1.1                          A bill for an act 
  1.2             relating to state government; restricting advertising 
  1.3             by state departments and agencies; prohibiting 
  1.4             advertising in connection with the lottery; 
  1.5             prescribing penalties; amending Minnesota Statutes 
  1.6             1994, sections 349A.02, subdivisions 2 and 3; 349A.03, 
  1.7             subdivision 2; 349A.06, by adding a subdivision; 
  1.8             349A.10, subdivision 3; and 349A.12, subdivision 6, 
  1.9             and by adding a subdivision; proposing coding for new 
  1.10            law in Minnesota Statutes, chapters 15; and 349A; 
  1.11            repealing Minnesota Statutes 1994, sections 349A.02, 
  1.12            subdivision 5; and 349A.09. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  [15.062] [ADVERTISING RESTRICTED.] 
  1.15     A state department or agency shall not spend state money 
  1.16  for advertising or promotional purposes other than money 
  1.17  appropriated specifically for advertising or promotional 
  1.18  purposes. 
  1.19     Sec. 2.  Minnesota Statutes 1994, section 349A.02, 
  1.20  subdivision 2, is amended to read: 
  1.21     Subd. 2.  [REMOVAL.] (a) The director may be removed from 
  1.22  that position only by the governor after notice and a hearing if 
  1.23  requested, only for: 
  1.24     (1) violating section 349A.11; 
  1.25     (2) malfeasance, nonfeasance, or misfeasance as defined in 
  1.26  section 351.14, subdivisions 2, 3, and 4; or 
  1.27     (3) failure to perform adequately the duties of the 
  1.28  director.  
  1.29     (b) For the purposes of this subdivision, adequate 
  2.1   performance of the director may be determined by:  
  2.2      (1) gross revenue from the sale of lottery tickets; 
  2.3      (2) efficiency of the administration of lottery operations; 
  2.4   and 
  2.5      (3) public confidence in the integrity of the lottery; and 
  2.6      (4) compliance with advertising requirements in section 
  2.7   349A.09. 
  2.8      A hearing under this subdivision must be conducted by the 
  2.9   governor.  
  2.10     Sec. 3.  Minnesota Statutes 1994, section 349A.02, 
  2.11  subdivision 3, is amended to read: 
  2.12     Subd. 3.  [POWERS AND DUTIES.] In operating the lottery the 
  2.13  director shall exercise the following powers and duties: 
  2.14     (1) adopt rules and game procedures; 
  2.15     (2) issue lottery retailer contracts and rule on appeals of 
  2.16  decisions relating to those contracts; 
  2.17     (3) enter into lottery procurement contracts for the 
  2.18  provision of goods and services to the lottery; 
  2.19     (4) employ personnel as are required to operate the 
  2.20  lottery; 
  2.21     (5) enter into written agreements with one or more 
  2.22  government-authorized lotteries, or with an organization created 
  2.23  and controlled by those lotteries, for the operation, marketing, 
  2.24  and promotion of a joint lottery; and 
  2.25     (6) adopt and publish advertising and promotional materials 
  2.26  consistent with section 349A.09; and 
  2.27     (7) take all necessary steps to ensure the integrity of, 
  2.28  and public confidence in, the state lottery including, but not 
  2.29  limited to, steps to ensure that the lottery is not promoted or 
  2.30  advertised. 
  2.31     Sec. 4.  Minnesota Statutes 1994, section 349A.03, 
  2.32  subdivision 2, is amended to read: 
  2.33     Subd. 2.  [BOARD DUTIES.] The board has the following 
  2.34  duties: 
  2.35     (1) to advise the director on all aspects of the lottery; 
  2.36     (2) to review and comment on rules and game procedures 
  3.1   adopted by the director; 
  3.2      (3) review and comment on lottery procurement 
  3.3   contracts; and 
  3.4      (4) review and comment on agreements between the director 
  3.5   and one or more other lotteries relating to a joint lottery; and 
  3.6      (5) to review and comment on advertising promulgated by the 
  3.7   director at least quarterly to ensure that all advertising is 
  3.8   consistent with the dignity of the state and with section 
  3.9   349A.09.  
  3.10     Sec. 5.  Minnesota Statutes 1994, section 349A.06, is 
  3.11  amended by adding a subdivision to read: 
  3.12     Subd. 5a.  [ODDS; REQUIRED INFORMATION.] A lottery retailer 
  3.13  must post prominently at or near the point of ticket sale a 
  3.14  notice or notices printed and provided by the director of the 
  3.15  approximate odds of winning each prize in each game for which 
  3.16  the lottery retailer sells tickets. 
  3.17     Sec. 6.  [349A.091] [ADVERTISING AND PROMOTIONAL 
  3.18  EXPENDITURES PROHIBITED.] 
  3.19     Money in the lottery fund and other public funds may not be 
  3.20  expended to advertise or promote the lottery. 
  3.21     Sec. 7.  Minnesota Statutes 1994, section 349A.10, 
  3.22  subdivision 3, is amended to read: 
  3.23     Subd. 3.  [LOTTERY OPERATIONS.] (a) The director shall 
  3.24  establish a lottery operations account in the lottery fund.  The 
  3.25  director shall pay all costs of operating the lottery, including 
  3.26  payroll costs or amounts transferred to the state treasury for 
  3.27  payroll costs, but not including lottery prizes, from the 
  3.28  lottery operating account.  The director shall credit to the 
  3.29  lottery operations account amounts sufficient to pay the 
  3.30  operating costs of the lottery. 
  3.31     (b) The director may not credit in fiscal year 1993 amounts 
  3.32  to the lottery operations account which when totaled exceed 14.5 
  3.33  percent of gross revenue to the lottery fund.  The director may 
  3.34  not credit in any fiscal year thereafter amounts to the lottery 
  3.35  operations account which when totaled exceed 15 percent of gross 
  3.36  revenue to the lottery fund in that fiscal year.  In computing 
  4.1   total amounts credited to the lottery operations account under 
  4.2   this paragraph the director shall disregard amounts transferred 
  4.3   to or retained by lottery retailers as sales commissions or 
  4.4   other compensation. 
  4.5      (c) The director of the lottery may not expend after July 
  4.6   1, 1991, more than 2-3/4 percent of gross revenues in a fiscal 
  4.7   year for contracts for the preparation, publication, and 
  4.8   placement of advertising. 
  4.9      (d) Except as the director determines, the lottery is not 
  4.10  subject to chapter 16A relating to budgeting, payroll, and the 
  4.11  purchase of goods and services. 
  4.12     Sec. 8.  Minnesota Statutes 1994, section 349A.12, is 
  4.13  amended by adding a subdivision to read: 
  4.14     Subd. 3a.  [ADVERTISING PROHIBITED.] A lottery retailer may 
  4.15  not promote or advertise the lottery.  
  4.16     Sec. 9.  Minnesota Statutes 1994, section 349A.12, 
  4.17  subdivision 6, is amended to read: 
  4.18     Subd. 6.  [VIOLATIONS.] A violation of subdivision 1 or 
  4.19  2 or 3a or a rule adopted by the director is a misdemeanor.  A 
  4.20  violation of subdivision 3 or 4 is a gross misdemeanor. 
  4.21     Sec. 10.  [REPEALER.] 
  4.22     Minnesota Statutes 1994, sections 349A.02, subdivision 5; 
  4.23  and 349A.09, are repealed.