1.1                          A bill for an act 
  1.2             relating to the State Lottery; amending provisions 
  1.3             relating to the director; providing for review and 
  1.4             approval of lottery budget; creating a task force and 
  1.5             requiring a report; amending Minnesota Statutes 2002, 
  1.6             sections 15A.081, subdivision 8; 349A.02, subdivision 
  1.7             1; 349A.10, subdivision 6; 349A.15; Laws 2003, First 
  1.8             Special Session chapter 1, article 1, section 23; 
  1.9             repealing Minnesota Statutes 2002, section 349A.02, 
  1.10            subdivision 2. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 2002, section 15A.081, 
  1.13  subdivision 8, is amended to read: 
  1.14     Subd. 8.  [EXPENSE ALLOWANCE.] Notwithstanding any law to 
  1.15  the contrary, positions listed in section 15A.0815, subdivisions 
  1.16  2 and 3, constitutional officers, and the commissioner of Iron 
  1.17  Range resources and rehabilitation, and the director of the 
  1.18  state lottery are authorized an annual expense allowance not to 
  1.19  exceed $1,500 for necessary expenses in the normal performance 
  1.20  of their duties for which no other reimbursement is provided.  
  1.21  The expenditures under this subdivision are subject to any laws 
  1.22  and rules relating to budgeting, allotment and encumbrance, 
  1.23  preaudit and postaudit.  The commissioner of finance may adopt 
  1.24  rules to assure the proper expenditure of these funds and to 
  1.25  provide for reimbursement. 
  1.26     Sec. 2.  Minnesota Statutes 2002, section 349A.02, 
  1.27  subdivision 1, is amended to read: 
  1.28     Subdivision 1.  [DIRECTOR.] A State Lottery is established 
  2.1   under the supervision and control of a director.  The director 
  2.2   of the State Lottery shall be appointed by the governor with the 
  2.3   advice and consent of the senate.  The director must be 
  2.4   qualified by experience and training in the operation of a 
  2.5   lottery to supervise the lottery.  The director serves in the 
  2.6   unclassified service at the pleasure of the governor.  The 
  2.7   annual salary rate authorized for the director is equal to 95 
  2.8   percent of the salary rate prescribed for the governor. 
  2.9      Sec. 3.  Minnesota Statutes 2002, section 349A.10, 
  2.10  subdivision 6, is amended to read: 
  2.11     Subd. 6.  [BUDGET APPEARANCE; PLANS.] The director shall 
  2.12  prepare and submit a biennial budget plan to the commissioner of 
  2.13  finance.  The governor shall recommend the maximum amount 
  2.14  available for the lottery in the budget the governor submits to 
  2.15  the legislature under section 16A.11.  The maximum amount 
  2.16  available to the lottery for operating expenses and capital 
  2.17  expenditures shall be determined by law.  Operating expenses 
  2.18  shall not include expenses that are a direct function of lottery 
  2.19  sales, which include the cost of lottery prizes, amounts paid to 
  2.20  lottery retailers as sales commissions or other compensation, 
  2.21  amounts paid to produce and deliver scratch lottery games, and 
  2.22  amounts paid to an outside vendor to operate and maintain an 
  2.23  on-line gaming system.  In addition, the director shall appear 
  2.24  at least once each fiscal year before the senate and house of 
  2.25  representatives committees having jurisdiction over gambling 
  2.26  policy to present and explain the lottery's budget plans for 
  2.27  future games and the related advertising and promotions and 
  2.28  spending plans for the next fiscal year. 
  2.29     Sec. 4.  Minnesota Statutes 2002, section 349A.15, is 
  2.30  amended to read: 
  2.31     349A.15 [REPORT.] 
  2.32     The director shall file an annual report with the governor 
  2.33  and legislature which must include a complete statement of 
  2.34  lottery revenues, administrative and operating costs, capital 
  2.35  expenditures, net proceeds transferred, and other financial 
  2.36  transactions for the period the report covers. 
  3.1      Sec. 5.  [LOTTERY ORGANIZATION TASK FORCE.] 
  3.2      Subdivision 1.  [CREATION; MEMBERSHIP.] A Lottery 
  3.3   Organization Task Force is created to study and make 
  3.4   recommendations regarding the future organization and 
  3.5   profitability of the State Lottery.  The task force is composed 
  3.6   of seven members, to be appointed as follows: 
  3.7      (1) the commissioner of natural resources, or the 
  3.8   commissioner's designee; 
  3.9      (2) the commissioner of finance, or the commissioner's 
  3.10  designee; 
  3.11     (3) one member of the house of representatives, to be 
  3.12  appointed by the speaker; 
  3.13     (4) one member of the senate, to be appointed by the senate 
  3.14  majority leader; 
  3.15     (5) the director of the State Lottery; and 
  3.16     (6) two members to be appointed by the governor. 
  3.17     Subd. 2.  [CHARGE; REPORT.] (a) The task force shall 
  3.18  examine the State Lottery and consider whether the State Lottery 
  3.19  should: 
  3.20     (1) become part of another existing state agency; 
  3.21     (2) be accountable to an oversight board or commission to 
  3.22  be created for that purpose; 
  3.23     (3) continue under its current organizational structure; or 
  3.24     (4) operate under other governance structures that provide 
  3.25  appropriate oversight and accountability. 
  3.26     (b) The task force shall also examine the feasibility and 
  3.27  desirability of establishing measurable performance goals for 
  3.28  lottery proceeds and operations. 
  3.29     (c) The task force shall submit a report with its findings 
  3.30  and recommendations to the legislature and the governor by 
  3.31  February 1, 2005. 
  3.32     Subd. 3.  [SUNSET.] The task force expires upon the 
  3.33  adjournment of the 2005 regular legislative session. 
  3.34     Sec. 6.  Laws 2003, First Special Session chapter 1, 
  3.35  article 1, section 23, is amended to read: 
  3.36  Sec. 23.  [STATE LOTTERY.] 
  4.1   Notwithstanding Minnesota Statutes, 
  4.2   section 349A.10, the operating budget 
  4.3   must not exceed $43,538,000 $27,419,000 
  4.4   in fiscal year 2004 
  4.5   and $43,538,000 $27,419,000 in fiscal 
  4.6   year 2005 and thereafter.  The savings 
  4.7   must be transferred 60 percent to the 
  4.8   general fund in the state treasury and 
  4.9   40 percent to the Minnesota environment 
  4.10  and natural resources trust fund in the 
  4.11  state treasury. 
  4.12     Sec. 7.  [REPEALER.] 
  4.13     Minnesota Statutes 2002, section 349A.02, subdivision 2, is 
  4.14  repealed. 
  4.15     Sec. 8.  [EFFECTIVE DATE.] 
  4.16     This act is effective the day following final enactment.  
  4.17  Sections 2 and 7 apply to the appointment of a director of the 
  4.18  State Lottery made on or after January 1, 2004.