1.1                          A bill for an act 
  1.2             relating to the state lottery; prohibiting advertising 
  1.3             in connection with the lottery; amending Minnesota 
  1.4             Statutes 1998, sections 349A.02, subdivisions 2 and 3; 
  1.5             and 349A.10, subdivision 3; proposing coding for new 
  1.6             law in Minnesota Statutes, chapter 349A; repealing 
  1.7             Minnesota Statutes 1998, sections 349A.02, subdivision 
  1.8             5; and 349A.09. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 349A.02, 
  1.11  subdivision 2, is amended to read: 
  1.12     Subd. 2.  [REMOVAL.] (a) The director may be removed from 
  1.13  that position only by the governor after notice and a hearing if 
  1.14  requested, only for: 
  1.15     (1) violating section 349A.11; 
  1.16     (2) malfeasance, nonfeasance, or misfeasance as defined in 
  1.17  section 351.14, subdivisions 2, 3, and 4; or 
  1.18     (3) failure to perform adequately the duties of the 
  1.19  director.  
  1.20     (b) For the purposes of this subdivision, adequate 
  1.21  performance of the director may be determined by:  
  1.22     (1) gross revenue from the sale of lottery tickets; 
  1.23     (2) efficiency of the administration of lottery operations; 
  1.24  and 
  1.25     (3) public confidence in the integrity of the lottery; and 
  1.26     (4) compliance with advertising requirements in section 
  1.27  349A.09. 
  2.1      A hearing under this subdivision must be conducted by the 
  2.2   governor.  
  2.3      Sec. 2.  Minnesota Statutes 1998, section 349A.02, 
  2.4   subdivision 3, is amended to read: 
  2.5      Subd. 3.  [POWERS AND DUTIES.] In operating the lottery the 
  2.6   director shall exercise the following powers and duties: 
  2.7      (1) adopt rules and game procedures; 
  2.8      (2) issue lottery retailer contracts and rule on appeals of 
  2.9   decisions relating to those contracts; 
  2.10     (3) enter into lottery procurement contracts for the 
  2.11  provision of goods and services to the lottery; 
  2.12     (4) employ personnel as are required to operate the 
  2.13  lottery; 
  2.14     (5) enter into written agreements with one or more 
  2.15  government-authorized lotteries, or with an organization created 
  2.16  and controlled by those lotteries, for the operation, marketing, 
  2.17  and promotion of a joint lottery; and 
  2.18     (6) adopt and publish advertising and promotional materials 
  2.19  consistent with section 349A.09; and 
  2.20     (7) take all necessary steps to ensure the integrity of, 
  2.21  and public confidence in, the state lottery. 
  2.22     Sec. 3.  [349A.091] [ADVERTISING PROHIBITED.] 
  2.23     Money in the lottery fund and other public funds may not be 
  2.24  expended to advertise or promote the lottery. 
  2.25     Sec. 4.  Minnesota Statutes 1998, section 349A.10, 
  2.26  subdivision 3, is amended to read: 
  2.27     Subd. 3.  [LOTTERY OPERATIONS.] (a) The director shall 
  2.28  establish a lottery operations account in the lottery fund.  The 
  2.29  director shall pay all costs of operating the lottery, including 
  2.30  payroll costs or amounts transferred to the state treasury for 
  2.31  payroll costs, but not including lottery prizes, from the 
  2.32  lottery operating account.  The director shall credit to the 
  2.33  lottery operations account amounts sufficient to pay the 
  2.34  operating costs of the lottery. 
  2.35     (b) Except as provided in paragraph (e) (d), the director 
  2.36  may not credit in any fiscal year thereafter amounts to the 
  3.1   lottery operations account which when totaled exceed 15 percent 
  3.2   of gross revenue to the lottery fund in that fiscal year.  In 
  3.3   computing total amounts credited to the lottery operations 
  3.4   account under this paragraph the director shall disregard 
  3.5   amounts transferred to or retained by lottery retailers as sales 
  3.6   commissions or other compensation. 
  3.7      (c) The director of the lottery may not expend after July 
  3.8   1, 1991, more than 2-3/4 percent of gross revenues in a fiscal 
  3.9   year for contracts for the preparation, publication, and 
  3.10  placement of advertising. 
  3.11     (d) Except as the director determines, the lottery is not 
  3.12  subject to chapter 16A relating to budgeting, payroll, and the 
  3.13  purchase of goods and services. 
  3.14     (e) (d) In addition to the amounts credited to the lottery 
  3.15  operations account under paragraph (b), the director is 
  3.16  authorized, if necessary, to meet the current obligations of the 
  3.17  lottery and to credit up to 25 percent of an amount equal to the 
  3.18  average annual amount which was authorized to be credited to the 
  3.19  lottery operations account for the previous three fiscal years 
  3.20  but was not needed to meet the obligations of the lottery. 
  3.21     Sec. 5.  [REPEALER.] 
  3.22     Minnesota Statutes 1998, sections 349A.02, subdivision 5; 
  3.23  and 349A.09, are repealed.