| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to lawful gambling; authorizing licensed veterans organizations to use |
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| 3 | 3 | | 1.3 gross profits from lawful gambling for repair, maintenance, or improvement of |
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| 4 | 4 | | 1.4 real property; amending Minnesota Statutes 2024, section 349.12, subdivision 25. |
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| 5 | 5 | | 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 6 | 6 | | 1.6 Section 1. Minnesota Statutes 2024, section 349.12, subdivision 25, is amended to read: |
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| 7 | 7 | | 1.7 Subd. 25.Lawful purpose.(a) "Lawful purpose" means one or more of the following: |
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| 8 | 8 | | 1.8 (1) any expenditure by or contribution to a 501(c)(3) or festival organization, as defined |
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| 9 | 9 | | 1.9in subdivision 15c, provided that the organization and expenditure or contribution are in |
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| 10 | 10 | | 1.10conformity with standards prescribed by the board under section 349.154, which standards |
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| 11 | 11 | | 1.11must apply to both types of organizations in the same manner and to the same extent; |
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| 12 | 12 | | 1.12 (2) a contribution to or expenditure for goods and services for an individual or family |
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| 13 | 13 | | 1.13suffering from poverty, homelessness, or disability, which is used to relieve the effects of |
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| 14 | 14 | | 1.14that suffering; |
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| 15 | 15 | | 1.15 (3) a contribution to a program recognized by the Minnesota Department of Human |
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| 16 | 16 | | 1.16Services for the education, prevention, or treatment of problem gambling; |
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| 17 | 17 | | 1.17 (4) a contribution to or expenditure on a public or private nonprofit educational institution |
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| 18 | 18 | | 1.18registered with or accredited by this state or any other state; |
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| 19 | 19 | | 1.19 (5) a contribution to an individual, public or private nonprofit educational institution |
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| 20 | 20 | | 1.20registered with or accredited by this state or any other state, or to a scholarship fund of a |
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| 21 | 21 | | 1.21nonprofit organization whose primary mission is to award scholarships, for defraying the |
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| 22 | 22 | | 1Section 1. |
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| 23 | 23 | | 25-00841 as introduced12/02/24 REVISOR JSK/NS |
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| 24 | 24 | | SENATE |
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| 25 | 25 | | STATE OF MINNESOTA |
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| 26 | 26 | | S.F. No. 623NINETY-FOURTH SESSION |
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| 27 | 27 | | (SENATE AUTHORS: HOWE, Pratt, Nelson, Draheim and Anderson) |
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| 28 | 28 | | OFFICIAL STATUSD-PGDATE |
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| 29 | 29 | | Introduction and first reading01/27/2025 |
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| 30 | 30 | | Referred to State and Local Government 2.1cost of education to individuals where the funds are awarded through an open and fair |
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| 31 | 31 | | 2.2selection process; |
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| 32 | 32 | | 2.3 (6) activities by an organization or a government entity which recognize military service |
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| 33 | 33 | | 2.4to the United States, the state of Minnesota, or a community, subject to rules of the board, |
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| 34 | 34 | | 2.5provided that the rules must not include mileage reimbursements in the computation of the |
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| 35 | 35 | | 2.6per diem reimbursement limit and must impose no aggregate annual limit on the amount of |
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| 36 | 36 | | 2.7reasonable and necessary expenditures made to support: |
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| 37 | 37 | | 2.8 (i) members of a military marching or color guard unit for activities conducted within |
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| 38 | 38 | | 2.9the state; |
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| 39 | 39 | | 2.10 (ii) members of an organization solely for services performed by the members at funeral |
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| 40 | 40 | | 2.11services; |
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| 41 | 41 | | 2.12 (iii) members of military marching, color guard, or honor guard units may be reimbursed |
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| 42 | 42 | | 2.13for participating in color guard, honor guard, or marching unit events within the state or |
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| 43 | 43 | | 2.14states contiguous to Minnesota at a per participant rate of up to $50 per diem; or |
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| 44 | 44 | | 2.15 (iv) active military personnel and their immediate family members in need of support |
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| 45 | 45 | | 2.16services; |
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| 46 | 46 | | 2.17 (7) recreational, community, and athletic facilities and activities, intended primarily for |
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| 47 | 47 | | 2.18persons under age 21, provided that such facilities and activities do not discriminate on the |
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| 48 | 48 | | 2.19basis of gender and the organization complies with section 349.154, subdivision 3a; |
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| 49 | 49 | | 2.20 (8) payment of local taxes authorized under this chapter, including local gambling taxes |
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| 50 | 50 | | 2.21authorized under section 349.213, subdivision 3, taxes imposed by the United States on |
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| 51 | 51 | | 2.22receipts from lawful gambling, the taxes imposed by section 297E.02, subdivisions 1 and |
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| 52 | 52 | | 2.236, and the tax imposed on unrelated business income by section 290.05, subdivision 3; |
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| 53 | 53 | | 2.24 (9) payment of real estate taxes and assessments on permitted gambling premises owned |
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| 54 | 54 | | 2.25by the licensed organization paying the taxes, or wholly leased by a licensed veterans |
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| 55 | 55 | | 2.26organization under a national charter recognized under section 501(c)(19) of the Internal |
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| 56 | 56 | | 2.27Revenue Code; |
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| 57 | 57 | | 2.28 (10) a contribution to the United States, this state or any of its political subdivisions, or |
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| 58 | 58 | | 2.29any agency or instrumentality thereof other than a direct contribution to a law enforcement |
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| 59 | 59 | | 2.30or prosecutorial agency; |
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| 60 | 60 | | 2.31 (11) a contribution to or expenditure by a nonprofit organization which is a church or |
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| 61 | 61 | | 2.32body of communicants gathered in common membership for mutual support and edification |
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| 62 | 62 | | 2.33in piety, worship, or religious observances; |
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| 63 | 63 | | 2Section 1. |
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| 64 | 64 | | 25-00841 as introduced12/02/24 REVISOR JSK/NS 3.1 (12) an expenditure for citizen monitoring of surface water quality by individuals or |
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| 65 | 65 | | 3.2nongovernmental organizations that is consistent with section 115.06, subdivision 4, and |
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| 66 | 66 | | 3.3Minnesota Pollution Control Agency guidance on monitoring procedures, quality assurance |
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| 67 | 67 | | 3.4protocols, and data management, provided that the resulting data is submitted to the |
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| 68 | 68 | | 3.5Minnesota Pollution Control Agency for review and inclusion in the state water quality |
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| 69 | 69 | | 3.6database; |
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| 70 | 70 | | 3.7 (13) a contribution to or expenditure on projects or activities approved by the |
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| 71 | 71 | | 3.8commissioner of natural resources for: |
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| 72 | 72 | | 3.9 (i) wildlife management projects that benefit the public at large; |
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| 73 | 73 | | 3.10 (ii) grant-in-aid trail maintenance and grooming established under sections 84.83 and |
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| 74 | 74 | | 3.1184.927, and other trails open to public use, including purchase or lease of equipment for |
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| 75 | 75 | | 3.12this purpose; and |
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| 76 | 76 | | 3.13 (iii) supplies and materials for safety training and educational programs coordinated by |
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| 77 | 77 | | 3.14the Department of Natural Resources, including the Enforcement Division; |
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| 78 | 78 | | 3.15 (14) conducting nutritional programs, food shelves, and congregate dining programs |
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| 79 | 79 | | 3.16primarily for persons who are age 62 or older or disabled; |
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| 80 | 80 | | 3.17 (15) a contribution to a community arts organization, or an expenditure to sponsor arts |
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| 81 | 81 | | 3.18programs in the community, including but not limited to visual, literary, performing, or |
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| 82 | 82 | | 3.19musical arts; |
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| 83 | 83 | | 3.20 (16) an expenditure by a licensed fraternal organization or a licensed veterans organization |
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| 84 | 84 | | 3.21for payment of water, fuel for heating, electricity, and sewer costs for: |
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| 85 | 85 | | 3.22 (i) up to 100 percent for a building wholly owned or wholly leased by and used as the |
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| 86 | 86 | | 3.23primary headquarters of the licensed veteran or fraternal organization; or |
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| 87 | 87 | | 3.24 (ii) a proportional amount subject to approval by the director and based on the portion |
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| 88 | 88 | | 3.25of a building used as the primary headquarters of the licensed veteran or fraternal |
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| 89 | 89 | | 3.26organization; |
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| 90 | 90 | | 3.27 (17) expenditure by a licensed veterans organization of up to $5,000 in a calendar year |
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| 91 | 91 | | 3.28in net costs to the organization for meals and other membership events, limited to members |
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| 92 | 92 | | 3.29and spouses, held in recognition of military service. No more than $5,000 can be expended |
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| 93 | 93 | | 3.30in total per calendar year under this clause by all licensed veterans organizations sharing |
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| 94 | 94 | | 3.31the same veterans post home; |
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| 95 | 95 | | 3Section 1. |
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| 96 | 96 | | 25-00841 as introduced12/02/24 REVISOR JSK/NS 4.1 (18) payment of fees authorized under this chapter imposed by the state of Minnesota |
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| 97 | 97 | | 4.2to conduct lawful gambling in Minnesota; |
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| 98 | 98 | | 4.3 (19) a contribution or expenditure to honor an individual's humanitarian service as |
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| 99 | 99 | | 4.4demonstrated through philanthropy or volunteerism to the United States, this state, or local |
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| 100 | 100 | | 4.5community; |
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| 101 | 101 | | 4.6 (20) a contribution by a licensed organization to another licensed organization with prior |
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| 102 | 102 | | 4.7board approval, with the contribution designated to be used for one or more of the following |
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| 103 | 103 | | 4.8lawful purposes under this section: clauses (1) to (7), (11) to (15), (19), and (25); |
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| 104 | 104 | | 4.9 (21) an expenditure that is a contribution to a parent organization, if the parent |
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| 105 | 105 | | 4.10organization: (i) has not provided to the contributing organization within one year of the |
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| 106 | 106 | | 4.11contribution any money, grants, property, or other thing of value, and (ii) has received prior |
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| 107 | 107 | | 4.12board approval for the contribution that will be used for a program that meets one or more |
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| 108 | 108 | | 4.13of the lawful purposes under subdivision 7a; |
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| 109 | 109 | | 4.14 (22) an expenditure for the repair, maintenance, or improvement of real property and |
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| 110 | 110 | | 4.15capital assets owned by an organization, or for the replacement of a capital asset that can |
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| 111 | 111 | | 4.16no longer be repaired, with a fiscal year limit of five percent of gross profits from the |
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| 112 | 112 | | 4.17previous fiscal year, with no carryforward of unused allowances. The fiscal year is July 1 |
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| 113 | 113 | | 4.18through June 30. Total expenditures for the fiscal year may not exceed the limit unless the |
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| 114 | 114 | | 4.19board has specifically approved the expenditures that exceed the limit due to extenuating |
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| 115 | 115 | | 4.20circumstances beyond the organization's control. An expansion of a building or bar-related |
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| 116 | 116 | | 4.21expenditures are not allowed under this provision. |
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| 117 | 117 | | 4.22 (i) The expenditure must be related to the portion of the real property or capital asset |
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| 118 | 118 | | 4.23that must be made available for use free of any charge to other nonprofit organizations, |
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| 119 | 119 | | 4.24community groups, or service groups, and is used for the organization's primary mission or |
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| 120 | 120 | | 4.25headquarters. |
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| 121 | 121 | | 4.26 (ii) An expenditure may be made to bring an existing building that the organization owns |
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| 122 | 122 | | 4.27into compliance with the Americans with Disabilities Act. |
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| 123 | 123 | | 4.28 (iii) An organization may apply the amount that is allowed under item (ii) to the erection |
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| 124 | 124 | | 4.29or acquisition of a replacement building that is in compliance with the Americans with |
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| 125 | 125 | | 4.30Disabilities Act if the board has specifically approved the amount. The cost of the erection |
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| 126 | 126 | | 4.31or acquisition of a replacement building may not be made from gambling proceeds, except |
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| 127 | 127 | | 4.32for the portion allowed under this item; |
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| 128 | 128 | | 4Section 1. |
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| 129 | 129 | | 25-00841 as introduced12/02/24 REVISOR JSK/NS 5.1 (23) an expenditure for the acquisition or improvement of a capital asset with a cost |
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| 130 | 130 | | 5.2greater than $2,000, excluding real property, that will be used exclusively for lawful purposes |
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| 131 | 131 | | 5.3under this section if the board has specifically approved the amount; |
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| 132 | 132 | | 5.4 (24) an expenditure for the acquisition, erection, improvement, or expansion of real |
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| 133 | 133 | | 5.5property, if the board has first specifically authorized the expenditure after finding that the |
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| 134 | 134 | | 5.6real property will be used exclusively for lawful purpose under this section; |
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| 135 | 135 | | 5.7 (25) an expenditure, including a mortgage payment or other debt service payment, for |
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| 136 | 136 | | 5.8the erection or acquisition of a comparable building to replace an organization-owned |
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| 137 | 137 | | 5.9building that was destroyed or made uninhabitable by fire or catastrophe or to replace an |
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| 138 | 138 | | 5.10organization-owned building that was taken or sold under an eminent domain proceeding. |
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| 139 | 139 | | 5.11The expenditure may be only for that part of the replacement cost not reimbursed by |
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| 140 | 140 | | 5.12insurance for the fire or catastrophe or compensation not received from a governmental unit |
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| 141 | 141 | | 5.13under the eminent domain proceeding, if the board has first specifically authorized the |
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| 142 | 142 | | 5.14expenditure; or |
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| 143 | 143 | | 5.15 (26) a contribution to a 501(c)(19) organization that does not have an organization license |
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| 144 | 144 | | 5.16under section 349.16 and is not affiliated with the contributing organization, and whose |
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| 145 | 145 | | 5.17owned or leased property is not a permitted premises under section 349.165. The 501(c)(19) |
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| 146 | 146 | | 5.18organization may only use the contribution for lawful purposes under this subdivision or |
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| 147 | 147 | | 5.19for the organization's primary mission. The 501(c)(19) organization may not use the |
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| 148 | 148 | | 5.20contribution for expansion of a building or for bar-related expenditures. A contribution may |
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| 149 | 149 | | 5.21not be made to a statewide organization representing a consortia of 501(c)(19) organizations.; |
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| 150 | 150 | | 5.22or |
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| 151 | 151 | | 5.23 (27) an expenditure made before July 1, 2031, for the repair, maintenance, or |
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| 152 | 152 | | 5.24improvement of real property and capital assets owned by a licensed veterans organization, |
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| 153 | 153 | | 5.25or for the replacement of a capital asset that can no longer be repaired, with a fiscal year |
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| 154 | 154 | | 5.26limit of 50 percent of gross profits from the previous fiscal year, with no carryforward of |
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| 155 | 155 | | 5.27unused allowances. The fiscal year is July 1 through June 30. Total expenditures for the |
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| 156 | 156 | | 5.28fiscal year may not exceed the limit unless the board has specifically approved the |
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| 157 | 157 | | 5.29expenditures that exceed the limit due to extenuating circumstances beyond the organization's |
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| 158 | 158 | | 5.30control. An expansion of a building or bar-related expenditures are allowed under this |
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| 159 | 159 | | 5.31provision. |
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| 160 | 160 | | 5.32 (i) An expenditure may be made to bring an existing building that the organization owns |
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| 161 | 161 | | 5.33into compliance with the Americans with Disabilities Act. |
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| 162 | 162 | | 5Section 1. |
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| 163 | 163 | | 25-00841 as introduced12/02/24 REVISOR JSK/NS 6.1 (ii) An organization may apply the amount that is allowed under item (i) to the erection |
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| 164 | 164 | | 6.2or acquisition of a replacement building that is in compliance with the Americans with |
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| 165 | 165 | | 6.3Disabilities Act if the board has specifically approved the amount. The cost of the erection |
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| 166 | 166 | | 6.4or acquisition of a replacement building may not be made from gambling proceeds, except |
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| 167 | 167 | | 6.5for the portion allowed under this item. |
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| 168 | 168 | | 6.6 (b) Expenditures authorized by the board under paragraph (a), clauses (24) and (25), |
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| 169 | 169 | | 6.7must be 51 percent completed within two years of the date of board approval; otherwise the |
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| 170 | 170 | | 6.8organization must reapply to the board for approval of the project. "Fifty-one percent |
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| 171 | 171 | | 6.9completed" means that the work completed must represent at least 51 percent of the value |
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| 172 | 172 | | 6.10of the project as documented by the contractor or vendor. |
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| 173 | 173 | | 6.11 (c) Notwithstanding paragraph (a), "lawful purpose" does not include: |
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| 174 | 174 | | 6.12 (1) any expenditure made or incurred for the purpose of influencing the nomination or |
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| 175 | 175 | | 6.13election of a candidate for public office or for the purpose of promoting or defeating a ballot |
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| 176 | 176 | | 6.14question; |
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| 177 | 177 | | 6.15 (2) any activity intended to influence an election or a governmental decision-making |
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| 178 | 178 | | 6.16process; |
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| 179 | 179 | | 6.17 (3) a contribution to a statutory or home rule charter city, county, or town by a licensed |
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| 180 | 180 | | 6.18organization with the knowledge that the governmental unit intends to use the contribution |
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| 181 | 181 | | 6.19for a pension or retirement fund; or |
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| 182 | 182 | | 6.20 (4) a contribution to a 501(c)(3) organization or other entity with the intent or effect of |
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| 183 | 183 | | 6.21not complying with lawful purpose restrictions or requirements. |
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| 184 | 184 | | 6.22 EFFECTIVE DATE.This section is effective the day following final enactment. |
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| 185 | 185 | | 6Section 1. |
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| 186 | 186 | | 25-00841 as introduced12/02/24 REVISOR JSK/NS |
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