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 of~~ 
  4.2   ~~the gambling control board,~~ the director of the state lottery, 
  4.3   and the deputy director of the state lottery; 
  4.4      (q) ~~director~~ directors of the ~~division of~~ pari-mutuel 
  4.5   racing, gambling control, and gambling enforcement divisions in 
  4.6   the department of ~~public safety~~ gambling; 
  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 of ~~members of the Minnesota racing~~ 
  4.28  ~~commission,~~ the director of the ~~Minnesota~~ pari-mutuel racing 
  4.29  ~~commission, chief of security, medical officer, inspector of~~ 
  4.30  ~~pari-mutuels~~ division of the department of gambling, and 
  4.31  stewards employed or approved by the ~~commission~~ commissioner 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 gambling~~ 
  7.24  ~~enforcement,~~ 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      The ~~governor~~ commissioner shall appoint the director of the 
  8.9   ~~Minnesota~~ pari-mutuel racing ~~commission~~ division, who serves in 
  8.10  the ~~unclassified~~ classified service ~~at 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 director~~ 
  8.14  ~~from a list of one or more names submitted by the Minnesota~~ 
  8.15  ~~racing commission.~~  
  8.16     Sec. 9.  Minnesota Statutes 1994, section 240.03, is 
  8.17  amended to read: 
  8.18     240.03 [~~COMMISSION~~ POWERS AND DUTIES OF THE COMMISSIONER.] 
  8.19     The ~~commission~~ commissioner 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 records ~~it~~ 
  8.29  the commissioner deems necessary to carry out ~~its~~ the 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 the~~ 
  9.8   ~~commission, maintain its books, documents, and records, and make~~ 
  9.9   ~~them available for public inspection as the commission directs;~~ 
  9.10     ~~(b)~~ if so designated by the ~~commission~~ commissioner, 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  the ~~commission~~ commissioner; 
  9.15     (c) act as the ~~commission's~~ pari-mutuel racing division's 
  9.16  chief personnel officer and supervise the employment, conduct, 
  9.17  duties, and discipline of ~~commission~~ division employees; and 
  9.18     (d) perform other duties as directed by the ~~commission~~ 
  9.19  commissioner.  
  9.20     ~~Subd. 1a.  [DEPUTY DIRECTOR.] The commission may appoint a~~ 
  9.21  ~~deputy director who serves in the unclassified service at the~~ 
  9.22  ~~commission's pleasure.~~ 
  9.23     ~~Subd. 2.  [DIRECTOR OF PARI-MUTUELS.] The commission may~~ 
  9.24  ~~employ a director of pari-mutuels who serves in the unclassified~~ 
  9.25  ~~service at the commission's pleasure.  The director of~~ 
  9.26  ~~pari-mutuels shall perform the following duties:~~  
  9.27     ~~(a) supervise all forms of pari-mutuel betting on horse~~ 
  9.28  ~~racing in the state;~~ 
  9.29     ~~(b) inspect all machinery;~~ 
  9.30     ~~(c) make reports on pari-mutuel betting as the commission~~ 
  9.31  ~~directs;~~ 
  9.32     ~~(d) subject to commission approval, appoint assistants to~~ 
  9.33  ~~perform duties the commission designates; and~~ 
  9.34     ~~(e) perform other duties as directed by the commission.~~  
  9.35     ~~If no director of pari-mutuels is appointed the duties of~~ 
  9.36  ~~that office are assigned to the executive director.  The~~ 
 10.1   ~~commission may contract with outside services or personnel to~~ 
 10.2   ~~assist the executive director in the performance of these duties.~~
 10.3      ~~Subd. 3.  [DIRECTOR OF RACING SECURITY.] The commission may~~ 
 10.4   ~~appoint a director of racing security to serve in the~~ 
 10.5   ~~unclassified service at the commission's pleasure.  The director~~ 
 10.6   ~~of racing security shall enforce all laws and commission rules~~ 
 10.7   ~~relating to the security and integrity of racing.  The director~~ 
 10.8   ~~of racing security and all other persons designated by the~~ 
 10.9   ~~commission as security officers have free and open access to all~~ 
 10.10  ~~areas of all facilities the commission licenses and may search~~ 
 10.11  ~~without a search warrant any part of a licensed racetrack and~~ 
 10.12  ~~the person of any licensee of the commission on the premises.~~  
 10.13  ~~The director of racing security may order a licensee to take, at~~ 
 10.14  ~~the licensee's expense, security measures necessary to protect~~ 
 10.15  ~~the integrity of racing, but the order may be appealed to the~~ 
 10.16  ~~commission.  Nothing in this chapter prohibits law enforcement~~ 
 10.17  ~~authorities and agents from entering, in the performance of~~ 
 10.18  ~~their duties, a premises licensed under Laws 1983, chapter 214.~~  
 10.19     ~~If no director of racing security is appointed the duties~~ 
 10.20  ~~of that office are assigned to the executive director.  The~~ 
 10.21  ~~commission may contract with outside services or personnel to~~ 
 10.22  ~~assist the executive director in the performance of these duties.~~
 10.23     ~~Subd. 4.  [VETERINARIAN.] The commission may appoint a~~ 
 10.24  ~~veterinarian who must be a doctor of veterinary medicine and who~~ 
 10.25  ~~serves at its pleasure in the unclassified service.  The~~ 
 10.26  ~~veterinarian shall, while employed by the commission, perform~~ 
 10.27  ~~the following duties:~~  
 10.28     ~~(a) supervise the formulation, administration, and~~ 
 10.29  ~~evaluation of all medical tests the commission's rules require~~ 
 10.30  ~~or authorize;~~ 
 10.31     ~~(b) advise the commission on all aspects of veterinary~~ 
 10.32  ~~medicine relating to its powers and duties; and~~ 
 10.33     ~~(c) supervise all personnel involved in medical testing,~~ 
 10.34  ~~subject to the supervision of the executive director.~~  
 10.35     ~~If no veterinarian is appointed, the duties of that office~~ 
 10.36  ~~may be assigned to the executive director.  The commission may~~ 
 11.1   ~~contract with outside personnel to assist the executive director~~ 
 11.2   ~~in the performance of these duties.~~  
 11.3      ~~The commission may require that a licensee reimburse it for~~ 
 11.4   ~~the costs of services provided by assistant veterinarians.~~ 
 11.5      Subd. ~~5.~~ 2.  [OTHER EMPLOYEES.] Subject to applicable laws, 
 11.6   the ~~commission~~ commissioner shall employ and assign duties to 
 11.7   other officers, employees, and agents as ~~it deems~~ necessary to 
 11.8   discharge ~~its~~ the division's functions.  
 11.9      Subd. ~~6.~~ 3.  [COMPENSATION.] The compensation of all 
 11.10  ~~commission~~ employees shall be as provided in chapter 43A.  
 11.11     Subd. ~~7.~~ 4.  [ASSISTANCE.] The ~~commission~~ commissioner 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 the ~~commission~~ commissioner a licensee consents to having 
 11.20  property or person subject to inspection at any time by ~~the~~ 
 11.21  ~~director of racing security or by~~ security officers designated 
 11.22  by the ~~commission~~ commissioner.  
 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 the ~~commission~~ commissioner shall conduct, or request 
 11.27  the ~~division of~~ gambling enforcement division to conduct, a 
 11.28  comprehensive background and financial investigation of the 
 11.29  applicant and sources of financing.  The ~~commission~~ commissioner 
 11.30  may charge an applicant an investigation fee to cover the cost 
 11.31  of the investigation~~, and shall from this fee reimburse the~~ 
 11.32  ~~division of gambling enforcement for its share of the cost of~~ 
 11.33  ~~the investigation~~.  The ~~commission~~ commissioner has access to 
 11.34  all criminal history data compiled by the ~~division of~~ gambling 
 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 
 12.3   ~~commission~~ commissioner: 
 12.4      (1) may revoke a class A license for (i) a violation of 
 12.5   law, order, or rule which in the ~~commission's~~ commissioner'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 by ~~Laws 1983, chapter 214, and~~ this 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 
 12.15  ~~commission~~ commissioner during any period of 12 consecutive 
 12.16  months, unless the ~~commission~~ commissioner authorizes a shorter 
 12.17  period because of circumstances beyond the licensee's control. 
 12.18     The ~~commission~~ commissioner 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 the ~~commission's~~ commissioner'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 
 12.25  ~~commission's~~ commissioner'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 the ~~commission~~ commissioner suitable work areas for 
 12.36  ~~commission~~ division members, officers, employees, and agents, 
 13.1   including agents of the ~~division of~~ gambling enforcement 
 13.2   division, who are directed or requested by the ~~commission~~ 
 13.3   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 the ~~commission~~ commissioner 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  The ~~commission~~ commissioner has access to all criminal history 
 13.13  data compiled by the ~~division of~~ gambling 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.] The ~~commission~~ commissioner 
 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 the ~~commission~~ commissioner 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 the ~~commission~~ commissioner 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 under ~~Laws 1983, chapter 214~~ this 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 defined ~~by the~~ 
 14.12  ~~commission's rules~~ in rule; and 
 14.13     (f) has never knowingly violated a rule or order of the 
 14.14  ~~commission~~ commissioner 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 the ~~commission~~ commissioner.  
 14.28     Subd. 3.  [INVESTIGATIONS.] The ~~commission~~ commissioner 
 14.29  shall investigate each applicant for a class C license to the 
 14.30  extent it deems necessary, and may request the assistance of ~~and~~ 
 14.31  ~~may reimburse~~ the ~~division of~~ gambling enforcement division in 
 14.32  investigating applicants.  The ~~commission~~ commissioner 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.  The ~~commission~~ commissioner may cooperate with 
 15.1   national and international organizations and agencies in 
 15.2   conducting investigations.  The ~~commission~~ commissioner may by 
 15.3   rule provide for examining the qualifications of an applicant 
 15.4   for the license being applied for.  The ~~commission~~ commissioner 
 15.5   has access to all criminal history data compiled by the ~~division~~ 
 15.6   ~~of~~ gambling enforcement division on class C applicants and 
 15.7   licensees.  
 15.8      Subd. 4.  [LICENSE ISSUANCE AND RENEWAL.] If the ~~commission~~ 
 15.9   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.] The ~~commission~~ 
 15.17  commissioner may revoke a class C license for a violation of law 
 15.18  or rule which in the ~~commission's~~ commissioner'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     The ~~commission~~ commissioner may suspend a class C license 
 15.22  for up to one year for a violation of law, order or rule.  
 15.23     The ~~commission~~ commissioner 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 the ~~commission~~ 
 15.26  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 
 15.31  ~~commission~~ commissioner 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 the ~~commission~~ commissioner 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 the ~~division of~~ 
 16.9   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~~, and~~ 
 16.13  ~~shall from this fee reimburse the division of gambling~~ 
 16.14  ~~enforcement for its share of the cost of the investigation~~.  The 
 16.15  director has access to all criminal history data compiled by the 
 16.16  ~~division of~~ gambling 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 the ~~commission~~ commissioner 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 racing ~~commission~~ division reimbursement account, 
 16.26  except as provided under subdivision 2.  Receipts are 
 16.27  appropriated to the ~~commission~~ commissioner to pay the costs of 
 16.28  providing the services. 
 16.29     Subd. 2.  [GENERAL FUND CREDIT.] Money received by the 
 16.30  ~~commission~~ commissioner as reimbursement for the compensation of 
 16.31  a steward who is an employee of the ~~commission~~ division 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 the ~~commission~~ commissioner 
 17.4   or persons approved by ~~it~~ the commissioner.  The ~~commission~~ 
 17.5   commissioner shall designate one steward as chair.  At least two 
 17.6   stewards for all races either shall be employees of 
 17.7   the ~~commission~~ division who shall serve in the unclassified 
 17.8   service, or shall be under contract with the ~~commission~~ division 
 17.9   to serve as stewards.  The ~~commission~~ commissioner 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 
 17.12  ~~commission's~~ commissioner'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 
 17.18  ~~commission~~ rules, fines not exceeding $2,000 and license 
 17.19  suspensions not exceeding 90 days; 
 17.20     (e) to recommend to the ~~commission~~ commissioner 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 the ~~commission~~ commissioner.  
 17.25     Subd. 1a.  [SIMULCAST.] All simulcasts are subject to the 
 17.26  regulation of the ~~commission~~ commissioner.  The ~~commission~~ 
 17.27  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 the ~~commission~~ commissioner or be 
 17.32  reviewed ~~by it~~ on ~~its~~ the commissioner's own initiative.  ~~The~~ 
 17.33  ~~commission may provide for appeals to be heard by less than a~~ 
 17.34  ~~quorum 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 
 18.4   ~~commission's~~ commissioner'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 the ~~commission~~ 
 18.7   commissioner by rule makes applicable.  
 18.8      Subd. 4.  [RULES.] In addition to rules under subdivision 
 18.9   3, the ~~commission~~ commissioner may promulgate rules governing 
 18.10  the qualifications, appointment, approval, authority, removal, 
 18.11  and compensation of stewards.  
 18.12     Subd. 5.  [COSTS.] The ~~commission~~ commissioner 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 the ~~commission~~ division must be 
 18.18  commensurate with the compensation of stewards who are not 
 18.19  ~~commission~~ division 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  and ~~commission~~ division 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), the ~~commission~~ commissioner shall require 
 19.4   an annual report from the recipient on the use of the funds to 
 19.5   the ~~commission~~ commissioner, 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) The ~~commission~~ commissioner shall include in ~~its~~ an 
 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  the ~~commission~~ division 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 the ~~commission~~ commissioner 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     The ~~commission~~ commissioner and ~~its~~ the commissioner's 
 19.31  representatives, including representatives of the ~~division of~~ 
 19.32  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.] The ~~commission~~ commissioner 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 the ~~commission~~ commissioner 
 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  The ~~commission~~ commissioner 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  the ~~commission~~ commissioner 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 the ~~commission~~ commissioner; 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 the ~~commission~~ commissioner, taken from 
 20.26  a horse under the supervision of ~~the commission~~ a veterinarian 
 20.27  and in such manner as prescribed by the ~~commission~~ commissioner 
 20.28  for the purpose of analysis. 
 20.29     ~~The commission shall adopt emergency rules to implement the~~ 
 20.30  ~~provisions of this subdivision.~~ 
 20.31     Subd. 3.  [FEES.] The ~~commission~~ commissioner 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  the ~~commission~~ commissioner.  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 may ~~serve~~ 
 21.6   ~~on or~~ be employed by the ~~commission~~ division who has an interest 
 21.7   in any corporation, association, or partnership which holds a 
 21.8   license from the ~~commission~~ commissioner 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.  No ~~member~~ 
 21.11  ~~or~~ employee of the ~~commission~~ division 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.  No ~~member or~~ employee of the ~~commission~~ 
 21.14  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 as ~~a member or~~ an employee. 
 21.17     Subd. 2.  [BETTING.] No ~~member or~~ employee of the 
 21.18  ~~commission~~ division may bet or cause a bet to be made on a race 
 21.19  at a licensed racetrack while ~~serving on or~~ being employed by 
 21.20  the ~~commission~~ division.  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.  The ~~commission~~ commissioner 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 for ~~removal from the commission or~~ termination of 
 21.28  employment.  A bet made directly or indirectly by a licensee in 
 21.29  violation of a rule made by the ~~commission~~ commissioner 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 OF~~ GAMBLING 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 the ~~division of~~ gambling enforcement 
 22.3   division of the department of gambling.  
 22.4      (c) "Commissioner" means the commissioner of ~~public~~ 
 22.5   ~~safety~~ gambling. 
 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.] The ~~division of~~ gambling 
 22.16  enforcement division is a division in the department of ~~public~~ 
 22.17  ~~safety~~ gambling under the control and supervision of a director, 
 22.18  appointed by the commissioner and serving ~~at the commissioner's~~ 
 22.19  ~~pleasure~~ in the ~~unclassified~~ classified 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  division ~~of gambling enforcement~~ personnel, 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 division ~~of gambling~~ 
 23.6   ~~enforcement~~ may 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 the ~~board~~ commissioner, 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 issued ~~by the Minnesota racing~~ 
 23.28  ~~commission~~ under chapter 240.  
 23.29     (b) The director shall, upon request of the director of the 
 23.30  racing ~~commission~~ division, or when the director believes it to 
 23.31  be reasonable and necessary, investigate the activities of a 
 23.32  licensee ~~of the Minnesota racing commission~~ under chapter 240 to 
 23.33  determine the licensee's compliance with law and with rules of 
 23.34  the ~~commission~~ commissioner. 
 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 director ~~of gambling~~ 
 24.2   ~~enforcement~~ shall 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 division ~~of gambling enforcement~~ 
 24.8   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 division ~~of gambling enforcement~~ have 
 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 racing ~~commission~~ division, 
 25.9   or the gambling control ~~board~~ division, 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 division ~~of gambling enforcement~~ 
 25.17  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 division ~~of gambling enforcement~~ to 
 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 control ~~board~~ division.  
 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 by ~~board~~ 
 26.11  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.] The ~~board~~ commissioner 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.  The ~~board~~ commissioner has access to all criminal 
 26.21  history data compiled by the ~~division of~~ gambling 
 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.] The ~~governor~~ commissioner 
 26.26  shall appoint~~, with the advice and consent of the senate,~~ a 
 26.27  director ~~from a list of one or more persons submitted by the~~ 
 26.28  ~~board.  The director~~ who serves in the ~~unclassified~~ classified 
 26.29  service ~~at 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 not ~~serve on the board,~~ be the director, 
 26.34  or be an employee of the ~~board~~ division who has an interest in 
 26.35  any corporation, association, limited liability company, or 
 26.36  partnership that is licensed by the ~~board~~ commissioner 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   the ~~board~~ division 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 with ~~or a member of~~ the ~~board~~ division or within 
 27.8   one year after terminating employment with or leaving the ~~board~~ 
 27.9   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 member~~ of the ~~gambling control~~ 
 27.13  ~~board~~ division for one year after the employee~~,~~ or director~~,~~ 
 27.14  ~~or member~~ has terminated employment with or left the ~~gambling~~ 
 27.15  ~~control board~~ division.  
 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.] The ~~board~~ commissioner 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, if ~~it~~ the 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 the ~~board~~ commissioner or the 
 28.1   commissioner of revenue, or has made a false statement to 
 28.2   the ~~board~~ commissioner, 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  commissioner ~~of 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 the ~~board~~ commissioner in the 
 29.16  manner and time prescribed by the ~~board~~ commissioner.  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 the ~~board~~ 
 29.20  commissioner, in a form the ~~board~~ commissioner prescribes, its 
 29.21  sales of each type of gambling equipment.  Employees of 
 29.22  the ~~board~~ division and the ~~division of~~ gambling 
 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     The ~~board~~ commissioner 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 the ~~board~~ division, the ~~division of~~ gambling 
 29.33  enforcement ~~of the department of public safety~~ division, 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.] The ~~board~~ 
 30.10  commissioner shall require each licensed manufacturer to submit 
 30.11  to the ~~board~~ commissioner one or more samples of each item of 
 30.12  gambling equipment the manufacturer manufactures for use or 
 30.13  resale in this state.  The ~~board~~ commissioner 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 the ~~board~~ 
 30.17  commissioner before the equipment being sampled is shipped into 
 30.18  or sold for use or resale in this state.  The ~~board~~ commissioner 
 30.19  may request the assistance of the ~~commissioner of public safety~~ 
 30.20  ~~and the~~ director of the state lottery ~~board~~ in 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 the ~~board~~ commissioner deems 
 30.36  necessary to carry out ~~its~~ the purposes of this chapter. 
 31.1      An organization holding a premises permit must notify the 
 31.2   ~~board~~ commissioner 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 
 31.9   ~~board~~ commissioner.  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 the ~~board~~ 
 31.14  division and the ~~division of~~ gambling 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.  The ~~board~~ commissioner 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  the ~~board~~ commissioner 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 the ~~board~~ commissioner 
 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 commissioner ~~of~~ 
 32.15  ~~public safety~~ at 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 list~~ 
 32.27  ~~of at least three persons recommended to the governor by the~~ 
 32.28  ~~board.~~  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 the ~~board~~ commissioner.  
 33.2      Sec. 50.  Minnesota Statutes 1994, section 349A.03, 
 33.3   subdivision 2, is amended to read: 
 33.4      Subd. 2.  [~~BOARD~~ COMMISSIONER DUTIES.] The ~~board~~ 
 33.5   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 the ~~board~~ commissioner 
 33.29  for ~~its~~ review 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 the ~~board~~ commissioner for ~~its~~ review 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  to ~~a member of the board~~ the 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 the ~~member~~ commissioner, 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 member~~ the commissioner, an 
 35.32  employee of the lottery, a member of the immediate family of the 
 35.33  director, ~~board member~~ commissioner, 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 member~~ 
 36.31  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.