1.1                          A bill for an act 
  1.2             relating to the state lottery; establishing an 
  1.3             oversight council for the state lottery; providing 
  1.4             powers and duties; requiring a report; amending 
  1.5             Minnesota Statutes 2002, section 349A.08, subdivision 
  1.6             5; proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 349A. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [349A.012] [STATE LOTTERY OVERSIGHT COUNCIL.] 
  1.10     Subdivision 1.  [ESTABLISHMENT; MEMBERSHIP.] A state 
  1.11  lottery oversight council is established with the powers as 
  1.12  provided in this section and section 349A.013.  The council 
  1.13  consists of seven members, to be comprised as follows:  one 
  1.14  citizen member appointed by the speaker of the house of 
  1.15  representatives; one citizen member appointed by the majority 
  1.16  leader of the senate; the chair of the legislative commission on 
  1.17  Minnesota resources, or the commissioner's designee; the chair 
  1.18  of the game and fish fund citizen's oversight subcommittee, or 
  1.19  the chair's designee; and three citizen members appointed by the 
  1.20  governor.  Of the three citizen members appointed by the 
  1.21  governor, one must be qualified by experience and training in 
  1.22  managing a public lottery, one must be qualified by experience 
  1.23  and training in retail marketing, and one must be qualified by 
  1.24  experience and training in accounting and financial management. 
  1.25     Subd. 2.  [TERM; COMPENSATION.] The term of each member is 
  1.26  two years.  The compensation, removal, and filling of vacancies 
  2.1   among voting members on the council is governed by section 
  2.2   15.075, subdivisions 3, 4, and 5. 
  2.3      Subd. 3.  [POWERS AND DUTIES.] (a) The council may use 
  2.4   funds for the council's administrative and operating costs from 
  2.5   the lottery operations account in the lottery fund in section 
  2.6   349A.10, subdivision 3, not to exceed $100,000 over the fiscal 
  2.7   biennium. 
  2.8      (b) The council may provide advice and review regarding the 
  2.9   performance of the state lottery in its duties and in any 
  2.10  policies, procedures, or rules the lottery prescribes to perform 
  2.11  its duties. 
  2.12     (c) The council may communicate with and make 
  2.13  recommendations to the governor and the legislature. 
  2.14     (d) The council may, after consideration and study of the 
  2.15  issue and by a majority vote of its members, direct the director 
  2.16  of the state lottery to: 
  2.17     (1) outsource existing state lottery functions that do not 
  2.18  adversely affect the public health, safety, welfare, or 
  2.19  integrity of the state lottery; 
  2.20     (2) adjust staff complement; 
  2.21     (3) enter into or cancel lottery retailer contracts, 
  2.22  consistent with section 349A.06; and 
  2.23     (4) set performance goals of proceeds to sales for the 
  2.24  state lottery of 25 percent in fiscal year 2004 and 30 percent 
  2.25  in fiscal year 2005. 
  2.26     (e) The council shall determine revenue efficiencies of the 
  2.27  lottery cash flow account under section 349A.10, subdivision 7, 
  2.28  on a monthly basis.  When monthly revenue in the cash flow 
  2.29  account exceeds revenue for the same month over any of the past 
  2.30  five years, the council shall direct the surplus revenue in the 
  2.31  cash flow account be deposited into the SIMPLE account in 
  2.32  section 349A.013. 
  2.33     Subd. 4.  [STUDY AND REPORT.] The council shall conduct a 
  2.34  study analyzing the efficiency and performance of the current 
  2.35  state lottery structure.  The study shall compare and review the 
  2.36  administrative costs of other state lotteries, review the 
  3.1   current salary structure of state lottery employees, investigate 
  3.2   building ownership versus leasing arrangements, and review any 
  3.3   other information the council deems relevant.  The council shall 
  3.4   report its findings and make recommendations to the legislature 
  3.5   for improvements in maximizing revenue from the lottery to the 
  3.6   environment and natural resources trust fund.  The study shall 
  3.7   also review and make recommendations on lottery advertising 
  3.8   under section 349A.09. 
  3.9      Sec. 2.  [349A.013] [SIMPLE ACCOUNT.] 
  3.10     (a) A study of incentives to maximize proceeds from the 
  3.11  lottery to the environmental trust fund (SIMPLE) account is 
  3.12  established in the lottery fund.  The SIMPLE account consists of 
  3.13  unclaimed prize money as provided in section 349A.08, 
  3.14  subdivision 5, unspent administrative funds in the lottery 
  3.15  operations account in the lottery fund under section 349A.10, 
  3.16  subdivision 3, and money as provided in section 349A.012, 
  3.17  subdivision 3, paragraph (e).  Funds from this account may only 
  3.18  be used for purposes provided in article XI, section 14, of the 
  3.19  Minnesota Constitution and are appropriated as follows: 
  3.20     (1) 25 percent to the Minnesota pollution control agency 
  3.21  for the purpose of identifying and cleaning up failing and 
  3.22  improperly operating septic systems; 
  3.23     (2) 25 percent to the Minnesota pollution control agency 
  3.24  for the state water pollution control program under section 
  3.25  116.16; 
  3.26     (3) 25 percent to the game and fish fund under section 
  3.27  97A.055, for the purposes of that fund; and 
  3.28     (4) 25 percent to the board of water and soil resources for 
  3.29  local water planning grants. 
  3.30     (b) The council may review the SIMPLE account and propose 
  3.31  changes in policies, activities, and revenue enhancements or 
  3.32  reductions, review other relevant information, and make 
  3.33  recommendations to the legislature for improvements in the 
  3.34  management and use of money in the account. 
  3.35     Sec. 3.  Minnesota Statutes 2002, section 349A.08, 
  3.36  subdivision 5, is amended to read: 
  4.1      Subd. 5.  [PAYMENT; UNCLAIMED PRIZES.] A prize in the state 
  4.2   lottery must be claimed by the winner within one year of the 
  4.3   date of the drawing at which the prize was awarded or the last 
  4.4   day sales were authorized for a game where a prize was 
  4.5   determined in a manner other than by means of a drawing.  If a 
  4.6   valid claim is not made for a prize payable directly by the 
  4.7   lottery by the end of this period, the prize money is considered 
  4.8   unclaimed and the winner of the prize shall have no further 
  4.9   claim to the prize.  A prize won by a person who purchased the 
  4.10  winning ticket in violation of section 349A.12, subdivision 1, 
  4.11  or won by a person ineligible to be awarded a prize under 
  4.12  subdivision 7 must be treated as an unclaimed prize under this 
  4.13  section.  The director shall transfer ~~70 percent of all~~ 
  4.14  unclaimed prize money at the end of each fiscal year from the 
  4.15  lottery cash flow account as follows:  ~~of the 70 percent,~~ 40 
  4.16  percent must be transferred to the Minnesota environment and 
  4.17  natural resources trust fund and ~~60 percent must be transferred~~ 
  4.18  ~~to the general fund.~~ the remaining ~~30~~ 60 percent of the 
  4.19  unclaimed prize money must be ~~added by the director to prize~~ 
  4.20  ~~pools of subsequent lottery games~~ deposited in the SIMPLE 
  4.21  account in section 349A.013. 
  4.22     Sec. 4.  [EFFECTIVE DATE.] 
  4.23     Sections 1 to 3 are effective July 1, 2003. 
  4.24     Sec. 5.  [SUNSET.] 
  4.25     Sections 1 to 3 expire on July 1, 2005.