NOTICE OF SUBMISSION OF RULES PROPOSED FOR ADOPTION WITHOUT A PUBLIC HEARING TO THE OFFICE OF ADMINISTRATIVE HEARINGS
Amendments to Rules Governing Annual Audits of Lawful Gambling Organizations, Minnesota Rules, parts 8122.0100; 8122.0150, subparts 6, 9, and 12; 8122.0200, subpart 2; 8122.0250; 8122.0350; 8122.0400, subpart 3; 8122.0450; 8122.0500; 8122.0510; 8122.0550, subparts 3, 4, 5, 6, and 7; and 8122.0650, subparts 1 and 2; Repealing part 8122.0150, subpart 11; Revisor’s ID Number R-4657.
TO: ALL INTERESTED PERSONS
In accordance with Minnesota Statutes, section 14.388, subdivision 2, this Notice is being sent to all persons who have registered their name with the agency under Minnesota Statutes, section 14.14, subdivision 1a. This notice is also posted on the website of the Department of Revenue.
The Department is using the good cause exemption process under Minnesota Statutes, section 14.388, subd. 1, clause (3) and (4), as authority for proposing the rule amendments cited above.
PLEASE TAKE NOTICE that the rule amendments cited above will be submitted to the Office of Administrative Hearings on the date of this notice, October 26, 2020. A copy of the proposed rule changes is attached to this notice.
Also attached is the “Findings & Statement of Supporting Reasons,” which explain why the amendments qualify for the good cause exemption from rulemaking. The same “Findings and Statement of Supporting Reasons” was incorporated by reference into the Commissioner’s proposed order adopted the rule, which was submitted to the Office of Administrative Hearings.
All interested persons have five business days after the date of this notice to submit comments to the Office of Administrative Hearings via its eComments website at https://minnesotaoah.granicusideas.com/discussions or via its mailing address at 600 North Robert Street, P.O. Box 64620, St. Paul, Minnesota 55164-64620. To be considered, comments must be received by OAH no later than 4:30 p.m. on November 2, 2020.
The agency contact person is Jim Jordan, Department of Revenue, 600 N. Robert St., St. Paul, MN 55164-64620, (651) 556-4080, jim.jordan@state.mn.us. Please contact Mr. Jordan with questions about this proposed rulemaking or for a special accommodation.
Signed by: Jim Jordan, Esq., Department of Revenue, Appeals and Legal Services Division
October 26, 2020
FINDINGS & STATEMENT OF SUPPORTING REASONS
Adoption of Permanent Exempt Rule Governing Annual Audits of Lawful Gambling Organizations: Amending Minnesota Rules, parts 8122.0100; 8122.0150, subparts 6, 9, and 12; 8122.0200, subpart 2; 8122.0250; 8122.0350; 8122.0400, subpart 3; 8122.0450; 8122.0500; 8122.0510; 8122.0550, subparts 3, 4, 5, 6, and 7; and 8122.0650, subparts 1 and 2; Repealing part 8122.0150, subpart 11.
FINDINGS
Under Minnesota Statutes, section 297E.06, subdivision 4, lawful charitable gambling organizations licensed by the Gambling Control Board under Minnesota Statutes, Chapter 349, and which generate over $750,000 in annual revenue through the sale of gambling games (e.g., pull-tabs and bingo), must hire an independent accounting firm to conduct an annual financial audit. The audit helps the Department ensure appropriate Chapter 297E gambling tax is paid.
The statute imposing the annual audit requirement, Minnesota Statutes, section 297E.06, subdivision 4, was enacted in 1994. Minnesota Rules, chapter 8122, governing annual audits of lawful gambling organizations (the Annual Audit Rule) provides more detail about the annual audit requirement and was first promulgated in 1996. The Annual Audit Rule has been amended four times since then, the last time in 2010.
The current rule needs to be amended to reflect major changes enacted in 2012 to Minnesota’s laws governing gambling tax (Chapter 297E) and lawful charitable gambling generally (Chapter 349). The 2012 changes included, among other things: 1) legalization of electronic games (e.g., electronic pull-tabs and electronic bingo) and sports-themed tipboards; and 2) elimination of a tax on distributors of gambling equipment and imposition of tax on certain gambling net receipts and certain combined net receipts.
The Annual Audit Rule also needs to be amended to ensure it reflects other changes to lawful gambling statutes (e.g., a change in 2009 to the kinds of organizations that must include a certified cash count in their audit) and non-statutory changes (e.g., changes in the government agency responsible for collecting data and changes to the names of required forms).
Given the large volume of changes in this proposal, we have attached Exhibit 1, which presents the findings for each amendment in “track changes” form. This form makes it easier for readers to visually connect each amendment with the rationale for promulgating the amendment using the “good cause exemption” procedures found in Minnesota Statutes, section 14.388.
STATEMENT OF SUPPORTING REASONS
An amendment must meet one of the criteria of Minnesota Statutes, section 14.388, to be adopted under good cause exemption procedures. The third clause, “to incorporate specific changes set forth in applicable statutes when no interpretation of law is required,” applies in this instance. The fourth clause – “make[s] changes that do not alter the sense, meaning, or effect of a rule” – also applies.
As noted above, see Exhibit 1 for an explanation of why each amendment meets one or both of these criteria.
Minn. R. 8122 Proposed Rule Amendments
Notice of Submission with all Exhibits
