Florida Senate - 2010 SB 1428
By Senator Smith
29-00808-10 20101428__
1 A bill to be entitled
2 An act relating to operation of the Florida Lottery;
3 amending s. 20.317, F.S.; clarifying provisions
4 concerning regional offices; amending s. 24.101, F.S.;
5 revising a reference; amending s. 24.102, F.S.;
6 revising provisions relating to legislative intent to
7 provide for the operation of the lottery under a
8 management agreement; amending s. 24.103, F.S.;
9 providing and revising definitions; amending s.
10 24.104, F.S.; revising provisions concerning the
11 purpose of the Department of the Lottery to permit
12 contracting with a manager; amending s. 24.105, F.S.;
13 revising provisions concerning the powers and duties
14 of the department to allow for possible contracting
15 with a manager; providing that specified provisions
16 apply regardless of whether the department contracts
17 with a manager; deleting obsolete provisions; amending
18 s. 24.107, F.S.; revising provisions concerning
19 advertising and promotion of lottery games to conform
20 to the possibility of contracting with a manager;
21 amending ss. 24.108 and 24.111, F.S.; revising
22 provisions relating to security and contracts for
23 goods or services to conform to the possibility of
24 contracting with a manager; creating s. 24.1115, F.S.;
25 providing for a management agreement under which the
26 lottery may be operated; providing intent; providing
27 definitions; limiting the duration of such an
28 agreement; providing limits on the games that may be
29 offered under such an agreement; providing for an
30 initial payment to the department by a manager;
31 providing for royalty payments by a manager; providing
32 for collection of funds in excess of a specified
33 baseline growth percentage to ensure that the manager
34 does not earn excess revenue; providing requirements
35 for the contents of a management agreement; requiring
36 periodic investigations of the performance by a
37 manager; providing for a request for qualifications
38 process to select a manager; providing for the public
39 records status of specified materials under existing
40 exemptions; providing for negotiations between one or
41 more offerors and the department; providing selection
42 procedures; requiring a public hearing; providing for
43 designation of a manager by the Governor; providing
44 for status of debt offering by the manager; providing
45 for a time period for challenges to designation of a
46 manager; providing department powers; prohibiting the
47 department from selling the authorization to manage
48 the lottery; providing that there is no prohibition on
49 additional legislative authorization of other forms of
50 gambling; amending s. 24.112, F.S.; revising
51 provisions concerning retailers of lottery tickets to
52 conform to the possibility of contracting with a
53 manager; amending s. 24.113, F.S.; providing that
54 provisions concerning minority participation also
55 apply if the lottery contracts with a manager;
56 amending ss. 24.114, 24.115, 24.1153, 24.117, 24.118,
57 and 24.120, F.S.; revising provisions relating to bank
58 deposits and control of lottery transactions, payment
59 of prizes, assignment of prizes payable in
60 installments, penalties for unlawful sale of lottery
61 tickets, breach of confidentiality, and unlawful
62 representation, and financial matters to conform to
63 the possibility of contracting with a manager;
64 amending s. 24.121, F.S.; revising provisions relating
65 to allocation of revenues and expenditure of funds for
66 public education to conform to the possibility of
67 contracting with a manager; providing for a minimum
68 allocation of proceeds received under a management
69 agreement to the Florida Bright Futures Scholarship
70 Program; amending ss. 24.122, 24.123, and 24.124,
71 F.S.; revising provisions relating to an exemption
72 from taxation, state preemption, inapplicability of
73 other laws, annual audit of financial records and
74 reports, responsibility for ticket accuracy, and
75 liability to conform to the possibility of contracting
76 with a manager; providing an effective date.
77
78 Be It Enacted by the Legislature of the State of Florida:
79
80 Section 1. Subsection (3) of section 20.317, Florida
81 Statutes, is amended to read:
82 20.317 Department of the Lottery.—There is created a
83 Department of the Lottery.
84 (3) The headquarters of the department shall be located in
85 Tallahassee. However, the department may establish such regional
86 offices throughout the state as the secretary deems necessary to
87 perform its duties concerning the efficient operation of the
88 state lottery.
89 Section 2. Section 24.101, Florida Statutes, is amended to
90 read:
91 24.101 Short title.—This chapter act may be cited as the
92 “Florida Public Education Lottery Act.”
93 Section 3. Section 24.102, Florida Statutes, is amended to
94 read:
95 24.102 Purpose and intent.—
96 (1) The purpose of this chapter act is to implement s. 15,
97 Art. X of the State Constitution in a manner that enables the
98 people of the state to benefit from significant additional
99 moneys for education and also enables the people of the state to
100 play the best lottery games available.
101 (2) The intent of the Legislature is:
102 (a) That the net proceeds of lottery games conducted
103 pursuant to this chapter act be used to support improvements in
104 public education and that such proceeds not be used as a
105 substitute for existing resources for public education.
106 (b) That the lottery games be operated by a department of
107 state government that functions as much as possible in the
108 manner of an entrepreneurial business enterprise or with the
109 assistance of an entrepreneurial business enterprise under a
110 management agreement overseen by the department. The Legislature
111 recognizes that the operation of a lottery is a unique activity
112 for state government and that structures and procedures
113 appropriate to the performance of other governmental functions
114 are not necessarily appropriate to the operation of a state
115 lottery.
116 (c) That the lottery games be operated by a self
117 supporting, revenue-producing department or with the assistance
118 of an entrepreneurial business enterprise under a management
119 agreement with government oversight.
120 (d) That the department be accountable to the Legislature
121 and the people of the state through a system of audits and
122 reports and through compliance with financial disclosure, open
123 meetings, and public records laws and that any entity contracted
124 with under a management agreement must also be accountable to
125 the Legislature and the people of the state.
126 Section 4. Section 24.103, Florida Statutes, is renumbered
127 and amended to read:
128 24.103 Definitions.—As used in this chapter act:
129 (1) “Department” means the Department of the Lottery.
130 (7)(2) “Secretary” means the secretary of the department.
131 (3) “Management agreement” means that agreement entered
132 into pursuant to which the state may contract with a manager to
133 provide management services to the lottery, although under such
134 an agreement the department shall continue to manage and operate
135 the lottery, and further pursuant to which the manager may
136 receive a certain share of lottery ticket sales or related
137 proceeds in consideration of the payment of a fee or fees to the
138 state.
139 (4) “Manager” means an entity that provides management
140 services to the lottery on behalf of the department under a
141 management agreement.
142 (5)(3) “Person” means any individual, firm, association,
143 joint adventure, partnership, estate, trust, syndicate,
144 fiduciary, corporation, or other group or combination and shall
145 include any agency or political subdivision of the state.
146 (2)(4) “Major procurement” means a procurement for a
147 contract for the printing of tickets for use in any lottery
148 game, consultation services for the startup of the lottery, any
149 goods or services involving the official recording for lottery
150 game play purposes of a player’s selections in any lottery game
151 involving player selections, any goods or services involving the
152 receiving of a player’s selection directly from a player in any
153 lottery game involving player selections, any goods or services
154 involving the drawing, determination, or generation of winners
155 in any lottery game, the security report services provided for
156 in this chapter act, or any goods and services relating to
157 marketing and promotion that which exceed a value of $25,000.
158 (6)(5) “Retailer” means a person who sells lottery tickets
159 on behalf of the department or the manager pursuant to a
160 contract.
161 (8)(6) “Vendor” means a person who provides or proposes to
162 provide goods or services to the department, but does not
163 include an employee of the department, a retailer, or a state
164 agency.
165 Section 5. Section 24.104, Florida Statutes, is amended to
166 read:
167 24.104 Department; purpose.—The purpose of the department
168 is to operate the state lottery as authorized by s. 15, Art. X
169 of the State Constitution with or without a manager so as to
170 maximize revenues in a manner consonant with the dignity of the
171 state and the welfare of its citizens.
172 Section 6. Subsections (2), (4), (6), (7), (9), (11), (15),
173 (17), (18), and (19) of section 24.105, Florida Statutes, are
174 amended to read:
175 24.105 Powers and duties of department.—The department
176 shall:
177 (2) Supervise and administer the operation of the lottery
178 with or without a manager in accordance with the provisions of
179 this chapter act and rules adopted pursuant thereto.
180 (4) Submit monthly and annual reports to the Governor, the
181 Chief Financial Officer, the President of the Senate, and the
182 Speaker of the House of Representatives disclosing the total
183 lottery revenues, prize disbursements, and other expenses of the
184 department during the preceding month or, if the lottery has
185 entered into a management agreement, comparable information
186 provided by the manager. The annual report shall additionally
187 describe the organizational structure of the department,
188 including its hierarchical structure, and shall identify the
189 divisions and bureaus created by the secretary and summarize the
190 departmental functions performed by each.
191 (6) Maintain weekly or more frequent records of lottery
192 transactions, including the distribution of tickets to
193 retailers, revenues received, claims for prizes, prizes paid,
194 and other financial transactions of the department. If the
195 department has entered into a management agreement, the
196 agreement shall require the manager to maintain comparable
197 information.
198 (7) Make a continuing study of the lottery to ascertain any
199 defects of this chapter act or rules adopted thereunder which
200 could result in abuses in the administration of the lottery;
201 make a continuing study of the operation and the administration
202 of similar laws in other states and of federal laws that which
203 may affect the lottery; and, if the department has not entered
204 into a management agreement, make a continuing study of the
205 reaction of the public to existing and potential features of the
206 lottery.
207 (9) Adopt rules governing the establishment and operation
208 of the state lottery, including:
209 (a)1. The type of lottery games to be conducted.
210 2. Regardless of whether the department has entered into a
211 management agreement, except that:
212 a.1. No name of an elected official shall appear on the
213 ticket or play slip of any lottery game or on any prize or on
214 any instrument used for the payment of prizes, unless such prize
215 is in the form of a state warrant.
216 b.2. No coins or currency shall be dispensed from any
217 electronic computer terminal or device used in any lottery game.
218 c.3. Other than as provided in sub-subparagraph d.
219 subparagraph 4., no terminal or device may be used for any
220 lottery game that which may be operated solely by the player
221 without the assistance of the retailer.
222 d.4. The only player-activated machine that which may be
223 utilized is a machine that which dispenses instant lottery game
224 tickets following the insertion of a coin or currency by a
225 ticket purchaser. To be authorized a machine must: be under the
226 supervision and within the direct line of sight of the lottery
227 retailer to ensure that the machine is monitored and only
228 operated by persons at least 18 years of age and; be capable of
229 being electronically deactivated by the retailer to prohibit use
230 by persons less than 18 years of age through the use of a
231 lockout device that maintains the machine’s deactivation for a
232 period of no less than 5 minutes unless the machine uses a
233 method of verifying the age of an operator that the department
234 certifies is equivalent or superior to line-of-sight monitoring
235 and lockout by the retailer. Such a machine must also; and be
236 designed to prevent its use or conversion for use in any manner
237 other than the dispensing of instant lottery tickets. Authorized
238 machines may dispense change to players purchasing tickets but
239 may not be utilized for paying the holders of winning tickets of
240 any kind. At least one clerk must be on duty at the lottery
241 retailer while the machine is in operation. However, at least
242 two clerks must be on duty at any lottery location that which
243 has violated s. 24.1055.
244 (b) The sales price of tickets.
245 (c) The number and sizes of prizes.
246 (d) The method of selecting winning tickets. However,
247 regardless of whether the department has entered into a
248 management agreement, if a lottery game involves a drawing, the
249 drawing shall be public and witnessed by an accountant employed
250 by an independent certified public accounting firm. The
251 equipment used in the drawing shall be inspected before and
252 after the drawing.
253 (e) The manner of payment of prizes to holders of winning
254 tickets.
255 (f) The frequency of drawings or selections of winning
256 tickets.
257 (g) The number and type of locations at which tickets may
258 be purchased.
259 (h) The method to be used in selling tickets.
260 (i) The manner and amount of compensation of retailers.
261 (j) Such other matters necessary or desirable for the
262 efficient or economical operation of the lottery or for the
263 convenience of the public.
264 (11) In the selection of games and method of selecting
265 winning tickets, be sensitive to the impact of the lottery upon
266 the pari-mutuel industry and, accordingly, the department or the
267 manager, if any, may use for any game the theme of horseracing,
268 dogracing, or jai alai and may allow a lottery game to be based
269 upon a horserace, dograce, or jai alai activity so long as the
270 outcome of such lottery game is determined entirely by chance.
271 (15) Or the manager, if any, shall have the authority to
272 charge fees to persons applying for contracts as vendors or
273 retailers, which fees are reasonably calculated to cover the
274 costs of investigations and other activities related to the
275 processing of the application.
276 (17) Or the manager, if any, shall, in accordance with the
277 provisions of this chapter act, enter into contracts with
278 retailers so as to provide adequate and convenient availability
279 of tickets to the public for each game.
280 (18) Or the manager, if any, shall have the authority to
281 enter into agreements with other states for the operation and
282 promotion of a multistate lottery if such agreements are in the
283 best interest of the state lottery. The authority conferred by
284 this subsection is not effective until 1 year after the first
285 day of lottery ticket sales.
286 (19) Employ division directors and other staff as may be
287 necessary to carry out the provisions of this chapter act;
288 however:
289 (a) No person shall be employed by the department who has
290 been convicted of, or entered a plea of guilty or nolo
291 contendere to, a felony committed in the preceding 10 years,
292 regardless of adjudication, unless the department determines
293 that:
294 1. The person has been pardoned or his or her civil rights
295 have been restored; or
296 2. Subsequent to such conviction or entry of plea the
297 person has engaged in the kind of law-abiding commerce and good
298 citizenship that would reflect well upon the integrity of the
299 lottery.
300 (b) No officer or employee of the department having
301 decisionmaking authority shall participate in any decision
302 involving any vendor or retailer with whom the officer or
303 employee has a financial interest. No such officer or employee
304 may participate in any decision involving any vendor or retailer
305 with whom the officer or employee has discussed employment
306 opportunities without the approval of the secretary or, if such
307 officer is the secretary, without the approval of the Governor.
308 Any officer or employee of the department shall notify the
309 secretary of any such discussion or, if such officer is the
310 secretary, he or she shall notify the Governor. A violation of
311 this paragraph is punishable in accordance with s. 112.317.
312 (c) No officer or employee of the department who leaves the
313 employ of the department shall represent any vendor or retailer
314 or the manager, if any, before the department regarding any
315 specific matter in which the officer or employee was involved
316 while employed by the department, for a period of 1 year
317 following cessation of employment with the department. A
318 violation of this paragraph is punishable in accordance with s.
319 112.317.
320 (d) The department shall establish and maintain a personnel
321 program for its employees, including a personnel classification
322 and pay plan which may provide any or all of the benefits
323 provided in the Senior Management Service or Selected Exempt
324 Service. Each officer or employee of the department shall be a
325 member of the Florida Retirement System. The retirement class of
326 each officer or employee shall be the same as other persons
327 performing comparable functions for other agencies. Employees of
328 the department shall serve at the pleasure of the secretary and
329 shall be subject to suspension, dismissal, reduction in pay,
330 demotion, transfer, or other personnel action at the discretion
331 of the secretary. Such personnel actions are exempt from the
332 provisions of chapter 120. All employees of the department are
333 exempt from the Career Service System provided in chapter 110
334 and, notwithstanding the provisions of s. 110.205(5), are not
335 included in either the Senior Management Service or the Selected
336 Exempt Service. However, all employees of the department are
337 subject to all standards of conduct adopted by rule for career
338 service and senior management employees pursuant to chapter 110.
339 In the event of a conflict between standards of conduct
340 applicable to employees of the Department of the Lottery the
341 more restrictive standard shall apply. Interpretations as to the
342 more restrictive standard may be provided by the Commission on
343 Ethics upon request of an advisory opinion pursuant to s.
344 112.322(3)(a), for purposes of this subsection the opinion shall
345 be considered final action.
346 (e) If the department enters into a management agreement,
347 no employee or contractor of the manager shall receive
348 membership in the Florida Retirement System or any other state
349 retirement or other state employee benefits on the basis of such
350 employment or contract.
351 Section 7. Section 24.107, Florida Statutes, is amended to
352 read:
353 24.107 Advertising and promotion of lottery games.—
354 (1) The Legislature recognizes the need for extensive and
355 effective advertising and promotion of lottery games. It is the
356 intent of the Legislature that such advertising and promotion be
357 consistent with the dignity and integrity of the state. In
358 advertising the value of a prize that will be paid over a period
359 of years, the department or the manager, if any, may refer to
360 the sum of all prize payments over the period.
361 (2) The department or the manager, if any, may act as a
362 retailer and may conduct promotions that which involve the
363 dispensing of lottery tickets free of charge.
364 Section 8. Subsections (2), (5), and (7) of section 24.108,
365 Florida Statutes, are amended to read:
366 24.108 Division of Security; duties; security report.—
367 (2) The director and all investigators employed by the
368 division shall meet the requirements for employment and
369 appointment provided by s. 943.13 and shall satisfy the
370 requirements for certification established by the Criminal
371 Justice Standards and Training Commission pursuant to chapter
372 943. The director and such investigators shall be designated law
373 enforcement officers and shall have the power to investigate and
374 arrest for any alleged violation of this chapter act or any rule
375 adopted pursuant thereto, or any law of this state. Such law
376 enforcement officers may enter upon any premises in which
377 lottery tickets are sold, manufactured, printed, or stored
378 within the state for the performance of their lawful duties and
379 may take with them any necessary equipment, and such entry shall
380 not constitute a trespass. In any instance in which there is
381 reason to believe that a violation has occurred, such officers
382 have the authority, without warrant, to search and inspect any
383 premises where the violation is alleged to have occurred or is
384 occurring. Any such officer may, consistent with the United
385 States and Florida Constitutions, seize or take possession of
386 any papers, records, tickets, currency, or other items related
387 to any alleged violation.
388 (5) The Department of Law Enforcement shall provide
389 assistance in obtaining criminal history information relevant to
390 investigations required for honest, secure, and exemplary
391 lottery operations, and such other assistance as may be
392 requested by the secretary and agreed to by the executive
393 director of the Department of Law Enforcement. Any other state
394 agency, including the Department of Business and Professional
395 Regulation and the Department of Revenue, shall, upon request,
396 provide the Department of the Lottery with any information
397 relevant to any investigation conducted pursuant to this chapter
398 act. The Department of the Lottery shall maintain the
399 confidentiality of any confidential information it receives from
400 any other agency. The Department of the Lottery shall reimburse
401 any agency for the actual cost of providing any assistance
402 pursuant to this subsection.
403 (7)(a) After the first full year of sales of tickets to the
404 public, or sooner if the secretary deems necessary, The
405 department shall, as it deems appropriate, but at least once
406 every 2 years engage an independent firm experienced in security
407 procedures, including, but not limited to, computer security and
408 systems security, to conduct a comprehensive study and
409 evaluation of all aspects of security in the operation of the
410 department.
411 (b) The portion of the security report containing the
412 overall evaluation of the department in terms of each aspect of
413 security shall be presented to the Governor, the President of
414 the Senate, and the Speaker of the House of Representatives. The
415 portion of the security report containing specific
416 recommendations shall be confidential and shall be presented
417 only to the secretary, the Governor, and the Auditor General;
418 however, upon certification that such information is necessary
419 for the purpose of effecting legislative changes, such
420 information shall be disclosed to the President of the Senate
421 and the Speaker of the House of Representatives, who may
422 disclose such information to members of the Legislature and
423 legislative staff as necessary to effect such purpose. However,
424 any person who receives a copy of such information or other
425 information that which is confidential pursuant to this chapter
426 act or rule of the department shall maintain its
427 confidentiality. The confidential portion of the report is
428 exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
429 of the State Constitution.
430 (c) Thereafter, similar studies of security shall be
431 conducted as the department deems appropriate but at least once
432 every 2 years.
433 Section 9. Subsection (1) section 24.111, Florida Statutes,
434 is amended to read:
435 24.111 Vendors; disclosure and contract requirements.—
436 (1) The department may enter into contracts for the
437 purchase, lease, or lease-purchase of such goods or services as
438 are necessary for effectuating the purposes of this chapter act.
439 The department may not contract with any person or entity for
440 the total operation and administration of the state lottery
441 established by this chapter as provided in s. 24.1115 or act but
442 may make procurements that which integrate functions such as
443 lottery game design, supply of goods and services, and
444 advertising. In all procurement decisions, the department shall
445 take into account the particularly sensitive nature of the state
446 lottery and shall consider the competence, quality of product,
447 experience, and timely performance of the vendors in order to
448 promote and ensure security, honesty, fairness, and integrity in
449 the operation and administration of the lottery and the
450 objective of raising net revenues for the benefit of the public
451 purpose described in this chapter act.
452 Section 10. Section 24.1115, Florida Statutes, is created
453 to read:
454 24.1115 Management agreement.—
455 (1) In construing this section, it is the intent of the
456 Legislature that the manager be accountable to the Legislature
457 and the people of this state through a system of audits and
458 reports and by complying with the financial disclosure
459 requirements of this section. The powers conferred by this
460 section are in addition and supplemental to the powers conferred
461 by any other law. If any other law or rule is inconsistent with
462 this section, this section is controlling as to any management
463 agreement entered into under this section.
464 (2) As used in this section, the term:
465 (a) “Offeror” means a person or group of persons that
466 responds to a request for qualifications under this section.
467 (b) “Request for qualifications” means all materials and
468 documents prepared by the department to solicit the following
469 from offerors:
470 1. Statements of qualifications.
471 2. Proposals to enter into a management agreement.
472 (c) “Selected offer” means the final offer of an offeror
473 that is the preliminary selection to be the manager for the
474 lottery under subsection (12).
475 (3)(a) This section contains full and complete authority
476 for a management agreement between the department and a manager
477 and any rules adopted thereunder. No law, procedure, proceeding,
478 publication, notice, consent, approval, order, or act by the
479 department or any other officer, department, agency, or
480 instrumentality of the state or any political subdivision is
481 required for the department to enter into a management agreement
482 under this section.
483 (b) This section contains full and complete authority for
484 the department to approve any subcontracts entered into by a
485 manager under the terms of a management agreement.
486 (4) Subject to the other provisions of this section, the
487 department may enter into a management agreement with a manager
488 for a term not to exceed 30 years.
489 (5) The department may not enter into a management
490 agreement that authorizes a manager to operate any of the
491 following games or a game simulating any of the following games:
492 (a) Video lottery games.
493 (b) Pari-mutuel wagering on any form of racing.
494 (c) A game in which winners are selected on the results of
495 a race or sporting event.
496 (d) Any other game commonly considered to be a form of
497 gambling that is not a game or a variation of a game that the
498 department operated before the management agreement is executed
499 or is operating on the date the management agreement is
500 executed.
501 (6)(a) The management agreement must establish a
502 substantial benchmark amount. The management agreement must
503 require the manager to make an initial payment to the department
504 on the effective date of the management agreement in an amount
505 that exceeds the benchmark amount established in the management
506 agreement.
507 (b) The initial payment required under paragraph (a) shall
508 be deposited as provided in s. 24.121.
509 (c) If the manager fails to make any payment under this
510 section by the due date of the payment, the management agreement
511 is terminated.
512 (7)(a) The management agreement must require that all
513 lottery proceeds initially be directly deposited with the state.
514 The state shall provide sums due to the manager under the
515 agreement only after all of the manager’s obligations to the
516 state have been satisfied.
517 (b) The state shall retain an annual amount at least equal
518 to the lottery proceeds for the last fiscal year preceding the
519 agreement beginning on a date specified in the management
520 agreement and occurring during the first year after the
521 execution of the management agreement. For the purposes of this
522 subsection, such annual amount shall be referred to as the
523 “state annuity.” The state annuity received under this
524 subsection shall be deposited as provided in s. 24.121.
525 (c) The management agreement must include the following
526 provisions to ensure that the manager does not earn excess
527 revenue under the management agreement:
528 1. The Office of Policy and Budget in the Executive Office
529 of the Governor shall calculate the percentage rate of average
530 annual growth in gross revenue earned by the department during
531 the last 5 full state fiscal years preceding the commencement of
532 the management agreement. For purposes of this subsection, this
533 percentage is referred to as the “baseline growth percentage.“
534 2. Beginning with the second full state fiscal year after
535 the execution of the management agreement, the Office of Policy
536 and Budget in the Executive Office of the Governor shall for
537 each state fiscal year calculate the growth, expressed as a
538 percentage, in gross revenue earned by the manager under the
539 management agreement, as compared to the preceding state fiscal
540 year.
541 3. The department shall establish an excess payments
542 account for purposes of this paragraph. Any earnings from money
543 in the excess payments account accrue to the account. Money in
544 the excess payments account may be used only to make payments to
545 a manager as required by this paragraph and to receive payments
546 from a manager as required by this paragraph.
547 4. If the percentage calculated by the Office of Policy and
548 Budget in the Executive Office of the Governor under
549 subparagraph 2. for a particular state fiscal year exceeds the
550 baseline growth percentage, the manager must make an additional
551 payment to the department. The amount of the additional payment
552 for the state fiscal year is equal to the gross revenue earned
553 by the manager from lottery tickets in the state fiscal year
554 multiplied by one-half the difference between the percentage
555 calculated by the Office of Policy and Budget in the Executive
556 Office of the Governor under subparagraph 2. for the state
557 fiscal year and the baseline growth percentage. The department
558 shall deposit any additional payment made by the manager under
559 this subparagraph into the excess payments account.
560 5. If the baseline growth percentage exceeds the percentage
561 calculated by the Office of Policy and Budget in the Executive
562 Office of the Governor under subparagraph 2. for a particular
563 state fiscal year, the department must make a payment to the
564 manager from the excess payments account. However, the
565 department is required to make a payment to the manager only if
566 the excess payments account has a positive balance. The amount
567 of the payment by the department for the state fiscal year is
568 equal to the lesser of:
569 a. The result of the gross revenue earned by the manager
570 from lottery tickets in the state fiscal year multiplied by one
571 half the difference between the baseline growth percentage and
572 the percentage calculated by the Office of Policy and Budget in
573 the Executive Office of the Governor under subparagraph 2. for
574 the state fiscal year; or
575 b. The balance in the excess payments account.
576 6. The management agreement must specify the time by which
577 a payment required under this paragraph shall be made.
578 7. If at the expiration or termination of the management
579 agreement there is money remaining in the excess payments
580 account, it shall be retained by the department and deposited as
581 provided in s. 24.121.
582 (8) A management agreement must contain the following:
583 (a) The original term of the management agreement.
584 (b) A requirement that the manager locate its principal
585 office within this state.
586 (c) So long as the manager complies with all the conditions
587 of the agreement under the oversight of the department, the
588 manager shall perform its duties and obligations with respect to
589 management of the operation of the lottery, including the
590 following:
591 1. The right to use, or ownership of, equipment and other
592 assets used in the operation of the lottery.
593 2. The rights and obligations under contracts with
594 retailers and vendors.
595 3. The implementation of a comprehensive security program
596 by the manager.
597 4. The implementation of a comprehensive system of internal
598 audits.
599 5. The implementation of a program by the manager to curb
600 compulsive gambling by persons playing the lottery.
601 6. A system for determining the following:
602 a. The type of lottery games to be conducted.
603 b. The method of selecting winning tickets.
604 c. The manner of payment of prizes to holders of winning
605 tickets.
606 d. The frequency of drawings of winning tickets.
607 e. The method to be used in selling tickets.
608 f. A system for verifying the validity of tickets claimed
609 to be winning tickets.
610 g. The basis upon which retailer commissions are
611 established by the manager.
612 h. Minimum payouts.
613 7. A requirement that advertising and promotion must be
614 consistent with the dignity and integrity of the state.
615 (d) Guidelines to ensure that advertising and promoting of
616 the lottery by the manager are not misleading and fairly balance
617 the potential benefits and the potential costs and risks of
618 playing lottery games.
619 (e) A code of ethics for the manager’s officers and
620 employees.
621 (f) A requirement that the department monitor the manager’s
622 practices and take action that the department considers
623 appropriate to ensure that the manager is in compliance with the
624 terms of the management agreement, while allowing the manager,
625 unless specifically prohibited by law or the management
626 agreement, to negotiate and sign its own contracts with vendors.
627 (g) A provision requiring the manager to periodically file
628 appropriate financial statements in a form and manner acceptable
629 to the department.
630 (h) Cash reserve requirements.
631 (i) Procedural requirements for obtaining approval by the
632 department when a management agreement or an interest in a
633 management agreement is sold, assigned, transferred, or pledged
634 as collateral to secure financing. A management agreement or an
635 interest in a management agreement may not be sold, assigned,
636 transferred, or pledged as collateral to secure financing
637 without the approval of the department.
638 (j) Grounds for termination of the management agreement by
639 the department or the manager.
640 (k) Procedures for amendment of the agreement.
641 (l) A provision prohibiting the department from entering
642 into another management agreement under this section as long as
643 the original management agreement has not been terminated.
644 (m) The transition of rights and obligations, including any
645 associated equipment or other assets used in the operation of
646 the lottery, from the manager to any successor manager of the
647 lottery, including the department, following the termination of
648 or foreclosure upon the management agreement.
649 (n) Ownership of all copyrights, trademarks, and service
650 marks by the department in the name of the state and that any
651 use of them by the manager shall only be for the purpose of
652 fulfilling its obligations under the management agreement during
653 the term of the agreement.
654 (o) Minority participation as provided in s. 24.113.
655 (9)(a) The manager shall undergo a complete investigation
656 every 3 years by the department to determine whether the manager
657 remains in compliance with this chapter and the management
658 agreement.
659 (b) The manager shall bear the cost of an investigation or
660 reinvestigation of the manager under this subsection.
661 (10)(a) Before the department enters into a management
662 agreement pursuant to this section, the secretary, as provided
663 in subsection (17), may retain an advisor or advisors to assess
664 the fiscal feasibility of such an agreement and help determine
665 whether to proceed. Such an advisor may also be retained by the
666 department to represent the department in the request for
667 qualifications process, if one is commenced. If the secretary
668 decides to pursue the possibility of a management agreement, a
669 request for qualifications must be issued as set forth in this
670 section. A request for qualifications for a management agreement
671 may be issued in one or more phases.
672 (b) A request for qualifications must include the
673 following:
674 1. The factors or criteria that will be used in evaluating
675 an offeror’s statement of qualifications and proposal.
676 2. A statement that a proposal must be accompanied by
677 evidence of the offeror’s financial responsibility.
678 3. A statement concerning whether discussions may be
679 conducted with the offerors for the purpose of clarification to
680 ensure full understanding of and responsiveness to the
681 solicitation requirements.
682 4. A statement concerning any other information to be
683 considered in evaluating the offeror’s qualifications and
684 proposal.
685 (c) Notice of a request for qualifications shall be
686 published twice at least 7 calendar days apart, with the second
687 publication made at least 7 days before any initial submission
688 is due.
689 (d) As provided in a request for qualifications,
690 discussions may be conducted with the offerors for the purpose
691 of clarification to ensure full understanding of and
692 responsiveness to the solicitation requirements.
693 (11) The contents of proposals are competitive sealed
694 replies in response to an invitation to negotiate for purposes
695 of s. 119.071(1)(b) and are exempt from s. 119.07(1) and s.
696 24(a), Art. I of the State Constitution until disclosure of the
697 contents that are not otherwise exempt under s. 119.071 or other
698 law is required under s. 119.071(1)(b).
699 (12)(a) The department may negotiate with one or more
700 offerors the department determines are responsible and
701 reasonably capable of managing the lottery and may seek to
702 obtain a final offer from one or more of those offerors.
703 (b) The department shall consider the statement of
704 qualifications and the proposals to enter into a management
705 agreement that are submitted in response to a request for
706 qualifications in making a determination under this section,
707 including the following as they apply to the offeror and its
708 partners, if any:
709 1. Expertise, qualifications, competence, skills, and plan
710 to perform obligations under the management agreement in
711 accordance with the management agreement.
712 2. Financial strength, including capitalization and
713 available financial resources.
714 3. Experience in operating government-authorized lotteries
715 and gaming and other similar projects and the quality of any
716 past or present performance on similar or equivalent
717 engagements.
718 4. Integrity, background, and reputation.
719 (c) The requirements set forth in paragraph (b) also apply
720 to the approval of any successor manager.
721 (13)(a) After the final offers from offerors have been
722 negotiated under subsection (12), the department shall:
723 1. Make a preliminary selection of an offeror as the
724 manager for the lottery; or
725 2. Terminate the request for qualifications process.
726 (b) If the department makes a preliminary selection of the
727 manager under this subsection, the department shall schedule a
728 public hearing on the preliminary selection and provide public
729 notice of the hearing at least 7 days before the hearing. The
730 notice must include the following:
731 1. The date, time, and place of the hearing.
732 2. The subject matter of the hearing.
733 3. A brief description of the management agreement to be
734 awarded.
735 4. The identity of the offeror that has been preliminarily
736 selected as the manager.
737 5. The address and telephone number of the department.
738 6. A statement indicating that, subject to subsection (11),
739 and except for those parts that are confidential under s.
740 119.071 or other applicable law, the selected offer and an
741 explanation of the basis upon which the preliminary selection
742 was made are available for public inspection and copying at the
743 principal office of the department during regular business hours
744 and, to the extent feasible, on the Internet.
745 (c) Subject to subsection (11), and except for those parts
746 that are confidential under s. 119.071 or other applicable law,
747 the selected offer and a written explanation of the basis upon
748 which the preliminary selection was made shall be made available
749 for inspection and copying in accordance with s. 119.07 and, to
750 the extent feasible, on the Internet at least 7 calendar days
751 before the hearing scheduled under this section.
752 (d) At the hearing, the department shall allow the public
753 to be heard on the preliminary selection.
754 (14)(a) After the hearing required under subsection (13),
755 the department shall determine if a management agreement should
756 be entered into with the offeror that submitted the selected
757 offer. If the department makes a favorable determination, the
758 department shall submit the determination to the Governor.
759 (b) After review of the department’s determination, the
760 Governor may accept or reject the department’s determination. If
761 the Governor accepts the department’s determination, the
762 Governor shall designate the offeror who submitted the selected
763 offer as the manager for the lottery.
764 (c) After the Governor designates the manager, the
765 department may execute a management agreement with the
766 designated manager.
767 (15) The manager may finance its obligations with respect
768 to the lottery and the management agreement in the amounts and
769 upon the terms and conditions determined by the manager.
770 However, any bonds, debt, other securities, or other financing
771 issued for the purposes of this section shall not be considered
772 to constitute a debt of the state or any political subdivision
773 of the state or a pledge of the faith and credit of the state or
774 any political subdivision of the state.
775 (16) An action to contest the validity of a management
776 agreement entered into under this section may not be brought
777 after the 15th day after the publication of the notice of the
778 designation of the manager under the management agreement as
779 provided in subsection (14).
780 (17)(a) The department must use appropriate experts and
781 professionals needed to conduct a competitive bidding proceeding
782 as required under this section and may use the services of
783 outside professionals to the extent necessary to carry out its
784 obligations under this section.
785 (b) The department may exercise any powers provided under
786 this section in participation or cooperation with any other
787 governmental entity and enter into any contracts to facilitate
788 that participation or cooperation without compliance with any
789 other statute.
790 (c) The department may make and enter into all contracts
791 and agreements necessary or incidental to the performance of the
792 department’s duties under this section and the execution of the
793 department’s powers under this section. These contracts or
794 agreements are not subject to any approval by any other
795 governmental entity and may be for any term of years within the
796 time period of the management agreement under subsection (4) and
797 contain any terms that are considered reasonable by the
798 department.
799 (d) The department may make and enter into all contracts
800 and agreements with a state agency necessary or incidental to
801 the performance of the duties and the execution of the powers
802 granted to the department or the state agency in accordance with
803 this section or the management agreement. These contracts or
804 agreements are not subject to approval by any other governmental
805 entity and may be for any term of years and contain any terms
806 that are considered reasonable by the department or the state
807 agency.
808 (18)(a) The department may not sell the authorization to
809 operate the lottery.
810 (b) Any tangible personal property used exclusively in
811 connection with the lottery that is owned by the department and
812 leased to the manager shall be owned by the department in the
813 name of the state and shall be considered to be public property
814 devoted to an essential public and governmental function.
815 (19) The department may exercise any of its powers under
816 this chapter or any other law as necessary or desirable for the
817 execution of the department’s powers under this section.
818 (20) Neither this section nor any management agreement
819 entered into under this section prohibits the Legislature from
820 authorizing forms of gambling that are not in direct competition
821 with the lottery.
822 Section 11. Section 24.112, Florida Statutes, is amended to
823 read:
824 24.112 Retailers of lottery tickets.—
825 (1) If the department does not enter into a management
826 agreement, the department shall adopt promulgate rules
827 specifying the terms and conditions for contracting with
828 retailers who will best serve the public interest and promote
829 the sale of lottery tickets.
830 (2) If the department does not enter into a management
831 agreement, in the selection of retailers, the department shall
832 consider factors such as financial responsibility, integrity,
833 reputation, accessibility of the place of business or activity
834 to the public, security of the premises, the sufficiency of
835 existing retailers to serve the public convenience, and the
836 projected volume of the sales for the lottery game involved. In
837 the consideration of these factors, the department may require
838 the information it deems necessary of any person applying for
839 authority to act as a retailer. However, the department may not
840 establish a limitation upon the number of retailers and shall
841 make every effort to allow small business participation as
842 retailers. It is the intent of the Legislature that retailer
843 selections be based on business considerations and the public
844 convenience and that retailers be selected without regard to
845 political affiliation.
846 (3) If the department does not enter into a management
847 agreement, the department may shall not contract with any person
848 as a retailer who:
849 (a) Is less than 18 years of age.
850 (b) Is engaged exclusively in the business of selling
851 lottery tickets; however, this paragraph shall not preclude the
852 department from selling lottery tickets.
853 (c) Has been convicted of, or entered a plea of guilty or
854 nolo contendere to, a felony committed in the preceding 10
855 years, regardless of adjudication, unless the department
856 determines that:
857 1. The person has been pardoned or the person’s civil
858 rights have been restored;
859 2. Subsequent to such conviction or entry of plea the
860 person has engaged in the kind of law-abiding commerce and good
861 citizenship that would reflect well upon the integrity of the
862 lottery; or
863 3. If the person is a firm, association, partnership,
864 trust, corporation, or other entity, the person has terminated
865 its relationship with the individual whose actions directly
866 contributed to the person’s conviction or entry of plea.
867 (4) If the department does not enter into a management
868 agreement, the department shall issue a certificate of authority
869 to each person with whom it contracts as a retailer for purposes
870 of display pursuant to subsection (6). The issuance of the
871 certificate does shall not confer upon the retailer any right
872 apart from that specifically granted in the contract. The
873 authority to act as a retailer is shall not be assignable or
874 transferable.
875 (5) Any contract executed by the department under pursuant
876 to this section shall specify the reasons for any suspension or
877 termination of the contract by the department, including, but
878 not limited to:
879 (a) Commission of a violation of this chapter act or rule
880 adopted pursuant thereto.
881 (b) Failure to accurately account for lottery tickets,
882 revenues, or prizes as required by the department.
883 (c) Commission of any fraud, deceit, or misrepresentation.
884 (d) Insufficient sale of tickets.
885 (e) Conduct prejudicial to public confidence in the
886 lottery.
887 (f) Any material change in any matter considered by the
888 department in executing the contract with the retailer.
889 (6) Every retailer shall post and keep conspicuously
890 displayed in a location on the premises accessible to the public
891 its certificate of authority and, with respect to each game, a
892 statement supplied by the department or the manager of the
893 estimated odds of winning some prize for the game.
894 (7) No contract with a retailer shall authorize the sale of
895 lottery tickets at more than one location, and a retailer may
896 sell lottery tickets only at the location stated on the
897 certificate of authority.
898 (8) If the department does not enter into a management
899 agreement, with respect to any retailer whose rental payments
900 for premises are contractually computed, in whole or in part, on
901 the basis of a percentage of retail sales, and where such
902 computation of retail sales is not explicitly defined to include
903 sales of tickets in a state-operated lottery, the compensation
904 received by the retailer from the department shall be deemed to
905 be the amount of the retail sale for the purposes of such
906 contractual compensation.
907 (9) If the department does not enter into a management
908 agreement:
909 (a) The department may require every retailer to post an
910 appropriate bond as determined by the department, using an
911 insurance company acceptable to the department, in an amount not
912 to exceed twice the average lottery ticket sales of the retailer
913 for the period within which the retailer is required to remit
914 lottery funds to the department. For the first 90 days of sales
915 of a new retailer, the amount of the bond may not exceed twice
916 the average estimated lottery ticket sales for the period within
917 which the retailer is required to remit lottery funds to the
918 department. This paragraph does shall not apply to lottery
919 tickets that which are prepaid by the retailer.
920 (b) In lieu of such bond, the department may purchase
921 blanket bonds covering all or selected retailers or may allow a
922 retailer to deposit and maintain with the Chief Financial
923 Officer securities that are interest bearing or accruing and
924 that, with the exception of those specified in subparagraphs 1.
925 and 2., are rated in one of the four highest classifications by
926 an established nationally recognized investment rating service.
927 Securities eligible under this paragraph shall be limited to:
928 1. Certificates of deposit issued by solvent banks or
929 savings associations organized and existing under the laws of
930 this state or under the laws of the United States and having
931 their principal place of business in this state.
932 2. United States bonds, notes, and bills for which the full
933 faith and credit of the government of the United States is
934 pledged for the payment of principal and interest.
935 3. General obligation bonds and notes of any political
936 subdivision of the state.
937 4. Corporate bonds of any corporation that is not an
938 affiliate or subsidiary of the depositor.
939
940 Such securities shall be held in trust and shall have at all
941 times a market value at least equal to an amount required by the
942 department.
943 (10) Every contract entered into by the department pursuant
944 to this section shall contain a provision for payment of
945 liquidated damages to the department for any breach of contract
946 by the retailer.
947 (11) The department shall establish procedures by which
948 each retailer shall account for all tickets sold by the retailer
949 and account for all funds received by the retailer from such
950 sales. The contract with each retailer shall include provisions
951 relating to the sale of tickets, payment of moneys to the
952 department, reports, service charges, and interest and
953 penalties, if necessary, as the department shall deem
954 appropriate.
955 (12) No payment by a retailer to the department for tickets
956 shall be in cash. All such payments shall be in the form of a
957 check, bank draft, electronic fund transfer, or other financial
958 instrument authorized by the secretary.
959 (13) Each retailer shall provide accessibility for disabled
960 persons on habitable grade levels. This subsection does not
961 apply to a retail location that which has an entrance door
962 threshold more than 12 inches above ground level. As used herein
963 and for purposes of this subsection only, the term
964 “accessibility for disabled persons on habitable grade levels”
965 means that retailers shall provide ramps, platforms, aisles and
966 pathway widths, turnaround areas, and parking spaces to the
967 extent these are required for the retailer’s premises by the
968 particular jurisdiction where the retailer is located.
969 Accessibility shall be required to only one point of sale of
970 lottery tickets for each lottery retailer location. The
971 requirements of this subsection shall be deemed to have been met
972 if, in lieu of the foregoing, disabled persons can purchase
973 tickets from the retail location by means of a drive-up window,
974 provided the hours of access at the drive-up window are not less
975 than those provided at any other entrance at that lottery
976 retailer location. Inspections for compliance with this
977 subsection shall be performed by those enforcement authorities
978 responsible for enforcement pursuant to s. 553.80 in accordance
979 with procedures established by those authorities. Those
980 enforcement authorities shall provide to the Department of the
981 Lottery a certification of noncompliance for any lottery
982 retailer not meeting such requirements.
983 (14) The secretary may, after filing with the Department of
984 State his or her manual signature certified by the secretary
985 under oath, execute or cause to be executed contracts between
986 the department and retailers by means of engraving, imprinting,
987 stamping, or other facsimile signature.
988 Section 12. Section 24.113, Florida Statutes, is amended to
989 read:
990 24.113 Minority participation.—
991 (1) It is the intent of the Legislature that the department
992 or the manager, if any, encourage participation by minority
993 business enterprises as defined in s. 288.703. Accordingly, 15
994 percent of the retailers shall be minority business enterprises
995 as defined in s. 288.703(2); however, no more than 35 percent of
996 such retailers shall be owned by the same type of minority
997 person, as defined in s. 288.703(3). The department or the
998 manager, if any, is encouraged to meet the minority business
999 enterprise procurement goals set forth in s. 287.09451 in the
1000 procurement of commodities, contractual services, construction,
1001 and architectural and engineering services. This section shall
1002 not preclude or prohibit a minority person from competing for
1003 any other retailing or vending agreement awarded by the
1004 department or the manager.
1005 (2) The department or the manager, if any, shall is
1006 directed to undertake training programs and other educational
1007 activities to enable minority persons to compete for such
1008 contracts on an equal basis.
1009 Section 13. Section 24.114, Florida Statutes, is amended to
1010 read:
1011 24.114 Bank deposits and control of lottery transactions.—
1012 (1) All moneys received by each retailer from the operation
1013 of the state lottery, including, but not limited to, all ticket
1014 sales, interest, gifts, and donations, less the amount retained
1015 as compensation for the sale of the tickets and the amount paid
1016 out as prizes, shall be remitted to the department or deposited
1017 in a qualified public depository, as defined in s. 280.02, as
1018 directed by the department. The department shall have the
1019 responsibility for all administrative functions related to the
1020 receipt of funds. The department may also require each retailer
1021 to file with the department reports of the retailer’s receipts
1022 and transactions in the sale of lottery tickets in such form and
1023 containing such information as the department may require. The
1024 department may require any person, including a qualified public
1025 depository, to perform any function, activity, or service in
1026 connection with the operation of the lottery as it may deem
1027 advisable pursuant to this chapter act and rules of the
1028 department, and such functions, activities, or services shall
1029 constitute lawful functions, activities, and services of such
1030 person.
1031 (2) The department may require retailers to establish
1032 separate electronic funds transfer accounts for the purpose of
1033 receiving moneys from ticket sales, making payments to the
1034 department, and receiving payments from the department.
1035 (3) Each retailer is liable to the department for any and
1036 all tickets accepted or generated by any employee or
1037 representative of that retailer, and the tickets shall be deemed
1038 to have been purchased by the retailer unless returned to the
1039 department within the time and in the manner prescribed by the
1040 department. All moneys received by retailers from the sale of
1041 lottery tickets, less the amount retained as compensation for
1042 the sale of tickets and the amount paid out as prizes by the
1043 retailer, shall be held in trust prior to delivery to the
1044 department or electronic transfer to the Operating Trust Fund.
1045 Section 14. Section 24.115, Florida Statutes, is amended to
1046 read:
1047 24.115 Payment of prizes.—
1048 (1) The department shall promulgate rules to establish a
1049 system of verifying the validity of tickets claimed to win
1050 prizes and to effect payment of such prizes; however, the
1051 following shall apply whether the department does or does not
1052 enter into a management agreement:
1053 (a) The right of any person to a prize, other than a prize
1054 that is payable in installments over time, is not assignable.
1055 However, any prize, to the extent that it has not been assigned
1056 or encumbered pursuant to s. 24.1153, may be paid to the estate
1057 of a deceased prize winner or to a person designated pursuant to
1058 an appropriate court order. A prize that is payable in
1059 installments over time is assignable, but only pursuant to an
1060 appropriate court order as provided in s. 24.1153.
1061 (b) No prize shall be paid to any person under the age of
1062 18 years unless the winning ticket was lawfully purchased and
1063 made a gift to the minor. In such case, the department or the
1064 manager, if a management agreement is in force, shall direct
1065 payment to an adult member of the minor’s family or the legal
1066 guardian of the minor as custodian for the minor. The person
1067 named as custodian shall have the same powers and duties as
1068 prescribed for a custodian pursuant to chapter 710, the Florida
1069 Uniform Transfers to Minors Act.
1070 (c) No prize may be paid arising from claimed tickets that
1071 are stolen, counterfeit, altered, fraudulent, unissued, produced
1072 or issued in error, unreadable, not received or not recorded by
1073 the department or the manager, if a management agreement is in
1074 force, by applicable deadlines, lacking in captions that confirm
1075 and agree with the lottery play symbols as appropriate to the
1076 lottery game involved, or not in compliance with such additional
1077 specific rules and public or confidential validation and
1078 security tests of the department or the manager, if a management
1079 agreement is in force, appropriate to the particular lottery
1080 game involved.
1081 (d) No particular prize in any lottery game may be paid
1082 more than once, and in the event of a binding determination that
1083 more than one claimant is entitled to a particular prize, the
1084 sole remedy of such claimants is the award to each of them of an
1085 equal share in the prize.
1086 (e) For the convenience of the public, retailers may be
1087 authorized to pay winners amounts less than $600 after
1088 performing validation procedures on their premises appropriate
1089 to the lottery game involved.
1090 (f) Holders of tickets shall have the right to claim prizes
1091 for 180 days after the drawing or the end of the lottery game or
1092 play in which the prize was won; except that with respect to any
1093 game in which the player may determine instantly if he or she
1094 has won or lost, such right shall exist for 60 days after the
1095 end of the lottery game. If a valid claim is not made for a
1096 prize within the applicable period, the prize shall constitute
1097 an unclaimed prize for purposes of subsection (2).
1098 (g) No prize shall be paid upon a ticket purchased or sold
1099 in violation of this chapter act or to any person who is
1100 prohibited from purchasing a lottery ticket pursuant to this
1101 chapter act. Any such prize shall constitute an unclaimed prize
1102 for purposes of subsection (2).
1103 (2)(a) Eighty percent of all unclaimed prize money shall be
1104 deposited in the Educational Enhancement Trust Fund consistent
1105 with the provisions of s. 24.121(2). Subject to appropriations
1106 provided in the General Appropriations Act, these funds may be
1107 used to match private contributions received under the
1108 postsecondary matching grant programs established in ss.
1109 1011.32, 1011.85, 1011.94, and 1013.79.
1110 (b) The remaining 20 percent of unclaimed prize money shall
1111 be added to the pool from which future prizes are to be awarded
1112 or used for special prize promotions.
1113 (3) The department or the manager, if a management
1114 agreement is in force, shall be discharged of all liability upon
1115 payment of a prize.
1116 (4) It is the responsibility of the appropriate state
1117 agency and of the judicial branch to identify to the department
1118 or the manager, if a management agreement is in force, in the
1119 form and format prescribed by the department or the manager,
1120 persons owing an outstanding debt to any state agency or owing
1121 child support collected through a court, including spousal
1122 support or alimony for the spouse or former spouse of the
1123 obligor if the child support obligation is being enforced by the
1124 Department of Revenue. Prior to the payment of a prize of $600
1125 or more to any claimant having such an outstanding obligation,
1126 the department or the manager shall transmit the amount of the
1127 debt to the agency claiming the debt and shall authorize payment
1128 of the balance to the prize winner after deduction of the debt.
1129 If a prize winner owes multiple debts subject to offset under
1130 this subsection and the prize is insufficient to cover all such
1131 debts, the amount of the prize shall be transmitted first to the
1132 agency claiming that past due child support is owed. If a
1133 balance of lottery prize remains after payment of past due child
1134 support, the remaining lottery prize amount shall be transmitted
1135 to other agencies claiming debts owed to the state, pro rata,
1136 based upon the ratio of the individual debt to the remaining
1137 debt owed to the state.
1138 Section 15. Section 24.1153, Florida Statutes, is amended
1139 to read:
1140 24.1153 Assignment of prizes payable in installments.—
1141 (1) The right of any person to receive payments under a
1142 prize that is paid in installments over time by the department
1143 or the manager, if a management agreement is in force, may be
1144 voluntarily assigned, in whole or in part, if the assignment is
1145 made to a person or entity designated pursuant to an order of a
1146 court of competent jurisdiction located in the judicial district
1147 where the assigning prize winner resides or where the
1148 headquarters of the department is located or where in the state
1149 the headquarters of the manager is located, if a management
1150 agreement is in force. A court may issue an order approving a
1151 voluntary assignment and directing the department or the manager
1152 to make prize payments in whole or in part to the designated
1153 assignee, if the court finds that all of the following
1154 conditions have been met:
1155 (a) The assignment is in writing, is executed by the
1156 assignor, and is, by its terms, subject to the laws of this
1157 state.
1158 (b) The purchase price being paid for the payments being
1159 assigned represents a present value of the payments being
1160 assigned, discounted at an annual rate that does not exceed the
1161 state’s usury limit for loans.
1162 (c) The assignor provides a sworn affidavit attesting that
1163 he or she:
1164 1. Is of sound mind, is in full command of his or her
1165 faculties, and is not acting under duress;
1166 2. Has been advised regarding the assignment by his or her
1167 own independent legal counsel, who is unrelated to and is not
1168 being compensated by the assignee or any of the assignee’s
1169 affiliates, and has received independent financial or tax advice
1170 concerning the effects of the assignment from a lawyer or other
1171 professional who is unrelated to and is not being compensated by
1172 the assignee or any of the assignee’s affiliates;
1173 3. Understands that he or she will not receive the prize
1174 payments or portions thereof for the years assigned;
1175 4. Understands and agrees that with regard to the assigned
1176 payments the department or the manager and its officials and
1177 employees will have no further liability or responsibility to
1178 make the assigned payments to him or her;
1179 5. Has been provided with a one-page written disclosure
1180 statement setting forth, in bold type of not less than 14
1181 points, the payments being assigned, by amounts and payment
1182 dates; the purchase price being paid; the rate of discount to
1183 present value, assuming daily compounding and funding on the
1184 contract date; and the amount, if any, of any origination or
1185 closing fees that will be charged to him or her; and
1186 6. Was advised in writing, at the time he or she signed the
1187 assignment contract, that he or she had the right to cancel the
1188 contract, without any further obligation, within 3 business days
1189 following the date on which the contract was signed.
1190 (d) Written notice of the proposed assignment and any court
1191 hearing concerning the proposed assignment is provided to the
1192 department’s or the manager’s counsel at least 10 days prior to
1193 any court hearing. The department or the manager is not required
1194 to appear in or be named as a party to any such action seeking
1195 judicial confirmation of an assignment under this section, but
1196 may intervene as of right in any such proceeding.
1197 (2) A certified copy of a court order approving a voluntary
1198 assignment must be provided to the department or the manager no
1199 later than 14 days before the date on which the payment is to be
1200 made.
1201 (3) In accordance with the provisions of s. 24.115(4), a
1202 voluntary assignment may not include or cover payments or
1203 portions of payments that are subject to offset on account of a
1204 defaulted or delinquent child support obligation or on account
1205 of a debt owed to a state agency. Each court order issued under
1206 subsection (1) shall provide that any delinquent child support
1207 obligations of the assigning prize winner and any debts owed to
1208 a state agency by the assigning prize winner, as of the date of
1209 the court order, shall be offset by the department or the
1210 manager first against remaining payments or portions thereof due
1211 the prize winner and then against payments due the assignee.
1212 (4) The department or the manager, and its respective
1213 officials and employees, shall be discharged of all liability
1214 upon payment of an assigned prize under this section.
1215 (5) The department or the manager may establish a
1216 reasonable fee to defray any administrative expenses associated
1217 with assignments made under this section, including the cost to
1218 the department or the manager of any processing fee that may be
1219 imposed by a private annuity provider. The fee amount shall
1220 reflect the direct and indirect costs associated with processing
1221 such assignments.
1222 (6) If at any time the Internal Revenue Service or a court
1223 of competent jurisdiction issues a determination letter, revenue
1224 ruling, other public ruling of the Internal Revenue Service, or
1225 published decision to any state lottery or prize winner of any
1226 state lottery declaring that the voluntary assignment of prizes
1227 will affect the federal income tax treatment of prize winners
1228 who do not assign their prizes, the secretary of the department
1229 shall immediately file a copy of that letter, ruling, or
1230 published decision with the Secretary of State and the Office of
1231 the State Courts Administrator. A court may not issue an order
1232 authorizing a voluntary assignment under this section after the
1233 date any such ruling, letter, or published decision is filed.
1234 Section 16. Section 24.117, Florida Statutes, is amended to
1235 read:
1236 24.117 Unlawful sale of lottery tickets; penalty.—Any
1237 person who knowingly:
1238 (1) Sells a state lottery ticket when not authorized by the
1239 department or this chapter act to engage in such sale;
1240 (2) Sells a state lottery ticket to a minor; or
1241 (3) Sells a state lottery ticket at any price other than
1242 that established by the department;
1243
1244 commits is guilty of a misdemeanor of the first degree,
1245 punishable as provided in s. 775.082 or s. 775.083.
1246 Section 17. Subsections (4) and (5) of section 24.118,
1247 Florida Statutes, are amended to read:
1248 24.118 Other prohibited acts; penalties.—
1249 (4) BREACH OF CONFIDENTIALITY.—Any person who, with intent
1250 to defraud or with intent to provide a financial or other
1251 advantage to himself, herself, or another, knowingly and
1252 willfully discloses any information relating to the lottery
1253 designated as confidential and exempt from the provisions of s.
1254 119.07(1) pursuant to this chapter commits act is guilty of a
1255 felony of the first degree, punishable as provided in s.
1256 775.082, s. 775.083, or s. 775.084.
1257 (5) UNLAWFUL REPRESENTATION.—
1258 (a) Any person who uses point-of-sale materials issued by
1259 the department or the manager or otherwise holds himself or
1260 herself out as a retailer without being authorized by the
1261 department or the manager to act as a retailer commits is guilty
1262 of a misdemeanor of the first degree, punishable as provided in
1263 s. 775.082 or s. 775.083.
1264 (b) Any person who without being authorized by the
1265 department or the manager in writing uses the term “Florida
1266 Lottery,” “State Lottery,” “Florida State Lottery,” or any
1267 similar term in the title or name of any charitable or
1268 commercial enterprise, product, or service commits is guilty of
1269 a misdemeanor of the first degree, punishable as provided in s.
1270 775.082 or s. 775.083.
1271 Section 18. Subsections (1) and (2) of section 24.120,
1272 Florida Statutes, are amended to read:
1273 24.120 Financial matters; Operating Trust Fund; interagency
1274 cooperation.—
1275 (1) There is hereby created in the State Treasury an
1276 Operating Trust Fund to be administered in accordance with
1277 chapters 215 and 216 by the department. All money received by
1278 the department which remains after payment of prizes and initial
1279 compensation paid to retailers shall be deposited into the
1280 Operating Trust Fund. All moneys in the trust fund are
1281 appropriated to the department for the purposes specified in
1282 this chapter act.
1283 (2) Moneys available for the payment of prizes awarded by
1284 the department, on a deferred basis shall be invested by the
1285 State Board of Administration in accordance with a trust
1286 agreement approved by the secretary and entered into between the
1287 department and the State Board of Administration in accordance
1288 with ss. 215.44-215.53. The investments authorized by this
1289 subsection shall be done in a manner designed to preserve
1290 capital and to ensure the integrity of the lottery disbursement
1291 system by eliminating the risk of payment of funds when due and
1292 to produce equal annual sums of money over the required term of
1293 the investments.
1294 Section 19. Subsections (1), (2), and (3) of section
1295 24.121, Florida Statutes, are amended to read:
1296 24.121 Allocation of revenues and expenditure of funds for
1297 public education.—
1298 (1) Variable percentages of the gross revenue from the sale
1299 of online and instant lottery tickets shall be returned to the
1300 public in the form of prizes paid by the department or retailers
1301 as authorized by this chapter act. The variable percentages of
1302 gross revenue from the sale of online and instant lottery
1303 tickets returned to the public in the form of prizes shall be
1304 established by the department in a manner designed to maximize
1305 the amount of funds deposited under subsection (2).
1306 (2) Each fiscal year, variable percentages of the gross
1307 revenue from the sale of online and instant lottery tickets as
1308 determined by the department consistent with subsection (1), and
1309 other earned revenue up to the amount of the state annuity
1310 requirement, excluding application processing fees, shall be
1311 deposited in the Educational Enhancement Trust Fund, which is
1312 hereby created in the State Treasury to be administered by the
1313 Department of Education. If the department enters into a
1314 management agreement, the proceeds received by the department
1315 from the management agreement under s. 24.1115(7)(b) and (c)
1316 shall be deposited in the Educational Enhancement Trust Fund,
1317 with, at minimum, the greater of $400 million or one-third of
1318 the funds deposited into the trust fund to be allocated to the
1319 Florida Bright Futures Scholarship Program. The Department of
1320 the Lottery shall transfer moneys to the Educational Enhancement
1321 Trust Fund at least once each quarter. Funds in the Educational
1322 Enhancement Trust Fund shall be used to the benefit of public
1323 education in accordance with the provisions of this chapter act.
1324 Notwithstanding any other provision of law, lottery revenues
1325 transferred to the Educational Enhancement Trust Fund shall be
1326 reserved as needed and used to meet the requirements of the
1327 documents authorizing the bonds issued by the state pursuant to
1328 s. 1013.68, s. 1013.70, or s. 1013.737 or distributed to school
1329 districts for the Classrooms First Program as provided in s.
1330 1013.68. Such lottery revenues are hereby pledged to the payment
1331 of debt service on bonds issued by the state pursuant to s.
1332 1013.68, s. 1013.70, or s. 1013.737. Debt service payable on
1333 bonds issued by the state pursuant to s. 1013.68, s. 1013.70, or
1334 s. 1013.737 shall be payable from, and is secured by a first
1335 lien on, the first lottery revenues transferred to the
1336 Educational Enhancement Trust Fund in each fiscal year. Amounts
1337 distributable to school districts that request the issuance of
1338 bonds pursuant to s. 1013.68(3) are hereby pledged to such bonds
1339 pursuant to s. 11(d), Art. VII of the State Constitution.
1340 (3) The funds remaining in the Operating Trust Fund after
1341 transfers to the Educational Enhancement Trust Fund shall be
1342 used for the payment of administrative expenses of the
1343 department. These expenses shall include all costs incurred in
1344 the department’s direct operation and administration of the
1345 lottery or the management agreement and all costs resulting from
1346 any contracts entered into for the purchase or lease of goods or
1347 services required by the lottery, including, but not limited to:
1348 (a) The compensation paid to retailers;
1349 (b) The costs of supplies, materials, tickets, independent
1350 audit services, independent studies, data transmission,
1351 advertising, promotion, incentives, public relations,
1352 communications, security, bonding for retailers, printing,
1353 distribution of tickets, and reimbursing other governmental
1354 entities for services provided to the lottery; and
1355 (c) The costs of any other goods and services necessary for
1356 effectuating the purposes of this chapter act.
1357 Section 20. Section 24.122, Florida Statutes, is amended to
1358 read:
1359 24.122 Exemption from taxation; state preemption;
1360 inapplicability of other laws.—
1361 (1) This chapter act shall not be construed to authorize
1362 any lottery except the lottery operated by the department or the
1363 manager under pursuant to this chapter act.
1364 (2) No state or local tax shall be imposed upon any prize
1365 paid or payable under this chapter act or upon the sale of any
1366 lottery ticket pursuant to this chapter act.
1367 (3) All matters relating to the operation of the state
1368 lottery are preempted to the state, and no county, municipality,
1369 or other political subdivision of the state shall enact any
1370 ordinance relating to the operation of the lottery authorized by
1371 this chapter act. However, this subsection shall not prohibit a
1372 political subdivision of the state from requiring a retailer to
1373 obtain an occupational license for any business unrelated to the
1374 sale of lottery tickets.
1375 (4) Any state or local law providing any penalty,
1376 disability, restriction, or prohibition for the possession,
1377 manufacture, transportation, distribution, advertising, or sale
1378 of any lottery ticket, including chapter 849, shall not apply to
1379 the tickets of the state lottery operated pursuant to this
1380 chapter act; nor shall any such law apply to the possession of a
1381 ticket issued by any other government-operated lottery. In
1382 addition, activities of the department under this chapter act
1383 are exempt from the provisions of:
1384 (a) Chapter 616, relating to public fairs and expositions.
1385 (b) Chapter 946, relating to correctional work programs.
1386 (c) Chapter 282, relating to communications and data
1387 processing.
1388 (d) Section 110.131, relating to other personal services.
1389 Section 21. Section 24.123, Florida Statutes, is amended to
1390 read:
1391 24.123 Annual audit of financial records and reports.—
1392 (1) The Legislative Auditing Committee shall contract with
1393 a certified public accountant licensed pursuant to chapter 473
1394 for an annual financial audit of the department. The certified
1395 public accountant shall have no financial interest in any vendor
1396 or manager with whom the department is under contract. The
1397 certified public accountant shall present an audit report no
1398 later than 7 months after the end of the fiscal year and shall
1399 make recommendations to enhance the earning capability of the
1400 state lottery or the management agreement and to improve the
1401 efficiency of department operations. The certified public
1402 accountant shall also perform a study and evaluation of internal
1403 accounting controls and shall express an opinion on those
1404 controls in effect during the audit period. The cost of the
1405 annual financial audit shall be paid by the department.
1406 (2) The Auditor General may at any time conduct an audit of
1407 any phase of the operations of the state lottery or the
1408 management agreement and shall receive a copy of the yearly
1409 independent financial audit and any security report prepared
1410 pursuant to s. 24.108.
1411 (3) A copy of any audit performed pursuant to this section
1412 shall be submitted to the secretary, the Governor, the President
1413 of the Senate, the Speaker of the House of Representatives, and
1414 members of the Legislative Auditing Committee.
1415 Section 22. Subsection (1) of section 24.124, Florida
1416 Statutes, is amended to read:
1417 24.124 Responsibility for ticket accuracy; department,
1418 retailer, and vendor liability.—
1419 (1) Purchasers of online games tickets shall be responsible
1420 for verifying the accuracy of their tickets, including the
1421 number or numbers printed on the tickets. In the event of an
1422 error, the ticket may be canceled and a replacement ticket
1423 issued pursuant to rules adopted promulgated by the department
1424 of the Lottery.
1425 Section 23. This act shall take effect January 1, 2011.