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Key: (1) language to be deleted (2) new language

                            CHAPTER 233-S.F.No. 2181 
                  An act relating to the State Lottery; amending 
                  provisions relating to the director; providing for 
                  review and approval of lottery budget; creating a task 
                  force and requiring a report; amending Minnesota 
                  Statutes 2002, sections 15A.081, subdivision 8; 
                  349A.02, subdivision 1; 349A.10, subdivision 6; 
                  349A.15; Laws 2003, First Special Session chapter 1, 
                  article 1, section 23; repealing Minnesota Statutes 
                  2002, section 349A.02, subdivision 2. 
           Section 1.  Minnesota Statutes 2002, section 15A.081, 
        subdivision 8, is amended to read: 
           Subd. 8.  [EXPENSE ALLOWANCE.] Notwithstanding any law to 
        the contrary, positions listed in section 15A.0815, subdivisions 
        2 and 3, constitutional officers, and the commissioner of Iron 
        Range resources and rehabilitation, and the director of the 
        State Lottery are authorized an annual expense allowance not to 
        exceed $1,500 for necessary expenses in the normal performance 
        of their duties for which no other reimbursement is provided.  
        The expenditures under this subdivision are subject to any laws 
        and rules relating to budgeting, allotment and encumbrance, 
        preaudit and postaudit.  The commissioner of finance may adopt 
        rules to assure the proper expenditure of these funds and to 
        provide for reimbursement. 
           Sec. 2.  Minnesota Statutes 2002, section 349A.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DIRECTOR.] A State Lottery is established 
        under the supervision and control of a director.  The director 
        of the State Lottery shall be appointed by the governor with the 
        advice and consent of the senate.  The director must be 
        qualified by experience and training in the operation of a 
        lottery to supervise the lottery.  The director serves in the 
        unclassified service at the pleasure of the governor.  The 
        annual salary rate authorized for the director is equal to 95 
        percent of the salary rate prescribed for the governor. 
           Sec. 3.  Minnesota Statutes 2002, section 349A.10, 
        subdivision 6, is amended to read: 
           Subd. 6.  [BUDGET APPEARANCE; PLANS.] The director shall 
        prepare and submit a biennial budget plan to the commissioner of 
        finance.  The governor shall recommend the maximum amount 
        available for the lottery in the budget the governor submits to 
        the legislature under section 16A.11.  The maximum amount 
        available to the lottery for operating expenses and capital 
        expenditures shall be determined by law.  Operating expenses 
        shall not include expenses that are a direct function of lottery 
        sales, which include the cost of lottery prizes, amounts paid to 
        lottery retailers as sales commissions or other compensation, 
        amounts paid to produce and deliver scratch lottery games, and 
        amounts paid to an outside vendor to operate and maintain an 
        on-line gaming system.  In addition, the director shall appear 
        at least once each fiscal year before the senate and house of 
        representatives committees having jurisdiction over gambling 
        policy to present and explain the lottery's budget plans for 
        future games and the related advertising and promotions and 
        spending plans for the next fiscal year. 
           Sec. 4.  Minnesota Statutes 2002, section 349A.15, is 
        amended to read: 
           349A.15 [REPORT.] 
           The director shall file an annual report with the governor 
        and legislature which must include a complete statement of 
        lottery revenues, administrative and operating costs, capital 
        expenditures, net proceeds transferred, and other financial 
        transactions for the period the report covers. 
           Subdivision 1.  [CREATION; MEMBERSHIP.] A Lottery 
        Organization Task Force is created to study and make 
        recommendations regarding the future organization and 
        profitability of the State Lottery.  The task force is composed 
        of nine members, to be appointed as follows: 
           (1) the commissioner of natural resources, or the 
        commissioner's designee; 
           (2) the commissioner of finance, or the commissioner's 
           (3) two members of the house of representatives, including 
        one member of the minority caucus, both to be appointed by the 
           (4) two members of the senate, including one member of the 
        minority caucus, both to be appointed by the senate committee on 
           (5) the director of the State Lottery; and 
           (6) two members to be appointed by the governor. 
           The governor shall appoint one member of the task force as 
        the chair.  
           Subd. 2.  [CHARGE; REPORT.] (a) The task force shall 
        examine the State Lottery and consider whether the State Lottery 
           (1) become part of another existing state agency; 
           (2) be accountable to an oversight board or commission to 
        be created for that purpose; 
           (3) continue under its current organizational structure; or 
           (4) operate under other governance structures that provide 
        appropriate oversight and accountability. 
           (b) The task force shall also examine the feasibility and 
        desirability of establishing measurable performance goals for 
        lottery proceeds and operations. 
           (c) The task force is encouraged to consult with the 
        commissioner of public safety, the commissioner of revenue, and 
        the chair of the Citizens' Advisory Committee for the 
        Legislative Commission on Minnesota Resources.  The task force 
        shall submit a report with its findings and recommendations to 
        the legislature and the governor by February 1, 2005. 
           Subd. 3.  [SUNSET.] The task force expires upon the 
        adjournment of the 2005 regular legislative session. 
           Sec. 6.  Laws 2003, First Special Session chapter 1, 
        article 1, section 23, is amended to read: 
        Sec. 23.  [STATE LOTTERY.] 
        Notwithstanding Minnesota Statutes, 
        section 349A.10, the operating budget 
        must not exceed $43,538,000 $27,419,000 
        in fiscal year 2004 
        and $43,538,000 $27,419,000 in fiscal 
        year 2005 and thereafter.  The savings 
        must be transferred 60 percent to the 
        general fund in the state treasury and 
        40 percent to the Minnesota environment 
        and natural resources trust fund in the 
        state treasury. 
           Sec. 7.  [REPEALER.] 
           Minnesota Statutes 2002, section 349A.02, subdivision 2, is 
           Sec. 8.  [EFFECTIVE DATE.] 
           This act is effective the day following final enactment.  
        Sections 2 and 7 apply to the appointment of a director of the 
        State Lottery made on or after January 1, 2004. 
           Presented to the governor May 15, 2004 
           Signed by the governor May 19, 2004, 1:40 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes