1.1                          A bill for an act 
  1.2             relating to state government; appropriating money for 
  1.3             the general legislative and administrative expenses of 
  1.4             state government; modifying provisions related to 
  1.5             state government operations; requiring licensure of 
  1.6             certain gambling equipment salespersons; modifying fee 
  1.7             provisions and providing for disposition of various 
  1.8             fees and other revenue; modifying provisions of 
  1.9             various state boards and commissions; appropriating 
  1.10            money; amending Minnesota Statutes 2002, sections 
  1.11            10A.02, by adding subdivisions; 10A.09, subdivision 6, 
  1.12            by adding a subdivision; 10A.31, subdivision 4; 15.50, 
  1.13            subdivision 1; 16A.17, by adding a subdivision; 
  1.14            16A.40; 16E.09, subdivision 1; 197.608; 240.03; 
  1.15            240.10; 240.15, subdivision 6; 240.155, subdivision 1; 
  1.16            240A.03, subdivisions 10, 15; 240A.04; 240A.06, 
  1.17            subdivision 1; 270.052; 270.44; 270.45; 270A.07, 
  1.18            subdivision 1; 349.12, subdivision 25, by adding a 
  1.19            subdivision; 349.151, subdivisions 4, 4b; 349.155, 
  1.20            subdivision 3; 349.16, subdivision 6; 349.161, 
  1.21            subdivisions 1, 4, 5; 349.162, subdivision 1; 349.163, 
  1.22            subdivisions 2, 6; 349.164, subdivision 4; 349.165, 
  1.23            subdivision 3; 349.166, subdivisions 1, 2; 349A.08, 
  1.24            subdivision 5; 474A.21; Laws 1998, chapter 366, 
  1.25            section 80, as amended; proposing coding for new law 
  1.26            in Minnesota Statutes, chapters 10A, 16A; repealing 
  1.27            Minnesota Statutes 2002, section 16A.87; Minnesota 
  1.28            Rules, part 1950.1070. 
  1.29  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.30                             ARTICLE 1 
  1.31                           APPROPRIATIONS 
  1.32  Section 1.  [STATE GOVERNMENT APPROPRIATIONS.] 
  1.33     The sums shown in the columns marked "APPROPRIATIONS" are 
  1.34  appropriated from the general fund, or another named fund, to 
  1.35  the agencies and for the purposes specified in this act, to be 
  1.36  available for the fiscal years indicated for each purpose.  The 
  1.37  figures "2004" and "2005," where used in this act, mean that the 
  2.1   appropriation or appropriations listed under them are available 
  2.2   for the year ending June 30, 2004, or June 30, 2005, 
  2.3   respectively.  The term "first year" means the fiscal year 
  2.4   ending June 30, 2004, and the term "second year" means the 
  2.5   fiscal year ending June 30, 2005. 
  2.6                           SUMMARY BY FUND
  2.7                             2004          2005           TOTAL
  2.8   General            $  264,972,000 $  266,124,000 $  531,096,000
  2.9   Health Care 
  2.10  Access                  1,782,000      1,782,000      3,564,000
  2.11  State Government 
  2.12  Special Revenue         2,012,000      1,991,000      4,003,000
  2.13  Environmental             332,000        248,000        580,000
  2.14  Solid Waste               672,000        672,000      1,344,000
  2.15  Special Revenue         3,002,000      3,002,000      6,004,000
  2.16  Highway User Tax 
  2.17  Distribution            2,097,000      2,097,000      4,194,000
  2.18  Workers' 
  2.19  Compensation            7,286,000      7,349,000     14,635,000
  2.20  TOTAL              $  282,155,000 $  283,265,000 $  565,420,000
  2.21                                             APPROPRIATIONS 
  2.22                                         Available for the Year 
  2.23                                             Ending June 30 
  2.24                                            2004         2005 
  2.25  Sec. 2.  LEGISLATURE 
  2.26  Subdivision 1.  Total 
  2.27  Appropriation                      $ 54,865,000   $ 54,858,000
  2.28                          Summary by Fund
  2.29  General              54,737,000    54,730,000
  2.30  Health Care Access      128,000       128,000
  2.31  The amounts that may be spent from this 
  2.32  appropriation for each program are 
  2.33  specified in the following subdivisions.
  2.34  Subd. 2.  Senate                      18,043,000     18,043,000
  2.35  Subd. 3.  House of
  2.36  Representatives                       24,158,000     24,158,000
  2.37  Subd. 4.  Legislative 
  2.38  Coordinating Commission               12,664,000     12,657,000
  2.39                          Summary by Fund
  2.40  General              12,536,000    12,529,000
  2.41  Health Care Access      128,000       128,000
  2.42  Subd. 5.  Legislative/Other
  3.1   In-Lieu Rent                           7,880,000      7,880,000
  3.2   Sec. 3.  GOVERNOR AND 
  3.3   LIEUTENANT GOVERNOR                    3,586,000      3,586,000
  3.4   This appropriation is to fund the 
  3.5   office of the governor and lieutenant 
  3.6   governor. 
  3.7   $19,000 the first year and $19,000 the 
  3.8   second year are for necessary expenses 
  3.9   in the normal performance of the 
  3.10  governor's and lieutenant governor's 
  3.11  duties for which no other reimbursement 
  3.12  is provided. 
  3.13  Sec. 4.  ATTORNEY GENERAL         24,800,000     24,779,000
  3.14                          Summary by Fund
  3.15  General              22,559,000    22,559,000
  3.16  State Government 
  3.17  Special Revenue       1,612,000     1,591,000
  3.18  Environmental           145,000       145,000
  3.19  Solid Waste             484,000       484,000
  3.20  Sec. 5.  STATE AUDITOR                 8,306,000      8,306,000
  3.21  Sec. 6.  SECRETARY OF STATE            5,912,000      6,032,000
  3.22  Sec. 7.  CAMPAIGN FINANCE AND
  3.23  PUBLIC DISCLOSURE BOARD                  712,000        712,000
  3.24  Sec. 8.  INVESTMENT BOARD              2,167,000      2,167,000
  3.25  Sec. 9.  ADMINISTRATIVE 
  3.26  HEARINGS                               7,186,000      7,249,000
  3.27  This appropriation is from the workers' 
  3.28  compensation fund. 
  3.29  Fee rates charged during fiscal years 
  3.30  2004 and 2005 by the Administrative Law 
  3.31  Division of the Office of 
  3.32  Administrative Hearings must be reduced 
  3.33  by ten percent from fiscal year 2003 
  3.34  levels. 
  3.35  Sec. 10.  OFFICE OF STRATEGIC
  3.36  AND LONG-RANGE PLANNING                3,764,000      3,764,000
  3.37  Sec. 11.  ADMINISTRATION
  3.38  Subdivision 1.  Total 
  3.39  Appropriation                         22,221,000     21,721,000
  3.40  The amounts that may be spent from this 
  3.41  appropriation for each program are 
  3.42  specified in the following subdivisions.
  3.43  Subd. 2.  Operations and Services
  3.44       9,414,000      8,914,000 
  3.45  $500,000 the first year is for onetime 
  3.46  funding of agency relocation expenses. 
  3.47  $262,000 the first year and $262,000 
  4.1   the second year are for administration 
  4.2   of the Capitol Area Architectural and 
  4.3   Planning Board. 
  4.4   Subd. 3.  Office of Technology 
  4.5        2,479,000      2,479,000 
  4.6   Subd. 4.  Public Broadcasting 
  4.7        2,440,000      2,440,000 
  4.8   $1,476,000 the first year and 
  4.9   $1,476,000 the second year are for 
  4.10  public television. 
  4.11  $360,000 the first year and $360,000 
  4.12  the second year are for grants and 
  4.13  contracts with the senate and house of 
  4.14  representatives for public information 
  4.15  television, Internet, Intranet, and 
  4.16  other transmission of legislative 
  4.17  activities.  At least one-half must go 
  4.18  for programming to be broadcast and 
  4.19  transmitted to rural Minnesota. 
  4.20  $18,000 the first year and $18,000 the 
  4.21  second year are for grants to the Twin 
  4.22  Cities regional cable channel. 
  4.23  $332,000 the first year and $332,000 
  4.24  the second year are for grants to 
  4.25  public educational radio stations. 
  4.26  $254,000 the first year and $254,000 
  4.27  the second year are for grants to 
  4.28  Minnesota Public Radio, Inc. 
  4.29  Sec. 12.  FINANCE                     15,216,000     15,216,000 
  4.30  Sec. 13.  EMPLOYEE RELATIONS           6,118,000      6,118,000 
  4.31  Sec. 14.  REVENUE 
  4.32  Subdivision 1.  Total 
  4.33  Appropriation                         90,942,000     92,658,000
  4.34                          Summary by Fund
  4.35  General              86,816,000    88,616,000
  4.36  Health Care Access    1,654,000     1,654,000
  4.37  Highway User 
  4.38  Tax Distribution      2,097,000     2,097,000
  4.39  Environmental           187,000       103,000
  4.40  Solid Waste             188,000       188,000
  4.41  The amounts that may be spent from this 
  4.42  appropriation for each program are 
  4.43  specified in the following subdivisions.
  4.44  Subd. 2.  Tax System Management 
  4.45       77,038,000     78,214,000 
  4.46                          Summary by Fund
  4.47  General              72,912,000    74,212,000
  5.1   Health Care Access    1,654,000     1,654,000
  5.2   Highway User 
  5.3   Tax Distribution      2,097,000     2,097,000
  5.4   Environmental           187,000       103,000
  5.5   Solid Waste             188,000       188,000
  5.6   $938,000 the first year and $2,238,000 
  5.7   the second year are for additional 
  5.8   activities to identify and collect tax 
  5.9   liabilities from individuals and 
  5.10  businesses that currently do not pay 
  5.11  all taxes owed.  This initiative is 
  5.12  expected to result in new general fund 
  5.13  revenues of $32,400,000 for the 
  5.14  biennium ending June 30, 2005. 
  5.15  The department must report to the 
  5.16  chairs of the house ways and means and 
  5.17  senate finance committees by March 1, 
  5.18  2004, and January 15, 2005, on the 
  5.19  following performance indicators: 
  5.20  (1) the number of corporations 
  5.21  noncompliant with the corporate tax 
  5.22  system each year and the percentage and 
  5.23  dollar amounts of valid tax liabilities 
  5.24  collected; 
  5.25  (2) the number of businesses 
  5.26  noncompliant with the sales and use tax 
  5.27  system and the percentage and dollar 
  5.28  amounts of the valid tax liabilities 
  5.29  collected; and 
  5.30  (3) the number of individual 
  5.31  noncompliant cases resolved and the 
  5.32  percentage and dollar amounts of valid 
  5.33  tax liabilities collected. 
  5.34  The reports must also identify base 
  5.35  level expenditures and staff positions 
  5.36  related to compliance and audit 
  5.37  activities, including baseline 
  5.38  information as of January 1, 2002.  The 
  5.39  information must be provided at the 
  5.40  budget activity level. 
  5.41  Subd. 3.  Accounts Receivable 
  5.42  Management 
  5.43      13,904,000     14,404,000 
  5.44  $862,000 the first year and $1,362,000 
  5.45  the second year are for additional 
  5.46  activities to identify and collect tax 
  5.47  liabilities from individuals and 
  5.48  businesses that currently do not pay 
  5.49  all taxes owed. 
  5.50  Sec. 15.  MILITARY AFFAIRS
  5.51  Subdivision 1.  Total 
  5.52  Appropriation                         12,279,000     12,279,000
  5.53  The amounts that may be spent from this 
  5.54  appropriation for each program are 
  5.55  specified in the following subdivisions.
  6.1   Subd. 2.  Maintenance of Training Facilities 
  6.2        5,611,000      5,611,000 
  6.3   Subd. 3.  General Support 
  6.4        1,736,000      1,736,000
  6.5   Subd. 4.  Enlistment Incentives 
  6.6        4,857,000      4,857,000 
  6.7   If appropriations for either year of 
  6.8   the biennium are insufficient, the 
  6.9   appropriation from the other year is 
  6.10  available.  
  6.11  Subd. 5.  Emergency Services 
  6.12          75,000         75,000
  6.13  These appropriations are for expenses 
  6.14  of military forces ordered to active 
  6.15  duty under Minnesota Statutes, chapter 
  6.16  192.  If the appropriation for either 
  6.17  year is insufficient, the appropriation 
  6.18  for the other year is available for it. 
  6.19  Sec. 16.  VETERANS AFFAIRS             4,061,000      4,061,000
  6.20  Up to $88,000 the first year and up to 
  6.21  $88,000 the second year are for grants 
  6.22  to veterans service organizations to be 
  6.23  used in their claim service offices. 
  6.24  Sec. 17.  GAMBLING CONTROL             2,728,000      2,526,000
  6.25                          Summary by Fund
  6.26  General                 202,000        -0-   
  6.27  Special Revenue       2,526,000     2,526,000
  6.28  The general fund appropriation in 
  6.29  fiscal year 2004 is intended to assist 
  6.30  with the transition to fee-based 
  6.31  funding.  The commissioner of finance 
  6.32  must approve the use of this onetime 
  6.33  appropriation and may require that it 
  6.34  be reimbursed to the general fund if 
  6.35  sufficient resources are available in 
  6.36  the special revenue fund. 
  6.37  The special revenue fund appropriation 
  6.38  is made from the lawful gambling 
  6.39  regulation account. 
  6.40  Sec. 18.  RACING COMMISSION              580,000        476,000 
  6.41                          Summary by Fund
  6.42  General                 104,000        -0-   
  6.43  Special Revenue         476,000       476,000
  6.44  The general fund appropriation in 
  6.45  fiscal year 2004 is intended to assist 
  6.46  with the transition to fee-based 
  6.47  funding.  The commissioner of finance 
  6.48  must approve the use of this onetime 
  6.49  appropriation and may require that it 
  7.1   be reimbursed to the general fund if 
  7.2   sufficient resources are available in 
  7.3   the special revenue fund. 
  7.4   The special revenue fund appropriation 
  7.5   is made from the racing and card 
  7.6   playing regulation account. 
  7.7   Sec. 19.  TORT CLAIMS                    161,000        161,000 
  7.8   To be spent by the commissioner of 
  7.9   finance. 
  7.10  If the appropriation for either year is 
  7.11  insufficient, the appropriation for the 
  7.12  other year is available for it. 
  7.13  Sec. 20.  MINNESOTA STATE 
  7.14  RETIREMENT SYSTEM                      5,269,000      5,314,000
  7.15  The amounts estimated to be needed for 
  7.16  each program are as follows: 
  7.17  (a) Legislators 
  7.18       5,011,000      5,043,000 
  7.19  (b) Constitutional Officers 
  7.20         258,000        271,000
  7.21  Sec. 21.  POLICE AND FIRE 
  7.22  AMORTIZATION AID                       5,257,000      5,257,000
  7.23  $4,050,000 the first year and 
  7.24  $4,050,000 the second year are to the 
  7.25  commissioner of revenue for state aid 
  7.26  to amortize the unfounded liability of 
  7.27  local police and salaried firefighters 
  7.28  relief associations under Minnesota 
  7.29  Statutes, section 423A.02. 
  7.30  $750,000 the first year and $750,000 
  7.31  the second year are to the commissioner 
  7.32  of revenue for supplemental state aid 
  7.33  to amortize the unfounded liability of 
  7.34  local police and salaried firefighters 
  7.35  relief associations under Minnesota 
  7.36  Statutes, section 423A.02, subdivision 
  7.37  1a. 
  7.38  $457,000 the first year and $457,000 
  7.39  the second year are to the commissioner 
  7.40  of revenue to pay reimbursements to 
  7.41  relief associations for firefighter 
  7.42  supplemental benefits paid under 
  7.43  Minnesota Statutes, section 424A.10. 
  7.44  Sec. 22.  AMATEUR SPORTS 
  7.45  COMMISSION                               525,000        525,000
  7.46  The appropriations in this section may 
  7.47  only be spent up to the amount of 
  7.48  offsetting fee revenue generated by the 
  7.49  commission under Minnesota Statutes, 
  7.50  section 240A.03. 
  7.51  Sec. 23.  GENERAL CONTINGENT
  7.52  ACCOUNTS                               5,500,000      5,500,000
  7.53                Summary by Fund
  8.1   General               5,000,000     5,000,000
  8.2   State Government 
  8.3   Special Revenue         400,000       400,000
  8.4   Workers' 
  8.5   Compensation            100,000       100,000
  8.6   The appropriations in this section may 
  8.7   only be spent with the approval of the 
  8.8   governor in accordance with the rules 
  8.9   of the legislative advisory commission 
  8.10  pursuant to Minnesota Statutes, section 
  8.11  3.30. 
  8.12  If an appropriation in this section for 
  8.13  either year is insufficient, the 
  8.14  appropriation for the other year is 
  8.15  available for it. 
  8.16     Sec. 24.  [EFFECTIVE DATE.] 
  8.17     Sections 1 to 22 are effective July 1, 2003.  Section 23 is 
  8.18  effective the day following final enactment. 
  8.19                             ARTICLE 2 
  8.20                    STATE GOVERNMENT OPERATIONS 
  8.21     Section 1.  Minnesota Statutes 2002, section 10A.02, is 
  8.22  amended by adding a subdivision to read: 
  8.23     Subd. 15.  [DISPOSITION OF FEES.] The board must deposit 
  8.24  all fees collected under this chapter into the general fund in 
  8.25  the state treasury. 
  8.26     Sec. 2.  Minnesota Statutes 2002, section 10A.02, is 
  8.27  amended by adding a subdivision to read: 
  8.28     Subd. 16.  [PROPOSED FEE CHANGES.] As part of its 
  8.29  submission of its biennial budget request, the board must 
  8.30  propose changes to the fees required in this chapter that will 
  8.31  be sufficient to recover the direct appropriation to the board.  
  8.32  The board must include in its recovery calculation seven percent 
  8.33  of the amounts designated by individuals for the state elections 
  8.34  campaign fund under section 10A.31, subdivision 4. 
  8.35     Sec. 3.  [10A.045] [LOBBYIST AND PRINCIPAL REPORT FEES.] 
  8.36     Subdivision 1.  [PURPOSE.] The purpose of this section is 
  8.37  to pay for the cost of administering sections 10A.03 to 10A.06 
  8.38  with fees collected from lobbyists to be used only for that 
  8.39  purpose. 
  8.40     Subd. 2.  [FEE; USE; PROHIBITION.] Each lobbyist and 
  8.41  principal must pay a biennial fee of $225 by January 15 of every 
  9.1   odd-numbered year.  The fees collected under this section must 
  9.2   not be more than the amount necessary to administer the lobbyist 
  9.3   registration and regulation provisions of this chapter.  A 
  9.4   person who has not paid the fee required by this section is 
  9.5   prohibited from acting as a lobbyist. 
  9.6      Sec. 4.  Minnesota Statutes 2002, section 10A.09, 
  9.7   subdivision 6, is amended to read: 
  9.8      Subd. 6.  [SUPPLEMENTARY STATEMENT.] Each individual who is 
  9.9   required to file a statement of economic interest must file a 
  9.10  supplementary statement on April 15 of each year that the 
  9.11  individual remains in office if information on the most recently 
  9.12  filed statement has changed.  The supplementary statement, if 
  9.13  required, must include the amount of each honorarium in excess 
  9.14  of $50 received since the previous statement and the name and 
  9.15  address of the source of the honorarium.  The board must 
  9.16  maintain a statement of economic interest submitted by an 
  9.17  officeholder in the same file with the statement submitted as a 
  9.18  candidate. 
  9.19     Sec. 5.  Minnesota Statutes 2002, section 10A.09, is 
  9.20  amended by adding a subdivision to read: 
  9.21     Subd. 9.  [FILING FEE.] A public official required to file 
  9.22  a statement of economic interest or an annual supplementary 
  9.23  statement with the board under this section must accompany the 
  9.24  statement with a $60 filing fee. 
  9.25     Sec. 6.  [10A.145] [REGISTRATION FEES.] 
  9.26     Subdivision 1.  [REQUIREMENT.] (a) Each principal campaign 
  9.27  committee must pay to the board a registration fee when it 
  9.28  originally registers with the board and each time a nonjudicial 
  9.29  candidate for whom a committee is registered files for office.  
  9.30  The office with which the candidate files must collect the fee 
  9.31  when the candidate files and must deposit it into the general 
  9.32  fund in the state treasury. 
  9.33     (b) Each political committee, political fund, and party 
  9.34  unit must pay a registration fee to the board when it originally 
  9.35  registers with the board and by January 31 of each odd-numbered 
  9.36  year thereafter. 
 10.1      Subd. 2.  [AMOUNT OF FEE.] The registration fees are as 
 10.2   follows: 
 10.3      (1) principal campaign committee for candidate for 
 10.4   nonjudicial statewide office, $1,000; 
 10.5      (2) principal campaign committee for candidate for state 
 10.6   senate, $500; 
 10.7      (3) principal campaign committee for candidate for state 
 10.8   house of representatives, $350; 
 10.9      (4) principal campaign committee for judicial candidate, 
 10.10  $250; 
 10.11     (5) political committee or political fund, two percent of 
 10.12  total expenditures, disbursements, and contributions made during 
 10.13  the prior two years; and 
 10.14     (6) party unit, one percent of total expenditures, 
 10.15  disbursements, and contributions made during the prior two years.
 10.16     Subd. 3.  [PROHIBITION.] A political committee, political 
 10.17  fund, or party unit may not accept a contribution or make an 
 10.18  expenditure, disbursement, or contribution unless the fee 
 10.19  required by this section has been paid. 
 10.20     Subd. 4.  [TRANSITION.] Lobbyists, principals, principal 
 10.21  campaign committees, political committees, political funds, and 
 10.22  party units that are registered on the effective date of this 
 10.23  section must pay the fee for initial registration required by 
 10.24  this section or section 10A.045 within 60 days after the 
 10.25  effective date of this section.  This subdivision expires August 
 10.26  1, 2004. 
 10.27     Sec. 7.  Minnesota Statutes 2002, section 10A.31, 
 10.28  subdivision 4, is amended to read: 
 10.29     Subd. 4.  [APPROPRIATION.] (a) The amounts designated by 
 10.30  individuals for the state elections campaign fund, less three 
 10.31  ten percent, are appropriated from the general fund, must be 
 10.32  transferred and credited to the appropriate account in the state 
 10.33  elections campaign fund, and are annually appropriated for 
 10.34  distribution as set forth in subdivisions 5, 5a, 6, and 7.  The 
 10.35  remaining three ten percent must be kept in the general fund for 
 10.36  administrative costs.  
 11.1      (b) In addition to the amounts in paragraph (a), $1,500,000 
 11.2   for each general election is appropriated from the general fund 
 11.3   for transfer to the general account of the state elections 
 11.4   campaign fund. 
 11.5      Sec. 8.  Minnesota Statutes 2002, section 15.50, 
 11.6   subdivision 1, is amended to read: 
 11.7      Subdivision 1.  [PURPOSE, MEMBERS, OFFICERS.] (a) The 
 11.8   legislature finds that the purposes of the board are to (1) 
 11.9   preserve and enhance the dignity, beauty and architectural 
 11.10  integrity of the capitol, the buildings immediately adjacent to 
 11.11  it, the capitol grounds, and the capitol area; (2) protect, 
 11.12  enhance, and increase the open spaces within the capitol area 
 11.13  when deemed necessary and desirable for the improvement of the 
 11.14  public enjoyment thereof; (3) develop proper approaches to the 
 11.15  capitol area for pedestrian movement, the highway system, and 
 11.16  mass transit system so that the area achieves its maximum 
 11.17  importance and accessibility; and (4) establish a flexible 
 11.18  framework for growth of the capitol buildings which will be in 
 11.19  keeping with the spirit of the original design. 
 11.20     (b) The capitol area architectural and planning board, 
 11.21  herein referred to as the board, is established within the 
 11.22  department of administration.  The board consists of ten 
 11.23  members.  The lieutenant governor shall be a member of the 
 11.24  board.  Four members shall be appointed by the governor; three 
 11.25  members, one of whom shall be a resident of the district 
 11.26  planning council area containing the capitol area, shall be 
 11.27  appointed by the mayor of the city of Saint Paul, with the 
 11.28  advice and consent of the city council.  The speaker of the 
 11.29  house shall appoint a member of the house of representatives and 
 11.30  the president of the senate shall appoint one senator to be 
 11.31  members of the board.  Each person appointed to the board shall 
 11.32  qualify by taking the oath of office. 
 11.33     (c) The lieutenant governor is the chair of the board.  The 
 11.34  attorney general is the legal advisor to the board.  The board 
 11.35  may elect a vice-chair who may preside at meetings in the 
 11.36  absence of the lieutenant governor and such other officers as it 
 12.1   may deem necessary to carry out its duties. 
 12.2      (d) The commissioner of administration, after consulting 
 12.3   with the board, shall select appoint an executive secretary to 
 12.4   serve the board.  It The commissioner may employ such other 
 12.5   officers and employees as it the commissioner may deem 
 12.6   necessary, all of whom shall be in the classified service of the 
 12.7   state civil service.  The board may contract for professional 
 12.8   and other similar service on such terms as it may deem 
 12.9   desirable.  The commissioner must provide administrative support 
 12.10  to the board. 
 12.11     Sec. 9.  [16A.351] [PAYMENT OF GRANT FUNDS.] 
 12.12     Grant funds must not be paid more frequently than on a 
 12.13  quarterly basis.  Each payment must not exceed 25 percent of the 
 12.14  total grant award, unless the grant agreement specifies that 
 12.15  payment will be based on reimbursement of actual expenditures 
 12.16  incurred by the grantee. 
 12.17     <b>[EFFECTIVE DATE.]</b> This section is effective for grant 
 12.18  agreements signed July 1, 2003, and later. 
 12.19     Sec. 10.  Minnesota Statutes 2002, section 16A.17, is 
 12.20  amended by adding a subdivision to read: 
 12.21     Subd. 10.  [DIRECT DEPOSIT.] Notwithstanding section 
 12.22  177.23, the commissioner may require direct deposit for all 
 12.23  state employees that are being paid by the state payroll system. 
 12.24     Sec. 11.  Minnesota Statutes 2002, section 16A.40, is 
 12.25  amended to read: 
 12.26     16A.40 [WARRANTS AND ELECTRONIC FUND TRANSFERS.] 
 12.27     Money must not be paid out of the state treasury except 
 12.28  upon the warrant of the commissioner or an electronic fund 
 12.29  transfer approved by the commissioner.  Warrants must be drawn 
 12.30  on printed blanks that are in numerical order.  The commissioner 
 12.31  shall enter, in numerical order in a warrant register, the 
 12.32  number, amount, date, and payee for every warrant issued. 
 12.33     The commissioner may require payees receiving more than ten 
 12.34  payments or $10,000 per year must to supply the commissioner 
 12.35  with their bank routing information to enable the payments to be 
 12.36  made through an electronic fund transfer. 
 13.1      Sec. 12.  Minnesota Statutes 2002, section 16E.09, 
 13.2   subdivision 1, is amended to read: 
 13.3      Subdivision 1.  [FUND ESTABLISHED.] A technology enterprise 
 13.4   fund is established.  Money deposited in the fund is 
 13.5   appropriated to the commissioner of administration for the 
 13.6   purpose of funding technology projects among government entities 
 13.7   that promote cooperation, innovation, and shared use of 
 13.8   technology and technology standards, and electronic government 
 13.9   services.  Savings generated by information technology and 
 13.10  communications projects or purchases, including rebates, 
 13.11  refunds, discounts, or other savings generated from aggregated 
 13.12  purchases of software, services, or technology products, may be 
 13.13  deposited in the fund upon agreement by the commissioner of 
 13.14  administration and the executive of the government entity 
 13.15  generating the funds.  The commissioner of administration may 
 13.16  apply for and accept grants, contributions, or other gifts from 
 13.17  the federal government and other public or private sources for 
 13.18  deposit into the fund.  The commissioner may accept paid 
 13.19  advertising for departmental publications, media productions, 
 13.20  state Web pages, and other informational materials.  Unless 
 13.21  otherwise provided in statute, advertising revenues received 
 13.22  shall first be used to defray costs associated with production 
 13.23  and promotion of advertising activities and the remaining 
 13.24  balance shall be deposited into the fund.  The commissioner may 
 13.25  not accept paid advertising from an elected official or 
 13.26  candidate for elected office.  The transfer of funds between 
 13.27  state agencies is subject to the approval of the commissioner of 
 13.28  finance.  The commissioner of finance shall notify the chairs of 
 13.29  the committees funding the affected state agencies of the 
 13.30  transfers.  Funds are available until June 30, 2005. 
 13.31     Sec. 13.  Minnesota Statutes 2002, section 197.608, is 
 13.32  amended to read: 
 13.33     197.608 [VETERANS SERVICE OFFICE GRANT PROGRAM.] 
 13.34     Subdivision 1.  [GRANT PROGRAM.] A veterans service office 
 13.35  grant program is established to be administered by the 
 13.36  commissioner of veterans affairs consisting of grants to 
 14.1   counties to enable them to enhance the effectiveness of their 
 14.2   veterans service offices. 
 14.3      Subd. 2.  [RULE DEVELOPMENT.] The commissioner of veterans 
 14.4   affairs shall consult with the Minnesota association of county 
 14.5   veterans service officers in formulating rules to implement the 
 14.6   grant program.  
 14.7      Subd. 2a.  [GRANT CYCLE.] Counties may become eligible to 
 14.8   receive grants on a three-year rotating basis according to a 
 14.9   schedule to be developed and announced in advance by the 
 14.10  commissioner.  The schedule must list no more than one-third of 
 14.11  the counties in each year of the three-year cycle.  A county may 
 14.12  be considered for a grant only in the year of its listing in the 
 14.13  schedule. 
 14.14     Subd. 3.  [ELIGIBILITY.] (a) To be eligible for a grant 
 14.15  under this program, a county must:  
 14.16     (1) employ a county veterans service officer as authorized 
 14.17  by sections 197.60 and 197.606, who is certified to serve in 
 14.18  this position by the commissioner of veterans affairs;. 
 14.19     (2) submit a written plan for the proposed expenditures to 
 14.20  enhance the functioning of the county veterans service office in 
 14.21  accordance with the program rules; and 
 14.22     (3) apply for the grant according to procedures to be 
 14.23  established for this program by the commissioner and receive 
 14.24  written approval from the commissioner for the grant in advance 
 14.25  of making the proposed expenditures. 
 14.26     (b) A county that employs a newly hired county veterans 
 14.27  service officer who is serving an initial probationary period 
 14.28  and who has not been certified by the commissioner is eligible 
 14.29  to receive a grant under subdivision 2a. 
 14.30     (c) Except for the situation described in paragraph (b), a 
 14.31  county whose veterans service officer does not receive 
 14.32  certification during any year of the three-year cycle is not 
 14.33  eligible to receive a grant during the remainder of that cycle 
 14.34  or the next three-year cycle. 
 14.35     Subd. 4.  [GRANT APPLICATION PROCESS.] (a) A grant 
 14.36  application must be submitted to the department of veterans 
 15.1   affairs according to procedures to be established by the 
 15.2   commissioner.  The grant application must include a specific 
 15.3   description of the plan for enhancing the operation of the 
 15.4   county veterans service office. The commissioner shall determine 
 15.5   the process for awarding grants.  A grant may be used only for 
 15.6   the purpose of enhancing the operations of the county veterans 
 15.7   service office. 
 15.8      (b) The commissioner shall provide a list of qualifying 
 15.9   uses for grant expenditures as developed in subdivision 5 and 
 15.10  shall approve a grant application only if it meets the criteria 
 15.11  for eligibility as established and announced by the commissioner 
 15.12  for a qualifying use and if there are sufficient funds remaining 
 15.13  in the grant program to cover the full amount of the grant.  The 
 15.14  commissioner may request modification of a plan.  If the 
 15.15  commissioner rejects a grant application, written reasons for 
 15.16  the rejection must be provided to the applicant county and the 
 15.17  county may modify the application and resubmit it. 
 15.18     Subd. 5.  [QUALIFYING USES.] The commissioner of veterans 
 15.19  affairs shall determine whether the plan specified in the grant 
 15.20  application will enable the applicant county to enhance the 
 15.21  effectiveness of its county veterans office. 
 15.22     Notwithstanding subdivision 3, clause (1), a county may 
 15.23  apply for and use a grant for the training and education 
 15.24  required by the commissioner for a newly employed county 
 15.25  veterans service officer's certificate, or for the continuing 
 15.26  education of other staff consult with the Minnesota association 
 15.27  of county veterans service officers in developing a list of 
 15.28  qualifying uses for grants awarded under this program. 
 15.29     Subd. 6.  [GRANT AMOUNT.] The amount of each grant must be 
 15.30  determined by the commissioner of veterans affairs, and may not 
 15.31  exceed the lesser of: 
 15.32     (1) the amount specified in the grant application to be 
 15.33  expended on the plan for enhancing the effectiveness of the 
 15.34  county veterans service office; or 
 15.35     (2) the county's share of the total funds available under 
 15.36  the program, determined in the following manner: 
 16.1      (i) $1,400, if the county's veteran population is less than 
 16.2   1,000, the county's grant share shall be $2,000; 
 16.3      (ii) $2,800, if the county's veteran population is 1,000 or 
 16.4   more but less than 3,000, the county's grant share shall be 
 16.5   $4,000; 
 16.6      (iii) $4,200, if the county's veteran population is 3,000 
 16.7   or more but less then 10,000, the county's grant share shall be 
 16.8   $6,000; or 
 16.9      (iv) $5,600, if the county's veteran population is 10,000 
 16.10  or more, the county's grant share shall be $8,000. 
 16.11     In any year, only one-half of the counties in each of the 
 16.12  four veteran population categories (i) to (iv) may be awarded 
 16.13  grants.  Grants shall be awarded on a first-come first-served 
 16.14  basis to counties submitting applications which meet the 
 16.15  commissioner's criteria as established in the rules.  Any county 
 16.16  not receiving a grant in any given year shall receive priority 
 16.17  consideration for a grant the following year.  
 16.18     In any year, after a period of time to be determined by the 
 16.19  commissioner, any amounts remaining from undistributed county 
 16.20  grant shares may be reallocated to the other counties which have 
 16.21  submitted qualifying application. 
 16.22     The veteran population of each county shall be determined 
 16.23  by the figure supplied by the United States Department of 
 16.24  Veterans Affairs, as adopted by the commissioner. 
 16.25     Subd. 7.  [RECAPTURE.] If a county fails to use the grant 
 16.26  for the qualified use approved by the commissioner, the 
 16.27  commissioner shall seek recovery of the grant from the county 
 16.28  and the county must repay the grant amount. 
 16.29     Sec. 14.  Minnesota Statutes 2002, section 240.03, is 
 16.30  amended to read: 
 16.31     240.03 [COMMISSION POWERS AND DUTIES.] 
 16.32     The commission has the following powers and duties:  
 16.33     (1) to regulate horse racing in Minnesota to ensure that it 
 16.34  is conducted in the public interest; 
 16.35     (2) to issue licenses as provided in this chapter; 
 16.36     (3) to enforce all laws and rules governing horse racing; 
 17.1      (4) to collect and distribute all taxes provided for in 
 17.2   this chapter; 
 17.3      (5) to conduct necessary investigations and inquiries and 
 17.4   compel the submission of information, documents, and records it 
 17.5   deems necessary to carry out its duties; 
 17.6      (6) to supervise the conduct of pari-mutuel betting on 
 17.7   horse racing; 
 17.8      (7) to employ and supervise personnel under this chapter; 
 17.9      (8) to determine the number of racing days to be held in 
 17.10  the state and at each licensed racetrack; and 
 17.11     (9) to take all necessary steps to ensure the integrity of 
 17.12  racing in Minnesota.; and 
 17.13     (10) to impose fees on the racing and card playing 
 17.14  industries sufficient to recover the operating costs of the 
 17.15  commission with the approval of the legislature according to 
 17.16  section 16A.1283.  Notwithstanding section 16A.1283, when the 
 17.17  legislature is not in session, the commissioner of finance may 
 17.18  grant interim approval for any new fees or adjustments to 
 17.19  existing fees that are not statutorily specified, until such 
 17.20  time as the legislature reconvenes and acts upon the new fees or 
 17.21  adjustments.  As part of its biennial budget request, the 
 17.22  commission must propose changes to its fees that will be 
 17.23  sufficient to recover the operating costs of the commission.  
 17.24     Sec. 15.  Minnesota Statutes 2002, section 240.10, is 
 17.25  amended to read: 
 17.26     240.10 [LICENSE FEES.] 
 17.27     The fee for a class A license is $10,000 per year.  The fee 
 17.28  for a class B license is $100 for each assigned racing day on 
 17.29  which racing is actually conducted, and $50 for each day on 
 17.30  which simulcasting is authorized and actually takes place, plus 
 17.31  $10,000 per year if the class B license includes authorization 
 17.32  to operate a card club.  The fee for a class D license is $50 
 17.33  for each assigned racing day on which racing is actually 
 17.34  conducted.  Fees imposed on class B and class D licenses must be 
 17.35  paid to the commission at a time and in a manner as provided by 
 17.36  rule of the commission.  
 18.1      The commission shall by rule establish an annual license 
 18.2   fee for each occupation it licenses under section 240.08 but no 
 18.3   annual fee for a class C license may exceed $100.  
 18.4      License fee payments received must be paid by the 
 18.5   commission to the state treasurer for deposit in the general 
 18.6   fund. 
 18.7      Sec. 16.  Minnesota Statutes 2002, section 240.15, 
 18.8   subdivision 6, is amended to read: 
 18.9      Subd. 6.  [DISPOSITION OF PROCEEDS; ACCOUNT.] The 
 18.10  commission shall distribute all money received under this 
 18.11  section, and all money received from license fees and fines it 
 18.12  collects, as follows: according to this subdivision.  All money 
 18.13  designated for deposit in the Minnesota breeders fund must be 
 18.14  paid into that fund for distribution under section 240.18 except 
 18.15  that all money generated by full racing card simulcasts must be 
 18.16  distributed as provided in section 240.18, subdivisions 2, 
 18.17  paragraph (d), clauses (1), (2), and (3); and 3.  Revenue from 
 18.18  an admissions tax imposed under subdivision 1 must be paid to 
 18.19  the local unit of government at whose request it was imposed, at 
 18.20  times and in a manner the commission determines.  All other 
 18.21  revenues Taxes received under this section by the commission, 
 18.22  and all license fees, fines, and other revenue it receives, and 
 18.23  fines collected under section 240.22 must be paid to the state 
 18.24  treasurer for deposit in the general fund.  All revenues from 
 18.25  licenses and other fees imposed by the commission must be 
 18.26  deposited in the state treasury and credited to a racing and 
 18.27  card playing regulation account in the special revenue fund.  
 18.28  Receipts in this account are available for the operations of the 
 18.29  commission up to the amount authorized in biennial 
 18.30  appropriations from the legislature. 
 18.31     Sec. 17.  Minnesota Statutes 2002, section 240.155, 
 18.32  subdivision 1, is amended to read: 
 18.33     Subdivision 1.  [REIMBURSEMENT ACCOUNT CREDIT.] Money 
 18.34  received by the commission as reimbursement for the costs of 
 18.35  services provided by assistant veterinarians, stewards, and 
 18.36  medical testing of horses must be deposited in the state 
 19.1   treasury and credited to a racing reimbursement account, except 
 19.2   as provided under subdivision 2.  Receipts are appropriated to 
 19.3   the commission to pay the costs of providing the services. 
 19.4      Sec. 18.  Minnesota Statutes 2002, section 240A.03, 
 19.5   subdivision 10, is amended to read: 
 19.6      Subd. 10.  [USE AGREEMENTS AND FEES.] The commission may 
 19.7   lease, license, or enter into agreements and may fix, alter, 
 19.8   charge, and collect rentals, fees, and charges to persons for 
 19.9   the use, occupation, and availability of part or all of any 
 19.10  premises, property, or facilities under its ownership, 
 19.11  operation, or control.  Fees charged by the commission are not 
 19.12  subject to section 16A.1285.  The commission may also impose 
 19.13  other fees it deems appropriate with the approval of the 
 19.14  legislature according to section 16A.1283.  Notwithstanding 
 19.15  section 16A.1283, when the legislature is not in session, the 
 19.16  commissioner of finance may grant interim approval of the fees, 
 19.17  until such time as the legislature reconvenes and acts upon the 
 19.18  fees.  Revenues generated by the commission under this section 
 19.19  must be sufficient to offset the biennial appropriations it 
 19.20  receives from the legislature and must be deposited to the state 
 19.21  treasury and credited to the general fund.  A use agreement may 
 19.22  provide that the other contracting party has exclusive use of 
 19.23  the premises at the times agreed upon.  As part of its biennial 
 19.24  budget request, the commission must propose changes to its fees 
 19.25  that will be sufficient to recover the direct appropriation to 
 19.26  the commission. 
 19.27     Sec. 19.  Minnesota Statutes 2002, section 240A.03, 
 19.28  subdivision 15, is amended to read: 
 19.29     Subd. 15.  [ADVERTISING.] The commission may accept paid 
 19.30  advertising in its publications.  Funds received from 
 19.31  advertising are annually appropriated to the commission for its 
 19.32  publications.  The commission must annually report the amount of 
 19.33  funds received under this subdivision to the chair of the house 
 19.34  of representatives ways and means and senate finance 
 19.35  committees must be deposited to the state treasury and credited 
 19.36  to the general fund. 
 20.1      Sec. 20.  Minnesota Statutes 2002, section 240A.04, is 
 20.2   amended to read: 
 20.3      240A.04 [PROMOTION AND DEVELOPMENT OF AMATEUR SPORTS.] 
 20.4      In addition to the powers and duties granted under section 
 20.5   240A.03, the commission shall may:  
 20.6      (1) promote the development of olympic training centers; 
 20.7      (2) promote physical fitness by promoting participation in 
 20.8   sports; 
 20.9      (3) develop, foster, and coordinate physical fitness 
 20.10  services and programs; 
 20.11     (4) sponsor amateur sport workshops, clinics, and 
 20.12  conferences; 
 20.13     (5) provide recognition for outstanding developments, 
 20.14  achievements, and contributions to amateur sports; 
 20.15     (6) stimulate and promote amateur sport research; 
 20.16     (7) collect, disseminate, and communicate amateur sport 
 20.17  information; 
 20.18     (8) promote amateur sport and physical fitness programs in 
 20.19  schools and local communities; 
 20.20     (9) develop programs to promote personal health and 
 20.21  physical fitness by participation in amateur sports in 
 20.22  cooperation with medical, dental, sports medicine, and similar 
 20.23  professional societies; 
 20.24     (10) promote the development of recreational amateur sport 
 20.25  opportunities and activities in the state, including the means 
 20.26  of facilitating acquisition, financing, construction, and 
 20.27  rehabilitation of sports facilities for the holding of amateur 
 20.28  sporting events; 
 20.29     (11) promote national and international amateur sport 
 20.30  competitions and events; 
 20.31     (12) sanction or sponsor amateur sport competition; 
 20.32     (13) take membership in regional or national amateur sports 
 20.33  associations or organizations; and 
 20.34     (14) promote the mainstreaming and normalization of people 
 20.35  with physical disabilities and visual and hearing impairments in 
 20.36  amateur sports. 
 21.1      Sec. 21.  Minnesota Statutes 2002, section 240A.06, 
 21.2   subdivision 1, is amended to read: 
 21.3      Subdivision 1.  [SPONSORSHIP REQUIRED.] The commission 
 21.4   shall may sponsor and sanction a series of statewide amateur 
 21.5   athletic games patterned after the winter and summer Olympic 
 21.6   Games, with variations as required by facilities, equipment, and 
 21.7   expertise, and as necessary to include people with physical 
 21.8   disabilities and visual and hearing impairments.  The games may 
 21.9   be held annually beginning in 1989, if money and facilities are 
 21.10  available, unless the time of the games would conflict with 
 21.11  other sporting events as the commission determines.  
 21.12     Sec. 22.  Minnesota Statutes 2002, section 270.052, is 
 21.13  amended to read: 
 21.14     270.052 [AGREEMENT WITH INTERNAL REVENUE SERVICE.] 
 21.15     Pursuant to section 270B.12, the commissioner may enter 
 21.16  into an agreement with the Internal Revenue Service to identify 
 21.17  taxpayers who have refunds due from the department of revenue 
 21.18  and liabilities owing to the Internal Revenue Service.  In 
 21.19  accordance with the procedures established in the agreement, the 
 21.20  Internal Revenue Service may levy against the refunds to be paid 
 21.21  by the department of revenue.  For each refund levied upon, the 
 21.22  commissioner shall first deduct from the refund a fee of $20, 
 21.23  and then remit the refund or the amount of the levy, whichever 
 21.24  is less, to the Internal Revenue Service.  The proceeds of fees 
 21.25  shall be deposited into the department of revenue recapture 
 21.26  revolving fund under section 270A.07, subdivision 1. 
 21.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 21.28  following final enactment. 
 21.29     Sec. 23.  Minnesota Statutes 2002, section 270.44, is 
 21.30  amended to read: 
 21.31     270.44 [CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.] 
 21.32     The board may establish reasonable fees or charges for 
 21.33  courses, examinations or materials, the proceeds of which shall 
 21.34  be used to finance the activities and operation of the board. 
 21.35     The board shall charge the following fees: 
 21.36     (1) $105 for a senior accredited Minnesota assessor 
 22.1   license; 
 22.2      (2) $80 for an accredited Minnesota assessor license; 
 22.3      (3) $65 for a certified Minnesota assessor specialist 
 22.4   license; 
 22.5      (4) $55 for a certified Minnesota assessor license; 
 22.6      (5) $50 for a course challenge examination; 
 22.7      (6) $35 for grading a form appraisal; 
 22.8      (7) $60 for grading a narrative appraisal; 
 22.9      (8) $30 for a reinstatement fee; 
 22.10     (9) $25 for a record retention fee; 
 22.11     (10) $20 for an educational transcript; and 
 22.12     (11) $30 for all retests of board-sponsored educational 
 22.13  courses.  
 22.14     <b>[EFFECTIVE DATE.]</b> This section is effective for license 
 22.15  terms beginning on or after July 1, 2004, and for all other fees 
 22.16  imposed on or after July 1, 2004. 
 22.17     Sec. 24.  Minnesota Statutes 2002, section 270.45, is 
 22.18  amended to read: 
 22.19     270.45 [DISPOSITION OF FEES.] 
 22.20     Notwithstanding section 214.06, all fees so established and 
 22.21  collected shall be paid to deposited in the state treasurer for 
 22.22  deposit in the general fund treasury and credited to the state 
 22.23  board of assessor's fund.  The expenses of carrying out the 
 22.24  provisions of sections 270.41 to 270.53 shall be paid from 
 22.25  appropriations made to the board of assessors.  Money in the 
 22.26  fund is appropriated to the commissioner of revenue to 
 22.27  administer sections 270.41 to 270.53. 
 22.28     <b>[EFFECTIVE DATE.]</b> This section is effective for fees 
 22.29  imposed on July 1, 2003, and thereafter. 
 22.30     Sec. 25.  Minnesota Statutes 2002, section 270A.07, 
 22.31  subdivision 1, is amended to read: 
 22.32     Subdivision 1.  [NOTIFICATION REQUIREMENT.] Any claimant 
 22.33  agency, seeking collection of a debt through setoff against a 
 22.34  refund due, shall submit to the commissioner information 
 22.35  indicating the amount of each debt and information identifying 
 22.36  the debtor, as required by section 270A.04, subdivision 3.  
 23.1      For each setoff of a debt against a refund due, the 
 23.2   commissioner shall charge a fee of $10 $15.  The proceeds of 
 23.3   fees shall be allocated by depositing $2.55 $4 of each $10 $15 
 23.4   fee collected into a department of revenue recapture revolving 
 23.5   fund and depositing the remaining balance into the general 
 23.6   fund.  The sums deposited into the revolving fund are 
 23.7   appropriated to the commissioner for the purpose of 
 23.8   administering the Revenue Recapture Act. 
 23.9      The claimant agency shall notify the commissioner when a 
 23.10  debt has been satisfied or reduced by at least $200 within 30 
 23.11  days after satisfaction or reduction. 
 23.12     <b>[EFFECTIVE DATE.]</b> This section is effective for refund 
 23.13  setoffs after June 30, 2003. 
 23.14     Sec. 26.  Minnesota Statutes 2002, section 349.12, is 
 23.15  amended by adding a subdivision to read: 
 23.16     Subd. 11a.  [DISTRIBUTOR SALESPERSON.] "Distributor 
 23.17  salesperson" means a person who in any manner receives orders 
 23.18  for gambling equipment or who solicits a licensed, exempt, or 
 23.19  excluded organization to purchase gambling equipment from a 
 23.20  licensed distributor. 
 23.21     Sec. 27.  Minnesota Statutes 2002, section 349.12, 
 23.22  subdivision 25, is amended to read: 
 23.23     Subd. 25.  [LAWFUL PURPOSE.] (a) "Lawful purpose" means one 
 23.24  or more of the following:  
 23.25     (1) any expenditure by or contribution to a 501(c)(3) or 
 23.26  festival organization, as defined in subdivision 15a, provided 
 23.27  that the organization and expenditure or contribution are in 
 23.28  conformity with standards prescribed by the board under section 
 23.29  349.154, which standards must apply to both types of 
 23.30  organizations in the same manner and to the same extent; 
 23.31     (2) a contribution to an individual or family suffering 
 23.32  from poverty, homelessness, or physical or mental disability, 
 23.33  which is used to relieve the effects of that poverty, 
 23.34  homelessness, or disability; 
 23.35     (3) a contribution to an individual for treatment for 
 23.36  delayed posttraumatic stress syndrome or a contribution to a 
 24.1   program recognized by the Minnesota department of human services 
 24.2   for the education, prevention, or treatment of compulsive 
 24.3   gambling; 
 24.4      (4) a contribution to or expenditure on a public or private 
 24.5   nonprofit educational institution registered with or accredited 
 24.6   by this state or any other state; 
 24.7      (5) a contribution to a scholarship fund for defraying the 
 24.8   cost of education to individuals where the funds are awarded 
 24.9   through an open and fair selection process; 
 24.10     (6) activities by an organization or a government entity 
 24.11  which recognize humanitarian or military service to the United 
 24.12  States, the state of Minnesota, or a community, subject to rules 
 24.13  of the board, provided that the rules must not include mileage 
 24.14  reimbursements in the computation of the per occasion 
 24.15  reimbursement limit and must impose no aggregate annual limit on 
 24.16  the amount of reasonable and necessary expenditures made to 
 24.17  support: 
 24.18     (i) members of a military marching or color guard unit for 
 24.19  activities conducted within the state; 
 24.20     (ii) members of an organization solely for services 
 24.21  performed by the members at funeral services; or 
 24.22     (iii) members of military marching, color guard, or honor 
 24.23  guard units may be reimbursed for participating in color guard, 
 24.24  honor guard, or marching unit events within the state or states 
 24.25  contiguous to Minnesota at a per participant rate of up to $35 
 24.26  per occasion; 
 24.27     (7) recreational, community, and athletic facilities and 
 24.28  activities intended primarily for persons under age 21, provided 
 24.29  that such facilities and activities do not discriminate on the 
 24.30  basis of gender and the organization complies with section 
 24.31  349.154; 
 24.32     (8) payment of local taxes authorized under this chapter, 
 24.33  taxes imposed by the United States on receipts from lawful 
 24.34  gambling, the taxes imposed by section 297E.02, subdivisions 1, 
 24.35  4, 5, and 6, and the tax imposed on unrelated business income by 
 24.36  section 290.05, subdivision 3; 
 25.1      (9) payment of real estate taxes and assessments on 
 25.2   permitted gambling premises wholly owned by the licensed 
 25.3   organization paying the taxes, or wholly leased by a licensed 
 25.4   veterans organization under a national charter recognized under 
 25.5   section 501(c)(19) of the Internal Revenue Code, not to exceed: 
 25.6      (i) for premises used for bingo, the amount that an 
 25.7   organization may expend under board rules on rent for bingo; and 
 25.8      (ii) $35,000 per year for premises used for other forms of 
 25.9   lawful gambling; 
 25.10     (10) a contribution to the United States, this state or any 
 25.11  of its political subdivisions, or any agency or instrumentality 
 25.12  thereof other than a direct contribution to a law enforcement or 
 25.13  prosecutorial agency; 
 25.14     (11) a contribution to or expenditure by a nonprofit 
 25.15  organization which is a church or body of communicants gathered 
 25.16  in common membership for mutual support and edification in 
 25.17  piety, worship, or religious observances; 
 25.18     (12) payment of the reasonable costs of an audit required 
 25.19  in section 297E.06, subdivision 4, provided the annual audit is 
 25.20  filed in a timely manner with the department of revenue; 
 25.21     (13) a contribution to or expenditure on a wildlife 
 25.22  management project that benefits the public at-large, provided 
 25.23  that the state agency with authority over that wildlife 
 25.24  management project approves the project before the contribution 
 25.25  or expenditure is made; 
 25.26     (14) expenditures, approved by the commissioner of natural 
 25.27  resources, by an organization for grooming and maintaining 
 25.28  snowmobile trails and all-terrain vehicle trails that are (1) 
 25.29  grant-in-aid trails established under section 85.019, or (2) 
 25.30  other trails open to public use, including purchase or lease of 
 25.31  equipment for this purpose; or 
 25.32     (15) conducting nutritional programs, food shelves, and 
 25.33  congregate dining programs primarily for persons who are age 62 
 25.34  or older or disabled; 
 25.35     (16) a contribution to a community arts organization, or an 
 25.36  expenditure to sponsor arts programs in the community, including 
 26.1   but not limited to visual, literary, performing, or musical 
 26.2   arts; 
 26.3      (17) payment of heat, water, sanitation, telephone, and 
 26.4   other utility bills for a building owned or leased by, and used 
 26.5   as the primary headquarters of, a veterans organization; or 
 26.6      (18) expenditure by a veterans organization of up to $5,000 
 26.7   in a calendar year in net costs to the organization for meals 
 26.8   and other membership events, limited to members and spouses, 
 26.9   held in recognition of military service; or 
 26.10     (19) payment of fees authorized under this chapter imposed 
 26.11  by the state of Minnesota to conduct lawful gambling in 
 26.12  Minnesota. 
 26.13     (b) Notwithstanding paragraph (a), "lawful purpose" does 
 26.14  not include: 
 26.15     (1) any expenditure made or incurred for the purpose of 
 26.16  influencing the nomination or election of a candidate for public 
 26.17  office or for the purpose of promoting or defeating a ballot 
 26.18  question; 
 26.19     (2) any activity intended to influence an election or a 
 26.20  governmental decision-making process; 
 26.21     (3) the erection, acquisition, improvement, expansion, 
 26.22  repair, or maintenance of real property or capital assets owned 
 26.23  or leased by an organization, unless the board has first 
 26.24  specifically authorized the expenditures after finding that (i) 
 26.25  the real property or capital assets will be used exclusively for 
 26.26  one or more of the purposes in paragraph (a); (ii) with respect 
 26.27  to expenditures for repair or maintenance only, that the 
 26.28  property is or will be used extensively as a meeting place or 
 26.29  event location by other nonprofit organizations or community or 
 26.30  service groups and that no rental fee is charged for the use; 
 26.31  (iii) with respect to expenditures, including a mortgage payment 
 26.32  or other debt service payment, for erection or acquisition only, 
 26.33  that the erection or acquisition is necessary to replace with a 
 26.34  comparable building, a building owned by the organization and 
 26.35  destroyed or made uninhabitable by fire or natural disaster, 
 26.36  provided that the expenditure may be only for that part of the 
 27.1   replacement cost not reimbursed by insurance; (iv) with respect 
 27.2   to expenditures, including a mortgage payment or other debt 
 27.3   service payment, for erection or acquisition only, that the 
 27.4   erection or acquisition is necessary to replace with a 
 27.5   comparable building a building owned by the organization that 
 27.6   was acquired from the organization by eminent domain or sold by 
 27.7   the organization to a purchaser that the organization reasonably 
 27.8   believed would otherwise have acquired the building by eminent 
 27.9   domain, provided that the expenditure may be only for that part 
 27.10  of the replacement cost that exceeds the compensation received 
 27.11  by the organization for the building being replaced; or (v) with 
 27.12  respect to an expenditure to bring an existing building into 
 27.13  compliance with the Americans with Disabilities Act under item 
 27.14  (ii), an organization has the option to apply the amount of the 
 27.15  board-approved expenditure to the erection or acquisition of a 
 27.16  replacement building that is in compliance with the Americans 
 27.17  with Disabilities Act; 
 27.18     (4) an expenditure by an organization which is a 
 27.19  contribution to a parent organization, foundation, or affiliate 
 27.20  of the contributing organization, if the parent organization, 
 27.21  foundation, or affiliate has provided to the contributing 
 27.22  organization within one year of the contribution any money, 
 27.23  grants, property, or other thing of value; 
 27.24     (5) a contribution by a licensed organization to another 
 27.25  licensed organization unless the board has specifically 
 27.26  authorized the contribution.  The board must authorize such a 
 27.27  contribution when requested to do so by the contributing 
 27.28  organization unless it makes an affirmative finding that the 
 27.29  contribution will not be used by the recipient organization for 
 27.30  one or more of the purposes in paragraph (a); or 
 27.31     (6) a contribution to a statutory or home rule charter 
 27.32  city, county, or town by a licensed organization with the 
 27.33  knowledge that the governmental unit intends to use the 
 27.34  contribution for a pension or retirement fund. 
 27.35     Sec. 28.  Minnesota Statutes 2002, section 349.151, 
 27.36  subdivision 4, is amended to read: 
 28.1      Subd. 4.  [POWERS AND DUTIES.] (a) The board has the 
 28.2   following powers and duties:  
 28.3      (1) to regulate lawful gambling to ensure it is conducted 
 28.4   in the public interest; 
 28.5      (2) to issue licenses to organizations, 
 28.6   distributors, distributor salespersons, bingo halls, 
 28.7   manufacturers, and gambling managers; 
 28.8      (3) to collect and deposit license, permit, and 
 28.9   registration fees due under this chapter; 
 28.10     (4) to receive reports required by this chapter and inspect 
 28.11  all premises, records, books, and other documents of 
 28.12  organizations, distributors, manufacturers, and bingo halls to 
 28.13  insure compliance with all applicable laws and rules; 
 28.14     (5) to make rules authorized by this chapter; 
 28.15     (6) to register gambling equipment and issue registration 
 28.16  stamps; 
 28.17     (7) to provide by rule for the mandatory posting by 
 28.18  organizations conducting lawful gambling of rules of play and 
 28.19  the odds and/or house percentage on each form of lawful 
 28.20  gambling; 
 28.21     (8) to report annually to the governor and legislature on 
 28.22  its activities and on recommended changes in the laws governing 
 28.23  gambling; 
 28.24     (9) to impose civil penalties of not more than $500 per 
 28.25  violation on organizations, distributors, employees eligible to 
 28.26  make sales on behalf of a distributor salespersons, 
 28.27  manufacturers, bingo halls, and gambling managers for failure to 
 28.28  comply with any provision of this chapter or any rule or order 
 28.29  of the board; 
 28.30     (10) to issue premises permits to organizations licensed to 
 28.31  conduct lawful gambling; 
 28.32     (11) to delegate to the director the authority to issue or 
 28.33  deny license and premises permit applications and renewals under 
 28.34  criteria established by the board; 
 28.35     (12) to suspend or revoke licenses and premises permits of 
 28.36  organizations, distributors, distributor salespersons, 
 29.1   manufacturers, bingo halls, or gambling managers as provided in 
 29.2   this chapter; 
 29.3      (13) to register employees of organizations licensed to 
 29.4   conduct lawful gambling; 
 29.5      (14) to require fingerprints from persons determined by 
 29.6   board rule to be subject to fingerprinting; 
 29.7      (15) to delegate to a compliance review group of the board 
 29.8   the authority to investigate alleged violations, issue consent 
 29.9   orders, and initiate contested cases on behalf of the board; 
 29.10     (16) to order organizations, distributors, distributor 
 29.11  salespersons, manufacturers, bingo halls, and gambling managers 
 29.12  to take corrective actions; and 
 29.13     (17) to take all necessary steps to ensure the integrity of 
 29.14  and public confidence in lawful gambling.  
 29.15     (b) The board, or director if authorized to act on behalf 
 29.16  of the board, may by citation assess any organization, 
 29.17  distributor, employee eligible to make sales on behalf of a 
 29.18  distributor, manufacturer, bingo hall licensee, or gambling 
 29.19  manager a civil penalty of not more than $500 per violation for 
 29.20  a failure to comply with any provision of this chapter or any 
 29.21  rule adopted or order issued by the board.  Any organization, 
 29.22  distributor, bingo hall licensee, gambling manager, or 
 29.23  manufacturer assessed a civil penalty under this paragraph may 
 29.24  request a hearing before the board.  Appeals of citations 
 29.25  imposing a civil penalty are not subject to the provisions of 
 29.26  the Administrative Procedure Act.  
 29.27     (c) All fees and penalties received by the board must be 
 29.28  deposited in the general fund. 
 29.29     (d) All fees imposed by the board under sections 349.16 to 
 29.30  349.165 must be deposited in the state treasury and credited to 
 29.31  a lawful gambling regulation account in the special revenue fund.
 29.32  Receipts in this account are available for the operations of the 
 29.33  board up to the amount authorized in biennial appropriations 
 29.34  from the legislature. 
 29.35     Sec. 29.  Minnesota Statutes 2002, section 349.151, 
 29.36  subdivision 4b, is amended to read: 
 30.1      Subd. 4b.  [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 
 30.2   The board may by rule authorize but not require the use of 
 30.3   pull-tab dispensing devices. 
 30.4      (b) Rules adopted under paragraph (a): 
 30.5      (1) must limit the number of pull-tab dispensing devices on 
 30.6   any permitted premises to three; and 
 30.7      (2) must limit the use of pull-tab dispensing devices to a 
 30.8   permitted premises which is (i) a licensed premises for on-sales 
 30.9   of intoxicating liquor or 3.2 percent malt beverages; or (ii) a 
 30.10  licensed bingo hall that allows gambling only by persons 18 
 30.11  years or older. 
 30.12     (c) Notwithstanding rules adopted under paragraph (b), 
 30.13  pull-tab dispensing devices may be used in establishments 
 30.14  licensed for the off-sale of intoxicating liquor, other than 
 30.15  drugstores and general food stores licensed under section 
 30.16  340A.405, subdivision 1. 
 30.17     (d) The director may charge a manufacturer a fee of up to 
 30.18  $5,000 per pull-tab dispensing device to cover the costs of 
 30.19  services provided by an independent testing laboratory to 
 30.20  perform testing and analysis of pull-tab dispensing devices.  
 30.21  The director shall deposit in a separate account in the state 
 30.22  treasury all money the director receives as reimbursement for 
 30.23  the costs of services provided by independent testing 
 30.24  laboratories that have entered into contracts with the state to 
 30.25  perform testing and analysis of pull-tab dispensing devices.  
 30.26  Money in the account is appropriated to the director to pay the 
 30.27  costs of services under those contracts. 
 30.28     Sec. 30.  Minnesota Statutes 2002, section 349.155, 
 30.29  subdivision 3, is amended to read: 
 30.30     Subd. 3.  [MANDATORY DISQUALIFICATIONS.] (a) In the case of 
 30.31  licenses for manufacturers, distributors, distributor 
 30.32  salespersons, bingo halls, and gambling managers, the board may 
 30.33  not issue or renew a license under this chapter, and shall 
 30.34  revoke a license under this chapter, if the applicant or 
 30.35  licensee, or a director, officer, partner, governor, or person 
 30.36  in a supervisory or management position of the applicant or 
 31.1   licensee, or an employee eligible to make sales on behalf of the 
 31.2   applicant or licensee: 
 31.3      (1) has ever been convicted of a felony or a crime 
 31.4   involving gambling; 
 31.5      (2) has ever been convicted of (i) assault, (ii) a criminal 
 31.6   violation involving the use of a firearm, or (iii) making 
 31.7   terroristic threats; 
 31.8      (3) is or has ever been connected with or engaged in an 
 31.9   illegal business; 
 31.10     (4) owes $500 or more in delinquent taxes as defined in 
 31.11  section 270.72; 
 31.12     (5) had a sales and use tax permit revoked by the 
 31.13  commissioner of revenue within the past two years; or 
 31.14     (6) after demand, has not filed tax returns required by the 
 31.15  commissioner of revenue.  The board may deny or refuse to renew 
 31.16  a license under this chapter, and may revoke a license under 
 31.17  this chapter, if any of the conditions in this paragraph are 
 31.18  applicable to an affiliate or direct or indirect holder of more 
 31.19  than a five percent financial interest in the applicant or 
 31.20  licensee.  
 31.21     (b) In the case of licenses for organizations, the board 
 31.22  may not issue or renew a license under this chapter, and shall 
 31.23  revoke a license under this chapter, if the organization, or an 
 31.24  officer or member of the governing body of the organization:  
 31.25     (1) has been convicted of a felony or gross misdemeanor 
 31.26  within the five years before the issuance or renewal of the 
 31.27  license; 
 31.28     (2) has ever been convicted of a crime involving gambling; 
 31.29  or 
 31.30     (3) has had a license issued by the board or director 
 31.31  permanently revoked for violation of law or board rule. 
 31.32     Sec. 31.  Minnesota Statutes 2002, section 349.16, 
 31.33  subdivision 6, is amended to read: 
 31.34     Subd. 6.  [LICENSE CLASSIFICATIONS FEES.] The board may 
 31.35  issue four classes of organization licenses:  a class A license 
 31.36  authorizing all forms of lawful gambling; a class B license 
 32.1   authorizing all forms of lawful gambling except bingo; a class C 
 32.2   license authorizing bingo only, or bingo and pull-tabs if the 
 32.3   gross receipts for any combination of bingo and pull-tabs does 
 32.4   not exceed $50,000 per year; and a class D license authorizing 
 32.5   raffles only.  The board shall not charge a fee for an 
 32.6   organization impose a fee of $100 for an organization's initial 
 32.7   license application.  There is no charge for a renewal license. 
 32.8      Sec. 32.  Minnesota Statutes 2002, section 349.161, 
 32.9   subdivision 1, is amended to read: 
 32.10     Subdivision 1.  [PROHIBITED ACTS; LICENSES REQUIRED.] (a) 
 32.11  No person may:  
 32.12     (1) sell, offer for sale, or furnish gambling equipment for 
 32.13  use within the state other than for lawful gambling exempt or 
 32.14  excluded from licensing, except to an organization licensed for 
 32.15  lawful gambling; 
 32.16     (2) sell, offer for sale, or furnish gambling equipment for 
 32.17  use within the state without having obtained a distributor 
 32.18  license or a distributor salesperson license under this section; 
 32.19     (3) sell, offer for sale, or furnish gambling equipment for 
 32.20  use within the state that is not purchased or obtained from a 
 32.21  manufacturer or distributor licensed under this chapter; or 
 32.22     (4) sell, offer for sale, or furnish gambling equipment for 
 32.23  use within the state that has the same serial number as another 
 32.24  item of gambling equipment of the same type sold or offered for 
 32.25  sale or furnished for use in the state by that distributor. 
 32.26     (b) No licensed distributor salesperson may sell, offer for 
 32.27  sale, or furnish gambling equipment for use within the state 
 32.28  without being employed by a licensed distributor or owning a 
 32.29  distributor license.  
 32.30     Sec. 33.  Minnesota Statutes 2002, section 349.161, 
 32.31  subdivision 4, is amended to read: 
 32.32     Subd. 4.  [FEES.] (a) The initial annual fee for a 
 32.33  distributor's license is $3,500 $6,000.  The initial term of a 
 32.34  distributor's license is one year.  Renewal licenses under this 
 32.35  section are valid for two years and the fee for the renewal 
 32.36  license is $7,000. 
 33.1      (b) The annual fee for a distributor salesperson license is 
 33.2   $100. 
 33.3      Sec. 34.  Minnesota Statutes 2002, section 349.161, 
 33.4   subdivision 5, is amended to read: 
 33.5      Subd. 5.  [PROHIBITION.] (a) No distributor, distributor 
 33.6   salesperson, or other employee of a distributor, may also be a 
 33.7   wholesale distributor of alcoholic beverages or an employee of a 
 33.8   wholesale distributor of alcoholic beverages. 
 33.9      (b) No distributor, distributor salesperson, or any 
 33.10  representative, agent, affiliate, or other employee of a 
 33.11  distributor, may:  (1) be involved in the conduct of lawful 
 33.12  gambling by an organization; (2) keep or assist in the keeping 
 33.13  of an organization's financial records, accounts, and 
 33.14  inventories; or (3) prepare or assist in the preparation of tax 
 33.15  forms and other reporting forms required to be submitted to the 
 33.16  state by an organization. 
 33.17     (c) No distributor, distributor salesperson, or any 
 33.18  representative, agent, affiliate, or other employee of a 
 33.19  distributor may provide a lessor of gambling premises any 
 33.20  compensation, gift, gratuity, premium, or other thing of value. 
 33.21     (d) No distributor, distributor salesperson, or any 
 33.22  representative, agent, affiliate, or other employee of a 
 33.23  distributor may participate in any gambling activity at any 
 33.24  gambling site or premises where gambling equipment purchased 
 33.25  from that distributor or distributor salesperson is being used 
 33.26  in the conduct of lawful gambling. 
 33.27     (e) No distributor, distributor salesperson, or any 
 33.28  representative, agent, affiliate, or other employee of a 
 33.29  distributor may alter or modify any gambling equipment, except 
 33.30  to add a "last ticket sold" prize sticker. 
 33.31     (f) No distributor, distributor salesperson, or any 
 33.32  representative, agent, affiliate, or other employee of a 
 33.33  distributor may:  (1) recruit a person to become a gambling 
 33.34  manager of an organization or identify to an organization a 
 33.35  person as a candidate to become gambling manager for the 
 33.36  organization; or (2) identify for an organization a potential 
 34.1   gambling location. 
 34.2      (g) No distributor or distributor salesperson may purchase 
 34.3   gambling equipment for resale to a person for use within the 
 34.4   state from any person not licensed as a manufacturer under 
 34.5   section 349.163. 
 34.6      (h) No distributor or distributor salesperson may sell 
 34.7   gambling equipment to any person for use in Minnesota other than 
 34.8   (i) a licensed organization or organization excluded or exempt 
 34.9   from licensing, or (ii) the governing body of an Indian tribe. 
 34.10     (i) No distributor or distributor salesperson may sell or 
 34.11  otherwise provide a pull-tab or tipboard deal with the symbol 
 34.12  required by section 349.163, subdivision 5, paragraph (h), 
 34.13  visible on the flare to any person other than in Minnesota to a 
 34.14  licensed organization or organization exempt from licensing. 
 34.15     Sec. 35.  Minnesota Statutes 2002, section 349.162, 
 34.16  subdivision 1, is amended to read: 
 34.17     Subdivision 1.  [STAMP REQUIRED.] (a) A distributor may not 
 34.18  sell, transfer, furnish, or otherwise provide to a person, and 
 34.19  no person may purchase, borrow, accept, or acquire from a 
 34.20  distributor gambling equipment for use within the state unless 
 34.21  the equipment has been registered with the board and has a 
 34.22  registration stamp affixed, except for gambling equipment not 
 34.23  stamped by the manufacturer pursuant to section 349.163, 
 34.24  subdivision 5 or 8.  The board shall charge a fee of five cents 
 34.25  for each stamp.  Each stamp must bear a registration number 
 34.26  assigned by the board.  A distributor or manufacturer is 
 34.27  entitled to a refund for unused registration stamps and 
 34.28  replacement for registration stamps which are defective or 
 34.29  canceled by the distributor or manufacturer. 
 34.30     (b) A manufacturer must return all unused registration 
 34.31  stamps in its possession to the board by February 1, 1995.  No 
 34.32  manufacturer may possess unaffixed registration stamps after 
 34.33  February 1, 1995. 
 34.34     (c) After February 1, 1996, no person may possess any 
 34.35  unplayed pull-tab or tipboard deals with a registration stamp 
 34.36  affixed to the flare or any unplayed paddleticket cards with a 
 35.1   registration stamp affixed to the master flare.  This paragraph 
 35.2   does not apply to unplayed pull-tab or tipboard deals with a 
 35.3   registration stamp affixed to the flare, or to unplayed 
 35.4   paddleticket cards with a registration stamp affixed to the 
 35.5   master flare, if the deals or cards are identified on a list of 
 35.6   existing inventory submitted by a licensed organization or a 
 35.7   licensed distributor, in a format prescribed by the commissioner 
 35.8   of revenue, to the commissioner of revenue on or before February 
 35.9   1, 1996.  Gambling equipment kept in violation of this paragraph 
 35.10  is contraband under section 349.2125. 
 35.11     Sec. 36.  Minnesota Statutes 2002, section 349.163, 
 35.12  subdivision 2, is amended to read: 
 35.13     Subd. 2.  [LICENSE; FEE.] The initial license under this 
 35.14  section is valid for one year.  The fee for the initial license 
 35.15  is $5,000.  Renewal licenses under this section are valid for 
 35.16  two years and the fee for the renewal license is $10,000.  The 
 35.17  annual fee for a manufacturer's license is $9,000. 
 35.18     Sec. 37.  Minnesota Statutes 2002, section 349.163, 
 35.19  subdivision 6, is amended to read: 
 35.20     Subd. 6.  [SAMPLES OF GAMBLING EQUIPMENT.] The board shall 
 35.21  require each licensed manufacturer to submit to the board one or 
 35.22  more samples of each item of gambling equipment the manufacturer 
 35.23  manufactures for use or resale in this state.  The board shall 
 35.24  inspect and test all the equipment it deems necessary to 
 35.25  determine the equipment's compliance with law and board rules.  
 35.26  Samples required under this subdivision must be approved by the 
 35.27  board before the equipment being sampled is shipped into or sold 
 35.28  for use or resale in this state.  The board shall impose a fee 
 35.29  of $25 for each item of gambling equipment that the manufacturer 
 35.30  submits for approval or for which the manufacturer requests 
 35.31  approval.  The board shall impose a fee of $100 for each sample 
 35.32  of gambling equipment that it tests.  The board may require 
 35.33  samples of gambling equipment to be tested by an independent 
 35.34  testing laboratory prior to submission to the board for 
 35.35  approval.  All costs of testing by an independent testing 
 35.36  laboratory must be borne by the manufacturer.  An independent 
 36.1   testing laboratory used by a manufacturer to test samples of 
 36.2   gambling equipment must be approved by the board before the 
 36.3   equipment is submitted to the laboratory for testing.  The board 
 36.4   may request the assistance of the commissioner of public safety 
 36.5   and the director of the state lottery in performing the tests. 
 36.6      Sec. 38.  Minnesota Statutes 2002, section 349.164, 
 36.7   subdivision 4, is amended to read: 
 36.8      Subd. 4.  [FEES; TERM OF LICENSE.] The initial annual fee 
 36.9   for a bingo hall license is $2,500 $4,000.  An initial license 
 36.10  under this section is valid for one year.  Renewal licenses 
 36.11  under this section are valid for two years and the fee for the 
 36.12  renewal license is $5,000. 
 36.13     Sec. 39.  Minnesota Statutes 2002, section 349.165, 
 36.14  subdivision 3, is amended to read: 
 36.15     Subd. 3.  [FEES.] (a) The board may issue four classes of 
 36.16  premises permits corresponding to the classes of licenses 
 36.17  authorized under section 349.16, subdivision 6.  The fee for 
 36.18  each class of permit is: 
 36.19     (1) $400 for a class A permit; 
 36.20     (2) $250 for a class B permit; 
 36.21     (3) $200 for a class C permit; and 
 36.22     (4) $150 for a class D permit. 
 36.23     (b) If a premises permit is issued during the second year 
 36.24  of an organization's license, the fee for each class of permit 
 36.25  is: 
 36.26     (1) $200 for a class A permit; 
 36.27     (2) $125 for a class B permit; 
 36.28     (3) $100 for a class C permit; and 
 36.29     (4) $75 for a class D permit. 
 36.30     The monthly fee for a premises permit is 0.18 percent of 
 36.31  the organization's gross receipts from lawful gambling conducted 
 36.32  at that site.  The fee shall be reported and paid on a monthly 
 36.33  basis in a format as determined by the commissioner of revenue, 
 36.34  and remitted to the commissioner of revenue along with the 
 36.35  organization's monthly tax return for that premises.  All 
 36.36  premises permit fees received by the commissioner of revenue 
 37.1   pursuant to this subdivision must be deposited in the lawful 
 37.2   gambling regulation account of the special revenue fund 
 37.3   according to section 349.151.  Failure to pay the monthly 
 37.4   premises permit fees in a timely manner may result in 
 37.5   disciplinary action by the board. 
 37.6      Sec. 40.  Minnesota Statutes 2002, section 349.166, 
 37.7   subdivision 1, is amended to read: 
 37.8      Subdivision 1.  [EXCLUSIONS.] (a) Bingo may be conducted 
 37.9   without a license and without complying with sections 349.168, 
 37.10  subdivisions 1 and 2; 349.17, subdivisions 1, 4, and 5; 349.18, 
 37.11  subdivision 1; and 349.19, if it is conducted:  
 37.12     (1) by an organization in connection with a county fair, 
 37.13  the state fair, or a civic celebration and is not conducted for 
 37.14  more than 12 consecutive days and is limited to no more than 
 37.15  four separate applications for activities applied for and 
 37.16  approved in a calendar year; or 
 37.17     (2) by an organization that conducts four or fewer bingo 
 37.18  occasions in a calendar year.  
 37.19     An organization that holds a license to conduct lawful 
 37.20  gambling under this chapter may not conduct bingo under this 
 37.21  subdivision.  
 37.22     (b) Bingo may be conducted within a nursing home or a 
 37.23  senior citizen housing project or by a senior citizen 
 37.24  organization if the prizes for a single bingo game do not exceed 
 37.25  $10, total prizes awarded at a single bingo occasion do not 
 37.26  exceed $200, no more than two bingo occasions are held by the 
 37.27  organization or at the facility each week, only members of the 
 37.28  organization or residents of the nursing home or housing project 
 37.29  are allowed to play in a bingo game, no compensation is paid for 
 37.30  any persons who conduct the bingo, and a manager is appointed to 
 37.31  supervise the bingo.  Bingo conducted under this paragraph is 
 37.32  exempt from sections 349.11 to 349.23, and the board may not 
 37.33  require an organization that conducts bingo under this 
 37.34  paragraph, or the manager who supervises the bingo, to register 
 37.35  or file a report with the board.  The gross receipts from bingo 
 37.36  conducted under the limitations of this subdivision are exempt 
 38.1   from taxation under chapter 297A.  
 38.2      (c) Raffles may be conducted by an organization without a 
 38.3   license and without complying with sections 349.154 to 349.165 
 38.4   and 349.167 to 349.213 if the value of all raffle prizes awarded 
 38.5   by the organization in a calendar year does not 
 38.6   exceed $750 $1,500.  
 38.7      (d) Except as provided in paragraph (b), the organization 
 38.8   must maintain all required records of excluded gambling activity 
 38.9   for 3-1/2 years. 
 38.10     Sec. 41.  Minnesota Statutes 2002, section 349.166, 
 38.11  subdivision 2, is amended to read: 
 38.12     Subd. 2.  [EXEMPTIONS.] (a) Lawful gambling may be 
 38.13  conducted by an organization without a license and without 
 38.14  complying with sections 349.168, subdivisions 1 and 2; 349.17, 
 38.15  subdivisions 4 and 5; 349.18, subdivision 1; and 349.19 if: 
 38.16     (1) the organization conducts lawful gambling on five or 
 38.17  fewer days in a calendar year; 
 38.18     (2) the organization does not award more than $50,000 in 
 38.19  prizes for lawful gambling in a calendar year; 
 38.20     (3) the organization pays a fee of $25 $50 to the board, 
 38.21  notifies the board in writing not less than 30 days before each 
 38.22  lawful gambling occasion of the date and location of the 
 38.23  occasion, or 60 days for an occasion held in the case of a city 
 38.24  of the first class, the types of lawful gambling to be 
 38.25  conducted, the prizes to be awarded, and receives an exemption 
 38.26  identification number; 
 38.27     (4) the organization notifies the local government unit 30 
 38.28  days before the lawful gambling occasion, or 60 days for an 
 38.29  occasion held in a city of the first class; 
 38.30     (5) the organization purchases all gambling equipment and 
 38.31  supplies from a licensed distributor; and 
 38.32     (6) the organization reports to the board, on a single-page 
 38.33  form prescribed by the board, within 30 days of each gambling 
 38.34  occasion, the gross receipts, prizes, expenses, expenditures of 
 38.35  net profits from the occasion, and the identification of the 
 38.36  licensed distributor from whom all gambling equipment was 
 39.1   purchased.  
 39.2      (b) If the organization fails to file a timely report as 
 39.3   required by paragraph (a), clause (3) or (6), the board shall 
 39.4   not issue any authorization, license, or permit to the 
 39.5   organization to conduct lawful gambling on an exempt, excluded, 
 39.6   or licensed basis until the report has been filed. 
 39.7      (c) Merchandise prizes must be valued at their fair market 
 39.8   value. 
 39.9      (d) Unused pull-tab and tipboard deals must be returned to 
 39.10  the distributor within seven working days after the end of the 
 39.11  lawful gambling occasion.  The distributor must accept and pay a 
 39.12  refund for all returns of unopened and undamaged deals returned 
 39.13  under this paragraph. 
 39.14     (e) An organization that is exempt from taxation on 
 39.15  purchases of pull-tabs and tipboards under section 297E.02, 
 39.16  subdivision 4, paragraph (b), clause (4), must return to the 
 39.17  distributor any tipboard or pull-tab deal no part of which is 
 39.18  used at the lawful gambling occasion for which it was purchased 
 39.19  by the organization. 
 39.20     (f) The organization must maintain all required records of 
 39.21  exempt gambling activity for 3-1/2 years. 
 39.22     Sec. 42.  Minnesota Statutes 2002, section 349A.08, 
 39.23  subdivision 5, is amended to read: 
 39.24     Subd. 5.  [PAYMENT; UNCLAIMED PRIZES.] A prize in the state 
 39.25  lottery must be claimed by the winner within one year of the 
 39.26  date of the drawing at which the prize was awarded or the last 
 39.27  day sales were authorized for a game where a prize was 
 39.28  determined in a manner other than by means of a drawing.  If a 
 39.29  valid claim is not made for a prize payable directly by the 
 39.30  lottery by the end of this period, the prize money is considered 
 39.31  unclaimed and the winner of the prize shall have no further 
 39.32  claim to the prize.  A prize won by a person who purchased the 
 39.33  winning ticket in violation of section 349A.12, subdivision 1, 
 39.34  or won by a person ineligible to be awarded a prize under 
 39.35  subdivision 7 must be treated as an unclaimed prize under this 
 39.36  section.  The director shall must transfer 70 percent of all 
 40.1   unclaimed prize money at the end of each fiscal year from the 
 40.2   lottery cash flow account as follows:  of the 70 percent, 40 
 40.3   percent must be transferred to the Minnesota environment and 
 40.4   natural resources trust fund and 60 percent must be transferred 
 40.5   to the general fund.  The remaining 30 percent of the unclaimed 
 40.6   prize money must be added by the director to prize pools of 
 40.7   subsequent lottery games. 
 40.8      Sec. 43.  Minnesota Statutes 2002, section 474A.21, is 
 40.9   amended to read: 
 40.10     474A.21 [APPROPRIATION; RECEIPTS.] 
 40.11     Any application fees collected by the department under 
 40.12  sections 474A.01 to 474A.21 must be deposited in a separate 
 40.13  account in the general fund.  The amount necessary to refund 
 40.14  application deposits is appropriated to the department from the 
 40.15  separate account in the general fund for that purpose.  The 
 40.16  interest accruing on application deposits and any application 
 40.17  deposit not refunded as provided under section 474A.061, 
 40.18  subdivision 4, or 474A.091, subdivision 5, or forfeited as 
 40.19  provided under section 474A.131, subdivision 2, must be 
 40.20  deposited in the housing trust general fund account under 
 40.21  section 462A.201. 
 40.22     Sec. 44.  Laws 1998, chapter 366, section 80, as amended by 
 40.23  Laws 2001, First Special Session chapter 10, article 2, section 
 40.24  86, is amended to read: 
 40.25     Sec. 80.  [SETTLEMENT DIVISION; TRANSFER OF JUDGES.] 
 40.26     The office of administrative hearings shall establish a 
 40.27  settlement division.  The workers' compensation judges at the 
 40.28  department of labor and industry, together with their support 
 40.29  staff, offices, furnishings, equipment, and supplies, are 
 40.30  transferred to the settlement division of the office of 
 40.31  administrative hearings.  Minnesota Statutes, section 15.039, 
 40.32  applies to the transfer of employees.  The settlement division 
 40.33  of the office of administrative hearings shall maintain offices 
 40.34  in either Hennepin or Ramsey county and the cities city of 
 40.35  Duluth and Detroit Lakes.  The office of a judge in the 
 40.36  settlement division of the office of administrative hearings and 
 41.1   the support staff of the judge may be located in a building that 
 41.2   contains offices of the department of labor and industry.  The 
 41.3   seniority of a workers' compensation judge at the office of 
 41.4   administrative hearings, after the transfer, shall be based on 
 41.5   the total length of service as a judge at either agency.  For 
 41.6   purposes of the commissioner's plan under Minnesota Statutes, 
 41.7   section 43A.18, subdivision 2, all compensation judges at the 
 41.8   office of administrative hearings shall be considered to be in 
 41.9   the same employment condition, the same organizational unit and 
 41.10  qualified for work in either division. 
 41.11     Sec. 45.  [BOND SALE SCHEDULE.] 
 41.12     The commissioner of finance shall schedule the sale of 
 41.13  state general obligation bonds so that, during the biennium 
 41.14  ending June 30, 2005, no more than $686,777,000 will need to be 
 41.15  transferred from the general fund to the state bond fund to pay 
 41.16  principal and interest due and to become due on outstanding 
 41.17  state general obligation bonds.  During the biennium, before 
 41.18  each sale of state general obligations bonds, the commissioner 
 41.19  of finance shall calculate the amount of debt service payments 
 41.20  needed on bonds previously issued and shall estimate the amount 
 41.21  of debt service payments that will be needed on the bonds 
 41.22  scheduled to be sold.  The commissioner shall adjust the amount 
 41.23  of bonds scheduled to be sold so as to remain within the limit 
 41.24  set by this section.  The amount needed to make the debt service 
 41.25  payments is appropriated from the general fund as provided in 
 41.26  Minnesota Statutes, section 16A.641.  
 41.27     Sec. 46.  [GAMBLING CONTROL; FEE TRANSITION.] 
 41.28     Effective July 1, 2003, all organizations and individuals 
 41.29  regulated by the gambling control board must begin paying the 
 41.30  applicable fees under Minnesota Statutes, sections 349.16 to 
 41.31  349.165.  The gambling control board shall provide a onetime, 
 41.32  prorated credit against these fees to organizations and 
 41.33  individuals who paid for licenses before July 1, 2003, that were 
 41.34  to extend beyond July 1, 2003.  
 41.35     Sec. 47.  [REPEALER.] 
 41.36     (a) Minnesota Statutes 2002, section 16A.87, is repealed. 
 42.1      (b) Minnesota Rules, part 1950.1070, is repealed effective 
 42.2   July 1, 2004.