SENATE BILL NO. 315

INTRODUCED BY J. WELLS

A BILL FOR AN ACT ENTITLED: "AN ACT RESTRICTING LOTTERY ADVERTISING AND PROMOTION TO PRINT MEDIA; LIMITING THE AMOUNT THAT MAY BE EXPENDED FOR THE PROMOTION OF THE LOTTERY; AMENDING SECTIONS 23-7-202, 23-7-211, AND 23-7-402, MCA; AND PROVIDING AN EFFECTIVE DATE AND AN APPLICABILITY DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 23-7-202, MCA, is amended to read:

"23-7-202. Powers and duties of commission. (1) Subject to subsection (2), the commission shall:

(a) establish and operate a state lottery and may not become involved in any other gambling or gaming;

(b) determine policies for the operation of the state lottery, supervise the director and the staff, and meet with the director at least once every 3 months to make and consider recommendations, set policies, determine types and forms of lottery games to be operated by the state lottery, and transact other necessary business;

(c) maximize the net revenue paid to the state under 23-7-402 and ensure that all policies and rules adopted further revenue maximization;

(d) subject to 23-7-402(1), determine the percentage of the money paid for tickets or chances to be paid out as prizes;

(e) determine the price of each ticket or chance and the number and size of prizes;

(f) provide for the conduct of drawings of winners of lottery games;

(g) carry out, with the director, a continuing study of the state lotteries of Montana and other states to make the state lottery more efficient, profitable, and secure from violations of the law;

(h) study and may enter into agreements with other lottery states to offer lottery games;

(i) prepare quarterly and annual reports on all aspects of the operation of the state lottery, including but not limited to types of games, gross revenue, prize money paid, operating expenses, net revenue to the state, contracts with gaming suppliers, and recommendations for changes to this part, and deliver a copy of each report to the governor, the department of administration, the legislative auditor, the president of the senate, the speaker of the house of representatives, and each member of the appropriate committee of each house of the legislature as determined by the president of the senate and the speaker of the house; and

(j) adopt rules relating to lottery staff sales incentives or bonuses and sales agents' commissions and any other rules necessary to carry out this part.

(2) The commission may not adopt rules or policies that provide for the promotion of the lottery or advertise the availability of the lottery in an electronic media or on billboards."

Section 2. Section 23-7-211, MCA, is amended to read:

"23-7-211. Powers and duties of director. (1) The director shall:

(a) administer the operation of the state lottery in accordance with this chapter and the rules and other directives of the commission;

(b) appoint an assistant director for security and employ and direct personnel necessary to the operation of the state lottery;

(c) license lottery ticket or chance sales agents and suspend or revoke licenses pursuant to this chapter and commission rules; and

(d) maintain, with the assistant director for security, the security of the state lottery.

(2) (a) With the concurrence of the commission or pursuant to commission rules, the director may enter into contracts for materials, equipment, and supplies to be used in the operation of the state lottery, for the design and installation of games, for consultant services, for promotion of the lottery subject to 23-7-402, for the sale of tickets and chances, and for other services. The state shall provide for management, security, and internal audit control.

(b) When a contract is awarded, a performance bond satisfactory to and in an amount determined by the commission and executed by a surety company authorized to do business in this state or otherwise secured in a manner satisfactory to the commission must be delivered to the commission. The requirements for this bond must be at least as stringent as those stated in 18-4-312(3)."

Section 3. Section 23-7-402, MCA, is amended to read:

"23-7-402. (Temporary) Disposition of revenue. (1) A minimum of 45% of the money paid for tickets or chances must be paid out as prize money. The prize money is statutorily appropriated, as provided in 17-7-502, to the lottery.

(2) Commissions paid to lottery ticket or chance sales agents are not a state lottery operating expense.

(3) That part of all gross revenue not used for the payment of prizes, commissions, and operating expenses, together with the interest earned on the gross revenue while the gross revenue is in the enterprise fund, is net revenue. Except as provided in subsection (5), net revenue must be transferred quarterly from the enterprise fund established by 23-7-401 to the state general fund.

(4) The spending authority of the lottery may be increased in accordance with this section upon review and approval of a revised operation plan by the office of budget and program planning.

(5) For the purposes of funding a study of the socioeconomic impacts of gambling, $100,000 of net revenue may be appropriated from the enterprise fund established by 23-7-401. (Terminates June 30, 1999--sec. 8, Ch. 494, L. 1997.)

23-7-402. (Effective July 1, 1999) Disposition of revenue. (1) A minimum of 45% of the money paid for tickets or chances must be paid out as prize money. The prize money is statutorily appropriated, as provided in 17-7-502, to the lottery.

(2) Commissions paid to lottery ticket or chance sales agents are not a state lottery operating expense.

(3) That part of all gross revenue not used for the payment of prizes, commissions, and operating expenses, together with the interest earned on the gross revenue while the gross revenue is in the enterprise fund, is net revenue. Net revenue must be transferred quarterly from the enterprise fund established by 23-7-401 to the state general fund. Operating expenses may include promotion of the lottery only in print media or contract payments for the promotion of the lottery in print media. Operating expenses for promotion of the lottery are limited to the lesser of 1% of net operating revenue or $100,000.

(4) The spending authority of the lottery may be increased in accordance with this section upon review and approval of a revised operation plan by the office of budget and program planning."

NEW SECTION. Section 4. Effective date. [This act] is effective July 1, 1999.

NEW SECTION. Section 5. Applicability. [This act] applies to contracts entered into or renewed on or after [the effective date of this act].

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