Townships permitted to regulate lawful gambling.

A bill for an act

relating to local government; permitting townships to regulate lawful gambling;

amending Minnesota Statutes 2024, sections 349.16, subdivision 8; 349.213.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 349.16, subdivision 8, is amended to read:

Subd. 8.

Local investigation fee.

A statutory or home rule charter city
new text begin
, township,
new text end
or

county may assess an annual investigation fee on organizations applying for an initial

premises permit or conducting lawful gambling at a site within its jurisdiction under section

349.213, subdivision 2
. An investigation fee may not exceed the following limits:

(1) for cities of the first class, $500;

(2) for cities of the second class, $250;

(3) for all other cities
new text begin
and for townships
new text end
, $100; and

(4) for counties, $375.

Sec. 2.

Minnesota Statutes 2024, section 349.213, is amended to read:

349.213 LOCAL AUTHORITY.

Subdivision 1.

Local regulation.

(a) A statutory or home rule city
new text begin
, township,
new text end
or county

has the authority to adopt more stringent regulation of lawful gambling within its jurisdiction,

including the prohibition of lawful gambling.

(b) A statutory or home rule city
new text begin
, township,
new text end
or county may require a permit for the

conduct of gambling exempt from licensing under section
349.166
. The fee for a permit

issued under section 349.166 may not exceed $100.

(c) The authority granted by this subdivision does not include the authority to require a

license or fee for a license or permit to conduct gambling by organizations, gambling

managers, gambling employees, or sales by distributors or linked bingo game providers

licensed by or registered with the board.

(d) The authority granted by this subdivision does not include the authority to require

an organization to make specific expenditures of more than ten percent per year from its

net profits derived from lawful gambling.

(e) For the purposes of this subdivision, net profits are gross profits less amounts

expended for allowable expenses and paid in taxes assessed on lawful gambling.

(f) A statutory or home rule charter city
new text begin
, township,
new text end
or
deleted text begin
a
deleted text end
county may not require an

organization conducting lawful gambling within its jurisdiction to make an expenditure to

the city
new text begin
, township,
new text end
or county as a condition to operate within that city
new text begin
, township,
new text end
or county,

except:

(1) as authorized under section
349.16, subdivision 8
, or
297E.02
; or

(2) by an ordinance requirement that such organizations must contribute ten percent per

year of their net profits derived from lawful gambling conducted at premises within the

city's
new text begin
, township's,
new text end
or county's jurisdiction to a fund administered and regulated by the

responsible local unit of government without cost to such fund. The funds must be disbursed

by the local unit of government for (i) charitable contributions as defined in section 349.12,

subdivision 7a, or (ii) police, fire, and other emergency or public safety-related services,

equipment, and training, excluding pension obligations. A contribution made by an

organization is not considered an expenditure to the city
new text begin
, township,
new text end
or county nor a tax

under section
297E.02
, and is valid and lawful. A city
new text begin
, township,
new text end
or county receiving and

making expenditures authorized under this clause must by March 15 of each year file a

report with the board, on a form the board prescribes, that lists all such revenues collected,

interest received on fund balances, and expenditures for the previous calendar year. A home

rule or statutory city
new text begin
, township,
new text end
or county making charitable contributions authorized under

this clause must acknowledge financial contributions of organizations conducting lawful

gambling to the community and to the recipients of the funds. This may occur in

communications about the funds as well as in the distribution of funds.

(g) A statutory or home rule city
new text begin
, township,
new text end
or county may by ordinance require that a

licensed organization conducting lawful gambling within its jurisdiction expend all or a

portion of its expenditures for lawful purposes on lawful purposes conducted or located

within the city's
new text begin
, township's,
new text end
or county's trade area. Such an ordinance must be limited to

lawful purpose expenditures of gross profits derived from lawful gambling conducted at

premises within the city's
new text begin
, township's,
new text end
or county's jurisdiction, must define the city's
new text begin
,

township's,
new text end
or county's trade area, and must specify the percentage of lawful purpose

expenditures which must be expended within the trade area. A trade area defined by a city
new text begin

or township
new text end
under this subdivision must include each city and township contiguous to the

defining city
new text begin
or township
new text end
.

(h) A more stringent regulation or prohibition of lawful gambling adopted by a political

subdivision under this subdivision must apply equally to all forms of lawful gambling within

the jurisdiction of the political subdivision, except a political subdivision may prohibit the

use of paddlewheels.

Subd. 2.

Local approval.

The board may not issue an initial premises permit unless

approval is received from:

(1) the city council of the statutory or home rule city in which the organization's premises

is located;
deleted text begin
or
deleted text end

new text begin

(2) the township board of the township where the premises is located; or

new text end

deleted text begin

(2)
deleted text end
new text begin
(3)
new text end
the county board of the county where the premises is located.

The organization must submit a resolution from the city council
new text begin
, township board,
new text end
or county

board approving the premises permit. The resolution must have been adopted within 90

days of the date of application for the new permit.

Subd. 3.

Local gambling tax.

A statutory or home rule charter city that has one or more

licensed organizations operating lawful gambling,
new text begin
a township that has one or more licensed

organizations operating lawful gambling,
new text end
and a county that has one or more licensed

organizations outside incorporated areas operating lawful gambling, may impose a local

gambling tax on each licensed organization within the city's
new text begin
, township's,
new text end
or county's

jurisdiction. The tax may be imposed only if the amount to be received by the city
new text begin
, township,
new text end

or county is necessary to cover the costs incurred by the city
new text begin
, township,
new text end
or county to regulate

lawful gambling. The tax imposed by this subdivision may not exceed three percent per

year of the gross receipts of a licensed organization from all lawful gambling less prizes

actually paid out by the organization. A city
new text begin
, township,
new text end
or county may not use money

collected under this subdivision for any purpose other than to regulate lawful gambling. All

documents pertaining to site inspections, fines, penalties, or other corrective action involving

local lawful gambling regulation must be shared with the board within 30 days of filing at

the city
new text begin
, township,
new text end
or county of jurisdiction. A tax imposed under this subdivision is in lieu

of all other local taxes and local investigation fees on lawful gambling. A city
new text begin
, township,
new text end

or county that imposes a tax under this subdivision shall annually, by March 15, file a report

with the board in a form prescribed by the board showing (1) the amount of revenue produced

by the tax during the preceding calendar year, and (2) the use of the proceeds of the tax.