1.1                          A bill for an act 
  1.2             relating to gambling; abolishing pari-mutuel horse 
  1.3             racing employee positions; reducing the number of 
  1.4             members of the racing commission; requiring the 
  1.5             commissioner of agriculture to provide administrative 
  1.6             and technical support for the racing commission; 
  1.7             abolishing the gambling control board and the state 
  1.8             lottery board; creating the department of gambling and 
  1.9             transferring the responsibilities of the abolished 
  1.10            boards to it; transferring the division of gambling 
  1.11            enforcement from the department of public safety to 
  1.12            the department of gambling; making technical and 
  1.13            conforming changes; amending Minnesota Statutes 1994, 
  1.14            sections 10A.01, subdivision 18; 10A.09, subdivision 
  1.15            1; 15.01; 15A.081, subdivision 1; 16B.54, subdivision 
  1.16            2; 240.02, subdivision 1; 240.03; 240.05, subdivision 
  1.17            2; 240.13, subdivision 6; 240.155; 240.16, 
  1.18            subdivisions 1 and 5; 240.24, subdivision 2; 240.28, 
  1.19            subdivisions 1 and 2; 299L.01; 299L.02, subdivisions 
  1.20            2, 4, and 5; 299L.03, subdivisions 1, 4, 5, and 7; 
  1.21            349.12, subdivision 10, and by adding subdivisions; 
  1.22            349.13; 349.151, subdivision 8; 349.152, subdivision 
  1.23            1; 349.153; 349.155, subdivision 4; 349.162, 
  1.24            subdivisions 2 and 6; 349.163, subdivision 6; 349.165, 
  1.25            subdivision 2; 349.18, subdivision 1; 349.19, 
  1.26            subdivision 6; 349A.01, by adding a subdivision; 
  1.27            349A.02, subdivisions 1 and 8; 349A.03, subdivision 2; 
  1.28            349A.04; 349A.05; 349A.06, subdivision 2; 349A.08, 
  1.29            subdivision 7; 349A.11; and 349A.12, subdivision 4; 
  1.30            proposing coding for new law in Minnesota Statutes, 
  1.31            chapters 240; and 349B; repealing Minnesota Statutes 
  1.32            1994, sections 240.01, subdivision 20; 240.011; 
  1.33            240.04; 240.16, subdivision 6; 349.12, subdivision 6; 
  1.34            349.151, subdivisions 1, 2, and 3a; 349.152, 
  1.35            subdivision 4; 349A.01, subdivision 2; and 349A.03, 
  1.36            subdivision 1. 
  1.37  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.38                             ARTICLE 1
  1.39                         RACING COMMISSION
  1.40     Section 1.  Minnesota Statutes 1994, section 240.02, 
  1.41  subdivision 1, is amended to read: 
  2.1      Subdivision 1.  [COMMISSION.] ~~A~~ The Minnesota racing 
  2.2   commission ~~is established with the powers and duties specified~~ 
  2.3   ~~in this section.  The commission~~ consists of ~~nine~~ five members 
  2.4   appointed by the governor with the advice and consent of the 
  2.5   senate.  Not more than ~~five~~ three of the members may belong to 
  2.6   the same political party.  The governor shall designate the 
  2.7   chair of the commission.  Appointments by the governor are for 
  2.8   terms of six years.  An appointment to fill a vacancy in an 
  2.9   unexpired term is for the remainder of the term and is with the 
  2.10  advice and consent of the senate.  
  2.11     Sec. 2.  Minnesota Statutes 1994, section 240.03, is 
  2.12  amended to read: 
  2.13     240.03 [COMMISSION POWERS AND DUTIES.] 
  2.14     The commission has the following powers and duties:  
  2.15     (1) to regulate horse racing in Minnesota to ensure that it 
  2.16  is conducted in the public interest; 
  2.17     (2) to issue licenses as provided in this chapter; 
  2.18     (3) to enforce all laws and rules governing horse racing; 
  2.19     (4) to collect and distribute all taxes provided for in 
  2.20  this chapter; 
  2.21     (5) to conduct necessary investigations and inquiries and 
  2.22  compel the submission of information, documents, and records it 
  2.23  deems necessary to carry out its duties; 
  2.24     (6) to supervise the conduct of pari-mutuel betting on 
  2.25  horse racing; 
  2.26     (7) to ~~employ and~~ supervise personnel under this chapter; 
  2.27     (8) to determine the number of racing days to be held in 
  2.28  the state and at each licensed racetrack; and 
  2.29     (9) to take all necessary steps to ensure the integrity of 
  2.30  racing in Minnesota.  
  2.31     Sec. 3.  [240.041] [EMPLOYEES.] 
  2.32     The commissioner of agriculture shall provide office space, 
  2.33  equipment and supplies, and administrative and technical support 
  2.34  to the commission.  The commissioner of agriculture shall 
  2.35  provide these services from its existing complement.  The 
  2.36  commission shall not employ any personnel for the regulation and 
  3.1   supervision of horse racing. 
  3.2      Sec. 4.  Minnesota Statutes 1994, section 240.05, 
  3.3   subdivision 2, is amended to read: 
  3.4      Subd. 2.  [FORMS.] All application forms for licenses must 
  3.5   contain a statement to the effect that by accepting a license 
  3.6   from the commission a licensee consents to having property or 
  3.7   person subject to inspection at any time ~~by the director of~~ 
  3.8   ~~racing security or~~ by security officers designated by the 
  3.9   commission.  
  3.10     Sec. 5.  Minnesota Statutes 1994, section 240.13, 
  3.11  subdivision 6, is amended to read: 
  3.12     Subd. 6.  [SIMULCASTING.] (a) The commission may permit an 
  3.13  authorized licensee to conduct simulcasting at the licensee's 
  3.14  facility on any day authorized by the commission.  All 
  3.15  simulcasts must comply with the Interstate Horse Racing Act of 
  3.16  1978, United States Code, title 15, sections 3001 to 3007.  
  3.17     (b) The commission may not authorize any day for 
  3.18  simulcasting at a class A facility during the racing season, and 
  3.19  a licensee may not be allowed to transmit out-of-state telecasts 
  3.20  of races the licensee conducts, unless the licensee has obtained 
  3.21  the approval of the horsepersons' organization representing the 
  3.22  majority of the horsepersons racing the breed involved at the 
  3.23  licensed racetrack during the preceding 12 months.  
  3.24     (c) The licensee may pay fees and costs to an entity 
  3.25  transmitting a telecast of a race to the licensee for purposes 
  3.26  of conducting pari-mutuel wagering on the race.  The licensee 
  3.27  may deduct fees and costs related to the receipt of televised 
  3.28  transmissions from a pari-mutuel pool on the televised race, 
  3.29  provided that one-half of any amount recouped in this manner 
  3.30  must be added to the amounts required to be set aside for purses.
  3.31     (d) With the approval of the commission and subject to the 
  3.32  provisions of this subdivision, a licensee may transmit 
  3.33  telecasts of races it conducts, for wagering purposes, to 
  3.34  locations outside the state, and the commission may allow this 
  3.35  to be done on a commingled pool basis.  
  3.36     (e) Except as otherwise provided in this section, 
  4.1   simulcasting may be conducted on a separate pool basis or, with 
  4.2   the approval of the commission, on a commingled pool basis.  All 
  4.3   provisions of law governing pari-mutuel betting apply to 
  4.4   simulcasting except as otherwise provided in this subdivision or 
  4.5   in the commission's rules.  If pools are commingled, wagering ~~at~~ 
  4.6   ~~the licensed facility~~ must be on equipment electronically linked 
  4.7   with the equipment ~~at the licensee's class A facility or with~~ of 
  4.8   the sending racetrack via the totalizator computer at the 
  4.9   licensee's class A facility.  Subject to the approval of the 
  4.10  commission, the types of betting, takeout, and distribution of 
  4.11  winnings on commingled pari-mutuel pools are those in effect at 
  4.12  the sending racetrack.  Breakage for pari-mutuel pools on a 
  4.13  televised race must be calculated in accordance with the law or 
  4.14  rules governing the sending racetrack for these pools, and must 
  4.15  be distributed in a manner agreed to between the licensee and 
  4.16  the sending racetrack.  Notwithstanding subdivision 7 and 
  4.17  section 240.15, subdivision 5, the commission may approve 
  4.18  procedures governing the definition and disposition of unclaimed 
  4.19  tickets that are consistent with the law and rules governing 
  4.20  unclaimed tickets at the sending racetrack.  For the purposes of 
  4.21  this section, "sending racetrack" is either the racetrack 
  4.22  outside of this state where the horse race is conducted or, with 
  4.23  the consent of the racetrack, an alternative facility that 
  4.24  serves as the racetrack for the purpose of commingling pools.  
  4.25     (f) If there is more than one class B licensee conducting 
  4.26  racing within the seven-county metropolitan area, simulcasting 
  4.27  may be conducted only on races run by a breed that ran at the 
  4.28  licensee's class A facility within the 12 months preceding the 
  4.29  event.  
  4.30     Sec. 6.  Minnesota Statutes 1994, section 240.155, is 
  4.31  amended to read: 
  4.32     240.155 [REIMBURSEMENT ACCOUNTS AND PROCEDURES.] 
  4.33     Subdivision 1.  [REIMBURSEMENT ACCOUNT CREDIT.] Money 
  4.34  received by the ~~commission~~ commissioner of agriculture as 
  4.35  reimbursement for the costs of services provided by ~~assistant~~ 
  4.36  veterinarians and stewards must be deposited in the state 
  5.1   treasury and credited to a ~~racing commission~~ commissioner of 
  5.2   agriculture reimbursement account, except as provided under 
  5.3   subdivision 2.  Receipts are appropriated to the ~~commission~~ 
  5.4   commissioner of agriculture to pay the costs of providing the 
  5.5   services. 
  5.6      Subd. 2.  [GENERAL FUND CREDIT.] Money received by the 
  5.7   ~~commission~~ commissioner of agriculture as reimbursement for the 
  5.8   compensation of a steward who is an employee of the ~~commission~~ 
  5.9   commissioner of agriculture for which a general fund 
  5.10  appropriation has been made must be credited to the general fund.
  5.11     Sec. 7.  Minnesota Statutes 1994, section 240.16, 
  5.12  subdivision 1, is amended to read: 
  5.13     Subdivision 1.  [POWERS AND DUTIES.] All horse races run at 
  5.14  a licensed racetrack must be presided over by a board of three 
  5.15  stewards, who must be appointees of or persons approved by the 
  5.16  ~~commission or persons approved by it~~ commissioner of agriculture.
  5.17  The ~~commission~~ commissioner of agriculture shall designate one 
  5.18  steward as chair.  At least two stewards for all races either 
  5.19  shall be employees of the ~~commission~~ commissioner of agriculture 
  5.20  who shall serve in the unclassified service, or shall be under 
  5.21  contract with the ~~commission~~ commissioner of agriculture to 
  5.22  serve as stewards.  The commission may delegate the following 
  5.23  duties and powers to a board of stewards:  
  5.24     (a) to ensure that races are run in accordance with the 
  5.25  commission's rules; 
  5.26     (b) to supervise the conduct of racing to ensure the 
  5.27  integrity of the sport; 
  5.28     (c) to settle disputes arising from the running of horse 
  5.29  races, and to certify official results; 
  5.30     (d) to impose on licensees, for violation of law or 
  5.31  commission rules, fines not exceeding $2,000 and license 
  5.32  suspensions not exceeding 90 days; 
  5.33     (e) to recommend to the commission where warranted 
  5.34  penalties in excess of those in clause (d); 
  5.35     (f) to otherwise enforce the laws and rules of racing; and 
  5.36     (g) to perform other duties and have other powers assigned 
  6.1   by the commission.  
  6.2      Sec. 8.  Minnesota Statutes 1994, section 240.16, 
  6.3   subdivision 5, is amended to read: 
  6.4      Subd. 5.  [COSTS.] The ~~commission~~ commissioner of 
  6.5   agriculture may require that a licensee reimburse ~~it~~ the 
  6.6   commissioner for the costs of providing a state-paid steward or 
  6.7   stewards to supervise racing at the licensee's racetrack.  
  6.8      Sec. 9.  Minnesota Statutes 1994, section 240.24, 
  6.9   subdivision 2, is amended to read: 
  6.10     Subd. 2.  [EXCEPTION.] Notwithstanding subdivision 1, the 
  6.11  commission by rule shall allow the use of:  (1) topical external 
  6.12  applications that do not contain anesthetics or steroids; (2) 
  6.13  food additives; (3) Furosemide or other pulmonary hemostatic 
  6.14  agents if the agents are administered under the visual 
  6.15  supervision of the veterinarian or a designee of the 
  6.16  veterinarian employed by the ~~commission~~ commissioner of 
  6.17  agriculture; and (4) nonsteroidal anti-inflammatory drugs, 
  6.18  provided that the test sample does not contain more than three 
  6.19  micrograms of the substance or metabolites thereof per 
  6.20  milliliter of blood plasma.  For purposes of this clause, "test 
  6.21  sample" means any bodily substance including blood, urine, 
  6.22  saliva, or other substance as directed by the commission, taken 
  6.23  from a horse under the supervision of the ~~commission~~ 
  6.24  veterinarian employed by the commissioner of agriculture and in 
  6.25  such manner as prescribed by the commission for the purpose of 
  6.26  analysis. 
  6.27     The commission shall adopt emergency rules to implement the 
  6.28  provisions of this subdivision. 
  6.29     Sec. 10.  Minnesota Statutes 1994, section 240.28, 
  6.30  subdivision 1, is amended to read: 
  6.31     Subdivision 1.  [FINANCIAL INTEREST.] No person may serve 
  6.32  on ~~or be employed by~~ the commission or be an employee of the 
  6.33  commissioner of agriculture with duties that include providing 
  6.34  services to the commission who has an interest in any 
  6.35  corporation, association, or partnership which holds a license 
  6.36  from the commission or which holds a contract to supply goods or 
  7.1   services to a licensee or at a licensed racetrack, including 
  7.2   concessions contracts.  No member ~~or employee~~ of the 
  7.3   commission or employee of the commissioner of agriculture whose 
  7.4   duties include providing services to the commission may own, 
  7.5   wholly or in part, or have an interest in a horse which races at 
  7.6   a licensed racetrack in Minnesota.  No member ~~or employee~~ of the 
  7.7   commission or employee of the commissioner of agriculture whose 
  7.8   duties include providing services to the commission may have a 
  7.9   financial interest in or be employed in a profession or business 
  7.10  which conflicts with the performance of duties as a member or 
  7.11  employee. 
  7.12     Sec. 11.  Minnesota Statutes 1994, section 240.28, 
  7.13  subdivision 2, is amended to read: 
  7.14     Subd. 2.  [BETTING.] No member ~~or employee~~ of the 
  7.15  commission or employee of the commissioner of agriculture whose 
  7.16  duties include providing services to the commission may bet or 
  7.17  cause a bet to be made on a race at a licensed racetrack while 
  7.18  serving on ~~or being employed by~~ the commission or while being 
  7.19  employed by the commissioner of agriculture.  No person 
  7.20  appointed or approved by the ~~director~~ commissioner of 
  7.21  agriculture as a steward may bet or cause a bet to be made at a 
  7.22  licensed racetrack during a racing meeting at which the person 
  7.23  is serving as a steward.  The commission shall by rule prescribe 
  7.24  such restrictions on betting by its licensees as it deems 
  7.25  necessary to protect the integrity of racing.  
  7.26     Sec. 12.  [REPEALER.] 
  7.27     Minnesota Statutes 1994, sections 240.01, subdivision 20; 
  7.28  240.011; 240.04; and 240.16, subdivision 6, are repealed. 
  7.29                             ARTICLE 2
  7.30                          BOARDS ABOLISHED
  7.31     Section 1.  [RACING COMMISSION, GAMBLING CONTROL BOARD, AND 
  7.32  LOTTERY BOARD ABOLISHED; RESPONSIBILITIES TRANSFERRED.] 
  7.33     (a) The gambling control board and the state lottery board 
  7.34  are abolished.  Except as otherwise provided in this act, the 
  7.35  responsibilities of the boards are transferred under Minnesota 
  7.36  Statutes, section 15.039, to the department of gambling, 
  8.1   established in article 3. 
  8.2      (b) The division of gambling enforcement is transferred 
  8.3   from the department of public safety to the department of 
  8.4   gambling, established in article 3.  Minnesota Statutes, section 
  8.5   15.039, applies to this transfer. 
  8.6                              ARTICLE 3
  8.7                        DEPARTMENT OF GAMBLING
  8.8      Section 1.  [349B.02] [DEPARTMENT OF GAMBLING.] 
  8.9      Subdivision 1.  [EXECUTIVE AGENCY.] The department of 
  8.10  gambling is an agency in the executive branch of state 
  8.11  government under the supervision and control of a commissioner 
  8.12  appointed by the governor with the advice and consent of the 
  8.13  senate. 
  8.14     Subd. 2.  [STRUCTURE.] The department consists of the 
  8.15  gambling control division and the gambling enforcement division. 
  8.16     Subd. 3.  [POWERS AND DUTIES.] The powers and duties of the 
  8.17  commissioner are as specified in chapters 299L, 349, and 349A, 
  8.18  as well as other powers and duties imposed by law. 
  8.19     Sec. 2.  [APPROPRIATION REDUCTION.] 
  8.20     The appropriation for the department of gambling for the 
  8.21  biennium beginning July 1, 1995, must be reduced by $....... in 
  8.22  the first year and $....... in the second year from the combined 
  8.23  appropriation for the previous biennium for the boards and 
  8.24  division abolished or transferred by article 2. 
  8.25     Sec. 3.  [REPEALER.] 
  8.26     Minnesota Statutes 1994, sections 349.151, subdivisions 1, 
  8.27  2, and 3a; and 349A.03, subdivision 1, are repealed. 
  8.28                             ARTICLE 4
  8.29                       CONFORMING AMENDMENTS
  8.30     Section 1.  Minnesota Statutes 1994, section 10A.01, 
  8.31  subdivision 18, is amended to read: 
  8.32     Subd. 18.  "Public official" means any: 
  8.33     (a) member of the legislature; 
  8.34     (b) constitutional officer in the executive branch and the 
  8.35  officer's chief administrative deputy; 
  8.36     (c) member, chief administrative officer or deputy chief 
  9.1   administrative officer of a state board or commission which has 
  9.2   at least one of the following powers:  (i) the power to adopt, 
  9.3   amend or repeal rules, or (ii) the power to adjudicate contested 
  9.4   cases or appeals; 
  9.5      (d) commissioner, deputy commissioner, or assistant 
  9.6   commissioner of any state department as designated pursuant to 
  9.7   section 15.01; 
  9.8      (e) individual employed in the executive branch who is 
  9.9   authorized to adopt, amend or repeal rules or adjudicate 
  9.10  contested cases; 
  9.11     (f) executive director of the state board of investment; 
  9.12     (g) executive director of the Indian affairs intertribal 
  9.13  board; 
  9.14     (h) commissioner of the iron range resources and 
  9.15  rehabilitation board; 
  9.16     (i) commissioner of mediation services; 
  9.17     (j) deputy of any official listed in clauses (e) to (i); 
  9.18     (k) judge of the workers' compensation court of appeals; 
  9.19     (l) administrative law judge or compensation judge in the 
  9.20  state office of administrative hearings or referee in the 
  9.21  department of economic security; 
  9.22     (m) solicitor general or deputy, assistant or special 
  9.23  assistant attorney general; 
  9.24     (n) individual employed by the legislature as secretary of 
  9.25  the senate, legislative auditor, chief clerk of the house, 
  9.26  revisor of statutes, or researcher, legislative analyst, or 
  9.27  attorney in the office of senate counsel and research or house 
  9.28  research; 
  9.29     (o) member, regional administrator, division director, 
  9.30  general counsel, or operations manager of the metropolitan 
  9.31  council; 
  9.32     (p) ~~the director of the racing commission, the director of~~ 
  9.33  ~~the gambling control board,~~ the director of the state lottery~~,~~ 
  9.34  and the deputy director of the state lottery; 
  9.35     (q) ~~director~~ directors of the ~~division of~~ gambling control 
  9.36  and gambling enforcement divisions in the department of ~~public~~ 
 10.1   ~~safety~~ gambling; 
 10.2      (r) member or executive director of the higher education 
 10.3   facilities authority; 
 10.4      (s) member of the board of directors or president of the 
 10.5   Minnesota world trade center corporation; or 
 10.6      (t) member or chief administrator of a metropolitan agency. 
 10.7      Sec. 2.  Minnesota Statutes 1994, section 10A.09, 
 10.8   subdivision 1, is amended to read: 
 10.9      Subdivision 1.  [TIME FOR FILING.] Except for a candidate 
 10.10  for elective office in the judicial branch, an individual shall 
 10.11  file a statement of economic interest with the board: 
 10.12     (1) within 60 days of accepting employment as a public 
 10.13  official or a local official in a metropolitan governmental 
 10.14  unit; 
 10.15     (2) within 14 days after filing an affidavit of candidacy 
 10.16  or petition to appear on the ballot for an elective public 
 10.17  office or an elective local office in a metropolitan 
 10.18  governmental unit; 
 10.19     (3) in the case of a public official requiring the advice 
 10.20  and consent of the senate, within 14 days after undertaking the 
 10.21  duties of office; or 
 10.22     (4) in the case of members of the Minnesota racing 
 10.23  commission, the director of the ~~Minnesota racing commission,~~ 
 10.24  ~~chief of security, medical officer, inspector of~~ 
 10.25  ~~pari-mutuels~~ division of the department of gambling, and 
 10.26  stewards employed or approved by the ~~commission~~ commissioner of 
 10.27  agriculture or persons who fulfill those duties under contract, 
 10.28  within 60 days of accepting or assuming duties. 
 10.29     Sec. 3.  Minnesota Statutes 1994, section 15.01, is amended 
 10.30  to read: 
 10.31     15.01 [DEPARTMENTS OF THE STATE.] 
 10.32     The following agencies are designated as the departments of 
 10.33  the state government:  the department of administration; the 
 10.34  department of agriculture; the department of commerce; the 
 10.35  department of corrections; the department of education; the 
 10.36  department of economic security; the department of trade and 
 11.1   economic development; the department of finance; the department 
 11.2   of health; the department of human rights; the department of 
 11.3   gambling; the department of labor and industry; the department 
 11.4   of military affairs; the department of natural resources; the 
 11.5   department of employee relations; the department of public 
 11.6   safety; the department of public service; the department of 
 11.7   human services; the department of revenue; the department of 
 11.8   transportation; the department of veterans affairs; and their 
 11.9   successor departments. 
 11.10     Sec. 4.  Minnesota Statutes 1994, section 15A.081, 
 11.11  subdivision 1, is amended to read: 
 11.12     Subdivision 1.  [SALARY RANGES.] The governor shall set the 
 11.13  salary rate within the ranges listed below for positions 
 11.14  specified in this subdivision, upon approval of the legislative 
 11.15  commission on employee relations and the legislature as provided 
 11.16  by section 3.855: 
 11.17                            Salary Range 
 11.18  $57,500-$78,500 
 11.19     Commissioner of finance; 
 11.20     Commissioner of education; 
 11.21     Commissioner of transportation; 
 11.22     Commissioner of human services; 
 11.23     Commissioner of revenue; 
 11.24     Commissioner of public safety; 
 11.25     Commissioner of gambling; 
 11.26     Executive director, state board of investment; 
 11.27  $50,000-$67,500 
 11.28     Commissioner of administration; 
 11.29     Commissioner of agriculture; 
 11.30     Commissioner of commerce; 
 11.31     Commissioner of corrections; 
 11.32     Commissioner of economic security; 
 11.33     Commissioner of employee relations; 
 11.34     Commissioner of health; 
 11.35     Commissioner of labor and industry; 
 11.36     Commissioner of natural resources; 
 12.1      Commissioner of trade and economic development; 
 12.2      Chief administrative law judge; office of administrative 
 12.3      hearings; 
 12.4      Commissioner, pollution control agency; 
 12.5      Director, office of waste management; 
 12.6      Commissioner, housing finance agency; 
 12.7      Executive director, public employees retirement 
 12.8      association; 
 12.9      Executive director, teacher's retirement association; 
 12.10     Executive director, state retirement system; 
 12.11  $42,500-$60,000 
 12.12     Commissioner of human rights; 
 12.13     Commissioner, department of public service; 
 12.14     Commissioner of veterans affairs; 
 12.15     Commissioner, bureau of mediation services; 
 12.16     Commissioner, public utilities commission; 
 12.17     Member, transportation regulation board; 
 12.18     Ombudsman for corrections; 
 12.19     Ombudsman for mental health and retardation. 
 12.20     Sec. 5.  Minnesota Statutes 1994, section 16B.54, 
 12.21  subdivision 2, is amended to read: 
 12.22     Subd. 2.  [VEHICLES.] (a) [ACQUISITION FROM AGENCY; 
 12.23  APPROPRIATION.] The commissioner may direct an agency to make a 
 12.24  transfer of a passenger motor vehicle or truck currently 
 12.25  assigned to it.  The transfer must be made to the commissioner 
 12.26  for use in the central motor pool.  The commissioner shall 
 12.27  reimburse an agency whose motor vehicles have been paid for with 
 12.28  funds dedicated by the constitution for a special purpose and 
 12.29  which are assigned to the central motor pool.  The amount of 
 12.30  reimbursement for a motor vehicle is its average wholesale price 
 12.31  as determined from the midwest edition of the National 
 12.32  Automobile Dealers Association official used car guide. 
 12.33     (b) [PURCHASE.] To the extent that funds are available for 
 12.34  the purpose, the commissioner may purchase or otherwise acquire 
 12.35  additional passenger motor vehicles and trucks necessary for the 
 12.36  central motor pool.  The title to all motor vehicles assigned to 
 13.1   or purchased or acquired for the central motor pool is in the 
 13.2   name of the department of administration.  
 13.3      (c) [TRANSFER AT AGENCY REQUEST.] On the request of an 
 13.4   agency, the commissioner may transfer to the central motor pool 
 13.5   any passenger motor vehicle or truck for the purpose of 
 13.6   disposing of it.  The department or agency transferring the 
 13.7   vehicle or truck must be paid for it from the motor pool 
 13.8   revolving account established by this section in an amount equal 
 13.9   to two-thirds of the average wholesale price of the vehicle or 
 13.10  truck as determined from the midwest edition of the National 
 13.11  Automobile Dealers Association official used car guide. 
 13.12     (d) [VEHICLES; MARKING.] The commissioner shall provide for 
 13.13  the uniform marking of all motor vehicles.  Motor vehicle colors 
 13.14  must be selected from the regular color chart provided by the 
 13.15  manufacturer each year.  The commissioner may further provide 
 13.16  for the use of motor vehicles without marking by the governor, 
 13.17  the lieutenant governor, the division of criminal apprehension, 
 13.18  division of liquor control, ~~division of gambling enforcement,~~ 
 13.19  arson investigators of the division of fire marshal in the 
 13.20  department of public safety, financial institutions division of 
 13.21  the department of commerce, state lottery, criminal 
 13.22  investigators of the department of revenue, state-owned 
 13.23  community service facilities in the department of human 
 13.24  services, the investigative staff of the department of economic 
 13.25  security, the gambling control division and gambling enforcement 
 13.26  division in the department of gambling, and the office of the 
 13.27  attorney general.  
 13.28     Sec. 6.  Minnesota Statutes 1994, section 299L.01, is 
 13.29  amended to read: 
 13.30     299L.01 [~~DIVISION OF~~ GAMBLING ENFORCEMENT DIVISION.] 
 13.31     Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
 13.32  chapter, the terms defined in this subdivision have the meanings 
 13.33  given them. 
 13.34     (b) "Division" means the ~~division of~~ gambling enforcement 
 13.35  division of the department of gambling.  
 13.36     (c) "Commissioner" means the commissioner of ~~public~~ 
 14.1   ~~safety~~ gambling. 
 14.2      (d) "Director" means the director of the gambling 
 14.3   enforcement division.  
 14.4      (e) "Manufacturer" means a person who assembles from raw 
 14.5   materials or subparts a gambling device for sale or use in 
 14.6   Minnesota. 
 14.7      (f) "Distributor" means a person who sells, offers to sell, 
 14.8   or otherwise provides a gambling device to a person in Minnesota.
 14.9      (g) "Used gambling device" means a gambling device five or 
 14.10  more years old from the date of manufacture. 
 14.11     Subd. 2.  [ESTABLISHED.] The ~~division of~~ gambling 
 14.12  enforcement division is a division in the department of ~~public~~ 
 14.13  ~~safety~~ gambling under the control and supervision of a director, 
 14.14  appointed by the commissioner and serving ~~at the commissioner's~~ 
 14.15  ~~pleasure~~ in the ~~unclassified~~ classified service.  The director 
 14.16  must be a person who is licensed or eligible to be licensed as a 
 14.17  peace officer under sections 626.84 to 626.863. 
 14.18     Subd. 3.  [EMPLOYEES.] The director shall employ in the 
 14.19  division ~~of gambling enforcement~~ personnel, in the classified 
 14.20  service, necessary to carry out the duties under this chapter.  
 14.21  The director shall request the bureau of criminal apprehension 
 14.22  to perform background checks on persons who are finalists for 
 14.23  employment with the division but may employ personnel pending 
 14.24  completion of the background check. 
 14.25     Subd. 4.  [CONFLICT OF INTEREST.] (a) The director and any 
 14.26  person employed by the division may not have a direct or 
 14.27  indirect financial interest in: 
 14.28     (1) a class A or B licensee of the racing commission; 
 14.29     (2) a lottery retailer under contract with the state 
 14.30  lottery; 
 14.31     (3) a person who is under a lottery procurement contract 
 14.32  with the state lottery; 
 14.33     (4) a bingo hall, manufacturer, or distributor licensed 
 14.34  under chapter 349; or 
 14.35     (5) a manufacturer or distributor licensed under this 
 14.36  chapter. 
 15.1      (b) The director or an employee of the division ~~of gambling~~ 
 15.2   ~~enforcement~~ may not participate in the conducting of lawful 
 15.3   gambling under chapter 349. 
 15.4      Sec. 7.  Minnesota Statutes 1994, section 299L.02, 
 15.5   subdivision 2, is amended to read: 
 15.6      Subd. 2.  [GAMBLING.] The director shall:  
 15.7      (1) conduct background investigations of applicants for 
 15.8   licensing as a manufacturer or distributor of gambling equipment 
 15.9   or as a bingo hall under chapter 349; and 
 15.10     (2) when requested by the director of gambling 
 15.11  control division, or when the director believes it to be 
 15.12  reasonable and necessary, inspect the premises of a licensee 
 15.13  under chapter 349 to determine compliance with law and with the 
 15.14  rules of the ~~board~~ commissioner, or to conduct an audit of the 
 15.15  accounts, books, records, or other documents required to be kept 
 15.16  by the licensee. 
 15.17     The director may charge applicants under clause (1) a 
 15.18  reasonable fee to cover the costs of the investigation. 
 15.19     Sec. 8.  Minnesota Statutes 1994, section 299L.02, 
 15.20  subdivision 4, is amended to read: 
 15.21     Subd. 4.  [OTHER GAMBLING.] The director ~~of gambling~~ 
 15.22  ~~enforcement~~ shall cooperate with all state and local agencies in 
 15.23  the detection and apprehension of unlawful gambling. 
 15.24     Sec. 9.  Minnesota Statutes 1994, section 299L.02, 
 15.25  subdivision 5, is amended to read: 
 15.26     Subd. 5.  [BACKGROUND CHECKS.] In any background check 
 15.27  required to be conducted by the division ~~of gambling enforcement~~ 
 15.28  under this chapter, chapter 240, 349, 349A, or section 3.9221, 
 15.29  the director may, or shall when required by law, require that 
 15.30  fingerprints be taken and the director may forward the 
 15.31  fingerprints to the Federal Bureau of Investigation for the 
 15.32  conducting of a national criminal history check.  The director 
 15.33  may charge a fee for fingerprint recording and investigation 
 15.34  under section 3.9221. 
 15.35     Sec. 10.  Minnesota Statutes 1994, section 299L.03, 
 15.36  subdivision 1, is amended to read: 
 16.1      Subdivision 1.  [INSPECTIONS; ACCESS.] In conducting any 
 16.2   inspection authorized under this chapter or chapter 240, 349, or 
 16.3   349A, the employees of the division ~~of gambling enforcement~~ have 
 16.4   free and open access to all parts of the regulated business 
 16.5   premises, and may conduct the inspection at any reasonable time 
 16.6   without notice and without a search warrant.  For purposes of 
 16.7   this subdivision, "regulated business premises" means premises 
 16.8   where: 
 16.9      (1) lawful gambling is conducted by an organization 
 16.10  licensed under chapter 349 or by an organization exempt from 
 16.11  licensing under section 349.166; 
 16.12     (2) gambling equipment is manufactured, sold, distributed, 
 16.13  or serviced by a manufacturer or distributor licensed under 
 16.14  chapter 349; 
 16.15     (3) records required to be maintained under chapter 240, 
 16.16  297E, 349, or 349A are prepared or retained; 
 16.17     (4) lottery tickets are sold by a lottery retailer under 
 16.18  chapter 340A; 
 16.19     (5) races are conducted by a person licensed under chapter 
 16.20  240; or 
 16.21     (6) gambling devices are manufactured or distributed, 
 16.22  including places of storage under section 299L.07. 
 16.23     Sec. 11.  Minnesota Statutes 1994, section 299L.03, 
 16.24  subdivision 4, is amended to read: 
 16.25     Subd. 4.  [ACCESS TO CRIMINAL HISTORY.] The director has 
 16.26  access to all criminal history data compiled by the bureau of 
 16.27  criminal apprehension on any person licensed or under contract 
 16.28  with the state lottery, pari-mutuel racing ~~commission~~ division, 
 16.29  or the gambling control ~~board~~ division, or any applicant for 
 16.30  licensing or a person who has submitted a bid on a lottery 
 16.31  contractor or any employee and finalist for employment with the 
 16.32  state lottery. 
 16.33     Sec. 12.  Minnesota Statutes 1994, section 299L.03, 
 16.34  subdivision 5, is amended to read: 
 16.35     Subd. 5.  [ARREST POWERS.] The director may designate 
 16.36  certain employees within the division ~~of gambling enforcement~~ 
 17.1   who are authorized to arrest or investigate any person who is 
 17.2   suspected of violating any provision of chapter 240, 349, or 
 17.3   349A, or is suspected of committing any crime involving 
 17.4   gambling, and to conduct searches and seizures to enforce any of 
 17.5   those laws.  Any employee authorized by this subdivision to make 
 17.6   an arrest must be licensed under sections 626.84 to 626.863.  
 17.7      Sec. 13.  Minnesota Statutes 1994, section 299L.03, 
 17.8   subdivision 7, is amended to read: 
 17.9      Subd. 7.  [OTHER POWERS.] Nothing in this chapter limits 
 17.10  the authority of the division ~~of gambling enforcement~~ to 
 17.11  exercise any other power specified under chapter ~~240,~~ 349~~,~~ or 
 17.12  349A.  
 17.13     Sec. 14.  Minnesota Statutes 1994, section 349.12, is 
 17.14  amended by adding a subdivision to read: 
 17.15     Subd. 8a.  [COMMISSIONER.] "Commissioner" is the 
 17.16  commissioner of the department of gambling. 
 17.17     Sec. 15.  Minnesota Statutes 1994, section 349.12, 
 17.18  subdivision 10, is amended to read: 
 17.19     Subd. 10.  [DIRECTOR.] "Director" is the director of the 
 17.20  gambling control ~~board~~ division.  
 17.21     Sec. 16.  Minnesota Statutes 1994, section 349.12, is 
 17.22  amended by adding a subdivision to read: 
 17.23     Subd. 12.  [DIVISION.] "Division" is the gambling control 
 17.24  division of the department of gambling. 
 17.25     Sec. 17.  Minnesota Statutes 1994, section 349.13, is 
 17.26  amended to read: 
 17.27     349.13 [LAWFUL GAMBLING.] 
 17.28     Lawful gambling is not a lottery or gambling within the 
 17.29  meaning of sections 609.75 to 609.76 if it is conducted under 
 17.30  this chapter.  A pull-tab dispensing device permitted by ~~board~~ 
 17.31  rule is not a gambling device within the meaning of sections 
 17.32  609.75 to 609.76 and chapter 299L. 
 17.33     Sec. 18.  Minnesota Statutes 1994, section 349.151, 
 17.34  subdivision 8, is amended to read: 
 17.35     Subd. 8.  [CRIMINAL HISTORY.] The ~~board~~ commissioner may 
 17.36  request the director of the gambling enforcement division to 
 18.1   assist in investigating the background of an applicant for a 
 18.2   license under this chapter, and the director of the gambling 
 18.3   enforcement division may bill the license applicant for the cost 
 18.4   thereof.  The ~~board~~ commissioner has access to all criminal 
 18.5   history data compiled by the ~~division of~~ gambling 
 18.6   enforcement division on licensees and applicants. 
 18.7      Sec. 19.  Minnesota Statutes 1994, section 349.152, 
 18.8   subdivision 1, is amended to read: 
 18.9      Subdivision 1.  [APPOINTED.] The ~~governor~~ commissioner 
 18.10  shall appoint~~, with the advice and consent of the senate,~~ a 
 18.11  director ~~from a list of one or more persons submitted by the~~ 
 18.12  ~~board.  The director~~ who serves in the ~~unclassified~~ classified 
 18.13  service ~~at the pleasure of the governor~~.  
 18.14     Sec. 20.  Minnesota Statutes 1994, section 349.153, is 
 18.15  amended to read: 
 18.16     349.153 [CONFLICT OF INTEREST.] 
 18.17     (a) A person may not ~~serve on the board,~~ be the director, 
 18.18  or be an employee of the ~~board~~ division who has an interest in 
 18.19  any corporation, association, limited liability company, or 
 18.20  partnership that is licensed by the ~~board~~ commissioner as a 
 18.21  distributor, manufacturer, or a bingo hall under section 349.164.
 18.22     (b) ~~A member of the board,~~ The director, or an employee of 
 18.23  the ~~board~~ division may not accept employment with, receive 
 18.24  compensation directly or indirectly from, or enter into a 
 18.25  contractual relationship with an organization that conducts 
 18.26  lawful gambling, a distributor, a bingo hall or a manufacturer 
 18.27  while employed with ~~or a member of~~ the ~~board~~ division or within 
 18.28  one year after terminating employment with or leaving the ~~board~~ 
 18.29  division. 
 18.30     (c) A distributor, bingo hall, manufacturer, or 
 18.31  organization licensed to conduct lawful gambling may not hire a 
 18.32  former employee~~,~~ or director~~, or member~~ of the ~~gambling control~~ 
 18.33  ~~board~~ division for one year after the employee~~,~~ or director~~,~~ 
 18.34  ~~or member~~ has terminated employment with or left the ~~gambling~~ 
 18.35  ~~control board~~ division.  
 18.36     Sec. 21.  Minnesota Statutes 1994, section 349.155, 
 19.1   subdivision 4, is amended to read: 
 19.2      Subd. 4.  [LICENSE REVOCATION, SUSPENSION, DENIAL; 
 19.3   CENSURE.] The ~~board~~ commissioner may by order (i) deny, suspend, 
 19.4   revoke, or refuse to renew a license or premises permit, or (ii) 
 19.5   censure a licensee or applicant, if ~~it~~ the commissioner finds 
 19.6   that the order is in the public interest and that the applicant 
 19.7   or licensee, or a director, officer, partner, governor, person 
 19.8   in a supervisory or management position of the applicant or 
 19.9   licensee, an employee eligible to make sales on behalf of the 
 19.10  applicant or licensee, or direct or indirect holder of more than 
 19.11  a five percent financial interest in the applicant or licensee: 
 19.12     (1) has violated or failed to comply with any provision of 
 19.13  this chapter or chapter 297E or 299L, or any rule adopted or 
 19.14  order issued thereunder; 
 19.15     (2) has filed an application for a license that is 
 19.16  incomplete in any material respect, or contains a statement 
 19.17  that, in light of the circumstances under which it was made, is 
 19.18  false, misleading, fraudulent, or a misrepresentation; 
 19.19     (3) has made a false statement in a document or report 
 19.20  required to be submitted to the ~~board~~ commissioner or the 
 19.21  commissioner of revenue, or has made a false statement to 
 19.22  the ~~board~~ commissioner, the compliance review group, or the 
 19.23  director; 
 19.24     (4) has been convicted of a crime in another jurisdiction 
 19.25  that would be a felony if committed in Minnesota; 
 19.26     (5) is permanently or temporarily enjoined by any gambling 
 19.27  regulatory agency from engaging in or continuing any conduct or 
 19.28  practice involving any aspect of gambling; 
 19.29     (6) has had a gambling-related license revoked or 
 19.30  suspended, or has paid or been required to pay a monetary 
 19.31  penalty of $2,500 or more, by a gambling regulator in another 
 19.32  state or jurisdiction; 
 19.33     (7) has been the subject of any of the following actions by 
 19.34  the director of the gambling enforcement division or 
 19.35  commissioner ~~of public safety~~:  (i) had a license under chapter 
 19.36  299L denied, suspended, or revoked, (ii) been censured, 
 20.1   reprimanded, has paid or been required to pay a monetary penalty 
 20.2   or fine, or (iii) has been the subject of any other discipline 
 20.3   by the director or commissioner; or 
 20.4      (8) has engaged in conduct that is contrary to the public 
 20.5   health, welfare, or safety, or to the integrity of gambling; or 
 20.6      (9) based on past activities or criminal record poses a 
 20.7   threat to the public interest or to the effective regulation and 
 20.8   control of gambling, or creates or enhances the dangers of 
 20.9   unsuitable, unfair, or illegal practices, methods, and 
 20.10  activities in the conduct of gambling or the carrying on of the 
 20.11  business and financial arrangements incidental to the conduct of 
 20.12  gambling. 
 20.13     Sec. 22.  Minnesota Statutes 1994, section 349.162, 
 20.14  subdivision 2, is amended to read: 
 20.15     Subd. 2.  [RECORDS REQUIRED.] A distributor must maintain a 
 20.16  record of all gambling equipment which it sells to 
 20.17  organizations.  The record must include:  
 20.18     (1) the identity of the person from whom the distributor 
 20.19  purchased the equipment; 
 20.20     (2) the registration number of the equipment; 
 20.21     (3) the name, address, and license or exempt permit number 
 20.22  of the organization to which the sale was made; 
 20.23     (4) the date of the sale; 
 20.24     (5) the name of the person who ordered the equipment; 
 20.25     (6) the name of the person who received the equipment; 
 20.26     (7) the type of equipment; 
 20.27     (8) the serial number of the equipment; 
 20.28     (9) the name, form number, or other identifying information 
 20.29  for each game; and 
 20.30     (10) in the case of bingo hard cards or paper sheets sold 
 20.31  on and after January 1, 1991, the individual number of each card 
 20.32  or sheet. 
 20.33     The invoice for each sale must be retained for at least 
 20.34  3-1/2 years after the sale is completed and a copy of each 
 20.35  invoice is to be delivered to the ~~board~~ commissioner in the 
 20.36  manner and time prescribed by the ~~board~~ commissioner.  For 
 21.1   purposes of this section, a sale is completed when the gambling 
 21.2   equipment is physically delivered to the purchaser.  
 21.3      Each distributor must report monthly to the ~~board~~ 
 21.4   commissioner, in a form the ~~board~~ commissioner prescribes, its 
 21.5   sales of each type of gambling equipment.  Employees of 
 21.6   the ~~board~~ division and the ~~division of~~ gambling 
 21.7   enforcement division may inspect the business premises, books, 
 21.8   records, and other documents of a distributor at any reasonable 
 21.9   time without notice and without a search warrant.  
 21.10     The ~~board~~ commissioner may require that a distributor 
 21.11  submit the monthly report and invoices required in this 
 21.12  subdivision via magnetic media or electronic data transfer. 
 21.13     Sec. 23.  Minnesota Statutes 1994, section 349.162, 
 21.14  subdivision 6, is amended to read: 
 21.15     Subd. 6.  [REMOVAL OF EQUIPMENT FROM INVENTORY.] Authorized 
 21.16  employees of the ~~board~~ division, the ~~division of~~ gambling 
 21.17  enforcement ~~of the department of public safety~~ division, and the 
 21.18  commissioner of revenue may remove gambling equipment from the 
 21.19  inventories of distributors and organizations and test that 
 21.20  equipment to determine its compliance with all applicable laws 
 21.21  and rules.  A distributor or organization may return to the 
 21.22  manufacturer thereof any gambling equipment which is determined 
 21.23  to be in violation of law or rule.  The cost to an organization 
 21.24  of gambling equipment removed from inventory under this 
 21.25  paragraph and found to be in compliance with all applicable law 
 21.26  and rules is an allowable expense under section 349.15. 
 21.27     Sec. 24.  Minnesota Statutes 1994, section 349.163, 
 21.28  subdivision 6, is amended to read: 
 21.29     Subd. 6.  [SAMPLES OF GAMBLING EQUIPMENT.] The ~~board~~ 
 21.30  commissioner shall require each licensed manufacturer to submit 
 21.31  to the ~~board~~ commissioner one or more samples of each item of 
 21.32  gambling equipment the manufacturer manufactures for use or 
 21.33  resale in this state.  The ~~board~~ commissioner shall inspect and 
 21.34  test all the equipment it deems necessary to determine the 
 21.35  equipment's compliance with law and board rules.  Samples 
 21.36  required under this subdivision must be approved by the ~~board~~ 
 22.1   commissioner before the equipment being sampled is shipped into 
 22.2   or sold for use or resale in this state.  The ~~board~~ commissioner 
 22.3   may request the assistance of the ~~commissioner of public safety~~ 
 22.4   ~~and the~~ director of the state lottery ~~board~~ in performing the 
 22.5   tests.  
 22.6      Sec. 25.  Minnesota Statutes 1994, section 349.165, 
 22.7   subdivision 2, is amended to read: 
 22.8      Subd. 2.  [CONTENTS OF APPLICATION.] An application for a 
 22.9   premises permit must contain: 
 22.10     (1) the name and address of the applying organization and 
 22.11  of the organization's gambling manager; 
 22.12     (2) a description of the site for which the permit is 
 22.13  sought, including its address and, where applicable, its 
 22.14  placement within another premises or establishment; 
 22.15     (3) if the site is leased, the name and address of the 
 22.16  lessor and information about the lease the board requires, 
 22.17  including all rents and other charges for the use of the site; 
 22.18  and 
 22.19     (4) other information the ~~board~~ commissioner deems 
 22.20  necessary to carry out ~~its~~ the purposes of this chapter. 
 22.21     An organization holding a premises permit must notify the 
 22.22  ~~board~~ commissioner in writing within ten days whenever any 
 22.23  material change is made in the above information. 
 22.24     Sec. 26.  Minnesota Statutes 1994, section 349.18, 
 22.25  subdivision 1, is amended to read: 
 22.26     Subdivision 1.  [LEASE OR OWNERSHIP REQUIRED.] (a) An 
 22.27  organization may conduct lawful gambling only on premises it 
 22.28  owns or leases.  Leases must be on a form prescribed by the 
 22.29  ~~board~~ commissioner.  Except for leases entered into before the 
 22.30  effective date of this section, the term of the lease may not 
 22.31  begin before the effective date of the premises permit and must 
 22.32  expire on the same day that the premises permit expires.  Copies 
 22.33  of all leases must be made available to employees of the ~~board~~ 
 22.34  division and the ~~division of~~ gambling enforcement division on 
 22.35  request.  A lease may not provide for payments determined 
 22.36  directly or indirectly by the receipts or profits from lawful 
 23.1   gambling.  The ~~board~~ commissioner may prescribe by rule limits 
 23.2   on the amount of rent which an organization may pay to a lessor 
 23.3   for premises leased for lawful gambling provided that no rule of 
 23.4   the ~~board~~ commissioner may prescribe a limit of less than $1,000 
 23.5   per month on rent paid for premises used for lawful gambling 
 23.6   other than bingo.  Any rule adopted by the ~~board~~ commissioner 
 23.7   limiting the amount of rent to be paid may only be effective for 
 23.8   leases entered into, or renewed, after the effective date of the 
 23.9   rule. 
 23.10     (b) No person, distributor, manufacturer, lessor, or 
 23.11  organization other than the licensed organization leasing the 
 23.12  space may conduct any activity on the leased premises during 
 23.13  times when lawful gambling is being conducted on the premises. 
 23.14     (c) At a site where the leased premises consists of an area 
 23.15  on or behind a bar at which alcoholic beverages are sold and 
 23.16  employees of the lessor are employed by the organization as 
 23.17  pull-tab sellers at the site, pull-tabs and tipboard tickets may 
 23.18  be sold and redeemed by those employees at any place on or 
 23.19  behind the bar, but the tipboards and receptacles for pull-tabs 
 23.20  and cash drawers for lawful gambling receipts must be maintained 
 23.21  only within the leased premises. 
 23.22     (d)  Employees of a lessor may participate in lawful 
 23.23  gambling on the premises provided (1) if pull-tabs or tipboards 
 23.24  are sold, the organization voluntarily posts, or is required to 
 23.25  post, the major prizes as specified in section 349.172; and (2) 
 23.26  any employee of the lessor participating in lawful gambling is 
 23.27  not a gambling employee for the organization conducting lawful 
 23.28  gambling on the premises. 
 23.29     Sec. 27.  Minnesota Statutes 1994, section 349.19, 
 23.30  subdivision 6, is amended to read: 
 23.31     Subd. 6.  [PRESERVATION OF RECORDS.] Records required to be 
 23.32  kept by this section must be preserved by a licensed 
 23.33  organization for at least 3-1/2 years and may be inspected by 
 23.34  the commissioner of revenue~~, the board,~~ or the commissioner ~~of~~ 
 23.35  ~~public safety~~ at any reasonable time without notice or a search 
 23.36  warrant. 
 24.1      Sec. 28.  Minnesota Statutes 1994, section 349A.01, is 
 24.2   amended by adding a subdivision to read: 
 24.3      Subd. 2a.  [COMMISSIONER.] "Commissioner" is the 
 24.4   commissioner of the department of gambling. 
 24.5      Sec. 29.  Minnesota Statutes 1994, section 349A.02, 
 24.6   subdivision 1, is amended to read: 
 24.7      Subdivision 1.  [DIRECTOR.] A state lottery is established 
 24.8   under the supervision and control of the director of the state 
 24.9   lottery appointed by the governor with the advice and consent of 
 24.10  the senate.  ~~The governor shall appoint the director from a list~~ 
 24.11  ~~of at least three persons recommended to the governor by the~~ 
 24.12  ~~board.~~  The director must be qualified by experience and 
 24.13  training to supervise the lottery.  The director serves in the 
 24.14  unclassified service.  The annual salary rate authorized for the 
 24.15  director is equal to 80 percent of the salary rate prescribed 
 24.16  for the governor as of the effective date of Laws 1993, chapter 
 24.17  146. 
 24.18     Sec. 30.  Minnesota Statutes 1994, section 349A.02, 
 24.19  subdivision 8, is amended to read: 
 24.20     Subd. 8.  [ATTORNEY GENERAL.] The attorney general is the 
 24.21  attorney for the ~~board~~ commissioner.  
 24.22     Sec. 31.  Minnesota Statutes 1994, section 349A.03, 
 24.23  subdivision 2, is amended to read: 
 24.24     Subd. 2.  [~~BOARD~~ COMMISSIONER DUTIES.] The ~~board~~ 
 24.25  commissioner has the following duties: 
 24.26     (1) to advise the director on all aspects of the lottery; 
 24.27     (2) to review and comment on rules and game procedures 
 24.28  adopted by the director; 
 24.29     (3) review and comment on lottery procurement contracts; 
 24.30     (4) review and comment on agreements between the director 
 24.31  and one or more other lotteries relating to a joint lottery; and 
 24.32     (5) to review and comment on advertising promulgated by the 
 24.33  director at least quarterly to ensure that all advertising is 
 24.34  consistent with the dignity of the state and with section 
 24.35  349A.09.  
 24.36     Sec. 32.  Minnesota Statutes 1994, section 349A.04, is 
 25.1   amended to read: 
 25.2      349A.04 [LOTTERY GAME PROCEDURES.] 
 25.3      The director may adopt game procedures governing the 
 25.4   following elements of the lottery: 
 25.5      (1) lottery games; 
 25.6      (2) ticket prices; 
 25.7      (3) number and size of prizes; 
 25.8      (4) methods of selecting winning tickets; and 
 25.9      (5) frequency and method of drawings. 
 25.10     The adoption of lottery game procedures is not subject to 
 25.11  chapter 14.  Before adopting a lottery game procedure, the 
 25.12  director shall submit the procedure to the ~~board~~ commissioner 
 25.13  for ~~its~~ review and comment. 
 25.14     Sec. 33.  Minnesota Statutes 1994, section 349A.05, is 
 25.15  amended to read: 
 25.16     349A.05 [RULES.] 
 25.17     The director may adopt rules, including emergency rules, 
 25.18  under chapter 14 governing the following elements of the lottery:
 25.19     (1) the number and types of lottery retailers' locations; 
 25.20     (2) qualifications of lottery retailers and application 
 25.21  procedures for lottery retailer contracts; 
 25.22     (3) investigation of lottery retailer applicants; 
 25.23     (4) appeal procedures for denial, suspension, or 
 25.24  cancellation of lottery retailer contracts; 
 25.25     (5) compensation of lottery retailers; 
 25.26     (6) accounting for and deposit of lottery revenues by 
 25.27  lottery retailers; 
 25.28     (7) procedures for issuing lottery procurement contracts 
 25.29  and for the investigation of bidders on those contracts; 
 25.30     (8) payment of prizes; 
 25.31     (9) procedures needed to ensure the integrity and security 
 25.32  of the lottery; and 
 25.33     (10) other rules the director considers necessary for the 
 25.34  efficient operation and administration of the lottery.  
 25.35     Before adopting a rule the director shall submit the rule 
 25.36  to the ~~board~~ commissioner for ~~its~~ review and comment.  
 26.1      Sec. 34.  Minnesota Statutes 1994, section 349A.06, 
 26.2   subdivision 2, is amended to read: 
 26.3      Subd. 2.  [QUALIFICATIONS.] (a) The director may not 
 26.4   contract with a retailer who: 
 26.5      (1) is under the age of 18; 
 26.6      (2) is in business solely as a seller of lottery tickets; 
 26.7      (3) owes $500 or more in delinquent taxes as defined in 
 26.8   section 270.72; 
 26.9      (4) has been convicted within the previous five years of a 
 26.10  felony or gross misdemeanor, any crime involving fraud or 
 26.11  misrepresentation, or a gambling-related offense; 
 26.12     (5) is a member of the immediate family, residing in the 
 26.13  same household, as the director~~, board member,~~ or any employee 
 26.14  of the lottery; 
 26.15     (6) in the director's judgment does not have the financial 
 26.16  stability or responsibility to act as a lottery retailer, or 
 26.17  whose contracting as a lottery retailer would adversely affect 
 26.18  the public health, welfare, and safety, or endanger the security 
 26.19  and integrity of the lottery; or 
 26.20     (7) is a currency exchange, as defined in section 53A.01. 
 26.21     A contract entered into before August 1, 1990, which 
 26.22  violates clause (7) may continue in effect until its expiration 
 26.23  but may not be renewed. 
 26.24     (b) An organization, firm, partnership, or corporation that 
 26.25  has a stockholder who owns more than five percent of the 
 26.26  business or the stock of the corporation, an officer, or 
 26.27  director, that does not meet the requirements of paragraph (a), 
 26.28  clause (4), is not eligible to be a lottery retailer under this 
 26.29  section. 
 26.30     (c) The restrictions under paragraph (a), clause (4), do 
 26.31  not apply to an organization, partnership, or corporation if the 
 26.32  director determines that the organization, partnership, or firm 
 26.33  has terminated its relationship with the individual whose 
 26.34  actions directly contributed to the disqualification under this 
 26.35  subdivision. 
 26.36     Sec. 35.  Minnesota Statutes 1994, section 349A.08, 
 27.1   subdivision 7, is amended to read: 
 27.2      Subd. 7.  [PAYMENTS PROHIBITED.] (a) No prize may be paid 
 27.3   to ~~a member of the board~~ the commissioner, the director or an 
 27.4   employee of the lottery, or a member of their families residing 
 27.5   in the same household of the ~~member~~ commissioner, director, or 
 27.6   employee.  No prize may be paid to an officer or employee of a 
 27.7   vendor which at the time the game or drawing was being conducted 
 27.8   was involved with providing goods or services to the lottery 
 27.9   under a lottery procurement contract. 
 27.10     (b) No prize may be paid for a stolen, altered, or 
 27.11  fraudulent ticket. 
 27.12     Sec. 36.  Minnesota Statutes 1994, section 349A.11, is 
 27.13  amended to read: 
 27.14     349A.11 [CONFLICT OF INTEREST.] 
 27.15     (a) The director, ~~a board member~~ the commissioner, an 
 27.16  employee of the lottery, a member of the immediate family of the 
 27.17  director, ~~board member~~ commissioner, or employee residing in the 
 27.18  same household may not: 
 27.19     (1) purchase a lottery ticket; 
 27.20     (2) have any personal pecuniary interest in any vendor 
 27.21  holding a lottery procurement contract, or in any lottery 
 27.22  retailer; or 
 27.23     (3) receive any gift, gratuity, or other thing of value, 
 27.24  excluding food or beverage, from any lottery vendor or lottery 
 27.25  retailer, or person applying to be a retailer or vendor, in 
 27.26  excess of $100 in any calendar year.  
 27.27     (b) A violation of paragraph (a), clause (1), is a 
 27.28  misdemeanor.  A violation of paragraph (a), clause (2), is a 
 27.29  gross misdemeanor.  A violation of paragraph (a), clause (3), is 
 27.30  a misdemeanor unless the gift, gratuity, or other item of value 
 27.31  received has a value in excess of $500, in which case a 
 27.32  violation is a gross misdemeanor.  
 27.33     (c) The director or an unclassified employee of the lottery 
 27.34  may not, within one year of terminating employment with the 
 27.35  lottery, accept employment with, act as an agent or attorney 
 27.36  for, or otherwise represent any person, corporation, or entity 
 28.1   that had any lottery procurement contract or bid for a lottery 
 28.2   procurement contract with the lottery within a period of two 
 28.3   years prior to the termination of their employment.  A violation 
 28.4   of this paragraph is a misdemeanor.  
 28.5      Sec. 37.  Minnesota Statutes 1994, section 349A.12, 
 28.6   subdivision 4, is amended to read: 
 28.7      Subd. 4.  [LOTTERY RETAILERS AND VENDORS.] A person who is 
 28.8   a lottery retailer, or is applying to be a lottery retailer, a 
 28.9   person applying for a contract with the director, or a person 
 28.10  under contract with the director to supply goods or services to 
 28.11  lottery may not pay, give, or make any economic opportunity, 
 28.12  gift, loan, gratuity, special discount, favor, hospitality, or 
 28.13  service, excluding food or beverage, having an aggregate value 
 28.14  of over $100 in any calendar year to the director, ~~board member~~ 
 28.15  commissioner, employee of the lottery, or to a member of the 
 28.16  immediate family residing in the same household as that person. 
 28.17     Sec. 38.  [DIVISION DIRECTORS.] 
 28.18     The directors of the gambling control board and division of 
 28.19  gambling enforcement of the department of public safety on the 
 28.20  effective date of this act continue in the positions of 
 28.21  directors of those divisions in the department of gambling in 
 28.22  the classified service. 
 28.23     Sec. 39.  [REVISOR INSTRUCTION.] 
 28.24     (a) The revisor of statutes shall make the following 
 28.25  changes in Minnesota Statutes, as well as similar changes 
 28.26  elsewhere in Minnesota Statutes and Minnesota Rules to conform 
 28.27  to the legislative intent as expressed in this act: 
 28.28     (1) "board," "board's," or similar terms in Minnesota 
 28.29  Statutes, sections 349.12, subdivision 3; and 349.163, 
 28.30  subdivision 4, when referring to the gambling control board to 
 28.31  "division," "division's," or similar terms; and 
 28.32     (2) "board," "board's," or similar terms when referring to 
 28.33  the gambling control board to "commissioner," "commissioner's," 
 28.34  or similar terms in sections 349.12, subdivisions 3a, 4, and 25; 
 28.35  349.151, subdivisions 2, 4, 4a, 4b, 5, 7, and 9 to 13; 349.152, 
 28.36  subdivisions 2 and 3; 349.154; 349.155, subdivisions 1, 2, 3, 
 29.1   and 5 to 8; 349.16; 349.161, subdivisions 2 and 8; 349.162, 
 29.2   subdivisions 1 and 5; 349.163, subdivisions 1, 5, 6a, and 7; 
 29.3   349.164, subdivision 2; 349.1641; 349.165, subdivisions 1 and 3; 
 29.4   349.166; 349.167; 349.168; 349.169; 349.17; 349.172; 349.18, 
 29.5   subdivisions 1a and 2; 349.19, subdivisions 1 to 5 and 7 to 11; 
 29.6   349.191; and 349.211, subdivision 3. 
 29.7      (b) The revisor of statutes shall recodify Minnesota 
 29.8   Statutes, chapter 299L, and Minnesota Statutes, sections 349.11 
 29.9   to 349.23 as part of Minnesota Statutes, chapter 349B. 
 29.10     Sec. 40.  [REPEALER.] 
 29.11     Minnesota Statutes 1994, sections 349.12, subdivision 6; 
 29.12  349.152, subdivision 4; and 349A.01, subdivision 2, are repealed.
 29.13     Sec. 41.  [EFFECTIVE DATE.] 
 29.14     This act is effective July 1, 1995.