1.1                          A bill for an act 
  1.2             relating to lawful gambling; licensing employees 
  1.3             eligible to make sales on behalf of a distributor; 
  1.4             amending Minnesota Statutes 1996, sections 349.12, by 
  1.5             adding a subdivision; 349.151, subdivision 4; 349.155, 
  1.6             subdivision 3; 349.161; and 349.169, subdivision 3. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 349.12, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 11a.  [EMPLOYEE ELIGIBLE TO MAKE SALES ON BEHALF OF A 
  1.11  DISTRIBUTOR.] "Employee eligible to make sales on behalf of a 
  1.12  distributor" means a person who in any manner receives orders 
  1.13  for gambling equipment or who solicits a licensed, exempt, or 
  1.14  excluded organization to purchase lawful gambling equipment from 
  1.15  a licensed distributor. 
  1.16     Sec. 2.  Minnesota Statutes 1996, section 349.151, 
  1.17  subdivision 4, is amended to read: 
  1.18     Subd. 4.  [POWERS AND DUTIES.] (a) The board has the 
  1.19  following powers and duties:  
  1.20     (1) to regulate lawful gambling to ensure it is conducted 
  1.21  in the public interest; 
  1.22     (2) to issue licenses to organizations, 
  1.23  distributors, employees eligible to make sales on behalf of a 
  1.24  distributor, bingo halls, manufacturers, and gambling managers; 
  1.25     (3) to collect and deposit license, permit, and 
  1.26  registration fees due under this chapter; 
  2.1      (4) to receive reports required by this chapter and inspect 
  2.2   all premises, records, books, and other documents of 
  2.3   organizations, distributors, employees eligible to make sales on 
  2.4   behalf of a distributor, manufacturers, and bingo halls to 
  2.5   insure compliance with all applicable laws and rules; 
  2.6      (5) to make rules authorized by this chapter; 
  2.7      (6) to register gambling equipment and issue registration 
  2.8   stamps; 
  2.9      (7) to provide by rule for the mandatory posting by 
  2.10  organizations conducting lawful gambling of rules of play and 
  2.11  the odds and/or house percentage on each form of lawful 
  2.12  gambling; 
  2.13     (8) to report annually to the governor and legislature on 
  2.14  its activities and on recommended changes in the laws governing 
  2.15  gambling; 
  2.16     (9) to impose civil penalties of not more than $500 per 
  2.17  violation on organizations, distributors, employees eligible to 
  2.18  make sales on behalf of a distributor, manufacturers, bingo 
  2.19  halls, and gambling managers for failure to comply with any 
  2.20  provision of this chapter or any rule or order of the board; 
  2.21     (10) to issue premises permits to organizations licensed to 
  2.22  conduct lawful gambling; 
  2.23     (11) to delegate to the director the authority to issue or 
  2.24  deny license and premises permit applications and renewals under 
  2.25  criteria established by the board; 
  2.26     (12) to suspend or revoke licenses and premises permits of 
  2.27  organizations, distributors, employees eligible to make sales on 
  2.28  behalf of a distributor, manufacturers, bingo halls, or gambling 
  2.29  managers as provided in this chapter; 
  2.30     (13) to register employees of organizations licensed to 
  2.31  conduct lawful gambling; 
  2.32     (14) to require fingerprints from persons determined by 
  2.33  board rule to be subject to fingerprinting; 
  2.34     (15) to delegate to a compliance review group of the board 
  2.35  the authority to investigate alleged violations, issue consent 
  2.36  orders, and initiate contested cases on behalf of the board; 
  3.1      (16) to order organizations, distributors, employees 
  3.2   eligible to make sales on behalf of a distributor, 
  3.3   manufacturers, bingo halls, and gambling managers to take 
  3.4   corrective actions; and 
  3.5      (17) to take all necessary steps to ensure the integrity of 
  3.6   and public confidence in lawful gambling.  
  3.7      (b) The board, or director if authorized to act on behalf 
  3.8   of the board, may by citation assess any organization, 
  3.9   distributor, employee eligible to make sales on behalf of a 
  3.10  distributor, manufacturer, bingo hall licensee, or gambling 
  3.11  manager a civil penalty of not more than $500 per violation for 
  3.12  a failure to comply with any provision of this chapter or any 
  3.13  rule adopted or order issued by the board.  Any organization, 
  3.14  distributor, employee eligible to make sales on behalf of a 
  3.15  distributor, bingo hall licensee, gambling manager, or 
  3.16  manufacturer assessed a civil penalty under this paragraph may 
  3.17  request a hearing before the board.  Appeals of citations 
  3.18  imposing a civil penalty are not subject to the provisions of 
  3.19  the administrative procedure act.  
  3.20     (c) All fees and penalties received by the board must be 
  3.21  deposited in the general fund. 
  3.22     Sec. 3.  Minnesota Statutes 1996, section 349.155, 
  3.23  subdivision 3, is amended to read: 
  3.24     Subd. 3.  [MANDATORY DISQUALIFICATIONS.] (a) In the case of 
  3.25  licenses for manufacturers, distributors, employees eligible to 
  3.26  make sales on behalf of a distributor, bingo halls, and gambling 
  3.27  managers, the board may not issue or renew a license under this 
  3.28  chapter, and shall revoke a license under this chapter, if the 
  3.29  applicant or licensee, or a director, officer, partner, 
  3.30  governor, person in a supervisory or management position of the 
  3.31  applicant or licensee, or an employee eligible to make sales on 
  3.32  behalf of the applicant or licensee: 
  3.33     (1) has ever been convicted of a felony or a crime 
  3.34  involving gambling; 
  3.35     (2) has ever been convicted of (i) assault, (ii) a criminal 
  3.36  violation involving the use of a firearm, or (iii) making 
  4.1   terroristic threats; 
  4.2      (3) is or has ever been connected with or engaged in an 
  4.3   illegal business; 
  4.4      (4) owes $500 or more in delinquent taxes as defined in 
  4.5   section 270.72; 
  4.6      (5) had a sales and use tax permit revoked by the 
  4.7   commissioner of revenue within the past two years; or 
  4.8      (6) after demand, has not filed tax returns required by the 
  4.9   commissioner of revenue.  The board may deny or refuse to renew 
  4.10  a license under this chapter, and may revoke a license under 
  4.11  this chapter, if any of the conditions in this paragraph are 
  4.12  applicable to an affiliate or direct or indirect holder of more 
  4.13  than a five percent financial interest in the applicant or 
  4.14  licensee.  
  4.15     (b) In the case of licenses for organizations, the board 
  4.16  may not issue or renew a license under this chapter, and shall 
  4.17  revoke a license under this chapter, if the organization, or an 
  4.18  officer or member of the governing body of the organization:  
  4.19     (1) has been convicted of a felony or gross misdemeanor 
  4.20  within the five years before the issuance or renewal of the 
  4.21  license; 
  4.22     (2) has ever been convicted of a crime involving gambling; 
  4.23  or 
  4.24     (3) has had a license issued by the board or director 
  4.25  permanently revoked for violation of law or board rule. 
  4.26     Sec. 4.  Minnesota Statutes 1996, section 349.161, is 
  4.27  amended to read: 
  4.28     349.161 [DISTRIBUTOR LICENSES; LICENSES FOR EMPLOYEES 
  4.29  ELIGIBLE TO MAKE SALES ON BEHALF OF A DISTRIBUTOR.] 
  4.30     Subdivision 1.  [PROHIBITED ACTS; LICENSES REQUIRED.] No 
  4.31  person may:  
  4.32     (1) sell, offer for sale, or furnish gambling equipment for 
  4.33  use within the state other than for lawful gambling exempt or 
  4.34  excluded from licensing, except to an organization licensed for 
  4.35  lawful gambling; 
  4.36     (2) sell, offer for sale, or furnish gambling equipment for 
  5.1   use within the state without having obtained a distributor 
  5.2   license or a license as an employee eligible to make sales on 
  5.3   behalf of a distributor under this section; 
  5.4      (3) sell, offer for sale, or furnish gambling equipment for 
  5.5   use within the state that is not purchased or obtained from a 
  5.6   manufacturer or distributor licensed under this chapter; or 
  5.7      (4) sell, offer for sale, or furnish gambling equipment for 
  5.8   use within the state that has the same serial number as another 
  5.9   item of gambling equipment of the same type sold or offered for 
  5.10  sale or furnished for use in the state by that distributor.  
  5.11     Subd. 2.  [LICENSE APPLICATION.] The board may issue 
  5.12  licenses for the sale of gambling equipment to persons who meet 
  5.13  the qualifications of this section if the board determines that 
  5.14  a license is consistent with the purpose of sections 349.11 to 
  5.15  349.22.  Applications must be on a form the board prescribes. 
  5.16     Subd. 4.  [FEES AND TERM OF LICENSE.] The annual fee for a 
  5.17  distributor's license is $3,500.  The annual fee for an employee 
  5.18  eligible to make sales on behalf of a distributor license is 
  5.19  $25.  The employee eligible to make sales on behalf of a 
  5.20  distributor license runs concurrently with the license of the 
  5.21  distributor unless the employee eligible to make sales on behalf 
  5.22  of a distributor license is suspended or revoked.  If an 
  5.23  employee eligible to make sales on behalf of a distributor 
  5.24  discontinues employment with the licensed distributor, the 
  5.25  employee eligible to make sales on behalf of a distributor 
  5.26  license expires on the date that the employment terminates.  
  5.27     Subd. 5.  [PROHIBITION.] (a) No distributor, or employee of 
  5.28  a distributor, may also be a wholesale distributor of alcoholic 
  5.29  beverages or an employee of a wholesale distributor of alcoholic 
  5.30  beverages. 
  5.31     (b) No distributor, or any representative, agent, 
  5.32  affiliate, or employee of a distributor, may: (1) be involved in 
  5.33  the conduct of lawful gambling by an organization; (2) keep or 
  5.34  assist in the keeping of an organization's financial records, 
  5.35  accounts, and inventories; or (3) prepare or assist in the 
  5.36  preparation of tax forms and other reporting forms required to 
  6.1   be submitted to the state by an organization. 
  6.2      (c) No distributor or any representative, agent, affiliate, 
  6.3   or employee of a distributor may provide a lessor of gambling 
  6.4   premises any compensation, gift, gratuity, premium, or other 
  6.5   thing of value. 
  6.6      (d) No distributor or any representative, agent, affiliate, 
  6.7   or employee of a distributor may participate in any gambling 
  6.8   activity at any gambling site or premises where gambling 
  6.9   equipment purchased from that distributor is being used in the 
  6.10  conduct of lawful gambling. 
  6.11     (e) No distributor or any representative, agent, affiliate, 
  6.12  or employee of a distributor may alter or modify any gambling 
  6.13  equipment, except to add a "last ticket sold" prize sticker. 
  6.14     (f) No distributor or any representative, agent, affiliate, 
  6.15  or employee of a distributor may:  (1) recruit a person to 
  6.16  become a gambling manager of an organization or identify to an 
  6.17  organization a person as a candidate to become gambling manager 
  6.18  for the organization; or (2) identify for an organization a 
  6.19  potential gambling location. 
  6.20     (g) No distributor may purchase gambling equipment for 
  6.21  resale to a person for use within the state from any person not 
  6.22  licensed as a manufacturer under section 349.163. 
  6.23     (h) No distributor or employee eligible to make sales on 
  6.24  behalf of a distributor may sell gambling equipment to any 
  6.25  person for use in Minnesota other than (i) a licensed 
  6.26  organization or organization excluded or exempt from licensing, 
  6.27  or (ii) the governing body of an Indian tribe. 
  6.28     (i) No distributor or employee eligible to make sales on 
  6.29  behalf of a distributor may sell or otherwise provide a pull-tab 
  6.30  or tipboard deal with the symbol required by section 349.163, 
  6.31  subdivision 5, paragraph (h), visible on the flare to any person 
  6.32  other than in Minnesota to a licensed organization or 
  6.33  organization exempt from licensing. 
  6.34     Subd. 8.  [EMPLOYEES OF DISTRIBUTORS.] Licensed 
  6.35  distributors shall provide the board upon request with the names 
  6.36  and home addresses of all employees.  Each distributor and 
  7.1   employee of a distributor must have in their possession a 
  7.2   picture identification card approved by the board.  No person 
  7.3   other than an employee of a licensed distributor eligible to 
  7.4   make sales on behalf of a distributor shall make any sales on 
  7.5   behalf of a licensed distributor.  No employee eligible to make 
  7.6   sales on behalf of a distributor may be employed by more than 
  7.7   one licensed distributor at a time. 
  7.8      Sec. 5.  Minnesota Statutes 1996, section 349.169, 
  7.9   subdivision 3, is amended to read: 
  7.10     Subd. 3.  [SALES AT FILED PRICES.] No manufacturer may sell 
  7.11  to a distributor, and no distributor or person eligible to make 
  7.12  sales on behalf of a distributor may sell to an organization, 
  7.13  any gambling equipment for any price other than a price the 
  7.14  manufacturer or distributor has filed with the director under 
  7.15  subdivision 1, exclusive of transportation costs.