1.1                          A bill for an act
  1.2             relating to state departments; abolishing the higher 
  1.3             education coordinating board, the Minnesota racing 
  1.4             commission, the gambling control board, and the 
  1.5             department of public service; transferring certain 
  1.6             responsibilities and personnel to other agencies; 
  1.7             creating new agencies; reducing certain 
  1.8             appropriations; amending Minnesota Statutes 1994, 
  1.9             sections 126.56; 126.663, subdivision 3; 126A.02, 
  1.10            subdivision 2; 135A.12, subdivision 1; 135A.15, 
  1.11            subdivision 1; 135A.153, subdivision 1; 136A.01; 
  1.12            136A.03; 136A.07; 136A.08; 136A.101, subdivisions 2 
  1.13            and 3; 136A.15, subdivisions 3 and 4; 136A.16, 
  1.14            subdivision 1; 136A.233, subdivision 2; 136A.26, 
  1.15            subdivisions 1 and 2; 136A.42; 136A.62, subdivision 2; 
  1.16            136A.69; 141.25, subdivision 8; 144.1487, subdivision 
  1.17            1; 144.1488, subdivisions 1 and 4; 144.1489, 
  1.18            subdivisions 1, 3, and 4; 144.1490; 144.1491, 
  1.19            subdivision 2; 240.011; 240.03; 240.04; 240.28; 
  1.20            298.2214, subdivision 5; 299L.02, subdivision 2; 
  1.21            349.12, subdivision 10; 349.151; 349.153; 349A.02, 
  1.22            subdivision 1; 349A.04; 349A.05; 349A.06, subdivision 
  1.23            2; 349A.08, subdivision 7; 349A.11; and 349A.12, 
  1.24            subdivision 4; proposing coding for new law in 
  1.25            Minnesota Statutes, chapters 3; 135A; 136A; 240; and 
  1.26            349; proposing coding for new law as Minnesota 
  1.27            Statutes, chapter 216E; repealing Minnesota Statutes 
  1.28            1994, sections 135A.052, subdivisions 2 and 3; 
  1.29            135A.08; 135A.09; 135A.10; 135A.11; 135A.12, 
  1.30            subdivision 5; 136A.02; 136A.04; 136A.041; 136A.125, 
  1.31            subdivision 5; 136A.1352; 136A.1353; 136A.1354; 
  1.32            136A.85; 136A.86; 136A.87; 136A.88; 144.1488, 
  1.33            subdivision 2; 148.236; 240.01, subdivision 4; 240.02; 
  1.34            240.04, subdivisions 1 and 1a; 349.12, subdivision 6; 
  1.35            349.152, subdivisions 1 and 2; 349A.01, subdivision 2; 
  1.36            349A.02, subdivision 8; and 349A.03. 
  1.37  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.38                             ARTICLE 1
  1.39              HIGHER EDUCATION ADMINISTRATORS COUNCIL
  1.40     Section 1.  Minnesota Statutes 1994, section 126.56, is 
  1.41  amended to read: 
  2.1      126.56 [SUMMER SCHOLARSHIPS FOR ACADEMIC ENRICHMENT.] 
  2.2      Subdivision 1.  [ESTABLISHMENT.] A scholarship program is 
  2.3   established to enable secondary students to attend summer 
  2.4   programs sponsored by post-secondary institutions. 
  2.5      Subd. 2.  [ELIGIBLE STUDENT.] To be eligible for a 
  2.6   scholarship, a student shall: 
  2.7      (1) be a United States citizen or permanent resident of the 
  2.8   United States; 
  2.9      (2) be a resident of Minnesota; 
  2.10     (3) attend an eligible program; 
  2.11     (4) have completed at least one year of secondary school 
  2.12  but not have graduated from high school; 
  2.13     (5) have earned at least a B average during the semester or 
  2.14  quarter prior to application, or have earned at least a B 
  2.15  average during the semester or quarter prior to application in 
  2.16  the academic subject area applicable to the summer program the 
  2.17  student wishes to attend; and 
  2.18     (6) demonstrate need for financial assistance. 
  2.19     Subd. 3.  [FINANCIAL NEED.] Need for financial assistance 
  2.20  shall be based on family income, family size, and special 
  2.21  necessary expenditures of the family.  The higher 
  2.22  education coordinating board services office shall review the 
  2.23  financial need of each pupil to meet the actual costs of 
  2.24  attending the summer program, as determined by the institution 
  2.25  sponsoring the summer program.  The board office shall award 
  2.26  scholarships within the limits of the appropriation for this 
  2.27  section.  If the amount appropriated is insufficient, the board 
  2.28  shall allocate the amount appropriated in the manner it 
  2.29  determines.  A scholarship shall not exceed $1,000. 
  2.30     Subd. 4.  [ELIGIBLE INSTITUTIONS.] A scholarship may be 
  2.31  used only at an eligible institution.  A Minnesota public 
  2.32  post-secondary institution is an eligible institution.  A 
  2.33  private post-secondary institution is eligible if it: 
  2.34     (1) is accredited by the North Central Association of 
  2.35  Colleges; 
  2.36     (2) offers an associate or baccalaureate degree program 
  3.1   approved under section 136A.65, subdivision 1; and 
  3.2      (3) is located in Minnesota. 
  3.3      Subd. 4a.  [ELIGIBLE PROGRAMS.] A scholarship may be used 
  3.4   only for an eligible program.  To be eligible, a program must: 
  3.5      (1) provide, as its primary purpose, academic instruction 
  3.6   for student enrichment in curricular areas including, but not 
  3.7   limited to, communications, humanities, social studies, social 
  3.8   science, science, mathematics, art, or foreign languages; 
  3.9      (2) not be offered for credit to post-secondary students; 
  3.10     (3) not provide remedial instruction; 
  3.11     (4) meet any other program requirements established by the 
  3.12  state board of education and the higher education coordinating 
  3.13  board services office; and 
  3.14     (5) be approved by the commissioner.  
  3.15     Subd. 5.  [ADVISORY COMMITTEE.] An advisory committee shall 
  3.16  assist the state board of education in approving eligible 
  3.17  programs and shall assist the higher education coordinating 
  3.18  board services office in planning, implementing, and evaluating 
  3.19  the scholarship program.  The committee shall consist of 11 
  3.20  members, to include the executive director of the higher 
  3.21  education coordinating board services office or a 
  3.22  representative, the commissioner of education or a 
  3.23  representative, two secondary school administrators and two 
  3.24  secondary teachers appointed by the commissioner of education, 
  3.25  the executive director of the academic excellence foundation, a 
  3.26  private college representative appointed by the president of the 
  3.27  Minnesota private college council, a community college 
  3.28  representative appointed by the community college chancellor, a 
  3.29  state university representative appointed by the state 
  3.30  university chancellor, and a University of Minnesota 
  3.31  representative appointed by the president of the University of 
  3.32  Minnesota.  The committee expires June 30, 1995 1997. 
  3.33     Subd. 6.  [INFORMATION.] The higher education coordinating 
  3.34  board services office, in cooperation with the academic 
  3.35  excellence foundation, shall assemble and distribute information 
  3.36  about scholarships and eligible programs.  
  4.1      Subd. 7.  [ADMINISTRATION.] The higher education 
  4.2   coordinating board services office and commissioner shall 
  4.3   determine the time and manner for scholarship applications, 
  4.4   awards, and program approval. 
  4.5      Subd. 8.  [EXEMPTION FROM RULEMAKING.] Sections 14.01 to 
  4.6   14.47 do not apply to this section. 
  4.7      Sec. 2.  Minnesota Statutes 1994, section 126.663, 
  4.8   subdivision 3, is amended to read: 
  4.9      Subd. 3.  [MODEL LEARNER OUTCOMES.] The department shall 
  4.10  develop and maintain model learner outcomes in state board 
  4.11  identified subject areas, including career vocational learner 
  4.12  outcomes.  The department shall make learner outcomes available 
  4.13  upon request by a district.  Learner outcomes shall be for 
  4.14  pupils in early childhood through grade 12.  The department 
  4.15  shall consult with each of the public post-secondary systems and 
  4.16  with the higher education coordinating board in developing model 
  4.17  learner outcomes appropriate for entry into post-secondary 
  4.18  institutions.  Learner outcomes shall include thinking and 
  4.19  problem solving skills. 
  4.20     Sec. 3.  Minnesota Statutes 1994, section 126A.02, 
  4.21  subdivision 2, is amended to read: 
  4.22     Subd. 2.  [BOARD MEMBERS.] A 17-member 16-member board 
  4.23  shall advise the director.  The board is made up of the 
  4.24  commissioners of the department of natural resources; the 
  4.25  pollution control agency; the department of agriculture; the 
  4.26  department of education; the director of the office of strategic 
  4.27  and long-range planning; the chair of the board of water and 
  4.28  soil resources; the executive director of the higher education 
  4.29  coordinating board; the executive secretary of the board of 
  4.30  teaching; the director of the extension service; and eight 
  4.31  citizen members representing diverse interests appointed by the 
  4.32  governor.  The governor shall appoint one citizen member from 
  4.33  each congressional district.  The citizen members are subject to 
  4.34  section 15.0575.  Two of the citizen members appointed by the 
  4.35  governor must be licensed teachers currently teaching in the 
  4.36  K-12 system.  The governor shall annually designate a member to 
  5.1   serve as chair for the next year. 
  5.2      Sec. 4.  [135A.047] [HIGHER EDUCATION ADMINISTRATORS 
  5.3   COUNCIL.] 
  5.4      Subdivision 1.  [ESTABLISHED.] A higher education 
  5.5   administrators council is established.  The council is composed 
  5.6   of the president of the University of Minnesota, the provost of 
  5.7   arts, sciences and engineering at the Twin Cities campus, and 
  5.8   the chancellor of a coordinate University of Minnesota campus 
  5.9   selected by the other chancellors; the chancellor of the higher 
  5.10  education board, and the president of a state university, the 
  5.11  president of a community college, and the president of a 
  5.12  technical college, each selected by their respective group of 
  5.13  presidents; the president of the private college council; and a 
  5.14  representative from the Minnesota association of private 
  5.15  post-secondary schools.  The commissioner of education and the 
  5.16  commissioner of finance shall serve as ex officio, nonvoting 
  5.17  members. 
  5.18     Subd. 2.  [DUTIES.] The higher education administrators 
  5.19  council shall: 
  5.20     (1) provide information and assistance to high schools and 
  5.21  other organizations to help students prepare and plan for 
  5.22  college; 
  5.23     (2) enter into reciprocity agreements with neighboring 
  5.24  states and provinces, as provided in section 136A.08; 
  5.25     (3) appoint, in conjunction with the student advisory 
  5.26  council as provided in section 136A.031, subdivision 2, the 
  5.27  director of the higher education services office, as provided in 
  5.28  section 136A.01; 
  5.29     (4) consult with the student advisory council, established 
  5.30  in section 136A.011, whenever necessary but at least quarterly; 
  5.31  and 
  5.32     (5) communicate with and make recommendations to the 
  5.33  governor and the legislature regarding issues and needs in 
  5.34  higher education, except that the higher education services 
  5.35  office shall report on financial aid. 
  5.36     Sec. 5.  Minnesota Statutes 1994, section 135A.12, 
  6.1   subdivision 1, is amended to read: 
  6.2      Subdivision 1.  [APPLICABILITY.] This section applies 
  6.3   to the higher education coordinating board, each public 
  6.4   post-secondary governing board, and each public post-secondary 
  6.5   institution, and each school board that operates a technical 
  6.6   college.  
  6.7      Sec. 6.  Minnesota Statutes 1994, section 135A.15, 
  6.8   subdivision 1, is amended to read: 
  6.9      Subdivision 1.  [POLICY REQUIRED.] The governing board of 
  6.10  each public technical college, community college, or state 
  6.11  university shall, and the University of Minnesota is requested 
  6.12  to, adopt a clear, understandable written policy on sexual 
  6.13  harassment and sexual violence that informs victims of their 
  6.14  rights under the crime victims bill of rights, including the 
  6.15  right to assistance from the crime victims reparations board and 
  6.16  the office of the crime victim ombudsman.  The policy must apply 
  6.17  to students and employees and must provide information about 
  6.18  their rights and duties.  The policy must apply to criminal 
  6.19  incidents occurring on property owned by the post-secondary 
  6.20  system or institution in which the victim is a student or 
  6.21  employee of that system or institution.  It must include 
  6.22  procedures for reporting incidents of sexual harassment or 
  6.23  sexual violence and for disciplinary actions against violators.  
  6.24  During student registration, each technical college, community 
  6.25  college, or state university shall, and the University of 
  6.26  Minnesota is requested to, provide each student with information 
  6.27  regarding its policy.  A copy of the policy also shall be posted 
  6.28  at appropriate locations on campus at all times.  Each private 
  6.29  post-secondary institution that enrolls students who receive 
  6.30  state financial aid must adopt a policy that meets the 
  6.31  requirements of this section.  The higher education coordinating 
  6.32  board shall coordinate the policy development of the systems and 
  6.33  institutions and periodically provide for review and necessary 
  6.34  changes in the policies. 
  6.35     Sec. 7.  Minnesota Statutes 1994, section 135A.153, 
  6.36  subdivision 1, is amended to read: 
  7.1      Subdivision 1.  [CREATION AND DESIGNATION.] The higher 
  7.2   education center on violence and abuse is created.  The higher 
  7.3   education center on violence and abuse shall be located at and 
  7.4   managed by a public or private post-secondary institution in 
  7.5   Minnesota.  The higher education coordinating board shall 
  7.6   designate the location of the center following review of 
  7.7   proposals from potential higher education sponsors. 
  7.8      Sec. 8.  Minnesota Statutes 1994, section 136A.01, is 
  7.9   amended to read: 
  7.10     136A.01 [HIGHER EDUCATION SERVICES OFFICE.] 
  7.11     Subdivision 1.  [CREATION.] A coordinating board An office 
  7.12  for higher education in the state of Minnesota, to be known as 
  7.13  the Minnesota higher education coordinating board services 
  7.14  office or HESO, is hereby created. 
  7.15     Subd. 2.  [RESPONSIBILITIES.] The higher education services 
  7.16  office is responsible for: 
  7.17     (1) necessary state level administration of financial aid 
  7.18  programs, including accounting, auditing, and disbursing state 
  7.19  and federal financial aid funds, and reporting on financial aid 
  7.20  programs to the governor and the legislature; 
  7.21     (2) approval, registration, licensing, and financial aid 
  7.22  eligibility of private collegiate and career schools, under 
  7.23  sections 136A.61 to 136A.71 and chapter 141; 
  7.24     (3) administering the telecommunications council under Laws 
  7.25  1993, First Special Session chapter 2, article 5, section 2, and 
  7.26  the Learning Network of Minnesota; 
  7.27     (4) negotiating and administering reciprocity under the 
  7.28  direction of the higher education administrators council; 
  7.29     (5) publishing and distributing financial aid information 
  7.30  and materials; 
  7.31     (6) collecting and maintaining student enrollment and 
  7.32  financial aid data; and 
  7.33     (7) prescribing policies, procedures, and rules under 
  7.34  chapter 14 necessary to administer the programs under its 
  7.35  supervision. 
  7.36     Sec. 9.  Minnesota Statutes 1994, section 136A.03, is 
  8.1   amended to read: 
  8.2      136A.03 [EXECUTIVE OFFICERS; EMPLOYEES.] 
  8.3      The higher education coordinating board may appoint an 
  8.4   executive secretary or director as its principal executive 
  8.5   officer, and such other officers and employees as it may deem 
  8.6   necessary to carry out its duties.  The executive secretary or 
  8.7   director of the higher education services office shall possess 
  8.8   such the powers and perform such the duties as are delegated 
  8.9   prescribed by the board higher education administrators council 
  8.10  and shall serve in the unclassified service of the state civil 
  8.11  service.  The salary of the executive director shall be 
  8.12  established pursuant by the higher education administrators 
  8.13  council according to section 15A.081, subdivision 1.  The 
  8.14  executive director shall be a person qualified by training and 
  8.15  ability or experience in the field of higher education or 
  8.16  in educational financial aid administration.  The board director 
  8.17  may also appoint other officers and professional employees who 
  8.18  shall serve in the unclassified service of the state civil 
  8.19  service and fix the salaries thereof which shall be commensurate 
  8.20  with salaries in the classified service.  All other employees 
  8.21  shall be in the classified civil service.  
  8.22     An officer or professional employee in the unclassified 
  8.23  service as provided in this section is a person who has studied 
  8.24  higher education or a related field at the graduate level or has 
  8.25  similar experience and who is qualified for a career in some 
  8.26  aspect financial aid and other aspects of higher education and 
  8.27  for activities in keeping with the planning and administrative 
  8.28  responsibilities of the board office and who is appointed to 
  8.29  assume responsibility for administration of educational programs 
  8.30  or research in matters of higher education. 
  8.31     Sec. 10.  [136A.031] [ADVISORY GROUPS.] 
  8.32     Subdivision 1.  [APPOINTMENT.] The director of the higher 
  8.33  education services office may appoint advisory task forces as 
  8.34  necessary to assist in the administration of the higher 
  8.35  education services office responsibilities.  The task forces 
  8.36  expiration and the terms, compensation, and removal of members 
  9.1   are as provided in section 15.059. 
  9.2      Subd. 2.  [STUDENT ADVISORY COUNCIL.] A student advisory 
  9.3   council to the higher education services office is established.  
  9.4   The members of the council shall include the chair of the 
  9.5   University of Minnesota student senate, the state chair of the 
  9.6   Minnesota state university student association, the president of 
  9.7   the Minnesota community college student association, the 
  9.8   president of the Minnesota technical college student 
  9.9   association, the president of the Minnesota association of 
  9.10  private college students, and a student who is enrolled in a 
  9.11  private vocational school, to be appointed by the Minnesota 
  9.12  association of private post-secondary schools.  A member may be 
  9.13  represented by a designee.  The council shall select one of its 
  9.14  members to serve as chair. 
  9.15     The director of the higher education services office shall 
  9.16  inform the student advisory council of all matters under 
  9.17  consideration and shall refer all proposals to the council 
  9.18  before taking action or sending the proposals to the higher 
  9.19  education administrators council.  The student advisory council 
  9.20  shall report to the director of the higher education services 
  9.21  office quarterly and at other times that the council considers 
  9.22  desirable.  The council shall determine its meeting times, but 
  9.23  the council shall also meet with the director of the services 
  9.24  office within 30 days after the director's request for a council 
  9.25  meeting. 
  9.26     The advisory council shall: 
  9.27     (1) appoint two members to serve jointly with the higher 
  9.28  education administrators council in selecting a director of the 
  9.29  higher education services office; 
  9.30     (2) bring to the attention of the higher education services 
  9.31  office any matter that the council believes needs the attention 
  9.32  of the office; 
  9.33     (3) make recommendations to the higher education services 
  9.34  office as the council finds appropriate; 
  9.35     (4) appoint student members to the higher education 
  9.36  services office advisory groups as provided in subdivision 3; 
 10.1   and 
 10.2      (5) provide any reasonable assistance to the office. 
 10.3      Subd. 3.  [STUDENT REPRESENTATION.] If requested by the 
 10.4   student advisory council, the director must place at least one 
 10.5   student from an affected educational system on any group created 
 10.6   under subdivision 1.  The student member or members shall be 
 10.7   appointed by the student advisory council. 
 10.8      Sec. 11.  Minnesota Statutes 1994, section 136A.07, is 
 10.9   amended to read: 
 10.10     136A.07 [REPORTS.] 
 10.11     The higher education coordinating board administrators 
 10.12  council shall report to the governor and legislature concerning 
 10.13  its activities from time to time and may report in connection 
 10.14  therewith to the governing body of each institution of higher 
 10.15  education in the state, both public and private.  It shall file 
 10.16  a formal report including, but not limited to, detailed 
 10.17  financial aid information, prepared by the higher education 
 10.18  services office, with the governor and the legislature not later 
 10.19  than October 15 of each even-numbered year so that the 
 10.20  information therein contained, including recommendations, may be 
 10.21  embodied in the governor's budget message to the legislature.  
 10.22  It shall also report to the legislature not later than November 
 10.23  15 of each even-numbered year. 
 10.24     Sec. 12.  Minnesota Statutes 1994, section 136A.08, is 
 10.25  amended to read: 
 10.26     136A.08 [RECIPROCAL AGREEMENTS RELATING TO NONRESIDENT 
 10.27  TUITION WITH OTHER STATES OR PROVINCES.] 
 10.28     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 10.29  section, the terms "province" and "provincial" mean the Canadian 
 10.30  province of Manitoba. 
 10.31     Subd. 2.  [AUTHORIZATION.] The Minnesota higher education 
 10.32  coordinating board administrators council, in consultation with 
 10.33  the commissioner of finance and each affected public 
 10.34  post-secondary board, may enter into agreements, on subjects 
 10.35  that include remission of nonresident tuition for designated 
 10.36  categories of students at public post-secondary institutions, 
 11.1   with appropriate state or provincial agencies and public 
 11.2   post-secondary institutions in other states or provinces.  The 
 11.3   agreements shall be for the purpose of the mutual improvement of 
 11.4   educational advantages for residents of this state and other 
 11.5   states or provinces with whom agreements are made.  The higher 
 11.6   education services office shall negotiate and administer any 
 11.7   agreement entered into by the council. 
 11.8      Subd. 3.  [WISCONSIN.] A higher education reciprocity 
 11.9   agreement with the state of Wisconsin may include provision for 
 11.10  the transfer of funds between Minnesota and Wisconsin provided 
 11.11  that an income tax reciprocity agreement between Minnesota and 
 11.12  Wisconsin is in effect for the period of time included under the 
 11.13  higher education reciprocity agreement.  If this provision is 
 11.14  included, the amount of funds to be transferred shall be 
 11.15  determined according to a formula which is mutually acceptable 
 11.16  to the board council and a duly designated agency representing 
 11.17  Wisconsin.  The formula shall recognize differences in tuition 
 11.18  rates between the two states and the number of students 
 11.19  attending institutions in each state under the agreement.  Any 
 11.20  payments to Minnesota by Wisconsin shall be deposited by the 
 11.21  board higher education services office in the general fund of 
 11.22  the state treasury.  The amount required for the payments shall 
 11.23  be certified by the executive director of the higher 
 11.24  education coordinating board services office to the commissioner 
 11.25  of finance annually. 
 11.26     Subd. 4.  [NORTH DAKOTA; SOUTH DAKOTA.] A reciprocity 
 11.27  agreement with North Dakota may include provision for the 
 11.28  transfer of funds between Minnesota and North Dakota.  If 
 11.29  provision for transfer of funds between the two states is 
 11.30  included, the amount of funds to be transferred shall be 
 11.31  determined according to a formula which is mutually acceptable 
 11.32  to the board council and a duly designated agency representing 
 11.33  North Dakota.  In adopting a formula, the board council shall 
 11.34  consider tuition rates in the two states and the number of 
 11.35  students attending institutions in each state under the 
 11.36  agreement.  Any payment to Minnesota by North Dakota shall be 
 12.1   deposited by the board higher education services office in the 
 12.2   general fund.  The amount required for the payments shall be 
 12.3   certified by the executive director of the higher education 
 12.4   coordinating board services office to the commissioner of 
 12.5   finance annually.  All provisions in this subdivision pertaining 
 12.6   to North Dakota shall also be applied to South Dakota, and all 
 12.7   authority and conditions granted for higher education 
 12.8   reciprocity with North Dakota are also granted for higher 
 12.9   education reciprocity with South Dakota. 
 12.10     Subd. 5.  [FINANCIAL AID.] The board council may enter into 
 12.11  an agreement, with a state or province with which it has 
 12.12  negotiated a reciprocity agreement for tuition, to permit 
 12.13  students to receive student aid awards from the student's state 
 12.14  or province of residence for attending an eligible institution 
 12.15  in the other state or province. 
 12.16     Subd. 6.  [APPROVAL.] An agreement made by the board 
 12.17  council under this section is not valid as to a particular 
 12.18  institution without the approval of that institution's state or 
 12.19  provincial governing board.  A valid agreement under this 
 12.20  subdivision that incurs additional financial liability to the 
 12.21  state or to any of the Minnesota public post-secondary boards, 
 12.22  beyond enrollment funding adjustments, must be submitted to the 
 12.23  commissioner of finance and to the chairs of the higher 
 12.24  education finance divisions of the senate and house for review.  
 12.25  The agreement remains valid unless it is disapproved in law. 
 12.26     Sec. 13.  Minnesota Statutes 1994, section 136A.101, 
 12.27  subdivision 2, is amended to read: 
 12.28     Subd. 2.  "Board" "Office" means the Minnesota higher 
 12.29  education coordinating board services office. 
 12.30     Sec. 14.  Minnesota Statutes 1994, section 136A.101, 
 12.31  subdivision 3, is amended to read: 
 12.32     Subd. 3.  "Director" means the executive director of the 
 12.33  Minnesota higher education coordinating board services office. 
 12.34     Sec. 15.  Minnesota Statutes 1994, section 136A.15, 
 12.35  subdivision 3, is amended to read: 
 12.36     Subd. 3.  "Board" "Office" means the Minnesota higher 
 13.1   education coordinating board services office. 
 13.2      Sec. 16.  Minnesota Statutes 1994, section 136A.15, 
 13.3   subdivision 4, is amended to read: 
 13.4      Subd. 4.  "Director" means the executive director of the 
 13.5   Minnesota higher education coordinating board services office. 
 13.6      Sec. 17.  Minnesota Statutes 1994, section 136A.16, 
 13.7   subdivision 1, is amended to read: 
 13.8      Subdivision 1.  Notwithstanding chapter 16B, the Minnesota 
 13.9   higher education coordinating board services office is 
 13.10  designated as the administrative agency for carrying out the 
 13.11  purposes and terms of sections 136A.15 to 136A.1702.  The board 
 13.12  office may establish one or more loan programs. 
 13.13     Sec. 18.  Minnesota Statutes 1994, section 136A.233, 
 13.14  subdivision 2, is amended to read: 
 13.15     Subd. 2.  [DEFINITIONS.] For purposes of sections 136A.231 
 13.16  to 136A.233, the words defined in this subdivision have the 
 13.17  meanings ascribed to them. 
 13.18     (a) "Eligible student" means a Minnesota resident enrolled 
 13.19  or intending to enroll at least half time in a degree, diploma, 
 13.20  or certificate program in a Minnesota post-secondary institution.
 13.21     (b) "Minnesota resident" means a student who meets the 
 13.22  conditions in section 136A.101, subdivision 8. 
 13.23     (c) "Financial need" means the need for financial 
 13.24  assistance in order to attend a post-secondary institution as 
 13.25  determined by a post-secondary institution according to 
 13.26  guidelines established by the higher education coordinating 
 13.27  board services office. 
 13.28     (d) "Eligible employer" means any eligible post-secondary 
 13.29  institution and any nonprofit, nonsectarian agency or state 
 13.30  institution located in the state of Minnesota, including state 
 13.31  hospitals, and also includes a handicapped person or a person 
 13.32  over 65 who employs a student to provide personal services in or 
 13.33  about the residence of the handicapped person or the person over 
 13.34  65. 
 13.35     (e) "Eligible post-secondary institution" means any 
 13.36  post-secondary institution eligible for participation in the 
 14.1   Minnesota state grant program as specified in section 136A.101, 
 14.2   subdivision 4. 
 14.3      (f) "Independent student" has the meaning given it in the 
 14.4   Higher Education Act of 1965, United States Code, title 20, 
 14.5   section 1070a-6, and applicable regulations. 
 14.6      (g) "Half-time" for undergraduates has the meaning given in 
 14.7   section 136A.101, subdivision 7b, and for graduate students is 
 14.8   defined by the institution. 
 14.9      Sec. 19.  Minnesota Statutes 1994, section 136A.26, 
 14.10  subdivision 1, is amended to read: 
 14.11     Subdivision 1.  [MEMBERSHIP.] The Minnesota higher 
 14.12  education facilities authority shall consist of eight members 
 14.13  appointed by the governor with the advice and consent of the 
 14.14  senate, and the executive director of the Minnesota higher 
 14.15  education coordinating board.  The executive director of the 
 14.16  coordinating board may designate a member of the director's 
 14.17  staff to sit in the director's place as a member of the 
 14.18  authority a representative of the higher education 
 14.19  administrators council.  
 14.20     All members to be appointed by the governor shall be 
 14.21  residents of the state.  At least two members must reside 
 14.22  outside the metropolitan area as defined in section 473.121, 
 14.23  subdivision 2.  At least one of the members shall be a person 
 14.24  having a favorable reputation for skill, knowledge, and 
 14.25  experience in the field of state and municipal finance; and at 
 14.26  least one shall be a person having a favorable reputation for 
 14.27  skill, knowledge, and experience in the building construction 
 14.28  field; and at least one of the members shall be a trustee, 
 14.29  director, officer, or employee of an institution of higher 
 14.30  education. 
 14.31     Sec. 20.  Minnesota Statutes 1994, section 136A.26, 
 14.32  subdivision 2, is amended to read: 
 14.33     Subd. 2.  [TERM; COMPENSATION; REMOVAL.] The membership 
 14.34  terms, compensation, removal of members, and filling of 
 14.35  vacancies for authority members other than the executive 
 14.36  director of the higher education coordinating board or the 
 15.1   director's designee representative of the higher education 
 15.2   administrators council, and the chief executive officer of the 
 15.3   private college council, shall be as provided in section 15.0575.
 15.4      Sec. 21.  Minnesota Statutes 1994, section 136A.42, is 
 15.5   amended to read: 
 15.6      136A.42 [ANNUAL REPORT.] 
 15.7      The authority shall keep an accurate account of all of its 
 15.8   activities and all of its receipts and expenditures and shall 
 15.9   annually make a report thereof to the higher education 
 15.10  coordinating board administrators council.  The higher education 
 15.11  coordinating board shall review and comment upon the report and 
 15.12  make such recommendations as it deems necessary to the governor 
 15.13  and the legislature. 
 15.14     Sec. 22.  Minnesota Statutes 1994, section 136A.62, 
 15.15  subdivision 2, is amended to read: 
 15.16     Subd. 2.  [BOARD OFFICE.] "Board" "Office" means the 
 15.17  Minnesota higher education coordinating board services office. 
 15.18     Sec. 23.  Minnesota Statutes 1994, section 136A.69, is 
 15.19  amended to read: 
 15.20     136A.69 [FEES.] 
 15.21     The board may office shall collect reasonable registration 
 15.22  fees not to exceed $450 for an initial registration of each 
 15.23  school and $350 for each annual renewal of an existing 
 15.24  registration that are sufficient to recover, but do not exceed, 
 15.25  its costs of administering the registration program. 
 15.26     Sec. 24.  Minnesota Statutes 1994, section 141.25, 
 15.27  subdivision 8, is amended to read: 
 15.28     Subd. 8.  [FEES AND TERMS OF LICENSE.] (a) Applications for 
 15.29  initial license under sections 141.21 to 141.36 shall be 
 15.30  accompanied by $650 as a nonrefundable application 
 15.31  fee established by the office that is sufficient to recover, but 
 15.32  not exceed, its administrative costs. 
 15.33     (b) All licenses shall expire one year from the date issued 
 15.34  by the board.  Each renewal application shall be accompanied by 
 15.35  a nonrefundable renewal fee of $650 established by the office 
 15.36  that is sufficient to recover, but does not exceed, its 
 16.1   administrative costs.  
 16.2      (c) Application for renewal of license shall be made at 
 16.3   least 30 days before the expiration of the school's current 
 16.4   license.  Each renewal form shall be supplied by the board 
 16.5   office.  It shall not be necessary for an applicant to supply 
 16.6   all information required in the initial application at the time 
 16.7   of renewal unless requested by the board office. 
 16.8      Sec. 25.  Minnesota Statutes 1994, section 144.1487, 
 16.9   subdivision 1, is amended to read: 
 16.10     Subdivision 1.  [DEFINITIONS.] (a) For purposes of sections 
 16.11  144.1487 to 144.1492, the following definitions apply definition 
 16.12  applies. 
 16.13     (b) "Board" means the higher education coordinating board. 
 16.14     (c) "Health professional shortage area" means an area 
 16.15  designated as such by the federal Secretary of Health and Human 
 16.16  Services, as provided under Code of Federal Regulations, title 
 16.17  42, part 5, and United States Code, title 42, section 254E. 
 16.18     Sec. 26.  Minnesota Statutes 1994, section 144.1488, 
 16.19  subdivision 1, is amended to read: 
 16.20     Subdivision 1.  [DUTIES OF THE COMMISSIONER OF HEALTH.] The 
 16.21  commissioner shall administer the state loan repayment program.  
 16.22  The commissioner shall: 
 16.23     (1) ensure that federal funds are used in accordance with 
 16.24  program requirements established by the federal National Health 
 16.25  Services Corps; 
 16.26     (2) notify potentially eligible loan repayment sites about 
 16.27  the program; 
 16.28     (3) develop and disseminate application materials to sites; 
 16.29     (4) review and rank applications using the scoring criteria 
 16.30  approved by the federal Department of Health and Human Services 
 16.31  as part of the Minnesota department of health's National Health 
 16.32  Services Corps state loan repayment program application; 
 16.33     (5) select sites that qualify for loan repayment based upon 
 16.34  the availability of federal and state funding; 
 16.35     (6) provide the higher education coordinating board with a 
 16.36  list of qualifying sites; and 
 17.1      (7) carry out other activities necessary to implement and 
 17.2   administer sections 144.1487 to 144.1492.; 
 17.3      The commissioner shall enter into an interagency agreement 
 17.4   with the higher education coordinating board to carry out the 
 17.5   duties assigned to the board under sections 144.1487 to 144.1492.
 17.6      (7) verify the eligibility of program participants; 
 17.7      (8) sign a contract with each participant that specifies 
 17.8   the obligations of the participant and the state; 
 17.9      (9) arrange for the payment of qualifying educational loans 
 17.10  for program participants; 
 17.11     (10) monitor the obligated service of program participants; 
 17.12     (11) waive or suspend service or payment obligations of 
 17.13  participants in appropriate situations; 
 17.14     (12) place participants who fail to meet their obligations 
 17.15  in default; and 
 17.16     (13) enforce penalties for default. 
 17.17     Sec. 27.  Minnesota Statutes 1994, section 144.1488, 
 17.18  subdivision 4, is amended to read: 
 17.19     Subd. 4.  [ELIGIBLE HEALTH PROFESSIONALS.] (a) To be 
 17.20  eligible to apply to the higher education coordinating board 
 17.21  commissioner for the loan repayment program, health 
 17.22  professionals must be citizens or nationals of the United 
 17.23  States, must not have any unserved obligations for service to a 
 17.24  federal, state, or local government, or other entity, and must 
 17.25  be ready to begin full-time clinical practice upon signing a 
 17.26  contract for obligated service. 
 17.27     (b) In selecting physicians for participation, the board 
 17.28  commissioner shall give priority to physicians who are board 
 17.29  certified or have completed a residency in family practice, 
 17.30  osteopathic general practice, obstetrics and gynecology, 
 17.31  internal medicine, or pediatrics.  A physician selected for 
 17.32  participation is not eligible for loan repayment until the 
 17.33  physician has an employment agreement or contract with an 
 17.34  eligible loan repayment site and has signed a contract for 
 17.35  obligated service with the higher education coordinating 
 17.36  board commissioner. 
 18.1      Sec. 28.  Minnesota Statutes 1994, section 144.1489, 
 18.2   subdivision 1, is amended to read:  
 18.3      Subdivision 1.  [CONTRACT REQUIRED.] Before starting the 
 18.4   period of obligated service, a participant must sign a contract 
 18.5   with the higher education coordinating board commissioner that 
 18.6   specifies the obligations of the participant and the board 
 18.7   commissioner. 
 18.8      Sec. 29.  Minnesota Statutes 1994, section 144.1489, 
 18.9   subdivision 3, is amended to read: 
 18.10     Subd. 3.  [LENGTH OF SERVICE.] Participants must agree to 
 18.11  provide obligated service for a minimum of two years.  A 
 18.12  participant may extend a contract to provide obligated service 
 18.13  for a third year, subject to board approval by the commissioner 
 18.14  and the availability of federal and state funding. 
 18.15     Sec. 30.  Minnesota Statutes 1994, section 144.1489, 
 18.16  subdivision 4, is amended to read: 
 18.17     Subd. 4.  [AFFIDAVIT OF SERVICE REQUIRED.] Within 30 days 
 18.18  of the start of obligated service, and by February 1 of each 
 18.19  succeeding calendar year, a participant shall submit an 
 18.20  affidavit to the board commissioner stating that the participant 
 18.21  is providing the obligated service and which is signed by a 
 18.22  representative of the organizational entity in which the service 
 18.23  is provided.  Participants must provide written notice to 
 18.24  the board commissioner within 30 days of:  a change in name or 
 18.25  address, a decision not to fulfill a service obligation, or 
 18.26  cessation of clinical practice. 
 18.27     Sec. 31.  Minnesota Statutes 1994, section 144.1490, is 
 18.28  amended to read: 
 18.29     144.1490 [RESPONSIBILITIES OF THE LOAN REPAYMENT PROGRAM.] 
 18.30     Subdivision 1.  [LOAN REPAYMENT.] Subject to the 
 18.31  availability of federal and state funds for the loan repayment 
 18.32  program, the higher education coordinating board commissioner 
 18.33  shall pay all or part of the qualifying education loans up to 
 18.34  $20,000 annually for each primary care physician participant 
 18.35  that fulfills the required service obligation.  For purposes of 
 18.36  this provision, "qualifying educational loans" are government 
 19.1   and commercial loans for actual costs paid for tuition, 
 19.2   reasonable education expenses, and reasonable living expenses 
 19.3   related to the graduate or undergraduate education of a health 
 19.4   care professional. 
 19.5      Subd. 2.  [PROCEDURE FOR LOAN REPAYMENT.] Program 
 19.6   participants, at the time of signing a contract, shall designate 
 19.7   the qualifying loan or loans for which the higher education 
 19.8   coordinating board commissioner is to make payments.  The 
 19.9   participant shall submit to the board commissioner all payment 
 19.10  books for the designated loan or loans or all monthly billings 
 19.11  for the designated loan or loans within five days of receipt.  
 19.12  The board commissioner shall make payments in accordance with 
 19.13  the terms and conditions of the designated loans, in an amount 
 19.14  not to exceed $20,000 when annualized.  If the amount paid by 
 19.15  the board commissioner is less than $20,000 during a 12-month 
 19.16  period, the board commissioner shall pay during the 12th month 
 19.17  an additional amount towards a loan or loans designated by the 
 19.18  participant, to bring the total paid to $20,000.  The total 
 19.19  amount paid by the board commissioner must not exceed the amount 
 19.20  of principal and accrued interest of the designated loans. 
 19.21     Sec. 32.  Minnesota Statutes 1994, section 144.1491, 
 19.22  subdivision 2, is amended to read: 
 19.23     Subd. 2.  [SUSPENSION OR WAIVER OF OBLIGATION.] Payment or 
 19.24  service obligations cancel in the event of a participant's 
 19.25  death.  The board commissioner may waive or suspend payment or 
 19.26  service obligations in case of total and permanent disability or 
 19.27  long-term temporary disability lasting for more than two years.  
 19.28  The board commissioner shall evaluate all other requests for 
 19.29  suspension or waivers on a case-by-case basis. 
 19.30     Sec. 33.  Minnesota Statutes 1994, section 298.2214, 
 19.31  subdivision 5, is amended to read: 
 19.32     Subd. 5.  [HECB AND SYSTEM APPROVAL.] A program may not be 
 19.33  offered under a contract executed according to this section 
 19.34  unless it is approved by the higher education coordinating board 
 19.35  and the board of the system offering the program.  
 19.36     Sec. 34.  [TRANSFER.] 
 20.1      On July 1, 1995, the higher education coordinating board is 
 20.2   abolished and the duties and responsibilities of the board 
 20.3   related to financial aid, private institution registration and 
 20.4   private career school licensing, data management and reporting, 
 20.5   and telecommunications council and network functions, and 
 20.6   communications, are transferred to the higher education services 
 20.7   office as provided in Minnesota Statutes, section 15.039.  The 
 20.8   transfer includes two positions in the executive director's 
 20.9   office; 14 positions in the administrative services divisions; 
 20.10  13 positions in the financial aid division; five positions in 
 20.11  the policy and program planning division with direct 
 20.12  responsibility for database management/analysis, 
 20.13  telecommunications, private institution registration or private 
 20.14  career school licensing, and financial aid analysis; four 
 20.15  positions in the information management division; and two 
 20.16  positions in communications.  The director of the administrative 
 20.17  services division shall serve as acting director of the higher 
 20.18  education services office until a permanent director is 
 20.19  appointed.  All positions in the higher education coordinating 
 20.20  board that are not transferred to the higher education services 
 20.21  office under this section are abolished. 
 20.22     All material and property that does not relate directly to 
 20.23  financial aid, private institution registration or private 
 20.24  career school licensing, or telecommunications functions shall 
 20.25  be transferred to the higher education administrators council as 
 20.26  provided in Minnesota Statutes, section 15.039, subdivision 5.  
 20.27  All obligations related to bond covenants entered into under 
 20.28  Minnesota Statutes, sections 136A.15 to 136A.1702, are 
 20.29  transferred to the higher education services office under 
 20.30  Minnesota Statutes, section 15.039, subdivision 5a.  
 20.31     By January 15, 1996, the director of the higher education 
 20.32  services office, in consultation with the department of finance, 
 20.33  shall provide recommendations to the higher education 
 20.34  administrators council, the education committees of the 
 20.35  legislature, and the governor on appropriate further reductions 
 20.36  in complement and appropriation. 
 21.1      Sec. 35.  [TRANSFER OF PROGRAMS.] 
 21.2      The responsibilities of the higher education coordinating 
 21.3   board confirmed and specified under Minnesota Statutes, sections 
 21.4   136A.1355 to 136A.1358, are transferred under Minnesota 
 21.5   Statutes, section 15.039, to the Minnesota department of health. 
 21.6      Sec. 36.  [FINANCIAL AID DELIVERY TASK FORCE.] 
 21.7      By July 15, 1995, the higher education administrators 
 21.8   council shall establish a task force to plan and begin 
 21.9   implementing improvements in the delivery of financial aid 
 21.10  services and funds.  The task force shall determine ways to 
 21.11  maximize the financial aid delivery at the campus level while 
 21.12  maintaining data collection, auditing, and other necessary 
 21.13  functions at the state level.  The task force shall include 
 21.14  system and campus representatives from each of the public 
 21.15  post-secondary systems, representatives of the private 
 21.16  collegiate and private vocational sectors, a representative of 
 21.17  the higher education services office, and representatives of the 
 21.18  student advisory council.  The task force shall present its 
 21.19  findings and recommendations to the director of the higher 
 21.20  education services office by December 1, 1995, and to the 
 21.21  education committees of the legislature by January 15, 1996. 
 21.22     Sec. 37.  [INSTRUCTION TO REVISOR.] 
 21.23     Subdivision 1.  [RENUMBERING.] In the next edition of 
 21.24  Minnesota Statutes, the revisor of statutes shall renumber each 
 21.25  section specified in column A with the number set forth in 
 21.26  column B.  The revisor shall make necessary cross-reference 
 21.27  changes consistent with the renumbering. 
 21.28            Column A                 Column B
 21.29            136A.80                  135A.51
 21.30            136A.81                  135A.52
 21.31     Subd. 2.  [NAME CHANGE.] The revisor of statutes is 
 21.32  directed to change the term "higher education coordinating 
 21.33  board," and similar terms, to "higher education services 
 21.34  office," or similar terms.  The change must be made in the next 
 21.35  edition of Minnesota Statutes. 
 21.36     Sec. 38.  [REPEALER.] 
 22.1      Minnesota Statutes 1994, sections 135A.052, subdivisions 2 
 22.2   and 3; 135A.08; 135A.09; 135A.10; 135A.11; 135A.12, subdivision 
 22.3   5; 136A.02; 136A.04; 136A.041; 136A.125, subdivision 5; 
 22.4   136A.1352; 136A.1353; 136A.1354; 136A.85; 136A.86; 136A.87; 
 22.5   136A.88; 144.1488, subdivision 2; and 148.236, are repealed. 
 22.6                              ARTICLE 2 
 22.7                               GAMBLING 
 22.8      Section 1.  Minnesota Statutes 1994, section 240.011, is 
 22.9   amended to read: 
 22.10     240.011 [APPOINTMENT OF DIRECTOR.] 
 22.11     The governor shall appoint the a director of the Minnesota 
 22.12  racing commission pari-mutuel racing, who serves in the 
 22.13  unclassified service at the governor's pleasure.  The director 
 22.14  must be a person qualified by experience in the administration 
 22.15  and regulation of pari-mutuel racing to discharge the duties of 
 22.16  the director.  The governor must select a director from a list 
 22.17  of one or more names submitted by the Minnesota racing 
 22.18  commission.  
 22.19     Sec. 2.  Minnesota Statutes 1994, section 240.03, is 
 22.20  amended to read: 
 22.21     240.03 [COMMISSION POWERS AND DUTIES.] 
 22.22     The commission director has the following powers and duties:
 22.23     (1) to regulate horse racing in Minnesota to ensure that it 
 22.24  is conducted in the public interest; 
 22.25     (2) to issue licenses as provided in this chapter; 
 22.26     (3) to enforce all laws and rules governing horse racing; 
 22.27     (4) to collect and distribute all taxes provided for in 
 22.28  this chapter; 
 22.29     (5) to conduct necessary investigations and inquiries and 
 22.30  compel the submission of information, documents, and records it 
 22.31  the director deems necessary to carry out its the director's 
 22.32  duties; 
 22.33     (6) to supervise the conduct of pari-mutuel betting on 
 22.34  horse racing; 
 22.35     (7) to employ and supervise personnel under this chapter; 
 22.36     (8) to determine the number of racing days to be held in 
 23.1   the state and at each licensed racetrack; and 
 23.2      (9) to take all necessary steps to ensure the integrity of 
 23.3   racing in Minnesota.  
 23.4      Sec. 3.  Minnesota Statutes 1994, section 240.04, is 
 23.5   amended to read: 
 23.6      240.04 [EMPLOYEES.] 
 23.7      Subdivision 1.  [DIRECTOR; DUTIES.] The director shall 
 23.8   perform the following duties:  
 23.9      (a) take and preserve records of all proceedings before the 
 23.10  commission, maintain its books, documents, and records, and make 
 23.11  them available for public inspection as the commission directs; 
 23.12     (b) if so designated by the commission, act as a hearing 
 23.13  officer in hearings which need not be conducted under the 
 23.14  administrative procedure act to conduct hearings, receive 
 23.15  testimony and exhibits, and certify the record of proceedings to 
 23.16  the commission; 
 23.17     (c) act as the commission's chief personnel officer and 
 23.18  supervise the employment, conduct, duties, and discipline of 
 23.19  commission employees; and 
 23.20     (d) perform other duties as directed by the commission.  
 23.21     Subd. 1a.  [DEPUTY DIRECTOR.] The commission may appoint a 
 23.22  deputy director who serves in the unclassified service at the 
 23.23  commission's pleasure. 
 23.24     Subd. 2.  [DIRECTOR OF PARI-MUTUELS.] The commission 
 23.25  director may employ a director of pari-mutuels who serves in the 
 23.26  unclassified service at the commission's director's pleasure.  
 23.27  The director of pari-mutuels shall perform the following duties: 
 23.28     (a) supervise all forms of pari-mutuel betting on horse 
 23.29  racing in the state; 
 23.30     (b) inspect all machinery; 
 23.31     (c) make reports on pari-mutuel betting as the commission 
 23.32  director directs; 
 23.33     (d) subject to commission director approval, appoint 
 23.34  assistants to perform duties the commission director designates; 
 23.35  and 
 23.36     (e) perform other duties as directed by the commission 
 24.1   director.  
 24.2      If no director of pari-mutuels is appointed the duties of 
 24.3   that office are assigned to the executive director.  The 
 24.4   commission may contract with outside services or personnel to 
 24.5   assist the executive director in the performance of these duties.
 24.6      Subd. 3.  [DIRECTOR OF RACING SECURITY.] The commission 
 24.7   director may appoint a director of racing security to serve in 
 24.8   the unclassified service at the commission's director's 
 24.9   pleasure.  The director of racing security shall enforce all 
 24.10  laws and commission rules relating to the security and integrity 
 24.11  of racing.  The director of racing security and all other 
 24.12  persons designated by the commission director as security 
 24.13  officers have free and open access to all areas of all 
 24.14  facilities the commission director licenses and may search 
 24.15  without a search warrant any part of a licensed racetrack and 
 24.16  the person of any licensee of the commission director on the 
 24.17  premises.  The director of racing security may order a licensee 
 24.18  to take, at the licensee's expense, security measures necessary 
 24.19  to protect the integrity of racing, but the order may be 
 24.20  appealed to the commission director.  Nothing in this chapter 
 24.21  prohibits law enforcement authorities and agents from entering, 
 24.22  in the performance of their duties, a premises licensed under 
 24.23  Laws 1983, chapter 214.  
 24.24     If no director of racing security is appointed the duties 
 24.25  of that office are assigned to the executive director.  The 
 24.26  commission may contract with outside services or personnel to 
 24.27  assist the executive director in the performance of these duties.
 24.28     Subd. 4.  [VETERINARIAN.] The commission director may 
 24.29  appoint a veterinarian who must be a doctor of veterinary 
 24.30  medicine and who serves at its the director's pleasure in the 
 24.31  unclassified service.  The veterinarian shall, while employed by 
 24.32  the commission director, perform the following duties:  
 24.33     (a) supervise the formulation, administration, and 
 24.34  evaluation of all medical tests the commission's director's 
 24.35  rules require or authorize; 
 24.36     (b) advise the commission director on all aspects of 
 25.1   veterinary medicine relating to its the director's powers and 
 25.2   duties; and 
 25.3      (c) supervise all personnel involved in medical testing, 
 25.4   subject to the supervision of the executive director.  
 25.5      If no veterinarian is appointed, the duties of that office 
 25.6   may be assigned to the executive director.  The commission may 
 25.7   contract with outside personnel to assist the executive director 
 25.8   in the performance of these duties.  
 25.9      The commission director may require that a licensee 
 25.10  reimburse it the state general fund for the costs of services 
 25.11  provided by assistant veterinarians. 
 25.12     Subd. 5.  [OTHER EMPLOYEES.] Subject to applicable laws, 
 25.13  the commission director shall employ and assign duties to other 
 25.14  officers, employees, and agents as it the director deems 
 25.15  necessary to discharge its the director's functions.  
 25.16     Subd. 6.  [COMPENSATION.] The compensation of all 
 25.17  commission employees shall be as provided in chapter 43A. 
 25.18     Subd. 7.  [ASSISTANCE.] The commission and director may 
 25.19  request assistance from any department or agency of the state in 
 25.20  fulfilling its the director's duties, and shall make appropriate 
 25.21  reimbursement for all such assistance.  
 25.22     Sec. 4.  Minnesota Statutes 1994, section 240.28, is 
 25.23  amended to read: 
 25.24     240.28 [CONFLICT OF INTEREST.] 
 25.25     Subdivision 1.  [FINANCIAL INTEREST.] No person may 
 25.26  serve on as director or be employed by the commission director 
 25.27  who has an interest in any corporation, association, or 
 25.28  partnership which holds a license from the commission director 
 25.29  or which holds a contract to supply goods or services to a 
 25.30  licensee or at a licensed racetrack, including concessions 
 25.31  contracts.  No member or Neither the director nor an employee of 
 25.32  the commission director may own, wholly or in part, or have an 
 25.33  interest in a horse which races at a licensed racetrack in 
 25.34  Minnesota.  No member or Neither the director nor an employee of 
 25.35  the commission director may have a financial interest in or be 
 25.36  employed in a profession or business which conflicts with the 
 26.1   performance of duties as a member director or employee. 
 26.2      Subd. 2.  [BETTING.] No member or Neither the director nor 
 26.3   an employee of the commission director may bet or cause a bet to 
 26.4   be made on a race at a licensed racetrack while serving on or 
 26.5   being employed by the commission.  No person appointed or 
 26.6   approved by the director as a steward may bet or cause a bet to 
 26.7   be made at a licensed racetrack during a racing meeting at which 
 26.8   the person is serving as a steward.  The commission director 
 26.9   shall by rule prescribe such restrictions on betting by its 
 26.10  director's licensees as it the director deems necessary to 
 26.11  protect the integrity of racing.  
 26.12     Subd. 3.  [VIOLATION.] A violation of subdivisions 1 and 2 
 26.13  is grounds for removal from the commission as director or 
 26.14  termination of employment.  A bet made directly or indirectly by 
 26.15  a licensee in violation of a rule made by the commission 
 26.16  director under subdivision 2 is grounds for suspension or 
 26.17  revocation of the license.  
 26.18     Sec. 5.  [240.30] [COMMISSION ABOLISHED.] 
 26.19     The Minnesota racing commission is abolished on July 1, 
 26.20  1995.  The terms of all members of the commission serving on 
 26.21  that date expire on that date.  All powers, duties, and 
 26.22  responsibilities of the commission are transferred to the 
 26.23  director of pari-mutuel racing. 
 26.24     Sec. 6.  Minnesota Statutes 1994, section 299L.02, 
 26.25  subdivision 2, is amended to read: 
 26.26     Subd. 2.  [GAMBLING.] The director shall:  
 26.27     (1) conduct background investigations of applicants for 
 26.28  licensing as a manufacturer or distributor of gambling equipment 
 26.29  or as a bingo hall under chapter 349; and 
 26.30     (2) when requested by the director of lawful gambling 
 26.31  control, or when the director believes it to be reasonable and 
 26.32  necessary, inspect the premises of a licensee under chapter 349 
 26.33  to determine compliance with law and with the rules of the board 
 26.34  director of lawful gambling, or to conduct an audit of the 
 26.35  accounts, books, records, or other documents required to be kept 
 26.36  by the licensee. 
 27.1      The director may charge applicants under clause (1) a 
 27.2   reasonable fee to cover the costs of the investigation. 
 27.3      Sec. 7.  Minnesota Statutes 1994, section 349.12, 
 27.4   subdivision 10, is amended to read: 
 27.5      Subd. 10.  [DIRECTOR.] "Director" is the director of 
 27.6   the lawful gambling control board.  
 27.7      Sec. 8.  Minnesota Statutes 1994, section 349.151, is 
 27.8   amended to read: 
 27.9      349.151 [DIRECTOR OF LAWFUL GAMBLING CONTROL BOARD.] 
 27.10     Subdivision 1.  [BOARD CREATED.] The gambling control board 
 27.11  is created with the powers and duties established by subdivision 
 27.12  4.  
 27.13     Subd. 2.  [MEMBERSHIP.] (a) On and after July 1, 1991, the 
 27.14  board consists of seven members, as follows:  (1) those members 
 27.15  appointed by the governor before July 1, 1991, whose terms 
 27.16  expire June 30, 1992, June 30, 1993, and June 30, 1994; (2) one 
 27.17  member appointed by the governor for a term expiring June 30, 
 27.18  1994; (3) one member appointed by the commissioner of public 
 27.19  safety for a term expiring June 30, 1995; and (4) one member 
 27.20  appointed by the attorney general for a term expiring June 30, 
 27.21  1995. 
 27.22     (b) All appointments under this subdivision are with the 
 27.23  advice and consent of the senate. 
 27.24     (c) After expiration of the initial terms, appointments are 
 27.25  for four years. 
 27.26     (d) The board shall select one of its members to serve as 
 27.27  chair.  No more than three members appointed by the governor 
 27.28  under this subdivision may belong to the same political party. 
 27.29     Subd. 3a.  [COMPENSATION.] The compensation of board 
 27.30  members is as provided in section 15.0575, subdivision 3. 
 27.31     Subd. 3b.  [DIRECTOR.] A director of lawful gambling shall 
 27.32  be appointed by the governor with the advice and consent of the 
 27.33  senate.  The director serves in the unclassified service at the 
 27.34  pleasure of the governor. 
 27.35     Subd. 4.  [POWERS AND DUTIES.] (a) The board director has 
 27.36  the following powers and duties:  
 28.1      (1) to regulate lawful gambling to ensure it is conducted 
 28.2   in the public interest; 
 28.3      (2) to issue licenses to organizations, distributors, bingo 
 28.4   halls, manufacturers, and gambling managers; 
 28.5      (3) to collect and deposit license, permit, and 
 28.6   registration fees due under this chapter; 
 28.7      (4) to receive reports required by this chapter and inspect 
 28.8   all premises, records, books, and other documents of 
 28.9   organizations, distributors, manufacturers, and bingo halls to 
 28.10  insure compliance with all applicable laws and rules; 
 28.11     (5) to make rules authorized by this chapter; 
 28.12     (6) to register gambling equipment and issue registration 
 28.13  stamps; 
 28.14     (7) to provide by rule for the mandatory posting by 
 28.15  organizations conducting lawful gambling of rules of play and 
 28.16  the odds and/or house percentage on each form of lawful 
 28.17  gambling; 
 28.18     (8) to report annually to the governor and legislature on 
 28.19  its the director's activities and on recommended changes in the 
 28.20  laws governing gambling; 
 28.21     (9) to impose civil penalties of not more than $500 per 
 28.22  violation on organizations, distributors, manufacturers, bingo 
 28.23  halls, and gambling managers for failure to comply with any 
 28.24  provision of this chapter or any rule or order of the board 
 28.25  director; 
 28.26     (10) to issue premises permits to organizations licensed to 
 28.27  conduct lawful gambling; 
 28.28     (11) to delegate to the director the authority to issue or 
 28.29  deny license and premises permit applications and renewals under 
 28.30  criteria established by the board; 
 28.31     (12) to suspend or revoke licenses and premises permits of 
 28.32  organizations, distributors, manufacturers, bingo halls, or 
 28.33  gambling managers as provided in this chapter; 
 28.34     (13) (12) to register employees of organizations licensed 
 28.35  to conduct lawful gambling; 
 28.36     (14) (13) to require fingerprints from persons determined 
 29.1   by board rule to be subject to fingerprinting; 
 29.2      (15) to delegate to a compliance review group of the board 
 29.3   the authority to investigate alleged violations, issue consent 
 29.4   orders, and initiate contested cases on behalf of the board; 
 29.5      (16) (14) to order organizations, distributors, 
 29.6   manufacturers, bingo halls, and gambling managers to take 
 29.7   corrective actions; and 
 29.8      (17) (15) to take all necessary steps to ensure the 
 29.9   integrity of and public confidence in lawful gambling.  
 29.10     (b) The board, or director if authorized to act on behalf 
 29.11  of the board, may by citation assess any organization, 
 29.12  distributor, manufacturer, bingo hall licensee, or gambling 
 29.13  manager a civil penalty of not more than $500 per violation for 
 29.14  a failure to comply with any provision of this chapter or any 
 29.15  rule adopted or order issued by the board director.  Any 
 29.16  organization, distributor, bingo hall licensee, gambling 
 29.17  manager, or manufacturer assessed a civil penalty under this 
 29.18  paragraph may request a hearing before the board director.  
 29.19  Appeals of citations imposing a civil penalty are not subject to 
 29.20  the provisions of the administrative procedure act.  
 29.21     (c) All fees and penalties received by the board director 
 29.22  must be deposited in the general fund. 
 29.23     Subd. 4a.  [PADDLEWHEEL RULES.] The board shall promulgate 
 29.24  rules governing paddlewheels before July 1, 1992.  The rules 
 29.25  must provide for operation procedures, internal control 
 29.26  standards, posted information, records, and reports. 
 29.27     Subd. 4b.  [PULL-TAB SALES FROM DISPENSING DEVICES.] (a) 
 29.28  The board director may by rule authorize but not require the use 
 29.29  of pull-tab dispensing devices. 
 29.30     (b) Rules adopted under paragraph (a): 
 29.31     (1) must limit the number of pull-tab dispensing devices on 
 29.32  any permitted premises to three; 
 29.33     (2) must limit the use of pull-tab dispensing devices to a 
 29.34  permitted premises which is (i) a licensed premises for on-sales 
 29.35  of intoxicating liquor or 3.2 percent malt beverages or (ii) a 
 29.36  licensed bingo hall that allows gambling only by persons 18 
 30.1   years or older; and 
 30.2      (3) must prohibit the use of pull-tab dispensing devices at 
 30.3   any licensed premises where pull-tabs are sold other than 
 30.4   through a pull-tab dispensing device by an employee of the 
 30.5   organization who is also the lessor or an employee of the lessor.
 30.6      Subd. 5.  [ATTORNEY GENERAL.] The attorney general is the 
 30.7   attorney for the board director.  
 30.8      Subd. 7.  [ORDERS.] The board director may order any person 
 30.9   subject to its the director's jurisdiction who has violated this 
 30.10  chapter or a board rule or order to take appropriate action to 
 30.11  correct the violation. 
 30.12     Subd. 8.  [CRIMINAL HISTORY.] The board director may 
 30.13  request the director of gambling enforcement to assist in 
 30.14  investigating the background of an applicant for a license under 
 30.15  this chapter, and the director of gambling enforcement may bill 
 30.16  the license applicant for the cost thereof.  The board director 
 30.17  has access to all criminal history data compiled by the division 
 30.18  of gambling enforcement on licensees and applicants. 
 30.19     Subd. 9.  [RESPONSE TO REQUESTS.] An applicant, licensee, 
 30.20  or other person subject to the board's director's jurisdiction 
 30.21  must: 
 30.22     (1) comply with requests for information or documents, or 
 30.23  other requests, from the board or director within the time 
 30.24  specified in the request or, if no time is specified, within 30 
 30.25  days of the date the board or director mails the request; and 
 30.26     (2) appear before the board or director when requested to 
 30.27  do so, and must bring documents or materials requested by the 
 30.28  board or director. 
 30.29     Subd. 10.  [PRODUCTION OF EVIDENCE.] For the purpose of any 
 30.30  investigation, inspection, compliance review, audit, or 
 30.31  proceeding under this chapter, the board or director may (1) 
 30.32  administer oaths and affirmations, (2) subpoena witnesses and 
 30.33  compel their attendance, (3) take evidence, and (4) require the 
 30.34  production of books, papers, correspondence, memoranda, 
 30.35  agreements, or other documents or records that the board or 
 30.36  director determines are relevant or material to the inquiry. 
 31.1      Subd. 11.  [COURT ORDERS.] In the event of a refusal to 
 31.2   appear by, or refusal to obey a subpoena issued to, any person 
 31.3   under this chapter, the district court may on application of the 
 31.4   board or director issue to the person an order directing the 
 31.5   person to appear before the board or director, and to produce 
 31.6   documentary evidence if so ordered or to give evidence relating 
 31.7   to the matter under investigation or in question.  Failure to 
 31.8   obey such an order may be punished by the court as contempt of 
 31.9   court. 
 31.10     Subd. 12.  [ACCESS.] The board or director has free access 
 31.11  during normal business hours to the offices and places of 
 31.12  business of licensees or organizations conducting excluded or 
 31.13  exempt gambling, and to all books, accounts, papers, records, 
 31.14  files, safes, and vaults maintained in the places of business or 
 31.15  required to be maintained. 
 31.16     Subd. 13.  [RULEMAKING.] In addition to any authority to 
 31.17  adopt rules specifically authorized under this chapter, the 
 31.18  board director may adopt, amend, or repeal rules, including 
 31.19  emergency rules, under chapter 14, when necessary or proper in 
 31.20  discharging the board's director's powers and duties. 
 31.21     Sec. 9.  Minnesota Statutes 1994, section 349.153, is 
 31.22  amended to read: 
 31.23     349.153 [CONFLICT OF INTEREST.] 
 31.24     (a) A person may not serve on the board, be the director, 
 31.25  or be an employee of the board director, who has an interest in 
 31.26  any corporation, association, limited liability company, or 
 31.27  partnership that is licensed by the board director as a 
 31.28  distributor, manufacturer, or a bingo hall under section 349.164.
 31.29     (b) A member of the board, The director, or an employee of 
 31.30  the board director may not accept employment with, receive 
 31.31  compensation directly or indirectly from, or enter into a 
 31.32  contractual relationship with an organization that conducts 
 31.33  lawful gambling, a distributor, a bingo hall or a manufacturer 
 31.34  while serving as the director or while employed with or a member 
 31.35  of the board by the director, or within one year after 
 31.36  terminating employment with or leaving the board office. 
 32.1      (c) A distributor, bingo hall, manufacturer, or 
 32.2   organization licensed to conduct lawful gambling may not 
 32.3   hire the director or a former employee, director, or member of 
 32.4   the gambling control board of the office for one year after the 
 32.5   employee, or director, or member has terminated employment with 
 32.6   or left the gambling control board service as director or 
 32.7   employee.  
 32.8      Sec. 10.  [349.24] [BOARD ABOLISHED.] 
 32.9      The gambling control board is abolished on July 1, 1995.  
 32.10  The terms of all members serving on the board on that date 
 32.11  expire on that date.  All powers, duties, and responsibilities 
 32.12  of the board are transferred to the director of lawful gambling. 
 32.13     Sec. 11.  Minnesota Statutes 1994, section 349A.02, 
 32.14  subdivision 1, is amended to read: 
 32.15     Subdivision 1.  [DIRECTOR.] A state lottery is established 
 32.16  under the supervision and control of the director of the state 
 32.17  lottery appointed by the governor with the advice and consent of 
 32.18  the senate.  The governor shall appoint the director from a list 
 32.19  of at least three persons recommended to the governor by the 
 32.20  board.  The director must be qualified by experience and 
 32.21  training to supervise the lottery.  The director serves in the 
 32.22  unclassified service.  The annual salary rate authorized for the 
 32.23  director is equal to 80 percent of the salary rate prescribed 
 32.24  for the governor as of the effective date of Laws 1993, chapter 
 32.25  146. 
 32.26     Sec. 12.  Minnesota Statutes 1994, section 349A.04, is 
 32.27  amended to read: 
 32.28     349A.04 [LOTTERY GAME PROCEDURES.] 
 32.29     The director may adopt game procedures governing the 
 32.30  following elements of the lottery: 
 32.31     (1) lottery games; 
 32.32     (2) ticket prices; 
 32.33     (3) number and size of prizes; 
 32.34     (4) methods of selecting winning tickets; and 
 32.35     (5) frequency and method of drawings. 
 32.36     The adoption of lottery game procedures is not subject to 
 33.1   chapter 14.  Before adopting a lottery game procedure, the 
 33.2   director shall submit the procedure to the board for its review 
 33.3   and comment. 
 33.4      Sec. 13.  Minnesota Statutes 1994, section 349A.05, is 
 33.5   amended to read: 
 33.6      349A.05 [RULES.] 
 33.7      The director may adopt rules, including emergency rules, 
 33.8   under chapter 14 governing the following elements of the lottery:
 33.9      (1) the number and types of lottery retailers' locations; 
 33.10     (2) qualifications of lottery retailers and application 
 33.11  procedures for lottery retailer contracts; 
 33.12     (3) investigation of lottery retailer applicants; 
 33.13     (4) appeal procedures for denial, suspension, or 
 33.14  cancellation of lottery retailer contracts; 
 33.15     (5) compensation of lottery retailers; 
 33.16     (6) accounting for and deposit of lottery revenues by 
 33.17  lottery retailers; 
 33.18     (7) procedures for issuing lottery procurement contracts 
 33.19  and for the investigation of bidders on those contracts; 
 33.20     (8) payment of prizes; 
 33.21     (9) procedures needed to ensure the integrity and security 
 33.22  of the lottery; and 
 33.23     (10) other rules the director considers necessary for the 
 33.24  efficient operation and administration of the lottery.  
 33.25     Before adopting a rule the director shall submit the rule 
 33.26  to the board for its review and comment.  
 33.27     Sec. 14.  Minnesota Statutes 1994, section 349A.06, 
 33.28  subdivision 2, is amended to read: 
 33.29     Subd. 2.  [QUALIFICATIONS.] (a) The director may not 
 33.30  contract with a retailer who: 
 33.31     (1) is under the age of 18; 
 33.32     (2) is in business solely as a seller of lottery tickets; 
 33.33     (3) owes $500 or more in delinquent taxes as defined in 
 33.34  section 270.72; 
 33.35     (4) has been convicted within the previous five years of a 
 33.36  felony or gross misdemeanor, any crime involving fraud or 
 34.1   misrepresentation, or a gambling-related offense; 
 34.2      (5) is a member of the immediate family, residing in the 
 34.3   same household, as the director, board member, or any employee 
 34.4   of the lottery; 
 34.5      (6) in the director's judgment does not have the financial 
 34.6   stability or responsibility to act as a lottery retailer, or 
 34.7   whose contracting as a lottery retailer would adversely affect 
 34.8   the public health, welfare, and safety, or endanger the security 
 34.9   and integrity of the lottery; or 
 34.10     (7) is a currency exchange, as defined in section 53A.01. 
 34.11     A contract entered into before August 1, 1990, which 
 34.12  violates clause (7) may continue in effect until its expiration 
 34.13  but may not be renewed. 
 34.14     (b) An organization, firm, partnership, or corporation that 
 34.15  has a stockholder who owns more than five percent of the 
 34.16  business or the stock of the corporation, an officer, or 
 34.17  director, that does not meet the requirements of paragraph (a), 
 34.18  clause (4), is not eligible to be a lottery retailer under this 
 34.19  section. 
 34.20     (c) The restrictions under paragraph (a), clause (4), do 
 34.21  not apply to an organization, partnership, or corporation if the 
 34.22  director determines that the organization, partnership, or firm 
 34.23  has terminated its relationship with the individual whose 
 34.24  actions directly contributed to the disqualification under this 
 34.25  subdivision. 
 34.26     Sec. 15.  Minnesota Statutes 1994, section 349A.08, 
 34.27  subdivision 7, is amended to read: 
 34.28     Subd. 7.  [PAYMENTS PROHIBITED.] (a) No prize may be paid 
 34.29  to a member of the board, the director or an employee of the 
 34.30  lottery, or a member of their families residing in the same 
 34.31  household of the member, director, or employee.  No prize may be 
 34.32  paid to an officer or employee of a vendor which at the time the 
 34.33  game or drawing was being conducted was involved with providing 
 34.34  goods or services to the lottery under a lottery procurement 
 34.35  contract. 
 34.36     (b) No prize may be paid for a stolen, altered, or 
 35.1   fraudulent ticket. 
 35.2      Sec. 16.  Minnesota Statutes 1994, section 349A.11, is 
 35.3   amended to read: 
 35.4      349A.11 [CONFLICT OF INTEREST.] 
 35.5      (a) The director, a board member, an employee of the 
 35.6   lottery, a member of the immediate family of the director, board 
 35.7   member, or employee residing in the same household may not: 
 35.8      (1) purchase a lottery ticket; 
 35.9      (2) have any personal pecuniary interest in any vendor 
 35.10  holding a lottery procurement contract, or in any lottery 
 35.11  retailer; or 
 35.12     (3) receive any gift, gratuity, or other thing of value, 
 35.13  excluding food or beverage, from any lottery vendor or lottery 
 35.14  retailer, or person applying to be a retailer or vendor, in 
 35.15  excess of $100 in any calendar year.  
 35.16     (b) A violation of paragraph (a), clause (1), is a 
 35.17  misdemeanor.  A violation of paragraph (a), clause (2), is a 
 35.18  gross misdemeanor.  A violation of paragraph (a), clause (3), is 
 35.19  a misdemeanor unless the gift, gratuity, or other item of value 
 35.20  received has a value in excess of $500, in which case a 
 35.21  violation is a gross misdemeanor.  
 35.22     (c) The director or an unclassified employee of the lottery 
 35.23  may not, within one year of terminating employment with the 
 35.24  lottery, accept employment with, act as an agent or attorney 
 35.25  for, or otherwise represent any person, corporation, or entity 
 35.26  that had any lottery procurement contract or bid for a lottery 
 35.27  procurement contract with the lottery within a period of two 
 35.28  years prior to the termination of their employment.  A violation 
 35.29  of this paragraph is a misdemeanor.  
 35.30     Sec. 17.  Minnesota Statutes 1994, section 349A.12, 
 35.31  subdivision 4, is amended to read: 
 35.32     Subd. 4.  [LOTTERY RETAILERS AND VENDORS.] A person who is 
 35.33  a lottery retailer, or is applying to be a lottery retailer, a 
 35.34  person applying for a contract with the director, or a person 
 35.35  under contract with the director to supply goods or services to 
 35.36  lottery may not pay, give, or make any economic opportunity, 
 36.1   gift, loan, gratuity, special discount, favor, hospitality, or 
 36.2   service, excluding food or beverage, having an aggregate value 
 36.3   of over $100 in any calendar year to the director, board member, 
 36.4   employee of the lottery, or to a member of the immediate family 
 36.5   residing in the same household as that person.  
 36.6      Sec. 18.  [DIRECTORS.] 
 36.7      The directors of the Minnesota racing commission and 
 36.8   gambling control board on the effective date of this section 
 36.9   continue in the positions of director of pari-mutuel racing and 
 36.10  lawful gambling, respectively, in the unclassified service. 
 36.11     Sec. 19.  [REVISOR INSTRUCTION.] 
 36.12     The revisor of statutes shall make the following changes in 
 36.13  Minnesota Statutes, and similar changes in Minnesota Statutes 
 36.14  and Minnesota Rules, and conforming stylistic changes, to 
 36.15  conform to legislative intent as expressed in this act: 
 36.16     (1) "commission" to "director," and "racing commission" to 
 36.17  "director of pari-mutuel racing," in Minnesota Statutes, section 
 36.18  240.01, subdivisions 9, 10, and 16; 240.05; 240.06; 240.07; 
 36.19  240.08; 240.09; 240.10; 240.12; 240.13; 240.14; 240.15; 240.155; 
 36.20  240.16; 240.17; 240.18; 240.19; 240.20; 240.21; 240.22; 240.23; 
 36.21  240.24; 240.25; 240.27; 240.29; 299L.01, subdivision 4; 299L.02, 
 36.22  subdivision 3; and 299L.03, subdivision 3; 
 36.23     (2) "board" to "director," and "gambling control board" to 
 36.24  "director of lawful gambling," in Minnesota Statutes, section 
 36.25  297E.02, subdivision 2 and 7; 299L.03, subdivision 4; 349.12, 
 36.26  subdivisions 3, 3a, and 25; 349.15; 349.154; 349.155; 349.16; 
 36.27  349.161; 349.162; 349.163; 349.164; 349.1641; 349.165; 349.166; 
 36.28  349.167; 349.168; 349.169; 349.17; 349.172; 349.18; 349.19; 
 36.29  349.191; 349.211; 349.2123; 349.2125; 349.2127; and 349.213. 
 36.30     Sec. 20.  [REPEALER.] 
 36.31     Minnesota Statutes 1994, section 240.01, subdivision 4; 
 36.32  240.02; 240.04, subdivisions 1 and 1a; 349.12, subdivision 6; 
 36.33  349.152, subdivisions 1 and 2; 349A.01, subdivision 2; 349A.02, 
 36.34  subdivision 8; and 349A.03, are repealed. 
 36.35                             ARTICLE 3
 36.36                           PUBLIC SERVICE 
 37.1      Section 1.  [DEPARTMENT OF PUBLIC SERVICE ABOLISHED; 
 37.2   RESPONSIBILITIES TRANSFERRED.] 
 37.3      Subdivision 1.  [DEPARTMENT ABOLISHED; RESPONSIBILITIES 
 37.4   TRANSFERRED.] The department of public service is abolished.  
 37.5   The responsibilities held by the department are transferred to 
 37.6   the public utilities agency, unless otherwise specified in this 
 37.7   act.  Except as otherwise provided by this act, the 
 37.8   responsibilities of the department must be transferred under 
 37.9   Minnesota Statutes, section 15.039.  For the purposes of this 
 37.10  act, "responsibilities" means the powers, duties, rights, 
 37.11  obligations, rules, court actions, contracts, records, property 
 37.12  of every description, unexpended funds, personnel, and authority 
 37.13  imposed by law of the department of public service. 
 37.14     Subd. 2.  [SPECIFIC POSITIONS ABOLISHED.] The following 
 37.15  positions in the department of public service are not 
 37.16  transferred to a receiving agency and are specifically abolished:
 37.17     (1) commissioner; and 
 37.18     (2) deputy commissioner. 
 37.19     Subd. 3.  [ATTORNEY GENERAL.] The responsibility for 
 37.20  intervention as a party in all public utility and 
 37.21  telecommunications matters before the public utilities 
 37.22  commission is transferred to the attorney general's office. 
 37.23     Subd. 4.  [RULES.] All rules adopted by the department of 
 37.24  public service before the effective date of this section become 
 37.25  rules of the public utilities agency. 
 37.26     Sec. 2.  [UNIFIED REGULATORY AND ADMINISTRATIVE STRUCTURE.] 
 37.27     By October 15, 1995, the commissioner of the department of 
 37.28  public service and the chair of the public utilities commission 
 37.29  shall jointly submit to the legislature a plan for a unified 
 37.30  regulatory and administrative structure incorporating the 
 37.31  remaining functions and responsibilities of the department of 
 37.32  public service and public utilities commission.  The plan shall 
 37.33  provide for: 
 37.34     (1) the transfer of the public utilities commission to the 
 37.35  public utilities agency; 
 37.36     (2) an administrative structure which will provide for the 
 38.1   greatest possible independence of the public utilities 
 38.2   commission in its exercise of quasi-judicial functions within 
 38.3   the public utilities agency; 
 38.4      (3) the assignment to the public utilities commission of 
 38.5   such duties and responsibilities as are quasi-judicial in 
 38.6   nature; 
 38.7      (4) the joint provision of, administrative and support 
 38.8   services including, but not limited to, personnel, purchasing, 
 38.9   budgeting, information systems, and other such services; 
 38.10     (5) a reduction in staffing levels, from the existing staff 
 38.11  of both the department and the commission, to achieve the 
 38.12  expected savings from the unified structure; 
 38.13     (6) a recommendation for changes in the statutory 
 38.14  provisions, and recodification of such provisions in chapter 
 38.15  216E, regarding the department and the commission necessary to 
 38.16  carry out the policies of this act, including the identification 
 38.17  of obsolete, redundant or unnecessary functions that are 
 38.18  currently required of the department or the commission; and 
 38.19     (7) recommendations regarding the appropriate number of 
 38.20  commissioners on the public utilities commission within the 
 38.21  agency. 
 38.22     The reduction of staff in the department and the commission 
 38.23  under clause (5) must be proportionate to the number of staff in 
 38.24  each group prior to the unified structure.  The percentage of 
 38.25  managerial positions reduced in the department and the 
 38.26  commission must be at least as great as the percentage of 
 38.27  nonmanagerial positions reduced in each group. 
 38.28     Sec. 3.  [216E.01] [THE PUBLIC UTILITIES AGENCY.] 
 38.29     There is hereby created and established the public 
 38.30  utilities agency, which shall have and possess all of the rights 
 38.31  and powers and perform all of the duties vested in it by this 
 38.32  chapter. 
 38.33     Sec. 4.  [EFFECTIVE DATE.] 
 38.34     Sections 1 and 3 are effective on July 1, 1996.  Section 2 
 38.35  is effective on the day following final enactment. 
 38.36                             ARTICLE 4
 39.1                               REPORTS 
 39.2      Section 1.  [REVIEW.] 
 39.3      By January 15, 1996, each standing committee in the house 
 39.4   of representatives and the senate shall review statutory 
 39.5   requirements for periodic reports to the legislature from a 
 39.6   state agency.  Each committee shall report to the governmental 
 39.7   operations committee in its respective chamber any reporting 
 39.8   requirements that should be retained. 
 39.9      Sec. 2.  [3.1975] [PERIODIC REPORT REPEAL.] 
 39.10     Every requirement in a law enacted after January 1, 1995, 
 39.11  for a periodic report to the legislature is repealed five years 
 39.12  after the enactment of the law requiring the report. 
 39.13                             ARTICLE 5
 39.14                         WORKER PROVISIONS
 39.15     Section 1.  [WORKER PROVISIONS.] 
 39.16     Subdivision 1.  [LEGISLATIVE FINDINGS.] The legislature 
 39.17  finds that the reorganization of state agencies, including the 
 39.18  abolishment of agencies or their functions and the merger of 
 39.19  agency functions to the extent possible, makes the best use of 
 39.20  affected agency employees and improves the direct service 
 39.21  capabilities of state employees to provide public services to 
 39.22  citizens of the state and to customers of the agency.  To assure 
 39.23  that quality services are delivered to citizens of Minnesota, 
 39.24  appointing authorities shall comply with this section. 
 39.25     Subd. 2.  [RESTRUCTURING PROVISIONS.] The restructuring of 
 39.26  agencies required by this act must be conducted in accordance 
 39.27  with Minnesota Statutes, sections 15.039 and 43A.045. 
 39.28     Subd. 3.  [WORKER PARTICIPATION COMMITTEES.] (a) Before the 
 39.29  restructuring of executive branch agencies under this act, a 
 39.30  labor and management committee including representatives of 
 39.31  employees and employers must be established and given adequate 
 39.32  time to perform the activities prescribed by paragraph (b).  
 39.33  Each exclusive representative of employees shall select a 
 39.34  committee member from each of its bargaining units in each 
 39.35  affected agency.  The head of each agency shall select an 
 39.36  employee member from each unit of employees not represented by 
 40.1   an exclusive representative.  The agency head shall also appoint 
 40.2   one or more committee members to represent the agency.  The 
 40.3   number of members appointed by the agency head, however, may not 
 40.4   exceed the total number of members selected by exclusive 
 40.5   representatives.  The labor and management committee must be 
 40.6   participatory and nonauthoritarian.  Exclusive representatives 
 40.7   must be directly involved in the work of the committee. 
 40.8      (b) The committee established under paragraph (a) shall: 
 40.9      (1) identify tasks related to agency reorganization and 
 40.10  adopt plans for addressing those tasks; 
 40.11     (2) identify other employer and employee issues related to 
 40.12  reorganization and adopt plans for addressing those issues; 
 40.13     (3) adopt plans for implementing this act, including 
 40.14  detailed plans for providing retraining for affected employees; 
 40.15  and 
 40.16     (4) guide the implementation of the reorganization. 
 40.17     Subd. 4.  [EMPLOYEE JOB SECURITY.] The head of an agency 
 40.18  that is restructured shall meet with the exclusive 
 40.19  representatives of affected employees of the agency in the event 
 40.20  that employees are at risk of being laid off due to 
 40.21  restructuring or significant change in the activities of the 
 40.22  agency.  Any involuntary layoffs must be discussed with the 
 40.23  exclusive representatives of the affected employees in 
 40.24  accordance with Minnesota Statutes, section 43A.045, before the 
 40.25  layoffs may occur.  This subdivision does not apply to normal 
 40.26  changes in employment caused by contractual layoff, termination 
 40.27  for cause, or unrequested leave of absence.  Bargaining under 
 40.28  this subdivision must have as its purpose the achievement of the 
 40.29  highest possible degree of public service delivery to the 
 40.30  citizens of Minnesota and the provision of appropriate 
 40.31  incentives to state employees.  Incentives may include, but are 
 40.32  not limited to, early retirement incentives, negotiated options 
 40.33  in place of layoff, methods to mitigate layoffs and the effect 
 40.34  of layoffs, job training and retraining opportunities, and 
 40.35  enhanced severance. 
 40.36     Subd. 5.  [EMPLOYEE TRAINING AND RETRAINING.] The 
 41.1   legislature recognizes that a well trained and well educated 
 41.2   work force is needed to provide effective and efficient public 
 41.3   service delivery and that training and retraining of state 
 41.4   employees is a priority when merger and reorganization of state 
 41.5   agencies occur.  The labor and management committee required by 
 41.6   subdivision 3 shall recommend the employee training and 
 41.7   retraining required because of agency reorganization.  Employees 
 41.8   whose job duties are affected by reorganization must be given 
 41.9   the opportunity to take part in training or retraining for the 
 41.10  new job duties.  Existing employees must be trained or retrained 
 41.11  for agency positions before new hiring takes place.