as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to gambling; abolishing the Minnesota racing 1.3 commission, the gambling control board, and the state 1.4 lottery board; creating the department of gambling and 1.5 transferring the responsibilities of the abolished 1.6 commission and boards to it; transferring the division 1.7 of gambling enforcement from the department of public 1.8 safety to the department of gambling; making 1.9 conforming changes; amending Minnesota Statutes 1994, 1.10 sections 10A.01, subdivision 18; 10A.09, subdivision 1.11 1; 15.01; 15A.081, subdivision 1; 16B.54, subdivision 1.12 2; 240.01, by adding subdivisions; 240.011; 240.03; 1.13 240.04; 240.05, subdivision 2; 240.06, subdivisions 3, 1.14 7, and 8; 240.07, subdivision 2; 240.08; 240.09, 1.15 subdivision 3a; 240.155; 240.16; 240.18, subdivision 1.16 2; 240.21; 240.24; 240.28; 299L.01; 299L.02, 1.17 subdivisions 2, 3, 4, and 5; 299L.03, subdivisions 1, 1.18 4, 5, and 7; 349.12, subdivision 10, and by adding 1.19 subdivisions; 349.13; 349.151, subdivision 8; 349.152, 1.20 subdivision 1; 349.153; 349.155, subdivision 4; 1.21 349.162, subdivisions 2 and 6; 349.163, subdivision 6; 1.22 349.165, subdivision 2; 349.18, subdivision 1; 349.19, 1.23 subdivision 6; 349A.01, by adding a subdivision; 1.24 349A.02, subdivisions 1 and 8; 349A.03, subdivision 2; 1.25 349A.04; 349A.05; 349A.06, subdivision 2; 349A.08, 1.26 subdivision 7; 349A.11; and 349A.12, subdivision 4; 1.27 proposing coding for new law in Minnesota Statutes, 1.28 chapter 349B; repealing Minnesota Statutes 1994, 1.29 sections 240.01, subdivision 4; 240.02; 349.12, 1.30 subdivision 6; 349.151, subdivisions 1, 2, and 3a; 1.31 349.152, subdivision 4; 349A.01, subdivision 2; and 1.32 349A.03, subdivision 1. 1.33 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.34 ARTICLE 1 1.35 BOARDS AND COMMISSION ABOLISHED 1.36 Section 1. [RACING COMMISSION, GAMBLING CONTROL BOARD, AND 1.37 LOTTERY BOARD ABOLISHED; RESPONSIBILITIES TRANSFERRED.] 1.38 (a) The Minnesota racing commission, the gambling control 1.39 board, and the state lottery board are abolished. Except as 2.1 otherwise provided in this act, the responsibilities of the 2.2 commission and the boards are transferred under Minnesota 2.3 Statutes, section 15.039, to the department of gambling, 2.4 established in article 2. 2.5 (b) The division of gambling enforcement is transferred 2.6 from the department of public safety to the department of 2.7 gambling, established in article 2. Minnesota Statutes, section 2.8 15.039, applies to this transfer. 2.9 ARTICLE 2 2.10 DEPARTMENT OF GAMBLING 2.11 Section 1. [349B.02] [DEPARTMENT OF GAMBLING.] 2.12 Subdivision 1. [EXECUTIVE AGENCY.] The department of 2.13 gambling is an agency in the executive branch of state 2.14 government under the supervision and control of a commissioner 2.15 appointed by the governor with the advice and consent of the 2.16 senate. 2.17 Subd. 2. [STRUCTURE.] The department consists of the 2.18 pari-mutuel racing division, the gambling control division, and 2.19 the gambling enforcement division. 2.20 Subd. 3. [POWERS AND DUTIES.] The powers and duties of the 2.21 commissioner are as specified in chapters 240, 299L, 349, and 2.22 349A, as well as other powers and duties imposed by law. 2.23 Sec. 2. [APPROPRIATION REDUCTION.] 2.24 The appropriation for the department of gambling for the 2.25 biennium beginning July 1, 1995, must be reduced by $....... in 2.26 the first year and $....... in the second year from the combined 2.27 appropriation for the previous biennium for the commission, 2.28 boards, and division abolished or transferred by article 1. 2.29 Sec. 3. [REPEALER.] 2.30 Minnesota Statutes 1994, sections 240.02; 349.151, 2.31 subdivisions 1, 2, and 3a; and 349A.03, subdivision 1, are 2.32 repealed. 2.33 ARTICLE 3 2.34 CONFORMING AMENDMENTS 2.35 Section 1. Minnesota Statutes 1994, section 10A.01, 2.36 subdivision 18, is amended to read: 3.1 Subd. 18. "Public official" means any: 3.2 (a) member of the legislature; 3.3 (b) constitutional officer in the executive branch and the 3.4 officer's chief administrative deputy; 3.5 (c) member, chief administrative officer or deputy chief 3.6 administrative officer of a state board or commission which has 3.7 at least one of the following powers: (i) the power to adopt, 3.8 amend or repeal rules, or (ii) the power to adjudicate contested 3.9 cases or appeals; 3.10 (d) commissioner, deputy commissioner, or assistant 3.11 commissioner of any state department as designated pursuant to 3.12 section 15.01; 3.13 (e) individual employed in the executive branch who is 3.14 authorized to adopt, amend or repeal rules or adjudicate 3.15 contested cases; 3.16 (f) executive director of the state board of investment; 3.17 (g) executive director of the Indian affairs intertribal 3.18 board; 3.19 (h) commissioner of the iron range resources and 3.20 rehabilitation board; 3.21 (i) commissioner of mediation services; 3.22 (j) deputy of any official listed in clauses (e) to (i); 3.23 (k) judge of the workers' compensation court of appeals; 3.24 (l) administrative law judge or compensation judge in the 3.25 state office of administrative hearings or referee in the 3.26 department of economic security; 3.27 (m) solicitor general or deputy, assistant or special 3.28 assistant attorney general; 3.29 (n) individual employed by the legislature as secretary of 3.30 the senate, legislative auditor, chief clerk of the house, 3.31 revisor of statutes, or researcher, legislative analyst, or 3.32 attorney in the office of senate counsel and research or house 3.33 research; 3.34 (o) member, regional administrator, division director, 3.35 general counsel, or operations manager of the metropolitan 3.36 council; 4.1 (p)the director of the racing commission, the director of4.2the gambling control board,the director of the state lottery, 4.3 and the deputy director of the state lottery; 4.4 (q)directordirectors of thedivision ofpari-mutuel 4.5 racing, gambling control, and gambling enforcement divisions in 4.6 the department ofpublic safetygambling; 4.7 (r) member or executive director of the higher education 4.8 facilities authority; 4.9 (s) member of the board of directors or president of the 4.10 Minnesota world trade center corporation; or 4.11 (t) member or chief administrator of a metropolitan agency. 4.12 Sec. 2. Minnesota Statutes 1994, section 10A.09, 4.13 subdivision 1, is amended to read: 4.14 Subdivision 1. [TIME FOR FILING.] Except for a candidate 4.15 for elective office in the judicial branch, an individual shall 4.16 file a statement of economic interest with the board: 4.17 (1) within 60 days of accepting employment as a public 4.18 official or a local official in a metropolitan governmental 4.19 unit; 4.20 (2) within 14 days after filing an affidavit of candidacy 4.21 or petition to appear on the ballot for an elective public 4.22 office or an elective local office in a metropolitan 4.23 governmental unit; 4.24 (3) in the case of a public official requiring the advice 4.25 and consent of the senate, within 14 days after undertaking the 4.26 duties of office; or 4.27 (4) in the case ofmembers of the Minnesota racing4.28commission,the director of theMinnesotapari-mutuel racing 4.29commission, chief of security, medical officer, inspector of4.30pari-mutuelsdivision of the department of gambling, and 4.31 stewards employed or approved by thecommissioncommissioner of 4.32 gambling or persons who fulfill those duties under contract, 4.33 within 60 days of accepting or assuming duties. 4.34 Sec. 3. Minnesota Statutes 1994, section 15.01, is amended 4.35 to read: 4.36 15.01 [DEPARTMENTS OF THE STATE.] 5.1 The following agencies are designated as the departments of 5.2 the state government: the department of administration; the 5.3 department of agriculture; the department of commerce; the 5.4 department of corrections; the department of education; the 5.5 department of economic security; the department of trade and 5.6 economic development; the department of finance; the department 5.7 of health; the department of human rights; the department of 5.8 gambling; the department of labor and industry; the department 5.9 of military affairs; the department of natural resources; the 5.10 department of employee relations; the department of public 5.11 safety; the department of public service; the department of 5.12 human services; the department of revenue; the department of 5.13 transportation; the department of veterans affairs; and their 5.14 successor departments. 5.15 Sec. 4. Minnesota Statutes 1994, section 15A.081, 5.16 subdivision 1, is amended to read: 5.17 Subdivision 1. [SALARY RANGES.] The governor shall set the 5.18 salary rate within the ranges listed below for positions 5.19 specified in this subdivision, upon approval of the legislative 5.20 commission on employee relations and the legislature as provided 5.21 by section 3.855: 5.22 Salary Range 5.23 $57,500-$78,500 5.24 Commissioner of finance; 5.25 Commissioner of education; 5.26 Commissioner of transportation; 5.27 Commissioner of human services; 5.28 Commissioner of revenue; 5.29 Commissioner of public safety; 5.30 Commissioner of gambling; 5.31 Executive director, state board of investment; 5.32 $50,000-$67,500 5.33 Commissioner of administration; 5.34 Commissioner of agriculture; 5.35 Commissioner of commerce; 5.36 Commissioner of corrections; 6.1 Commissioner of economic security; 6.2 Commissioner of employee relations; 6.3 Commissioner of health; 6.4 Commissioner of labor and industry; 6.5 Commissioner of natural resources; 6.6 Commissioner of trade and economic development; 6.7 Chief administrative law judge; office of administrative 6.8 hearings; 6.9 Commissioner, pollution control agency; 6.10 Director, office of waste management; 6.11 Commissioner, housing finance agency; 6.12 Executive director, public employees retirement 6.13 association; 6.14 Executive director, teacher's retirement association; 6.15 Executive director, state retirement system; 6.16 $42,500-$60,000 6.17 Commissioner of human rights; 6.18 Commissioner, department of public service; 6.19 Commissioner of veterans affairs; 6.20 Commissioner, bureau of mediation services; 6.21 Commissioner, public utilities commission; 6.22 Member, transportation regulation board; 6.23 Ombudsman for corrections; 6.24 Ombudsman for mental health and retardation. 6.25 Sec. 5. Minnesota Statutes 1994, section 16B.54, 6.26 subdivision 2, is amended to read: 6.27 Subd. 2. [VEHICLES.] (a) [ACQUISITION FROM AGENCY; 6.28 APPROPRIATION.] The commissioner may direct an agency to make a 6.29 transfer of a passenger motor vehicle or truck currently 6.30 assigned to it. The transfer must be made to the commissioner 6.31 for use in the central motor pool. The commissioner shall 6.32 reimburse an agency whose motor vehicles have been paid for with 6.33 funds dedicated by the constitution for a special purpose and 6.34 which are assigned to the central motor pool. The amount of 6.35 reimbursement for a motor vehicle is its average wholesale price 6.36 as determined from the midwest edition of the National 7.1 Automobile Dealers Association official used car guide. 7.2 (b) [PURCHASE.] To the extent that funds are available for 7.3 the purpose, the commissioner may purchase or otherwise acquire 7.4 additional passenger motor vehicles and trucks necessary for the 7.5 central motor pool. The title to all motor vehicles assigned to 7.6 or purchased or acquired for the central motor pool is in the 7.7 name of the department of administration. 7.8 (c) [TRANSFER AT AGENCY REQUEST.] On the request of an 7.9 agency, the commissioner may transfer to the central motor pool 7.10 any passenger motor vehicle or truck for the purpose of 7.11 disposing of it. The department or agency transferring the 7.12 vehicle or truck must be paid for it from the motor pool 7.13 revolving account established by this section in an amount equal 7.14 to two-thirds of the average wholesale price of the vehicle or 7.15 truck as determined from the midwest edition of the National 7.16 Automobile Dealers Association official used car guide. 7.17 (d) [VEHICLES; MARKING.] The commissioner shall provide 7.18 for the uniform marking of all motor vehicles. Motor vehicle 7.19 colors must be selected from the regular color chart provided by 7.20 the manufacturer each year. The commissioner may further 7.21 provide for the use of motor vehicles without marking by the 7.22 governor, the lieutenant governor, the division of criminal 7.23 apprehension, division of liquor control,division of gambling7.24enforcement,arson investigators of the division of fire marshal 7.25 in the department of public safety, financial institutions 7.26 division of the department of commerce, state lottery, criminal 7.27 investigators of the department of revenue, state-owned 7.28 community service facilities in the department of human 7.29 services, the investigative staff of the department of economic 7.30 security, the pari-mutuel racing division, gambling control 7.31 division, and gambling enforcement division in the department of 7.32 gambling, and the office of the attorney general. 7.33 Sec. 6. Minnesota Statutes 1994, section 240.01, is 7.34 amended by adding a subdivision to read: 7.35 Subd. 4a. [COMMISSIONER.] "Commissioner" means the 7.36 commissioner of the department of gambling. 8.1 Sec. 7. Minnesota Statutes 1994, section 240.01, is 8.2 amended by adding a subdivision to read: 8.3 Subd. 4b. [DIVISION.] "Division" means the pari-mutuel 8.4 racing division of the department of gambling. 8.5 Sec. 8. Minnesota Statutes 1994, section 240.011, is 8.6 amended to read: 8.7 240.011 [APPOINTMENT OF DIRECTOR.] 8.8 Thegovernorcommissioner shall appoint the director of the 8.9Minnesotapari-mutuel racingcommissiondivision, who serves in 8.10 theunclassifiedclassified serviceat the governor's pleasure. 8.11 The director must be a person qualified by experience in the 8.12 administration and regulation of pari-mutuel racing to discharge 8.13 the duties of the director.The governor must select a director8.14from a list of one or more names submitted by the Minnesota8.15racing commission.8.16 Sec. 9. Minnesota Statutes 1994, section 240.03, is 8.17 amended to read: 8.18 240.03 [COMMISSIONPOWERS AND DUTIES OF THE COMMISSIONER.] 8.19 Thecommissioncommissioner has the following powers and 8.20 duties: 8.21 (1) to regulate horse racing in Minnesota to ensure that it 8.22 is conducted in the public interest; 8.23 (2) to issue licenses as provided in this chapter; 8.24 (3) to enforce all laws and rules governing horse racing; 8.25 (4) to collect and distribute all taxes provided for in 8.26 this chapter; 8.27 (5) to conduct necessary investigations and inquiries and 8.28 compel the submission of information, documents, and recordsit8.29 the commissioner deems necessary to carry outitsthe duties 8.30 under this chapter; 8.31 (6) to supervise the conduct of pari-mutuel betting on 8.32 horse racing; 8.33 (7) to employ and supervise personnel under this chapter; 8.34 (8) to determine the number of racing days to be held in 8.35 the state and at each licensed racetrack; and 8.36 (9) to take all necessary steps to ensure the integrity of 9.1 racing in Minnesota. 9.2 Sec. 10. Minnesota Statutes 1994, section 240.04, is 9.3 amended to read: 9.4 240.04 [EMPLOYEES.] 9.5 Subdivision 1. [DIRECTOR; DUTIES.] The director shall 9.6 perform the following duties: 9.7 (a)take and preserve records of all proceedings before the9.8commission, maintain its books, documents, and records, and make9.9them available for public inspection as the commission directs;9.10(b)if so designated by thecommissioncommissioner, act as 9.11 a hearing officer in hearings which need not be conducted under 9.12 the administrative procedure act to conduct hearings, receive 9.13 testimony and exhibits, and certify the record of proceedings to 9.14 thecommissioncommissioner; 9.15 (c) act as thecommission'spari-mutuel racing division's 9.16 chief personnel officer and supervise the employment, conduct, 9.17 duties, and discipline ofcommissiondivision employees; and 9.18 (d) perform other duties as directed by thecommission9.19 commissioner. 9.20Subd. 1a. [DEPUTY DIRECTOR.] The commission may appoint a9.21deputy director who serves in the unclassified service at the9.22commission's pleasure.9.23Subd. 2. [DIRECTOR OF PARI-MUTUELS.] The commission may9.24employ a director of pari-mutuels who serves in the unclassified9.25service at the commission's pleasure. The director of9.26pari-mutuels shall perform the following duties:9.27(a) supervise all forms of pari-mutuel betting on horse9.28racing in the state;9.29(b) inspect all machinery;9.30(c) make reports on pari-mutuel betting as the commission9.31directs;9.32(d) subject to commission approval, appoint assistants to9.33perform duties the commission designates; and9.34(e) perform other duties as directed by the commission.9.35If no director of pari-mutuels is appointed the duties of9.36that office are assigned to the executive director. The10.1commission may contract with outside services or personnel to10.2assist the executive director in the performance of these duties.10.3Subd. 3. [DIRECTOR OF RACING SECURITY.] The commission may10.4appoint a director of racing security to serve in the10.5unclassified service at the commission's pleasure. The director10.6of racing security shall enforce all laws and commission rules10.7relating to the security and integrity of racing. The director10.8of racing security and all other persons designated by the10.9commission as security officers have free and open access to all10.10areas of all facilities the commission licenses and may search10.11without a search warrant any part of a licensed racetrack and10.12the person of any licensee of the commission on the premises.10.13The director of racing security may order a licensee to take, at10.14the licensee's expense, security measures necessary to protect10.15the integrity of racing, but the order may be appealed to the10.16commission. Nothing in this chapter prohibits law enforcement10.17authorities and agents from entering, in the performance of10.18their duties, a premises licensed under Laws 1983, chapter 214.10.19If no director of racing security is appointed the duties10.20of that office are assigned to the executive director. The10.21commission may contract with outside services or personnel to10.22assist the executive director in the performance of these duties.10.23Subd. 4. [VETERINARIAN.] The commission may appoint a10.24veterinarian who must be a doctor of veterinary medicine and who10.25serves at its pleasure in the unclassified service. The10.26veterinarian shall, while employed by the commission, perform10.27the following duties:10.28(a) supervise the formulation, administration, and10.29evaluation of all medical tests the commission's rules require10.30or authorize;10.31(b) advise the commission on all aspects of veterinary10.32medicine relating to its powers and duties; and10.33(c) supervise all personnel involved in medical testing,10.34subject to the supervision of the executive director.10.35If no veterinarian is appointed, the duties of that office10.36may be assigned to the executive director. The commission may11.1contract with outside personnel to assist the executive director11.2in the performance of these duties.11.3The commission may require that a licensee reimburse it for11.4the costs of services provided by assistant veterinarians.11.5 Subd.5.2. [OTHER EMPLOYEES.] Subject to applicable laws, 11.6 thecommissioncommissioner shall employ and assign duties to 11.7 other officers, employees, and agents asit deemsnecessary to 11.8 dischargeitsthe division's functions. 11.9 Subd.6.3. [COMPENSATION.] The compensation of all 11.10commissionemployees shall be as provided in chapter 43A. 11.11 Subd.7.4. [ASSISTANCE.] Thecommissioncommissioner and 11.12 director may request assistance from any department or agency of 11.13 the state in fulfilling its duties, and shall make appropriate 11.14 reimbursement for all such assistance. 11.15 Sec. 11. Minnesota Statutes 1994, section 240.05, 11.16 subdivision 2, is amended to read: 11.17 Subd. 2. [FORMS.] All application forms for licenses must 11.18 contain a statement to the effect that by accepting a license 11.19 from thecommissioncommissioner a licensee consents to having 11.20 property or person subject to inspection at any time bythe11.21director of racing security or bysecurity officers designated 11.22 by thecommissioncommissioner. 11.23 Sec. 12. Minnesota Statutes 1994, section 240.06, 11.24 subdivision 3, is amended to read: 11.25 Subd. 3. [INVESTIGATION.] Before granting a class A 11.26 license thecommissioncommissioner shall conduct, or request 11.27 thedivision ofgambling enforcement division to conduct, a 11.28 comprehensive background and financial investigation of the 11.29 applicant and sources of financing. Thecommissioncommissioner 11.30 may charge an applicant an investigation fee to cover the cost 11.31 of the investigation, and shall from this fee reimburse the11.32division of gambling enforcement for its share of the cost of11.33the investigation. Thecommissioncommissioner has access to 11.34 all criminal history data compiled by thedivision ofgambling 11.35 enforcement division on class A licensees and applicants. 11.36 Sec. 13. Minnesota Statutes 1994, section 240.06, 12.1 subdivision 7, is amended to read: 12.2 Subd. 7. [LICENSE SUSPENSION AND REVOCATION.] The 12.3commissioncommissioner: 12.4 (1) may revoke a class A license for (i) a violation of 12.5 law, order, or rule which in thecommission'scommissioner's 12.6 opinion adversely affects the integrity of horse racing in 12.7 Minnesota, or for an intentional false statement made in a 12.8 license application, or (ii) a willful failure to pay any money 12.9 required to be paid byLaws 1983, chapter 214, andthis chapter; 12.10 (2) may revoke a class A license for failure to perform 12.11 material covenants or representations made in a license 12.12 application; and 12.13 (3) shall revoke a class A license if live racing has not 12.14 been conducted on at least 50 racing days assigned by the 12.15commissioncommissioner during any period of 12 consecutive 12.16 months, unless thecommissioncommissioner authorizes a shorter 12.17 period because of circumstances beyond the licensee's control. 12.18 Thecommissioncommissioner may suspend a class A license 12.19 for up to one year for a violation of law, order, or rule which 12.20 in thecommission'scommissioner's opinion adversely affects the 12.21 integrity of horse racing in Minnesota, and may suspend a class 12.22 A license indefinitely if it determines that the licensee has as 12.23 an officer, director, shareholder, or other person with a 12.24 direct, indirect, or beneficial interest a person who is in the 12.25commission'scommissioner's opinion inimical to the integrity of 12.26 horse racing in Minnesota or who cannot be certified under 12.27 subdivision 1, clause (d). 12.28 A license revocation or suspension under this subdivision 12.29 is a contested case under sections 14.57 to 14.69 of the 12.30 Administrative Procedure Act, and is in addition to criminal 12.31 penalties imposed for a violation of law or rule. 12.32 Sec. 14. Minnesota Statutes 1994, section 240.06, 12.33 subdivision 8, is amended to read: 12.34 Subd. 8. [WORK AREAS.] A class A licensee must provide at 12.35 no cost to thecommissioncommissioner suitable work areas for 12.36commissiondivision members, officers, employees, and agents, 13.1 including agents of thedivision ofgambling enforcement 13.2 division, who are directed or requested by thecommission13.3 commissioner to supervise and control racing at the licensed 13.4 racetrack. 13.5 Sec. 15. Minnesota Statutes 1994, section 240.07, 13.6 subdivision 2, is amended to read: 13.7 Subd. 2. [HEARINGS; INVESTIGATIONS.] Before granting an 13.8 initial class B license thecommissioncommissioner shall hold 13.9 at least one public hearing on the license. Comprehensive 13.10 investigations must be conducted and their costs paid in the 13.11 manner prescribed by section 240.06, subdivision 3. 13.12 Thecommissioncommissioner has access to all criminal history 13.13 data compiled by thedivision ofgambling enforcement division 13.14 on class B licensees and applicants. 13.15 Sec. 16. Minnesota Statutes 1994, section 240.08, is 13.16 amended to read: 13.17 240.08 [OCCUPATION LICENSES.] 13.18 Subdivision 1. [AUTHORITY.] Thecommissioncommissioner 13.19 may issue class C occupational licenses to persons who wish to 13.20 be employed in horse racing where pari-mutuel betting is 13.21 conducted as: 13.22 (a) horse owners or lessees; 13.23 (b) jockeys or drivers; 13.24 (c) exercise riders; 13.25 (d) grooms; 13.26 (e) trainers and their assistants; 13.27 (f) pari-mutuel personnel; 13.28 (g) security officers; 13.29 (h) other occupations thecommissioncommissioner by rule 13.30 determines require licensing to ensure the integrity of horse 13.31 racing in Minnesota. 13.32 Subd. 2. [APPLICATION.] An application for a class C 13.33 license must be on a form thecommissioncommissioner prescribes 13.34 and must be accompanied by an affidavit of qualification that 13.35 the applicant: 13.36 (a) is not in default in the payment of an obligation or 14.1 debt to the state underLaws 1983, chapter 214this chapter; 14.2 (b) has never been convicted of a felony in a state or 14.3 federal court and does not have a state or federal felony charge 14.4 pending; 14.5 (c) is not and never has been connected with or engaged in 14.6 an illegal business; 14.7 (d) has never been found guilty of fraud or 14.8 misrepresentation in connection with racing or breeding; 14.9 (e) has never been found guilty of a violation of law or 14.10 rule relating to horse racing, pari-mutuel betting or any other 14.11 form of gambling which is a serious violation as definedby the14.12commission's rulesin rule; and 14.13 (f) has never knowingly violated a rule or order of the 14.14commissioncommissioner or a law of Minnesota relating to racing. 14.15 The application must also contain an irrevocable consent 14.16 statement, to be signed by the applicant, which states that 14.17 suits and actions relating to the subject matter of the 14.18 application or acts or omissions arising from it may be 14.19 commenced against the applicant in any court of competent 14.20 jurisdiction in this state by the service on the secretary of 14.21 state of any summons, process, or pleading authorized by the 14.22 laws of this state. If any summons, process, or pleading is 14.23 served upon the secretary of state, it must be by duplicate 14.24 copies. One copy must be retained in the office of the 14.25 secretary of state and the other copy must be forwarded 14.26 immediately by certified mail to the address of the applicant, 14.27 as shown by the records of thecommissioncommissioner. 14.28 Subd. 3. [INVESTIGATIONS.] Thecommissioncommissioner 14.29 shall investigate each applicant for a class C license to the 14.30 extent it deems necessary, and may request the assistance ofand14.31may reimbursethedivision ofgambling enforcement division in 14.32 investigating applicants. Thecommissioncommissioner may by 14.33 rule require that an applicant be fingerprinted or furnish the 14.34 applicant's fingerprints. Investigations must be conducted and 14.35 their costs paid in the manner prescribed by section 240.06, 14.36 subdivision 3. Thecommissioncommissioner may cooperate with 15.1 national and international organizations and agencies in 15.2 conducting investigations. Thecommissioncommissioner may by 15.3 rule provide for examining the qualifications of an applicant 15.4 for the license being applied for. Thecommissioncommissioner 15.5 has access to all criminal history data compiled by thedivision15.6ofgambling enforcement division on class C applicants and 15.7 licensees. 15.8 Subd. 4. [LICENSE ISSUANCE AND RENEWAL.] If thecommission15.9 commissioner determines that the applicant is qualified for the 15.10 occupation for which licensing is sought and will not adversely 15.11 affect the public health, welfare, and safety or the integrity 15.12 of racing in Minnesota, it may issue a class C license to the 15.13 applicant. If it makes a similar finding for a renewal of a 15.14 class C license it may renew the license. Class C licenses are 15.15 effective for one year. 15.16 Subd. 5. [REVOCATION AND SUSPENSION.] Thecommission15.17 commissioner may revoke a class C license for a violation of law 15.18 or rule which in thecommission'scommissioner's opinion 15.19 adversely affects the integrity of horse racing in Minnesota, or 15.20 for an intentional false statement made in a license application. 15.21 Thecommissioncommissioner may suspend a class C license 15.22 for up to one year for a violation of law, order or rule. 15.23 Thecommissioncommissioner may delegate to its designated 15.24 agents the authority to impose suspensions of class C licenses, 15.25 and the suspension may be appealed to thecommission15.26 commissioner according to its rules. 15.27 A license revocation or suspension for more than 90 days is 15.28 a contested case under sections 14.57 to 14.69 of the 15.29 administrative procedure act and is in addition to criminal 15.30 penalties imposed for a violation of law or rule. The 15.31commissioncommissioner may summarily suspend a license for more 15.32 than 90 days prior to a contested case hearing where it is 15.33 necessary to ensure the integrity of racing. A contested case 15.34 hearing must be held within 20 days of the summary suspension 15.35 and the administrative law judge's report must be issued within 15.36 20 days from the close of the hearing record. In all cases 16.1 involving summary suspension thecommissioncommissioner must 16.2 issue its final decision within 30 days from receipt of the 16.3 report of the administrative law judge and subsequent exceptions 16.4 and argument under section 14.61. 16.5 Sec. 17. Minnesota Statutes 1994, section 240.09, 16.6 subdivision 3a, is amended to read: 16.7 Subd. 3a. [INVESTIGATION.] Before granting a class D 16.8 license the director shall conduct, or request thedivision of16.9 gambling enforcement division to conduct, a comprehensive 16.10 background and financial investigation of the applicant and the 16.11 sources of financing. The director may charge an applicant an 16.12 investigation fee to cover the cost of the investigation, and16.13shall from this fee reimburse the division of gambling16.14enforcement for its share of the cost of the investigation. The 16.15 director has access to all criminal history data compiled by the 16.16division ofgambling enforcement division on class A licensees 16.17 and applicants. 16.18 Sec. 18. Minnesota Statutes 1994, section 240.155, is 16.19 amended to read: 16.20 240.155 [REIMBURSEMENT ACCOUNTS AND PROCEDURES.] 16.21 Subdivision 1. [REIMBURSEMENT ACCOUNT CREDIT.] Money 16.22 received by thecommissioncommissioner as reimbursement for the 16.23 costs of services provided by assistant veterinarians and 16.24 stewards must be deposited in the state treasury and credited to 16.25 a pari-mutuel racingcommissiondivision reimbursement account, 16.26 except as provided under subdivision 2. Receipts are 16.27 appropriated to thecommissioncommissioner to pay the costs of 16.28 providing the services. 16.29 Subd. 2. [GENERAL FUND CREDIT.] Money received by the 16.30commissioncommissioner as reimbursement for the compensation of 16.31 a steward who is an employee of thecommissiondivision for 16.32 which a general fund appropriation has been made must be 16.33 credited to the general fund. 16.34 Sec. 19. Minnesota Statutes 1994, section 240.16, is 16.35 amended to read: 16.36 240.16 [STEWARDS.] 17.1 Subdivision 1. [POWERS AND DUTIES.] All horse races run at 17.2 a licensed racetrack must be presided over by a board of three 17.3 stewards, who must be appointees of thecommissioncommissioner 17.4 or persons approved byitthe commissioner. Thecommission17.5 commissioner shall designate one steward as chair. At least two 17.6 stewards for all races either shall be employees of 17.7 thecommissiondivision who shall serve in the unclassified 17.8 service, or shall be under contract with thecommissiondivision 17.9 to serve as stewards. Thecommissioncommissioner may delegate 17.10 the following duties and powers to a board of stewards: 17.11 (a) to ensure that races are run in accordance with the 17.12commission'scommissioner's rules; 17.13 (b) to supervise the conduct of racing to ensure the 17.14 integrity of the sport; 17.15 (c) to settle disputes arising from the running of horse 17.16 races, and to certify official results; 17.17 (d) to impose on licensees, for violation of law or 17.18commissionrules, fines not exceeding $2,000 and license 17.19 suspensions not exceeding 90 days; 17.20 (e) to recommend to thecommissioncommissioner where 17.21 warranted penalties in excess of those in clause (d); 17.22 (f) to otherwise enforce the laws and rules of racing; and 17.23 (g) to perform other duties and have other powers assigned 17.24 by thecommissioncommissioner. 17.25 Subd. 1a. [SIMULCAST.] All simulcasts are subject to the 17.26 regulation of thecommissioncommissioner. Thecommission17.27 commissioner may assign an official to preside over these 17.28 activities and, if so assigned, the official has the powers and 17.29 duties provided by rule. 17.30 Subd. 2. [APPEALS; HEARINGS.] A ruling of a board of 17.31 stewards may be appealed to thecommissioncommissioner or be 17.32 reviewedby itonitsthe commissioner's own initiative.The17.33commission may provide for appeals to be heard by less than a17.34quorum of the commission.A hearing on a penalty imposed by a 17.35 board of stewards must be granted on request. 17.36 Subd. 3. [PROCEDURAL POWERS.] A board of stewards has the 18.1 authority to administer oaths, issue subpoenas, order the 18.2 production of documents and other evidence, and regulate the 18.3 course of hearings before it, according to the 18.4commission'scommissioner's rules. Hearings held by a board of 18.5 stewards are not subject to the provisions of the Administrative 18.6 Procedure Act except those provisions which thecommission18.7 commissioner by rule makes applicable. 18.8 Subd. 4. [RULES.] In addition to rules under subdivision 18.9 3, thecommissioncommissioner may promulgate rules governing 18.10 the qualifications, appointment, approval, authority, removal, 18.11 and compensation of stewards. 18.12 Subd. 5. [COSTS.] Thecommissioncommissioner may require 18.13 that a licensee reimburse it for the costs of providing a 18.14 state-paid steward or stewards to supervise racing at the 18.15 licensee's racetrack. 18.16 Subd. 6. [COMPENSATION.] The total compensation of 18.17 stewards who are employees of thecommissiondivision must be 18.18 commensurate with the compensation of stewards who are not 18.19commissiondivision employees. 18.20 Sec. 20. Minnesota Statutes 1994, section 240.18, 18.21 subdivision 2, is amended to read: 18.22 Subd. 2. [THOROUGHBRED AND QUARTERHORSE CATEGORIES.] (a) 18.23 With respect to available money apportioned in the thoroughbred 18.24 and quarterhorse categories, 20 percent must be expended as 18.25 follows: 18.26 (1) at least one-half in the form of grants, contracts, or 18.27 expenditures for equine research and related education at the 18.28 University of Minnesota school of veterinary medicine; and 18.29 (2) the balance in the form of grants, contracts, or 18.30 expenditures for one or more of the following: 18.31 (i) additional equine research and related education; 18.32 (ii) substance abuse programs for licensed personnel at 18.33 racetracks in this state; and 18.34 (iii) promotion and public information regarding industry 18.35 andcommissiondivision activities; racehorse breeding, 18.36 ownership, and management; and development and expansion of 19.1 economic benefits from racing. 19.2 (b) As a condition of a grant, contract, or expenditure 19.3 under paragraph (a), thecommissioncommissioner shall require 19.4 an annual report from the recipient on the use of the funds to 19.5 thecommissioncommissioner, the chair of the house of 19.6 representatives committee on general legislation, veterans 19.7 affairs, and gaming, and the chair of the senate committee on 19.8 gaming regulation. 19.9 (c) Thecommissioncommissioner shall include initsan 19.10 annual report a summary of each grant, contract, or expenditure 19.11 under paragraph (a), clause (2), and a description of how 19.12 thecommissiondivision has coordinated activities among 19.13 recipients to ensure the most efficient and effective use of 19.14 funds. 19.15 (d) After deducting the amount for paragraph (a), the 19.16 balance of the available proceeds in each category may be 19.17 expended by thecommissioncommissioner to: 19.18 (1) supplement purses for races held exclusively for 19.19 Minnesota-bred or Minnesota-foaled horses, and supplement purses 19.20 for Minnesota-bred or Minnesota-foaled horses racing in 19.21 nonrestricted races in that category; 19.22 (2) pay breeders' or owners' awards to the breeders or 19.23 owners of Minnesota-bred horses in that category which win money 19.24 at licensed racetracks in the state; and 19.25 (3) provide other financial incentives to encourage the 19.26 horse breeding industry in Minnesota. 19.27 Sec. 21. Minnesota Statutes 1994, section 240.21, is 19.28 amended to read: 19.29 240.21 [RIGHT OF INSPECTION.] 19.30 Thecommissioncommissioner anditsthe commissioner's 19.31 representatives, including representatives of thedivision of19.32 gambling enforcement division, have the right to inspect the 19.33 licensed premises of a licensee and to examine the licensee's 19.34 books and other records at any time without a search warrant. 19.35 Sec. 22. Minnesota Statutes 1994, section 240.24, is 19.36 amended to read: 20.1 240.24 [MEDICATION.] 20.2 Subdivision 1. [RULES.] Thecommissioncommissioner shall 20.3 make and enforce rules governing medication and medical testing 20.4 for horses running at licensed racetracks. The rules must 20.5 provide that no medication, as thecommissioncommissioner 20.6 defines that term by rule, may be administered to a horse within 20.7 48 hours of a race it runs at a licensed racetrack. The rules 20.8 must also provide that no horse participating in a race shall 20.9 carry in its body any substance foreign to the natural horse. 20.10 Thecommissioncommissioner shall by rule establish the 20.11 qualifications for laboratories used by it as testing 20.12 laboratories to enforce its rules under this section. 20.13 Subd. 2. [EXCEPTION.] Notwithstanding subdivision 1, 20.14 thecommissioncommissioner by rule shall allow the use of: (1) 20.15 topical external applications that do not contain anesthetics or 20.16 steroids; (2) food additives; (3) Furosemide or other pulmonary 20.17 hemostatic agents if the agents are administered under the 20.18 visual supervision of the veterinarian or a designee of the 20.19 veterinarian employed by thecommissioncommissioner; and (4) 20.20 nonsteroidal anti-inflammatory drugs, provided that the test 20.21 sample does not contain more than three micrograms of the 20.22 substance or metabolites thereof per milliliter of blood 20.23 plasma. For purposes of this clause, "test sample" means any 20.24 bodily substance including blood, urine, saliva, or other 20.25 substance as directed by thecommissioncommissioner, taken from 20.26 a horse under the supervision ofthe commissiona veterinarian 20.27 and in such manner as prescribed by thecommissioncommissioner 20.28 for the purpose of analysis. 20.29The commission shall adopt emergency rules to implement the20.30provisions of this subdivision.20.31 Subd. 3. [FEES.] Thecommissioncommissioner shall 20.32 establish by rule a fee or schedule of fees to recover the costs 20.33 of medical testing of horses running at racetracks licensed by 20.34 thecommissioncommissioner. Fees charged for the testing of 20.35 horses shall cover the cost of the medical testing laboratory. 20.36 Fee receipts shall be deposited in the state treasury and 21.1 credited to the general fund. 21.2 Sec. 23. Minnesota Statutes 1994, section 240.28, is 21.3 amended to read: 21.4 240.28 [CONFLICT OF INTEREST.] 21.5 Subdivision 1. [FINANCIAL INTEREST.] No person mayserve21.6on orbe employed by thecommissiondivision who has an interest 21.7 in any corporation, association, or partnership which holds a 21.8 license from thecommissioncommissioner or which holds a 21.9 contract to supply goods or services to a licensee or at a 21.10 licensed racetrack, including concessions contracts. Nomember21.11oremployee of thecommissiondivision may own, wholly or in 21.12 part, or have an interest in a horse which races at a licensed 21.13 racetrack in Minnesota. Nomember oremployee of thecommission21.14 division may have a financial interest in or be employed in a 21.15 profession or business which conflicts with the performance of 21.16 duties asa member oran employee. 21.17 Subd. 2. [BETTING.] Nomember oremployee of the 21.18commissiondivision may bet or cause a bet to be made on a race 21.19 at a licensed racetrack whileserving on orbeing employed by 21.20 thecommissiondivision. No person appointed or approved by the 21.21 director as a steward may bet or cause a bet to be made at a 21.22 licensed racetrack during a racing meeting at which the person 21.23 is serving as a steward. Thecommissioncommissioner shall by 21.24 rule prescribe such restrictions on betting by its licensees as 21.25 it deems necessary to protect the integrity of racing. 21.26 Subd. 3. [VIOLATION.] A violation of subdivisions 1 and 2 21.27 is grounds forremoval from the commission ortermination of 21.28 employment. A bet made directly or indirectly by a licensee in 21.29 violation of a rule made by thecommissioncommissioner under 21.30 subdivision 2 is grounds for suspension or revocation of the 21.31 license. 21.32 Sec. 24. Minnesota Statutes 1994, section 299L.01, is 21.33 amended to read: 21.34 299L.01 [DIVISION OFGAMBLING ENFORCEMENT DIVISION.] 21.35 Subdivision 1. [DEFINITIONS.] (a) For the purposes of this 21.36 chapter, the terms defined in this subdivision have the meanings 22.1 given them. 22.2 (b) "Division" means thedivision ofgambling enforcement 22.3 division of the department of gambling. 22.4 (c) "Commissioner" means the commissioner ofpublic22.5safetygambling. 22.6 (d) "Director" means the director of the gambling 22.7 enforcement division. 22.8 (e) "Manufacturer" means a person who assembles from raw 22.9 materials or subparts a gambling device for sale or use in 22.10 Minnesota. 22.11 (f) "Distributor" means a person who sells, offers to sell, 22.12 or otherwise provides a gambling device to a person in Minnesota. 22.13 (g) "Used gambling device" means a gambling device five or 22.14 more years old from the date of manufacture. 22.15 Subd. 2. [ESTABLISHED.] Thedivision ofgambling 22.16 enforcement division is a division in the department ofpublic22.17safetygambling under the control and supervision of a director, 22.18 appointed by the commissioner and servingat the commissioner's22.19pleasurein theunclassifiedclassified service. The director 22.20 must be a person who is licensed or eligible to be licensed as a 22.21 peace officer under sections 626.84 to 626.863. 22.22 Subd. 3. [EMPLOYEES.] The director shall employ in the 22.23 divisionof gambling enforcementpersonnel, in the classified 22.24 service, necessary to carry out the duties under this chapter. 22.25 The director shall request the bureau of criminal apprehension 22.26 to perform background checks on persons who are finalists for 22.27 employment with the division but may employ personnel pending 22.28 completion of the background check. 22.29 Subd. 4. [CONFLICT OF INTEREST.] (a) The director and any 22.30 person employed by the division may not have a direct or 22.31 indirect financial interest in: 22.32 (1) a class A or B licensee of the racing commission; 22.33 (2) a lottery retailer under contract with the state 22.34 lottery; 22.35 (3) a person who is under a lottery procurement contract 22.36 with the state lottery; 23.1 (4) a bingo hall, manufacturer, or distributor licensed 23.2 under chapter 349; or 23.3 (5) a manufacturer or distributor licensed under this 23.4 chapter. 23.5 (b) The director or an employee of the divisionof gambling23.6enforcementmay not participate in the conducting of lawful 23.7 gambling under chapter 349. 23.8 Sec. 25. Minnesota Statutes 1994, section 299L.02, 23.9 subdivision 2, is amended to read: 23.10 Subd. 2. [GAMBLING.] The director shall: 23.11 (1) conduct background investigations of applicants for 23.12 licensing as a manufacturer or distributor of gambling equipment 23.13 or as a bingo hall under chapter 349; and 23.14 (2) when requested by the director of gambling 23.15 control division, or when the director believes it to be 23.16 reasonable and necessary, inspect the premises of a licensee 23.17 under chapter 349 to determine compliance with law and with the 23.18 rules of theboardcommissioner, or to conduct an audit of the 23.19 accounts, books, records, or other documents required to be kept 23.20 by the licensee. 23.21 The director may charge applicants under clause (1) a 23.22 reasonable fee to cover the costs of the investigation. 23.23 Sec. 26. Minnesota Statutes 1994, section 299L.02, 23.24 subdivision 3, is amended to read: 23.25 Subd. 3. [HORSE RACING INVESTIGATIONS.] (a) The director 23.26 shall conduct background investigations as provided by law on 23.27 all applicants for licenses issuedby the Minnesota racing23.28commissionunder chapter 240. 23.29 (b) The director shall, upon request of the director of the 23.30 racingcommissiondivision, or when the director believes it to 23.31 be reasonable and necessary, investigate the activities of a 23.32 licenseeof the Minnesota racing commissionunder chapter 240 to 23.33 determine the licensee's compliance with law and with rules of 23.34 thecommissioncommissioner. 23.35 Sec. 27. Minnesota Statutes 1994, section 299L.02, 23.36 subdivision 4, is amended to read: 24.1 Subd. 4. [OTHER GAMBLING.] The directorof gambling24.2enforcementshall cooperate with all state and local agencies in 24.3 the detection and apprehension of unlawful gambling. 24.4 Sec. 28. Minnesota Statutes 1994, section 299L.02, 24.5 subdivision 5, is amended to read: 24.6 Subd. 5. [BACKGROUND CHECKS.] In any background check 24.7 required to be conducted by the divisionof gambling enforcement24.8 under this chapter, chapter 240, 349, 349A, or section 3.9221, 24.9 the director may, or shall when required by law, require that 24.10 fingerprints be taken and the director may forward the 24.11 fingerprints to the Federal Bureau of Investigation for the 24.12 conducting of a national criminal history check. The director 24.13 may charge a fee for fingerprint recording and investigation 24.14 under section 3.9221. 24.15 Sec. 29. Minnesota Statutes 1994, section 299L.03, 24.16 subdivision 1, is amended to read: 24.17 Subdivision 1. [INSPECTIONS; ACCESS.] In conducting any 24.18 inspection authorized under this chapter or chapter 240, 349, or 24.19 349A, the employees of the divisionof gambling enforcementhave 24.20 free and open access to all parts of the regulated business 24.21 premises, and may conduct the inspection at any reasonable time 24.22 without notice and without a search warrant. For purposes of 24.23 this subdivision, "regulated business premises" means premises 24.24 where: 24.25 (1) lawful gambling is conducted by an organization 24.26 licensed under chapter 349 or by an organization exempt from 24.27 licensing under section 349.166; 24.28 (2) gambling equipment is manufactured, sold, distributed, 24.29 or serviced by a manufacturer or distributor licensed under 24.30 chapter 349; 24.31 (3) records required to be maintained under chapter 240, 24.32 297E, 349, or 349A are prepared or retained; 24.33 (4) lottery tickets are sold by a lottery retailer under 24.34 chapter 340A; 24.35 (5) races are conducted by a person licensed under chapter 24.36 240; or 25.1 (6) gambling devices are manufactured or distributed, 25.2 including places of storage under section 299L.07. 25.3 Sec. 30. Minnesota Statutes 1994, section 299L.03, 25.4 subdivision 4, is amended to read: 25.5 Subd. 4. [ACCESS TO CRIMINAL HISTORY.] The director has 25.6 access to all criminal history data compiled by the bureau of 25.7 criminal apprehension on any person licensed or under contract 25.8 with the state lottery, pari-mutuel racingcommissiondivision, 25.9 or the gambling controlboarddivision, or any applicant for 25.10 licensing or a person who has submitted a bid on a lottery 25.11 contractor or any employee and finalist for employment with the 25.12 state lottery. 25.13 Sec. 31. Minnesota Statutes 1994, section 299L.03, 25.14 subdivision 5, is amended to read: 25.15 Subd. 5. [ARREST POWERS.] The director may designate 25.16 certain employees within the divisionof gambling enforcement25.17 who are authorized to arrest or investigate any person who is 25.18 suspected of violating any provision of chapter 240, 349, or 25.19 349A, or is suspected of committing any crime involving 25.20 gambling, and to conduct searches and seizures to enforce any of 25.21 those laws. Any employee authorized by this subdivision to make 25.22 an arrest must be licensed under sections 626.84 to 626.863. 25.23 Sec. 32. Minnesota Statutes 1994, section 299L.03, 25.24 subdivision 7, is amended to read: 25.25 Subd. 7. [OTHER POWERS.] Nothing in this chapter limits 25.26 the authority of the divisionof gambling enforcementto 25.27 exercise any other power specified under chapter 240, 349, or 25.28 349A. 25.29 Sec. 33. Minnesota Statutes 1994, section 349.12, is 25.30 amended by adding a subdivision to read: 25.31 Subd. 8a. [COMMISSIONER.] "Commissioner" is the 25.32 commissioner of the department of gambling. 25.33 Sec. 34. Minnesota Statutes 1994, section 349.12, 25.34 subdivision 10, is amended to read: 25.35 Subd. 10. [DIRECTOR.] "Director" is the director of the 25.36 gambling controlboarddivision. 26.1 Sec. 35. Minnesota Statutes 1994, section 349.12, is 26.2 amended by adding a subdivision to read: 26.3 Subd. 12. [DIVISION.] "Division" is the gambling control 26.4 division of the department of gambling. 26.5 Sec. 36. Minnesota Statutes 1994, section 349.13, is 26.6 amended to read: 26.7 349.13 [LAWFUL GAMBLING.] 26.8 Lawful gambling is not a lottery or gambling within the 26.9 meaning of sections 609.75 to 609.76 if it is conducted under 26.10 this chapter. A pull-tab dispensing device permitted byboard26.11 rule is not a gambling device within the meaning of sections 26.12 609.75 to 609.76 and chapter 299L. 26.13 Sec. 37. Minnesota Statutes 1994, section 349.151, 26.14 subdivision 8, is amended to read: 26.15 Subd. 8. [CRIMINAL HISTORY.] Theboardcommissioner may 26.16 request the director of the gambling enforcement division to 26.17 assist in investigating the background of an applicant for a 26.18 license under this chapter, and the director of the gambling 26.19 enforcement division may bill the license applicant for the cost 26.20 thereof. Theboardcommissioner has access to all criminal 26.21 history data compiled by thedivision ofgambling 26.22 enforcement division on licensees and applicants. 26.23 Sec. 38. Minnesota Statutes 1994, section 349.152, 26.24 subdivision 1, is amended to read: 26.25 Subdivision 1. [APPOINTED.] Thegovernorcommissioner 26.26 shall appoint, with the advice and consent of the senate,a 26.27 directorfrom a list of one or more persons submitted by the26.28board. The directorwho serves in theunclassifiedclassified 26.29 serviceat the pleasure of the governor. 26.30 Sec. 39. Minnesota Statutes 1994, section 349.153, is 26.31 amended to read: 26.32 349.153 [CONFLICT OF INTEREST.] 26.33 (a) A person may notserve on the board,be the director, 26.34 or be an employee of theboarddivision who has an interest in 26.35 any corporation, association, limited liability company, or 26.36 partnership that is licensed by theboardcommissioner as a 27.1 distributor, manufacturer, or a bingo hall under section 349.164. 27.2 (b)A member of the board,The director, or an employee of 27.3 theboarddivision may not accept employment with, receive 27.4 compensation directly or indirectly from, or enter into a 27.5 contractual relationship with an organization that conducts 27.6 lawful gambling, a distributor, a bingo hall or a manufacturer 27.7 while employed withor a member oftheboarddivision or within 27.8 one year after terminating employment with or leaving theboard27.9 division. 27.10 (c) A distributor, bingo hall, manufacturer, or 27.11 organization licensed to conduct lawful gambling may not hire a 27.12 former employee,or director, or memberof thegambling control27.13boarddivision for one year after the employee,or director,27.14or memberhas terminated employment with or left thegambling27.15control boarddivision. 27.16 Sec. 40. Minnesota Statutes 1994, section 349.155, 27.17 subdivision 4, is amended to read: 27.18 Subd. 4. [LICENSE REVOCATION, SUSPENSION, DENIAL; 27.19 CENSURE.] Theboardcommissioner may by order (i) deny, suspend, 27.20 revoke, or refuse to renew a license or premises permit, or (ii) 27.21 censure a licensee or applicant, ifitthe commissioner finds 27.22 that the order is in the public interest and that the applicant 27.23 or licensee, or a director, officer, partner, governor, person 27.24 in a supervisory or management position of the applicant or 27.25 licensee, an employee eligible to make sales on behalf of the 27.26 applicant or licensee, or direct or indirect holder of more than 27.27 a five percent financial interest in the applicant or licensee: 27.28 (1) has violated or failed to comply with any provision of 27.29 this chapter or chapter 297E or 299L, or any rule adopted or 27.30 order issued thereunder; 27.31 (2) has filed an application for a license that is 27.32 incomplete in any material respect, or contains a statement 27.33 that, in light of the circumstances under which it was made, is 27.34 false, misleading, fraudulent, or a misrepresentation; 27.35 (3) has made a false statement in a document or report 27.36 required to be submitted to theboardcommissioner or the 28.1 commissioner of revenue, or has made a false statement to 28.2 theboardcommissioner, the compliance review group, or the 28.3 director; 28.4 (4) has been convicted of a crime in another jurisdiction 28.5 that would be a felony if committed in Minnesota; 28.6 (5) is permanently or temporarily enjoined by any gambling 28.7 regulatory agency from engaging in or continuing any conduct or 28.8 practice involving any aspect of gambling; 28.9 (6) has had a gambling-related license revoked or 28.10 suspended, or has paid or been required to pay a monetary 28.11 penalty of $2,500 or more, by a gambling regulator in another 28.12 state or jurisdiction; 28.13 (7) has been the subject of any of the following actions by 28.14 the director of the gambling enforcement division or 28.15 commissionerof public safety: (i) had a license under chapter 28.16 299L denied, suspended, or revoked, (ii) been censured, 28.17 reprimanded, has paid or been required to pay a monetary penalty 28.18 or fine, or (iii) has been the subject of any other discipline 28.19 by the director or commissioner; or 28.20 (8) has engaged in conduct that is contrary to the public 28.21 health, welfare, or safety, or to the integrity of gambling; or 28.22 (9) based on past activities or criminal record poses a 28.23 threat to the public interest or to the effective regulation and 28.24 control of gambling, or creates or enhances the dangers of 28.25 unsuitable, unfair, or illegal practices, methods, and 28.26 activities in the conduct of gambling or the carrying on of the 28.27 business and financial arrangements incidental to the conduct of 28.28 gambling. 28.29 Sec. 41. Minnesota Statutes 1994, section 349.162, 28.30 subdivision 2, is amended to read: 28.31 Subd. 2. [RECORDS REQUIRED.] A distributor must maintain a 28.32 record of all gambling equipment which it sells to 28.33 organizations. The record must include: 28.34 (1) the identity of the person from whom the distributor 28.35 purchased the equipment; 28.36 (2) the registration number of the equipment; 29.1 (3) the name, address, and license or exempt permit number 29.2 of the organization to which the sale was made; 29.3 (4) the date of the sale; 29.4 (5) the name of the person who ordered the equipment; 29.5 (6) the name of the person who received the equipment; 29.6 (7) the type of equipment; 29.7 (8) the serial number of the equipment; 29.8 (9) the name, form number, or other identifying information 29.9 for each game; and 29.10 (10) in the case of bingo hard cards or paper sheets sold 29.11 on and after January 1, 1991, the individual number of each card 29.12 or sheet. 29.13 The invoice for each sale must be retained for at least 29.14 3-1/2 years after the sale is completed and a copy of each 29.15 invoice is to be delivered to theboardcommissioner in the 29.16 manner and time prescribed by theboardcommissioner. For 29.17 purposes of this section, a sale is completed when the gambling 29.18 equipment is physically delivered to the purchaser. 29.19 Each distributor must report monthly to theboard29.20 commissioner, in a form theboardcommissioner prescribes, its 29.21 sales of each type of gambling equipment. Employees of 29.22 theboarddivision and thedivision ofgambling 29.23 enforcement division may inspect the business premises, books, 29.24 records, and other documents of a distributor at any reasonable 29.25 time without notice and without a search warrant. 29.26 Theboardcommissioner may require that a distributor 29.27 submit the monthly report and invoices required in this 29.28 subdivision via magnetic media or electronic data transfer. 29.29 Sec. 42. Minnesota Statutes 1994, section 349.162, 29.30 subdivision 6, is amended to read: 29.31 Subd. 6. [REMOVAL OF EQUIPMENT FROM INVENTORY.] Authorized 29.32 employees of theboarddivision, thedivision ofgambling 29.33 enforcementof the department of public safetydivision, and the 29.34 commissioner of revenue may remove gambling equipment from the 29.35 inventories of distributors and organizations and test that 29.36 equipment to determine its compliance with all applicable laws 30.1 and rules. A distributor or organization may return to the 30.2 manufacturer thereof any gambling equipment which is determined 30.3 to be in violation of law or rule. The cost to an organization 30.4 of gambling equipment removed from inventory under this 30.5 paragraph and found to be in compliance with all applicable law 30.6 and rules is an allowable expense under section 349.15. 30.7 Sec. 43. Minnesota Statutes 1994, section 349.163, 30.8 subdivision 6, is amended to read: 30.9 Subd. 6. [SAMPLES OF GAMBLING EQUIPMENT.] Theboard30.10 commissioner shall require each licensed manufacturer to submit 30.11 to theboardcommissioner one or more samples of each item of 30.12 gambling equipment the manufacturer manufactures for use or 30.13 resale in this state. Theboardcommissioner shall inspect and 30.14 test all the equipment it deems necessary to determine the 30.15 equipment's compliance with law and board rules. Samples 30.16 required under this subdivision must be approved by theboard30.17 commissioner before the equipment being sampled is shipped into 30.18 or sold for use or resale in this state. Theboardcommissioner 30.19 may request the assistance of thecommissioner of public safety30.20and thedirector of the state lotteryboardin performing the 30.21 tests. 30.22 Sec. 44. Minnesota Statutes 1994, section 349.165, 30.23 subdivision 2, is amended to read: 30.24 Subd. 2. [CONTENTS OF APPLICATION.] An application for a 30.25 premises permit must contain: 30.26 (1) the name and address of the applying organization and 30.27 of the organization's gambling manager; 30.28 (2) a description of the site for which the permit is 30.29 sought, including its address and, where applicable, its 30.30 placement within another premises or establishment; 30.31 (3) if the site is leased, the name and address of the 30.32 lessor and information about the lease the board requires, 30.33 including all rents and other charges for the use of the site; 30.34 and 30.35 (4) other information theboardcommissioner deems 30.36 necessary to carry outitsthe purposes of this chapter. 31.1 An organization holding a premises permit must notify the 31.2boardcommissioner in writing within ten days whenever any 31.3 material change is made in the above information. 31.4 Sec. 45. Minnesota Statutes 1994, section 349.18, 31.5 subdivision 1, is amended to read: 31.6 Subdivision 1. [LEASE OR OWNERSHIP REQUIRED.] (a) An 31.7 organization may conduct lawful gambling only on premises it 31.8 owns or leases. Leases must be on a form prescribed by the 31.9boardcommissioner. Except for leases entered into before the 31.10 effective date of this section, the term of the lease may not 31.11 begin before the effective date of the premises permit and must 31.12 expire on the same day that the premises permit expires. Copies 31.13 of all leases must be made available to employees of theboard31.14 division and thedivision ofgambling enforcement division on 31.15 request. A lease may not provide for payments determined 31.16 directly or indirectly by the receipts or profits from lawful 31.17 gambling. Theboardcommissioner may prescribe by rule limits 31.18 on the amount of rent which an organization may pay to a lessor 31.19 for premises leased for lawful gambling provided that no rule of 31.20 theboardcommissioner may prescribe a limit of less than $1,000 31.21 per month on rent paid for premises used for lawful gambling 31.22 other than bingo. Any rule adopted by theboardcommissioner 31.23 limiting the amount of rent to be paid may only be effective for 31.24 leases entered into, or renewed, after the effective date of the 31.25 rule. 31.26 (b) No person, distributor, manufacturer, lessor, or 31.27 organization other than the licensed organization leasing the 31.28 space may conduct any activity on the leased premises during 31.29 times when lawful gambling is being conducted on the premises. 31.30 (c) At a site where the leased premises consists of an area 31.31 on or behind a bar at which alcoholic beverages are sold and 31.32 employees of the lessor are employed by the organization as 31.33 pull-tab sellers at the site, pull-tabs and tipboard tickets may 31.34 be sold and redeemed by those employees at any place on or 31.35 behind the bar, but the tipboards and receptacles for pull-tabs 31.36 and cash drawers for lawful gambling receipts must be maintained 32.1 only within the leased premises. 32.2 (d) Employees of a lessor may participate in lawful 32.3 gambling on the premises provided (1) if pull-tabs or tipboards 32.4 are sold, the organization voluntarily posts, or is required to 32.5 post, the major prizes as specified in section 349.172; and (2) 32.6 any employee of the lessor participating in lawful gambling is 32.7 not a gambling employee for the organization conducting lawful 32.8 gambling on the premises. 32.9 Sec. 46. Minnesota Statutes 1994, section 349.19, 32.10 subdivision 6, is amended to read: 32.11 Subd. 6. [PRESERVATION OF RECORDS.] Records required to be 32.12 kept by this section must be preserved by a licensed 32.13 organization for at least 3-1/2 years and may be inspected by 32.14 the commissioner of revenue, the board,or the commissionerof32.15public safetyat any reasonable time without notice or a search 32.16 warrant. 32.17 Sec. 47. Minnesota Statutes 1994, section 349A.01, is 32.18 amended by adding a subdivision to read: 32.19 Subd. 2a. [COMMISSIONER.] "Commissioner" is the 32.20 commissioner of the department of gambling. 32.21 Sec. 48. Minnesota Statutes 1994, section 349A.02, 32.22 subdivision 1, is amended to read: 32.23 Subdivision 1. [DIRECTOR.] A state lottery is established 32.24 under the supervision and control of the director of the state 32.25 lottery appointed by the governor with the advice and consent of 32.26 the senate.The governor shall appoint the director from a list32.27of at least three persons recommended to the governor by the32.28board.The director must be qualified by experience and 32.29 training to supervise the lottery. The director serves in the 32.30 unclassified service. The annual salary rate authorized for the 32.31 director is equal to 80 percent of the salary rate prescribed 32.32 for the governor as of the effective date of Laws 1993, chapter 32.33 146. 32.34 Sec. 49. Minnesota Statutes 1994, section 349A.02, 32.35 subdivision 8, is amended to read: 32.36 Subd. 8. [ATTORNEY GENERAL.] The attorney general is the 33.1 attorney for theboardcommissioner. 33.2 Sec. 50. Minnesota Statutes 1994, section 349A.03, 33.3 subdivision 2, is amended to read: 33.4 Subd. 2. [BOARDCOMMISSIONER DUTIES.] Theboard33.5 commissioner has the following duties: 33.6 (1) to advise the director on all aspects of the lottery; 33.7 (2) to review and comment on rules and game procedures 33.8 adopted by the director; 33.9 (3) review and comment on lottery procurement contracts; 33.10 (4) review and comment on agreements between the director 33.11 and one or more other lotteries relating to a joint lottery; and 33.12 (5) to review and comment on advertising promulgated by the 33.13 director at least quarterly to ensure that all advertising is 33.14 consistent with the dignity of the state and with section 33.15 349A.09. 33.16 Sec. 51. Minnesota Statutes 1994, section 349A.04, is 33.17 amended to read: 33.18 349A.04 [LOTTERY GAME PROCEDURES.] 33.19 The director may adopt game procedures governing the 33.20 following elements of the lottery: 33.21 (1) lottery games; 33.22 (2) ticket prices; 33.23 (3) number and size of prizes; 33.24 (4) methods of selecting winning tickets; and 33.25 (5) frequency and method of drawings. 33.26 The adoption of lottery game procedures is not subject to 33.27 chapter 14. Before adopting a lottery game procedure, the 33.28 director shall submit the procedure to theboardcommissioner 33.29 foritsreview and comment. 33.30 Sec. 52. Minnesota Statutes 1994, section 349A.05, is 33.31 amended to read: 33.32 349A.05 [RULES.] 33.33 The director may adopt rules, including emergency rules, 33.34 under chapter 14 governing the following elements of the lottery: 33.35 (1) the number and types of lottery retailers' locations; 33.36 (2) qualifications of lottery retailers and application 34.1 procedures for lottery retailer contracts; 34.2 (3) investigation of lottery retailer applicants; 34.3 (4) appeal procedures for denial, suspension, or 34.4 cancellation of lottery retailer contracts; 34.5 (5) compensation of lottery retailers; 34.6 (6) accounting for and deposit of lottery revenues by 34.7 lottery retailers; 34.8 (7) procedures for issuing lottery procurement contracts 34.9 and for the investigation of bidders on those contracts; 34.10 (8) payment of prizes; 34.11 (9) procedures needed to ensure the integrity and security 34.12 of the lottery; and 34.13 (10) other rules the director considers necessary for the 34.14 efficient operation and administration of the lottery. 34.15 Before adopting a rule the director shall submit the rule 34.16 to theboardcommissioner foritsreview and comment. 34.17 Sec. 53. Minnesota Statutes 1994, section 349A.06, 34.18 subdivision 2, is amended to read: 34.19 Subd. 2. [QUALIFICATIONS.] (a) The director may not 34.20 contract with a retailer who: 34.21 (1) is under the age of 18; 34.22 (2) is in business solely as a seller of lottery tickets; 34.23 (3) owes $500 or more in delinquent taxes as defined in 34.24 section 270.72; 34.25 (4) has been convicted within the previous five years of a 34.26 felony or gross misdemeanor, any crime involving fraud or 34.27 misrepresentation, or a gambling-related offense; 34.28 (5) is a member of the immediate family, residing in the 34.29 same household, as the director, board member,or any employee 34.30 of the lottery; 34.31 (6) in the director's judgment does not have the financial 34.32 stability or responsibility to act as a lottery retailer, or 34.33 whose contracting as a lottery retailer would adversely affect 34.34 the public health, welfare, and safety, or endanger the security 34.35 and integrity of the lottery; or 34.36 (7) is a currency exchange, as defined in section 53A.01. 35.1 A contract entered into before August 1, 1990, which 35.2 violates clause (7) may continue in effect until its expiration 35.3 but may not be renewed. 35.4 (b) An organization, firm, partnership, or corporation that 35.5 has a stockholder who owns more than five percent of the 35.6 business or the stock of the corporation, an officer, or 35.7 director, that does not meet the requirements of paragraph (a), 35.8 clause (4), is not eligible to be a lottery retailer under this 35.9 section. 35.10 (c) The restrictions under paragraph (a), clause (4), do 35.11 not apply to an organization, partnership, or corporation if the 35.12 director determines that the organization, partnership, or firm 35.13 has terminated its relationship with the individual whose 35.14 actions directly contributed to the disqualification under this 35.15 subdivision. 35.16 Sec. 54. Minnesota Statutes 1994, section 349A.08, 35.17 subdivision 7, is amended to read: 35.18 Subd. 7. [PAYMENTS PROHIBITED.] (a) No prize may be paid 35.19 toa member of the boardthe commissioner, the director or an 35.20 employee of the lottery, or a member of their families residing 35.21 in the same household of themembercommissioner, director, or 35.22 employee. No prize may be paid to an officer or employee of a 35.23 vendor which at the time the game or drawing was being conducted 35.24 was involved with providing goods or services to the lottery 35.25 under a lottery procurement contract. 35.26 (b) No prize may be paid for a stolen, altered, or 35.27 fraudulent ticket. 35.28 Sec. 55. Minnesota Statutes 1994, section 349A.11, is 35.29 amended to read: 35.30 349A.11 [CONFLICT OF INTEREST.] 35.31 (a) The director,a board memberthe commissioner, an 35.32 employee of the lottery, a member of the immediate family of the 35.33 director,board membercommissioner, or employee residing in the 35.34 same household may not: 35.35 (1) purchase a lottery ticket; 35.36 (2) have any personal pecuniary interest in any vendor 36.1 holding a lottery procurement contract, or in any lottery 36.2 retailer; or 36.3 (3) receive any gift, gratuity, or other thing of value, 36.4 excluding food or beverage, from any lottery vendor or lottery 36.5 retailer, or person applying to be a retailer or vendor, in 36.6 excess of $100 in any calendar year. 36.7 (b) A violation of paragraph (a), clause (1), is a 36.8 misdemeanor. A violation of paragraph (a), clause (2), is a 36.9 gross misdemeanor. A violation of paragraph (a), clause (3), is 36.10 a misdemeanor unless the gift, gratuity, or other item of value 36.11 received has a value in excess of $500, in which case a 36.12 violation is a gross misdemeanor. 36.13 (c) The director or an unclassified employee of the lottery 36.14 may not, within one year of terminating employment with the 36.15 lottery, accept employment with, act as an agent or attorney 36.16 for, or otherwise represent any person, corporation, or entity 36.17 that had any lottery procurement contract or bid for a lottery 36.18 procurement contract with the lottery within a period of two 36.19 years prior to the termination of their employment. A violation 36.20 of this paragraph is a misdemeanor. 36.21 Sec. 56. Minnesota Statutes 1994, section 349A.12, 36.22 subdivision 4, is amended to read: 36.23 Subd. 4. [LOTTERY RETAILERS AND VENDORS.] A person who is 36.24 a lottery retailer, or is applying to be a lottery retailer, a 36.25 person applying for a contract with the director, or a person 36.26 under contract with the director to supply goods or services to 36.27 lottery may not pay, give, or make any economic opportunity, 36.28 gift, loan, gratuity, special discount, favor, hospitality, or 36.29 service, excluding food or beverage, having an aggregate value 36.30 of over $100 in any calendar year to the director,board member36.31 commissioner, employee of the lottery, or to a member of the 36.32 immediate family residing in the same household as that person. 36.33 Sec. 57. [DIVISION DIRECTORS.] 36.34 The directors of the Minnesota racing commission, gambling 36.35 control board, and division of gambling enforcement of the 36.36 department of public safety on the effective date of this act 37.1 continue in the positions of directors of those divisions in the 37.2 department of gambling in the classified service. 37.3 Sec. 58. [REVISOR INSTRUCTION.] 37.4 (a) The revisor of statutes shall make the following 37.5 changes in Minnesota Statutes, as well as similar changes 37.6 elsewhere in Minnesota Statutes and Minnesota Rules to conform 37.7 to the legislative intent as expressed in this act: 37.8 (1) "commission," "commission's," or similar terms in 37.9 Minnesota Statutes, sections 240.05, subdivisions 1 and 3; 37.10 240.06, subdivisions 1, 2, and 4 to 6; and 240.18, when 37.11 referring to the Minnesota racing commission to "commissioner," 37.12 "commissioner's," or similar terms; 37.13 (2) "board," "board's," or similar terms in Minnesota 37.14 Statutes, sections 349.12, subdivision 3; and 349.163, 37.15 subdivision 4, when referring to the gambling control board to 37.16 "division," "division's," or similar terms; and 37.17 (3) "board," "board's," or similar terms when referring to 37.18 the gambling control board to "commissioner," "commissioner's," 37.19 or similar terms in sections 349.12, subdivisions 3a, 4, and 25; 37.20 349.15, subdivisions 2, 4, 4a, 4b, 5, 7, and 9 to 13; 349.152, 37.21 subdivisions 2 and 3; 349.154; 349.155, subdivisions 1, 2, 3, 37.22 and 5 to 8; 349.16; 349.161, subdivisions 2 and 8; 349.162, 37.23 subdivisions 1 and 5; 349.163, subdivisions 1, 5, 6a, and 7; 37.24 349.164, subdivision 2; 349.1641; 349.165, subdivisions 1 and 3; 37.25 349.166; 349.167; 349.168; 349.169; 349.17; 349.172; 349.18, 37.26 subdivisions 1a and 2; 349.19, subdivisions 1 to 5 and 7 to 11; 37.27 349.191; and 349.211, subdivision 3. 37.28 (b) The revisor of statutes shall recodify Minnesota 37.29 Statutes, chapters 240 and 299L and Minnesota Statutes, sections 37.30 349.11 to 349.23 as part of Minnesota Statutes, chapter 349B. 37.31 Sec. 59. [REPEALER.] 37.32 Minnesota Statutes 1994, sections 240.01, subdivision 4; 37.33 349.12, subdivision 6; 349.152, subdivision 4; and 349A.01, 37.34 subdivision 2, are repealed. 37.35 Sec. 60. [EFFECTIVE DATE.] 37.36 This act is effective July 1, 1995.