. Minnesota Statutes 2010, section 349A.10, subdivision 3, is amended to read:
    Subd. 3. Lottery operations. (a) The director shall establish a lottery operations
account in the lottery fund. The director shall pay all costs of operating the lottery,
including payroll costs or amounts transferred to the state treasury for payroll costs, but
not including lottery prizes, from the lottery operating account. The director shall credit to
the lottery operations account amounts sufficient to pay the operating costs of the lottery.
(b) Except as provided in paragraph (e), the director may not credit in any fiscal
year thereafter amounts to the lottery operations account which when totaled exceed
nine percent of gross revenue to the lottery fund in that fiscal year. In computing total
amounts credited to the lottery operations account under this paragraph the director shall
disregard amounts transferred to or retained by lottery retailers as sales commissions or
other compensation and amounts transferred or retained by a racetrack under a location
contract under section 349A.17.
(c) The director of the lottery may not expend after July 1, 1991, more than 2-3/4
percent of gross revenues in a fiscal year for contracts for the preparation, publication, and
placement of advertising.
(d) Except as the director determines, the lottery is not subject to chapter 16A
relating to budgeting, payroll, and the purchase of goods and services.
(e) In addition to the amounts credited to the lottery operations account under
paragraph (b), the director is authorized, if necessary, to meet the current obligations of
the lottery and to credit up to 25 percent of an amount equal to the average annual amount
which was authorized to be credited to the lottery operations account for the previous three
fiscal years but was not needed to meet the obligations of the lottery.

    Sec. 15. Minnesota Statutes 2010, section 349A.13, is amended to read:
349A.13 RESTRICTIONS.
Nothing in this chapter:
(1) authorizes the director to conduct a lottery game or contest the winner or winners
of which are determined by the result of a sporting event other than a horse race conducted
under chapter 240;
(2) authorizes the director to install or operate a lottery device operated by coin or
currency which when operated determines the winner of a game, except as authorized
under section 349A.17; and
(3) authorizes the director to sell pull-tabs as defined under section 349.12,
subdivision 32 .

    Sec. 16. [349A.17] GAMING MACHINES.
    Subdivision 1. Location contract. (a) The director may enter into a contract with
a person to provide locations for gaming machines. Contracts entered into under this
section are not subject to chapter 16C. The director may only enter a contract under this
subdivision with a person who holds a class A license under chapter 240. The gaming
machines may only be placed at the racetrack for which the class A license under chapter
240 was issued. Contracts entered into under this section are void if the racetrack: (1) has
not hosted at least 75 days of live racing, authorized by the Minnesota Racing Commission,
during the previous year, or (2) has not been approved, unless approval is pending, for at
least 75 days of live racing during the present year. In the case of licensees authorized to
conduct racing for only one breed of horse, the live racing requirement is 50 days.
(b) The director may cancel, suspend, or refuse to renew the location contract
if the person:
(1) fails to account for proceeds from the gaming machines;
(2) fails to remit funds to the director in accordance with the location contract;
(3) violates a law, rule, or order of the director;
(4) fails to comply with a material term of the location contract; or
(5) has acted in a manner prejudicial to the public confidence in the integrity of the
operation of the gaming machines.
The cancellation, suspension, or refusal to renew the location contract is a contested
case under sections 14.57 to 14.69.
(c) Contracts entered into under this section must provide for compensation to the
licensee in recognition of goods, services, and facilities provided expenses, risk factors,
and losses. Compensation shall be in an amount equal to at least the following percentages
of adjusted gross gaming machine revenue generated at the licensee's facility:
(1) of the first $150,000,000 of annual adjusted gross gaming machine revenue,
60 percent;
(2) of annual adjusted gross gaming machine revenue between $150,000,000 and
$200,000,000, 55 percent; and
(3) of annual adjusted gross gaming machine revenue in excess of $200,000,000,
45 percent.
(d) A licensee must annually remit one percent of the compensation it receives
pursuant to this section to the city, and one percent to the county in which the licensee
conducts racing.
    Subd. 2. Operation. (a) All gaming machines that are placed at a racetrack under
subdivision 1 must be operated and controlled by the director.
(b) Gaming machines must be owned or leased by the director, however, the financial
responsibility for all other activities related to the gaming facility including, but not
limited to, advertising, marketing, facility expenses, staffing, security, and surveillance,
shall be borne by the holder of the location contract.
(c) Gaming machines must be maintained by the lottery, or by a vendor that is under
the control and direction of the director.
(d) The director must have a central communications system that monitors activities
on each gaming machine. The central communications system must be located at a
lottery office.
(e) The director must approve and oversee the general security arrangements
associated with and relating to the operation of the gaming machines and implement
procedures as deemed appropriate.
(f) Advertising and promotional material produced by the racetrack relating to
gaming machines located at the facility must be approved by the director.
(g) The director may implement such other controls as are deemed necessary for the
operation of gaming machines under this section.
(h) The holder of a location contract must make reasonable efforts to prevent
drinking or possession of intoxicating beverages in gaming machine areas, and must
not serve or allow consumption of intoxicating beverages in gaming machine areas. A
violation of this section by location provider is subject to section 340A.415. The holder
of a location contract is, however, exempt from this provision, and may allow serving
and possession of intoxicating beverages in the gaming machine area, if the premises is
located within ten miles of a facility conducting class III gambling under section 3.9221
that allows alcohol consumption in its gaming machine area.
    Subd. 3. Specifications. Gaming machines must be capable of being linked
electronically to a central communications system to provide auditing program information
as required by the director.
    Subd. 4. Games. The director shall specify the games that may be placed on
a gaming machine as provided in section 349A.04. Gaming machines may conduct
pari-mutuel wagering and display horse races under specifications provided by the director.
    Subd. 5. Examination of machines. The director shall examine prototypes of
gaming machines and require that the manufacturer of the machine pay the cost of the
examination. The director may contract for the examination of gaming machines.
    Subd. 6. Testing of machines. The director may require working models of a
gaming machine to be transported to the locations the director designates for testing,
examination, and analysis. The manufacturer shall pay all costs for testing, examination,
analysis, and transportation of the machine model.
    Subd. 7. Prizes. A person who plays a gaming machine agrees to be bound by the
rules and game procedures applicable to that particular gaming machine game. The player
acknowledges that the determination of whether the player has won a prize is subject to
the rules and game procedures adopted by the director, claim procedures established by
the director for the game, and any confidential or public validation tests established by
the director for the game. A person under 18 years of age may not claim a prize from the
operation of a gaming machine. A prize claimed from the play of a gaming machine game
is not subject to section 349A.08, subdivision 8.
    Subd. 8. Prohibitions. (a) A person under the age of 18 years may not play a
game on a gaming machine.
(b) The director or any employee of the lottery, or a member of the immediate family
residing in the same household, may not play a game on a gaming machine or receive a
prize from the operation of a gaming machine.
(c) No person shall consume or possess intoxicating beverages within a gaming
machine area.
    Subd. 9. Compulsive gambling notice. The director shall prominently post, in the
area where the gaming machines are located, the toll-free telephone number established
by the commissioner of human services in connection with the compulsive gambling
program established under section 245.98. The director and the location provider shall
establish a responsible gambling plan in consultation with the National Council on
Problem Gambling or the Minnesota affiliate. By January 15 of each year, the director
shall submit a report to the legislature, of not more than five pages in length, setting forth
the status of the responsible gambling plan.
    Subd. 10. Local licenses. Except as provided in subdivision 1, paragraph (d),
no political subdivision may require a license to operate a gaming machine, restrict or
regulate the placement of gaming machines, or impose a tax or fee on the business of
operating gaming machines.

    Sec. 17. LOTTERY BUDGET.
The director of the State Lottery shall submit a budget for the operation and control
of gaming machines to the commissioner of management and budget. Notwithstanding
Minnesota Statutes, section 349A.10, subdivision 6, the director of the State Lottery
may expend amounts necessary to operate and control the gaming machines. Amounts
expended by the director of the State Lottery for the operation and control of the gaming
machines in fiscal years 2013 and 2014 are not subject to the maximum amount set in law
for the operation of the lottery.

    Sec. 18. RACINO REVENUE.
Revenue transmitted to the commissioner under Minnesota Statutes, section
297A.651, must be deposited in the general fund.

    Sec. 19. SEVERABILITY; SAVINGS.
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.

    Sec. 20. REPEALER.
Minnesota Statutes 2010, section 240.30, subdivisions 3 and 8, are repealed.

    Sec. 21. EFFECTIVE DATE.
This article is effective the day following final enactment.

ARTICLE 7

MISCELLANEOUS

    Section 1. [297A.9905] USE OF LOCAL TAX REVENUES BY CITIES OF THE
FIRST CLASS.
(a) Notwithstanding section 297A.99, or other general or special law or charter
provision, if the revenues from any local tax imposed on retail sales under special law
by a city of the first class exceeds the amount needed to fund the uses authorized in the
special law, the city may expend the excess revenue from the tax to fund other capital
projects of regional significance.
(b) For purposes of this section:
(1) "city of the first class" has the meaning given in section 410.01; and
(2) "capital project of regional significance" means construction, expansion, or
renovation of a sports facility or convention or civic center, that has a construction cost
of at least $40,000,000.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 2. USE OF THE STADIUM.
    Subdivision 1. Amateur sports use. The lessee of the stadium must make the
facilities of the stadium available to the Minnesota Amateur Sports Commission up to
ten days each year on terms satisfactory to the commission for amateur sports activities
consistent with Minnesota Statutes, chapter 240A, each year during the time the bonds
issued pursuant to this act are outstanding. The commission must negotiate in good faith
for the time it uses the stadium.
    Subd. 2. High school league. The lessee of the stadium must make the facilities of
the stadium available for use by the Minnesota State High School League for at least seven
days each year for high school soccer and football tournaments. The lessee of the stadium
must provide, and may not charge the league a fee for, this use, including security, ticket
takers, custodial or cleaning services, or other similar services in connection with this use.

ARTICLE 8

GAMBLING TAX CHANGES

    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, or linked bingo paper sheets, or electronic linked bingo games; pull-tabs;
electronic pull-tab games; 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.
EFFECTIVE DATE.This section is effective July 1, 2012.

    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 and, paper sheets, linked bingo paper sheets, and
electronic linked bingo games before reduction for prizes, expenses, shortages, free plays,
or any other charges or offsets;
(2) the ideal gross of pull-tab, electronic pull-tab games, 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 .
EFFECTIVE DATE.This section is effective July 1, 2012.

    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, electronic pull-tab games or tipboard
deal, paddlewheel game, and raffle ticket was sold at its face value. In the calculation of
ideal gross and prizes, a free play ticket pull-tab or electronic pull-tab shall be valued at
face value. 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.
EFFECTIVE DATE.This section is effective July 1, 2012.

    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)
paper or electronic pull-tab deals or games; (2) tipboard deals or games; and (3) electronic
linked bingo; and (4) 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.
EFFECTIVE DATE.This section is effective for games reported as played after
June 30, 2012.

    Sec. 5. Minnesota Statutes 2010, section 297E.02, subdivision 3, is amended to read:
    Subd. 3. Collection; disposition. (a) Taxes imposed by this section other than in
subdivision 4 are due and payable to the commissioner when the gambling tax return
is required to be filed. 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. Distributors must file their monthly sales figures with
the commissioner on a form prescribed by the commissioner. 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.
(b) The sales tax imposed by chapter 297A on the sale of the 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.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 6. Minnesota Statutes 2010, section 297E.02, subdivision 6, is amended to read:
    Subd. 6. Combined net receipts tax. In addition to the taxes imposed under
subdivisions subdivision 1 and 4, a tax is imposed on the combined receipts of the
organization. As used in this section, "combined net receipts" is the sum of the
organization's gross receipts from lawful gambling less gross receipts directly derived
from the conduct of paper bingo, raffles, and paddle wheels, as defined in section 297E.01,
subdivision 8 , and less the net prizes actually paid, other than prizes actually paid for
paper bingo, raffles, and paddle wheels, for the fiscal year. The combined net receipts of
an organization are subject to a tax computed according to the following schedule:

		If the combined net receipts for the fiscal year are:		The tax is:
		Not over $500,000$87,500		zero9.10 percent
		Over $500,000$87,500,
		but not over $700,000 $122,500		1.7$7,693 plus 18.20 percent of the amount over $500,000$87,500, but not over $700,000$122,500
		Over $700,000$122,500,
		but not over $900,000 $157,500		$3,400$14,333 plus 3.427.30 percent of the amount over $700,000 $122,500, but not over $900,000 $157,500
		Over $900,000$157,500		$10,200$23,888 plus 5.136.40 percent of the amount over $900,000 $157,500

EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 7. Minnesota Statutes 2010, section 297E.02, is amended by adding a subdivision
to read:
    Subd. 6a. Unaccounted games. 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.
EFFECTIVE DATE.This section is effective July 1, 2012.

    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, electronic pull-tab game or tipboard upon which the tax imposed by
subdivision 4 this chapter has not been paid is liable for a tax of six percent of the ideal
gross of each pull-tab, electronic pull-tab game, 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, linked bingo, electronic linked bingo,
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.
EFFECTIVE DATE.This section is effective July 1, 2012.

    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 and subdivision 4, paragraph
(d), is appropriated from the general fund to the commissioner.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 10. Minnesota Statutes 2010, section 297E.02, subdivision 11, is amended to read:
    Subd. 11. Unplayed or Defective pull-tabs or tipboards gambling products. 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.
If a defective deal registered with the board or bar coded in accordance with this
chapter and chapter 349 and upon which the taxes have been paid 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 that no refund under this subdivision be made
unless the that all defective and returned pull-tabs or, tipboards have been, paddle tickets,
paper bingo sheets, and linked bingo paper sheets be 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.
EFFECTIVE DATE.This section is effective for games sold by a licensed
distributor after June 30, 2012.

    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, subdivision 4, 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.
EFFECTIVE DATE.This section is effective for actions occurring after June
30, 2012.

    Sec. 12. REPEALER.
Minnesota Statutes 2010, sections 297E.02, subdivision 4; and 349.12, subdivision
2, are repealed.
EFFECTIVE DATE.This section is effective for games sold by a licensed
distributor after June 30, 2012, and the commissioner of revenue retains authority to
issue refunds under Minnesota Statutes 2010, section 297E.02, subdivision 4, paragraph
(d), for games sold before July 1, 2012.