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HF 4922

Manufacturers audit requirement removed.

2025-2026 Regular Session Introduced by Wayne Johnson

The bill removes the mandatory annual SOC audit for electronic pull-tab manufacturers, while preserving existing audits and certified inventories for larger gambling licensees.

Introduction and first reading, referred to Commerce Finance and Policy
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Bill Summary · HF 4922

Summary of HF4922 (2025-2026) – “Manufacturers audit requirement removed”

Purpose and intent

HF4922 amends Minnesota law to remove the annual audit requirement that applies to electronic pull-tab (EPT) manufacturers and to simplify related auditing requirements for gambling-related organizations. The bill eliminates an existing audit obligation for EPT manufacturers and consolidates/clarifies the audit and inventory reporting framework for licensees under charitable gambling statutes.

Key provisions and changes

  • Abolition of electronic pull-tab manufacturer audit requirement (repealed)

    • Repeals Minnesota Statutes 2024, section 349.163, subdivision 12, which mandated an annual system and organization controls (SOC) audit for electronic pull-tab manufacturers.
    • The repealer is explicit in Sec. 2 of HF4922 and is reflected in the Appendix as the removed requirement.

  • Continuing annual audits for organizations with substantial gambling receipts (unchanged framework, clarifications)

    • Under Minnesota Statutes 297E.06, Subd. 4, continued framework remains for organizations licensed under chapter 349 with annual gross receipts from lawful gambling exceeding $750,000 to have an annual financial audit of their lawful gambling activities and funds.
    • For organizations with gross receipts under $750,000, the commissioner may require audits for specified compliance failures (late tax returns/payments, fraudulent returns, failure to take corrective actions, or other noncompliance).

  • Audit standards and certified inventory reporting (existing standards retained with potential updates)

    • Audits must be performed by an independent accounting firm licensed under ch. 326A.
    • Organizations must perform an annual certified inventory report at year-end, due within 30 days after fiscal year-end, on a form prescribed by the commissioner.
    • The commissioner of revenue sets auditing and certified inventory standards, aligned with AICPA standards (as applicable), and adapted to gross receipts levels.

Who/what is affected

  • Electronic pull-tab manufacturers (EPT manufacturers)

    • Direct impact: removal of the mandatory annual SOC audit requirement previously imposed under section 349.163, subdivision 12. The statutory basis for requiring SOC audits of EPT manufacturers is repealed.

  • Gambling licensees under chapter 349

    • Indirectly affected by harmonized audit and inventory reporting requirements. Larger licensees (>$750,000 gross receipts) retain annual financial audits of lawful gambling activities. Smaller licensees remain subject to commissioner-initiated audits for specified noncompliance and must continue annual certified inventory reporting.

  • Auditors and accounting firms

    • Retain roles in conducting audits for licensees and in performing certified inventories, under commissioner-prescribed standards consistent with AICPA guidance.

Procedural and timeline aspects

  • Status and action: Introduced and referred to the Commerce Finance and Policy committee on April 9, 2026.
  • Effective dates: The bill text does not specify immediate effective dates for the repeal beyond enactment; standard practice would be for the repeal to take effect upon becoming law, with any transitional matters handled in implementing guidance or subsequent amendments.

Practical impact

  • The main effect is to reduce regulatory and compliance burden on electronic pull-tab manufacturers by removing the mandatory SOC audit requirement.
  • The established audit framework for gambling licensees with higher gross receipts remains intact, maintaining accountability for substantial lawful gambling activity and ensuring accurate reporting and inventory controls.
  • The bill aligns Minnesota’s regulatory approach by phasing out the now-repealed EPT manufacturer audit while preserving independent audits and inventories for licensees, with standards guided by AICPA principles.

Compiled from official sources — confirm details with the bill’s official record.

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