1. No aquatic insect nor any insect that lives in the water during any of its life stages shall be taken from waters inhabited by trout nor from the banks thereof at any time.

2. No person shall take from the waters of the state or the banks thereof for sale as bait, and no person shall sell as bait, any such insect, without first obtaining from the department a license to take such insects for sale as bait or to sell such insects as bait.

3. The license provided for in subdivision 2 shall be issued only in the discretion of the department. Licenses to take for sale as bait insects described in this section shall be issued only to residents of this state and to residents of a state in which residents of this state may be licensed, or are permitted without license, to take such insects for sale as bait.