Bill Text: FL H1585 | 2010 | Regular Session | Introduced

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Bill Title: Operation of the Florida Lottery

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2010-04-30 - Died in Committee on Governmental Affairs Policy (EDCA) [H1585 Detail]

Download: Florida-2010-H1585-Introduced.html

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HB 1585

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

CODING: Words stricken are deletions; words underlined are additions.