1.1                          A bill for an act
  1.2             relating to the state lottery; permitting the director 
  1.3             to establish a bonus plan for lottery retailers; 
  1.4             permitting the lottery to conduct a holiday game; 
  1.5             authorizing the lottery to establish an operating 
  1.6             reserve account; authorizing the lottery to expend 
  1.7             additional funds on advertising; clarifying the 
  1.8             lottery conflict of interest; regulating retailer 
  1.9             commissions; amending Minnesota Statutes 1996, section 
  1.10            349A.06, by adding a subdivision; 349A.09, subdivision 
  1.11            2; 349A.10, subdivision 3; and 349A.11; proposing 
  1.12            coding for new law in Minnesota Statutes, chapter 349A.
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1996, section 349A.06, is 
  1.15  amended by adding a subdivision to read: 
  1.16     Subd. 12.  [RETAILER BONUS.] The director may adopt a plan 
  1.17  whereby eligible lottery retailers will receive a bonus payment, 
  1.18  in addition to commissions or incentives earned for the sale of 
  1.19  lottery tickets, if total lottery sales for a fiscal year 
  1.20  increase when compared to the total lottery sales for the 
  1.21  previous fiscal year.  The bonus payment shall be no more than 
  1.22  ten percent of any increase in total lottery sale, which shall 
  1.23  be paid to active lottery retailers at the end of a fiscal year 
  1.24  on the basis of each lottery retailer's market share. 
  1.25     Sec. 2.  Minnesota Statutes 1996, section 349A.09, 
  1.26  subdivision 2, is amended to read: 
  1.27     Subd. 2.  [CONTENT OF ADVERTISING.] (a) Advertising and 
  1.28  promotional materials for the lottery adopted or published by 
  1.29  the director must be consistent with the dignity of the state 
  2.1   and may only: 
  2.2      (1) present information on how lottery games are played, 
  2.3   prizes offered, where and how tickets may be purchased, when 
  2.4   drawings are held, and odds on the games advertised; 
  2.5      (2) identify state programs supported by lottery net 
  2.6   revenues; 
  2.7      (3) present the lottery as a form of entertainment; or 
  2.8      (4) state the winning numbers or identity of winners of 
  2.9   lottery prizes.  
  2.10     (b) The director may not adopt or publish any advertising 
  2.11  for the lottery which: 
  2.12     (1) presents directly or indirectly any lottery game as a 
  2.13  potential means of relieving any person's financial 
  2.14  difficulties; 
  2.15     (2) is specifically targeted with the intent to exploit a 
  2.16  person, or a specific group or economic class of people, or a 
  2.17  religious holiday by use of a religious theme or symbol; 
  2.18     (3) presents the purchase of a lottery ticket as a 
  2.19  financial investment or a way to achieve financial security; 
  2.20     (4) uses the name or picture of a current elected state 
  2.21  official to promote a lottery game; 
  2.22     (5) exhorts the public to bet by directly or indirectly 
  2.23  misrepresenting a person's chance of winning a prize; or 
  2.24     (6) denigrates a person who does not buy a lottery ticket 
  2.25  or unduly praises a person who does buy a ticket. 
  2.26     Sec. 3.  Minnesota Statutes 1996, section 349A.10, 
  2.27  subdivision 3, is amended to read: 
  2.28     Subd. 3.  [LOTTERY OPERATIONS.] (a) The director shall 
  2.29  establish a lottery operations account in the lottery fund.  The 
  2.30  director shall pay all costs of operating the lottery, including 
  2.31  payroll costs or amounts transferred to the state treasury for 
  2.32  payroll costs, but not including lottery prizes, from the 
  2.33  lottery operating account.  The director shall credit to the 
  2.34  lottery operations account amounts sufficient to pay the 
  2.35  operating costs of the lottery. 
  2.36     (b) The director may not credit in fiscal year 1993 amounts 
  3.1   to the lottery operations account which when totaled exceed 14.5 
  3.2   percent of gross revenue to the lottery fund.  Except as 
  3.3   provided in paragraph (e), the director may not credit in any 
  3.4   fiscal year thereafter amounts to the lottery operations account 
  3.5   which when totaled exceed 15 percent of gross revenue to the 
  3.6   lottery fund in that fiscal year.  In computing total amounts 
  3.7   credited to the lottery operations account under this paragraph 
  3.8   the director shall disregard amounts transferred to or retained 
  3.9   by lottery retailers as sales commissions or other compensation. 
  3.10     (c) The director of the lottery may not expend after July 
  3.11  1, 1991, more than 2-3/4 four percent of gross revenues in a 
  3.12  fiscal year for contracts for the preparation, publication, and 
  3.13  placement of advertising. 
  3.14     (d) Except as the director determines, the lottery is not 
  3.15  subject to chapter 16A relating to budgeting, payroll, and the 
  3.16  purchase of goods and services. 
  3.17     (e) In addition to the amounts credited to the lottery 
  3.18  operations account under paragraph (b), the director is 
  3.19  authorized, if necessary, to meet the current obligations of the 
  3.20  lottery and to credit up to 25 percent of an amount equal to the 
  3.21  average annual amount which was authorized to be credited to the 
  3.22  lottery operations account for the previous three fiscal years 
  3.23  but was not needed to meet the obligations of the lottery. 
  3.24     Sec. 4.  Minnesota Statutes 1996, section 349A.11, is 
  3.25  amended to read: 
  3.26     349A.11 [CONFLICT OF INTEREST.] 
  3.27     Subdivision 1.  [LOTTERY TICKET; RETAILER.] (a) The 
  3.28  director, an employee of the lottery, a member of the immediate 
  3.29  family of the director or employee residing in the same 
  3.30  household may not: 
  3.31     (1) purchase a lottery ticket; or 
  3.32     (2) have any personal pecuniary interest in any vendor 
  3.33  holding a lottery procurement contract, or in any lottery 
  3.34  retailer; or 
  3.35     (3) receive any gift, gratuity, or other thing of value, 
  3.36  excluding food or beverage, from any lottery vendor or lottery 
  4.1   retailer, or person applying to be a retailer or vendor, in 
  4.2   excess of $100 in any calendar year.  
  4.3      Subd. 2.  [GIFTS.] The director or an employee of the 
  4.4   lottery in the unclassified service may not accept a gift the 
  4.5   acceptance of which by an official would be prohibited by 
  4.6   section 10A.071. 
  4.7      Subd. 3.  [PENALTY.] (b) A violation of paragraph 
  4.8   (a) subdivision 1, clause (1), is a misdemeanor.  A violation of 
  4.9   paragraph (a) subdivision 1, clause (2), is a gross 
  4.10  misdemeanor.  A violation of paragraph (a), clause (3), is a 
  4.11  misdemeanor unless the gift, gratuity, or other item of value 
  4.12  received has a value in excess of $500, in which case a 
  4.13  violation is a gross misdemeanor.  
  4.14     Subd. 4.  [FUTURE EMPLOYMENT.] (c) The director or an 
  4.15  unclassified employee of the lottery may not, within one year 
  4.16  two years of terminating employment with the lottery, accept 
  4.17  employment with, act as an agent or attorney for, or otherwise 
  4.18  represent any person, corporation, or entity that had any 
  4.19  lottery procurement contract or bid for a lottery procurement 
  4.20  contract with before the lottery within a period of two years 
  4.21  prior to the termination of their employment.  A violation of 
  4.22  this paragraph is a misdemeanor. 
  4.23     Sec. 5.  [349A.16] [LOTTERY RETAILER COMMISSIONS.] 
  4.24     The director of the state lottery shall:  (1) increase 
  4.25  commissions paid to lottery retailers in effect on January 1, 
  4.26  1998, by one-half percent on the price of each ticket sold by 
  4.27  each retailer; and (2) provide that each lottery retailer 
  4.28  receive a commission of at least one percent on the amount of 
  4.29  each winning ticket cashed by that retailer.  The director of 
  4.30  the state lottery shall periodically review lottery ticket sales 
  4.31  and make such adjustments to lottery retailer commission rates 
  4.32  as are deemed necessary to maintain appropriate return to the 
  4.33  state. 
  4.34     Sec. 6.  [EFFECTIVE DATE.] 
  4.35     Sections 1 to 5 are effective the day following final 
  4.36  enactment.