1.1                          A bill for an act 
  1.2             relating to gambling; changing the pull-tab and 
  1.3             tipboard tax; amending Minnesota Statutes 1994, 
  1.4             sections 297E.02, subdivision 4; and 297E.031, 
  1.5             subdivision 2; Minnesota Statutes 1995 Supplement, 
  1.6             section 297E.031, subdivision 1. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 297E.02, 
  1.9   subdivision 4, is amended to read: 
  1.10     Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) A tax at the 
  1.11  rate of two percent is imposed on the sale of each deal of 
  1.12  pull-tabs and tipboards sold by a distributor an organization's 
  1.13  gross receipts from sales of pull-tab and tipboard deals.  The 
  1.14  rate of the tax is two percent of the ideal gross of the 
  1.15  pull-tab or tipboard deal.  The sales tax imposed by chapter 
  1.16  297A on the sale of the pull-tabs and tipboards by the 
  1.17  distributor is imposed on the retail sales price less the tax 
  1.18  imposed by this subdivision.  The retail sale of pull-tabs or 
  1.19  tipboards by the organization is exempt from taxes imposed by 
  1.20  chapter 297A and is exempt from all local taxes and license fees 
  1.21  except a fee authorized under section 349.16, subdivision 8.  
  1.22     (b) The liability for the tax imposed by this section is 
  1.23  incurred when the pull-tabs and tipboards are delivered by the 
  1.24  distributor to the customer or to a common or contract carrier 
  1.25  for delivery to the customer, or when received by the customer's 
  1.26  authorized representative at the distributor's place of 
  2.1   business, regardless of the distributor's method of accounting 
  2.2   or the terms of the sale.  
  2.3      The tax imposed by this subdivision is imposed on all sales 
  2.4   of pull-tabs and tipboards, except the following:  
  2.5      (1) sales to the governing body of an Indian tribal 
  2.6   organization for use on an Indian reservation; 
  2.7      (2) sales to distributors licensed under the laws of 
  2.8   another state or of a province of Canada, as long as all 
  2.9   statutory and regulatory requirements are met in the other state 
  2.10  or province; 
  2.11     (3) sales of promotional tickets as defined in section 
  2.12  349.12; and 
  2.13     (4) pull-tabs and tipboards sold to by an organization that 
  2.14  sells pull-tabs and tipboards under the exemption from licensing 
  2.15  in section 349.166, subdivision 2.  A distributor shall require 
  2.16  an organization conducting exempt gambling to show proof of its 
  2.17  exempt status before making a tax-exempt sale of pull-tabs or 
  2.18  tipboards to the organization.  A distributor An organization 
  2.19  shall identify, on all reports submitted to the commissioner, 
  2.20  all sales of pull-tabs and tipboards that are exempt from tax 
  2.21  under this subdivision.  
  2.22     (c) A distributor having a liability of $120,000 or more 
  2.23  during a fiscal year ending June 30 must remit all liabilities 
  2.24  in the subsequent calendar year by a funds transfer as defined 
  2.25  in section 336.4A-104, paragraph (a).  The funds transfer 
  2.26  payment date, as defined in section 336.4A-401, must be on or 
  2.27  before the date the tax is due.  If the date the tax is due is 
  2.28  not a funds transfer business day, as defined in section 
  2.29  336.4A-105, paragraph (a), clause (4), the payment date must be 
  2.30  on or before the funds transfer business day next following the 
  2.31  date the tax is due. 
  2.32     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
  2.33  297E.031, subdivision 1, is amended to read: 
  2.34     Subdivision 1.  [APPLICATION AND ISSUANCE.] A distributor 
  2.35  who An organization that sells gambling products pull-tabs and 
  2.36  tipboards under this chapter must file an application with the 
  3.1   commissioner, on a form prescribed by the commissioner, for a 
  3.2   gambling tax permit and identification number.  The 
  3.3   commissioner, when satisfied that the applicant meets all 
  3.4   applicable requirements under this chapter and chapter 349, 
  3.5   shall issue the applicant a permit and number.  A permit is not 
  3.6   assignable and is valid only for the distributor organization in 
  3.7   whose name it is issued. 
  3.8      Sec. 3.  Minnesota Statutes 1994, section 297E.031, 
  3.9   subdivision 2, is amended to read: 
  3.10     Subd. 2.  [SUSPENSION; REVOCATION.] (a) If a distributor an 
  3.11  organization fails to comply with this chapter or a rule of the 
  3.12  commissioner, or if a license issued under chapter 349 is 
  3.13  revoked or suspended, the commissioner, after giving notice, may 
  3.14  for reasonable cause revoke or suspend a permit held by a 
  3.15  distributor an organization.  A notice must be sent to 
  3.16  the distributor organization at least 15 days before the 
  3.17  proposed suspension or revocation is to take effect.  The notice 
  3.18  must give the reason for the proposed suspension or revocation 
  3.19  and must require the distributor organization to show cause why 
  3.20  the proposed action should not be taken.  The notice may be 
  3.21  served personally or by mail.  
  3.22     (b) The notice must inform the distributor organization of 
  3.23  the right to a contested case hearing.  If a request in writing 
  3.24  is made to the commissioner within 14 days of the date of the 
  3.25  notice, the commissioner shall defer action on the suspension or 
  3.26  revocation and shall refer the case to the office of 
  3.27  administrative hearings for the scheduling of a contested case 
  3.28  hearing.  The distributor organization must be served with 20 
  3.29  days' notice in writing specifying the time and place of the 
  3.30  hearing and the allegations against the distributor organization.
  3.31     (c) The commissioner shall issue a final order following 
  3.32  receipt of the recommendation of the administrative law judge.  
  3.33     (d) Under section 271.06, subdivision 1, an appeal to the 
  3.34  tax court may be taken from the commissioner's order of 
  3.35  revocation or suspension.  The commissioner may not issue a new 
  3.36  permit after revocation except upon application accompanied by 
  4.1   reasonable evidence of the intention of the applicant to comply 
  4.2   with all applicable laws and rules.