Bill Text: MI HB5417 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Gaming; lottery; lottery in the city of Detroit; establish. Amends title & secs. 3, 11, 12, 15, 17, 19 & 23 of 1972 PA 239 (MCL 432.3 et seq.) & adds heading for art. 1 & adds art. 2.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-02-22 - Printed Bill Filed 02/22/2012 [HB5417 Detail]

Download: Michigan-2011-HB5417-Introduced.html

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HOUSE BILL No. 5417

 

February 21, 2012, Introduced by Rep. Womack and referred to the Committee on Regulatory Reform.

 

     A bill to amend 1972 PA 239, entitled

 

"McCauley-Traxler-Law-Bowman-McNeely lottery act,"

 

by amending the title and sections 3, 11, 12, 15, 17, 19, and 23

 

(MCL 432.3, 432.11, 432.12, 432.15, 432.17, 432.19, and 432.23),

 

the title as amended by 1996 PA 95, section 3 as amended by 1996 PA

 

167, section 11 as amended by 2004 PA 383, section 12 as amended by

 

2011 PA 279, and section 23 as amended by 2008 PA 142, and by

 

adding a heading for article 1 and adding article 2.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

                                   TITLE

 

     An act to establish and operate a state lottery and to allow

 

state participation in certain lottery-related joint enterprises

 

with other sovereignties; to create a bureau of state lottery and

 

to prescribe its powers and duties; to provide for the

 

establishment and operation of a lottery in certain cities; to

 

provide for referenda; to provide for the creation and powers and

 

duties of city lottery bureaus and city lottery commissioners; to

 

prescribe certain provide for the powers and duties of other

 

certain state departments and agencies; and local governmental

 

officers and entities; to license and regulate certain sales

 

agents; to create the state lottery fund; to provide for the

 

distribution of lottery revenues and earnings for certain purposes;

 

to provide for an appropriation; and to provide for remedies and

 

penalties.

 

                          ARTICLE 1 STATE LOTTERY

 

     Sec. 3. As used in this act article:

 

     (a) "Bureau" means the bureau of state lottery created by this

 

act in section 5.

 

     (b) "Commissioner" means the commissioner of state lottery.

 

     (c) "Joint enterprise" means any lottery activity in which the

 

bureau participates pursuant to a written agreement between the

 

state of Michigan and any state, territory, country, or other

 

sovereignty as executed by the commissioner. Joint enterprise does

 

not include the state lottery or a city lottery created pursuant to

 

this act.

 

     (d) "Lottery" or "state lottery" means the lottery created

 

pursuant to this act article and operated exclusively by or under

 

the exclusive control of the bureau of state lottery.

 

     Sec. 11. (1) The commissioner shall promulgate rules pursuant

 

to the administrative procedures act of 1969, 1969 PA 306, MCL

 

24.201 to 24.328, as necessary to implement this act article.

 

     (2) The rules authorized under this section may include any of

 

the following subject to requirements and limitations in this act

 

article:

 

     (a) The type of lottery to be conducted.

 

     (b) The price of tickets or shares in the state lottery.

 

     (c) The number and size of the prizes on the winning tickets

 

or shares.

 

     (d) The manner of selecting the winning tickets or shares.

 

     (e) The manner of payment of prizes to the holders of winning

 

tickets or shares.

 

     (f) The frequency of the drawings or selections of winning

 

tickets or shares.

 

     (g) Without limit as to number, the type or types of locations

 

at which tickets or shares may be sold.

 

     (h) The method to be used in selling tickets or shares, except

 

that a person's name, other than a name used in advertising or a

 

promotion under section 18(2), shall not be printed on the tickets

 

or shares.

 

     (i) The licensing of agents to sell tickets or shares, but a

 

person under the age of 18 shall not be licensed as an agent.

 

     (j) The manner and amount of compensation to be paid licensed

 

sales agents necessary to provide for the adequate availability of

 

tickets or shares to prospective buyers and for the convenience of

 

the public.

 

     (k) The apportionment of the total annual revenues accruing

 

from the sale of state lottery tickets or shares and from all other

 

sources for the payment of prizes to the holders of winning tickets

 

or shares, for the payment of costs incurred in the operation and

 

administration of the state lottery, including the expenses of the

 

bureau and the costs resulting from any contract or contracts

 

entered into for promotional, advertising, consulting or

 

operational services or for the purchase or lease of state lottery

 

equipment and materials, for the repayment of the money

 

appropriated to the state lottery fund, and for transfer to the

 

general fund.

 

     (3) The commissioner may promulgate rules incorporating by

 

reference existing rules or regulations of any joint enterprise as

 

required as a condition for participation in that joint enterprise.

 

Any subsequent changes or additions to the rules or regulations of

 

the joint enterprise may be adopted by the commissioner through the

 

promulgation of a rule.

 

     Sec. 12. (1) Except as otherwise provided in subsection (2),

 

as nearly as is practicable, not less than 45% of the total annual

 

revenue accruing from the sale of state lottery tickets or shares

 

shall be apportioned for payment of prizes to the holders of

 

winning state lottery tickets or shares.

 

     (2) Notwithstanding subsection (1), the prize money from the

 

sale of tickets or shares of any joint enterprise is that

 

percentage of the total annual revenue accrued from that game as

 

prescribed by the joint enterprise participation agreement executed

 

by the commissioner.

 

     Sec. 15. (1) The commissioner shall report immediately to the

 

governor, the state treasurer, and the legislature any matters that

 

require immediate changes in the laws of this state in order to

 

prevent abuses or evasions of this act article or rules promulgated

 

hereunder under this article or to rectify undesirable conditions

 

in connection with the administration or operation of the state

 

lottery.

 

     (2) The commissioner shall make a continuous study and

 

investigation of the state lottery to do all of the following:

 

     (a) To ascertain any defects in this act article or in the

 

rules by reason whereof any that could result in abuses in the

 

administration and operation of the lottery or any evasion of this

 

act article or the rules. may arise or be practiced.

 

     (b) To formulate recommendations for changes in this act

 

article and the rules.

 

     (c) To guard against the use of this act article and the rules

 

as a cloak for the carrying on of organized gambling and crime.

 

     (d) To insure that this act article and the rules are in a

 

form and are administered as to serve the true purposes of this act

 

article.

 

     (3) The commissioner shall make a continuous study and

 

investigation of the operation and the administration of similar

 

laws which may be in effect in other states or countries, any

 

literature on the subject which may be that is published or

 

available, any federal laws which that may affect the operation of

 

the state lottery, and the reaction of citizens to existing and

 

potential features of the state lottery with a view to recommending

 

or effecting changes that will tend to serve the purposes of this

 

act article.

 

     Sec. 17. The commissioner shall do all of the following:

 

     (a) Supervise and administer the operation of the state

 

lottery in accordance with this act article and the rules.

 

     (b) License as agents to sell state lottery tickets such

 

persons whom he deems that the commissioner determines will best

 

serve the public convenience and promote the sale of tickets or

 

shares.

 

     Sec. 19. (1) The commissioner shall employ personnel as

 

necessary to implement this act article at least 2 of whom shall

 

not be in the classified service.

 

     (2) The departments, boards, commissions or other governmental

 

subdivisions of this state shall provide assistance to the bureau

 

upon the bureau's request.

 

     Sec. 23. (1) The commissioner shall not issue a license to a

 

person to engage in business exclusively as a state lottery sales

 

agent. Before issuing a state lottery sales license, the

 

commissioner shall consider factors such as the financial

 

responsibility and security of the person and his or her business

 

or activity, the accessibility of his or her place of business or

 

activity to the public, the sufficiency of existing licenses to

 

serve the public convenience, and the volume of expected sales.

 

     (2) The commissioner shall issue an initial or renewal state

 

lottery sales license not later than 90 days after the applicant

 

files a completed application. Receipt of the application is

 

considered the date the application is received by any agency or

 

department of this state. If the commissioner determines that the

 

application is incomplete, the commissioner shall notify the

 

applicant in writing, or make information electronically available,

 

within 30 days after receipt of the incomplete application,

 

describing the deficiency and requesting the additional

 

information. The 90-day period is tolled upon notification by the

 

commissioner of a deficiency until the date the requested

 

information is received by the commissioner. The determination of

 

the completeness of an application does not operate as an approval

 

of the application for the license and does not confer eligibility

 

of an applicant determined otherwise ineligible for issuance of a

 

license.

 

     (3) If the commissioner fails to issue or deny a state lottery

 

sales license within the time required by this section, the

 

commissioner shall return the license fee and shall reduce the

 

license fee for the applicant's next renewal application, if any,

 

by 15%. The failure to issue a state lottery sales license within

 

the time required under this section does not allow the

 

commissioner to otherwise delay the processing of the application,

 

and that application, upon completion, shall be placed in sequence

 

with other completed applications received at that same time. The

 

commissioner shall not discriminate against an applicant in the

 

processing of the application based upon the fact that the license

 

fee was refunded or discounted under this subsection.

 

     (4) The commissioner shall submit a report by December 1 of

 

each year to the standing committees and appropriations

 

subcommittees of the senate and house of representatives concerned

 

with gaming issues. The commissioner shall include all of the

 

following information in the report concerning the preceding fiscal

 

year:

 

     (a) The number of initial and renewal applications the

 

commissioner received and completed within the 90-day time period

 

described in subsection (2).

 

     (b) The number of applications denied.

 

     (c) The number of applicants not issued a license within the

 

90-day time period and the amount of money returned to licensees

 

and applicants under subsection (3).

 

     (5) Notwithstanding any other provision of law, a person

 

licensed as a state lottery sales agent may sell state lottery

 

tickets and shares. A person lawfully engaged in nongovernmental

 

business on state property may be licensed as a state lottery sales

 

agent.

 

     (6) A state lottery sales license is not assignable or

 

transferable.

 

     (7) A licensed agent or his or her employee may sell state

 

lottery tickets or shares only on the premises stated in the state

 

lottery sales license. A licensed agent who violates this

 

subsection is, at the commissioner's discretion, subject to 1 or

 

more of the following:

 

     (a) Probation for not more than 2 years.

 

     (b) A fine of not more than $1,000.00.

 

     (c) Removal of his or her lottery terminal.

 

     (8) The commissioner may require a bond from a licensed agent

 

in an amount provided in rules promulgated under this act article.

 

     (9) A licensed agent shall display his or her license or a

 

copy of the license conspicuously in accordance with rules

 

promulgated under this act article.

 

     (10) The commissioner may suspend or revoke the license of an

 

agent who violates this act article or a rule promulgated under

 

this act article.

 

     (11) For purposes of terminal placement, the commissioner

 

shall take into account with equal emphasis both of the following:

 

     (a) The total instant game sales for the 3 months immediately

 

preceding a market evaluation.

 

     (b) The need to maximize net lottery revenues from the total

 

number of terminals placed.

 

     (12) A licensed state lottery sales agent shall not offer to

 

give or give any money or other thing of value to the holder of a

 

state lottery ticket or share for winning the state lottery, other

 

than the prize if payment of the prize by the agent is authorized

 

by the commissioner.

 

     (13) As used in this section:

 

     (a) "Completed application" means an application complete on

 

its face and submitted with any applicable licensing fees and any

 

other information, records, approval, security, or similar item

 

required by law or rule from a local unit of government, a federal

 

agency, or a private entity but not from another department or

 

agency of this state.

 

     (b) "Person" means an individual, association, corporation,

 

club, trust, estate, society, company, joint stock company,

 

receiver, trustee, referee, or other person acting in a fiduciary

 

or representative capacity who is appointed by a court, or any

 

combination of individuals. Person includes a department,

 

commission, agency, or instrumentality of the state, including a

 

county, city, village, or township and an agency or instrumentality

 

of the county, city, village, or township.

 

                         ARTICLE 2 CITY LOTTERIES

 

     Sec. 51. As used in this article:

 

     (a) "City" means a city with a population of 300,000 or more.

 

     (b) "City lottery" means a city lottery created and operated

 

under this article.

 

     (c) "City lottery operator" means a person who has contracted

 

with a city to operate a city lottery under this article.

 

     (d) "Person" means an individual, association, partnership,

 

corporation, limited liability company, governmental entity, or

 

other legal entity.

 

     Sec. 53. (1) A legislative body of a city may resolve to

 

establish a city lottery. The city lottery shall not be established

 

or operated unless approved by the electors of the city under this

 

section.

 

     (2) If the legislative body of a city has resolved to

 

establish a city lottery, the city clerk shall submit the question

 

of whether the city should establish a city lottery to the electors

 

of the city at the next general election or special election called

 

for that purpose. The election shall be conducted in accordance

 

with the Michigan election law, 1954 PA 116, MCL 168.1 to 168.992.

 

     (3) The question to be submitted to the voters under

 

subsection (2) shall be, subject to the election laws of this

 

state, substantially as follows:

 

     "Should the city of [name] establish a city lottery?

 

     Yes ( )

 

     No ( )".

 

     (4) If a majority of the electors voting on the question

 

submitted under subsection (2) approve, the city shall proceed to

 

establish a city lottery in the manner provided in this article.

 

     Sec. 55. (1) To establish a city lottery that has been

 

approved by the electors of the city, the legislative body of the

 

city shall contract with a financially responsible person to act as

 

city lottery operator. A contract with a city lottery operator

 

shall comply with this article and applicable state and federal

 

law. The contract may include the following:

 

     (a) The type of lottery to be conducted.

 

     (b) The licensing of persons to sell tickets.

 

     (c) The locations at which tickets may be sold.

 

     (d) The price of tickets in the city lottery.

 

     (e) The method to be used in selling tickets.

 

     (f) The frequency of the drawings or selections of winning

 

tickets.

 

     (g) The manner of selecting the winning tickets.

 

     (h) The number and size of the prizes on the winning tickets.

 

     (i) The manner of payment of prizes to the holders of winning

 

tickets.

 

     (j) The compensation to be paid to persons licensed to sell

 

tickets.

 

     (k) A requirement that the city lottery operator post a bond

 

or provide other security in an amount approved by the legislative

 

body of the city.

 

     (2) A city lottery shall be conducted to produce the maximum

 

amount of net revenue for the city consonant with the general

 

welfare of the people of the city.

 

     (3) A contract with a city lottery operator under this section

 

shall not be assigned by the city lottery operator unless the

 

legislative body of the city specifically approves the assignment.

 

     (4) The legislative body of a city that has established a city

 

lottery may adopt resolutions and enact ordinances that are

 

necessary to operate the city lottery.

 

     Sec. 57. A city lottery shall not be based on an activity that

 

uses the mechanical, physical, or mental skills of the participant

 

and that is traditionally regarded as a sporting event.

 

     Sec. 59. (1) A city lottery operator shall issue licenses to

 

persons to sell city lottery tickets. A license to sell city

 

lottery tickets shall only be issued to a person who is licensed to

 

sell state lottery tickets or shares under article 1 in the city.

 

     (2) A license to sell city lottery tickets is not assignable

 

or transferable.

 

     (3) A city lottery operator may require a bond or other

 

security from a person licensed to sell city lottery tickets in an

 

amount required by the city lottery operator. A bond or other

 

security given under this subsection shall be for the benefit of

 

the city, the city lottery operator, or any other person required

 

by the city lottery operator.

 

     (4) The city lottery may suspend or revoke the license of a

 

person licensed to sell city lottery tickets if the person violates

 

this article or the license or contract for the operation of the

 

city lottery.

 

     Sec. 61. (1) A person licensed to sell city lottery tickets

 

shall only sell city lottery tickets in the city from the premises

 

stated in the license. A person who violates this subsection is

 

subject to 1 or both of the following:

 

     (a) A civil fine payable to the city of not more than

 

$1,000.00.

 

     (b) Revocation, suspension, or restriction of his or her

 

license.

 

     (2) City lottery tickets may be sold on city property if the

 

person licensed to sell tickets is lawfully engaged in

 

nongovernmental business on city property.

 

     (3) A person licensed to sell city lottery tickets shall

 

display his or her license or a copy of that license conspicuously.

 

     Sec. 63. (1) A person shall not sell a city lottery ticket at

 

a price greater than that fixed by the city lottery operator. A

 

person who is not licensed to sell city lottery tickets or the

 

employee of a licensed person shall not sell city lottery tickets.

 

A person may give city lottery tickets to another as a gift.

 

     (2) A person who violates this section is guilty of a

 

misdemeanor.

 

     Sec. 65. (1) A city lottery ticket shall not be sold to a

 

person under the age of 18. This subsection does not prohibit the

 

purchase of a city lottery ticket by a person 18 years of age or

 

older to be given as a gift to a person less than 18 years of age.

 

     (2) A person who knowingly sells or offers to sell a city

 

lottery ticket to a person under the age of 18 is guilty of a

 

misdemeanor.

 

     (3) If allowed by its contract with the city, the city lottery

 

operator may contract with 1 or more persons to allow the placement

 

of advertising or promotional material on city lottery tickets and

 

other available media under the control of the city lottery

 

operator. However, except for advertising that promotes responsible

 

consumption of alcoholic beverages, the city lottery operator shall

 

not allow the placement of advertising for the promotion of the

 

consumption of alcoholic beverages or tobacco products on city

 

lottery tickets.

 

     Sec. 67. A person who, with intent to defraud, falsely makes,

 

alters, forges, utters, passes, or counterfeits a city lottery

 

ticket is guilty of a felony punishable by imprisonment for not

 

more than 5 years or a fine of not more than $1,000.00, or both.

 

     Sec. 69. A city lottery ticket shall not be purchased by and a

 

city lottery prize shall not be paid to an officer or employee of a

 

city lottery operator or to any spouse, child, brother, sister, or

 

parent residing as a member of the same household in the principal

 

residence of an officer or employee of a city lottery operator.

 

     Sec. 71. (1) If the person entitled to a prize or any winning

 

city lottery ticket is under 18 years of age and the prize is more

 

than $1,000.00, a city lottery operator shall pay the prize to the

 

guardian of the minor with a check or draft payable to the order of

 

the guardian. If the prize is less than $1,000.00, the city lottery

 

operator may pay the prize to an adult member of the minor's family

 

who is legally responsible for the care and custody of the minor.

 

     (2) The city and city lottery operator are discharged of all

 

further liability on payment of a prize in accordance with

 

subsection (1).

 

     Sec. 73. (1) Before payment of a prize of more than $1,000.00,

 

a city lottery operator shall determine whether department of

 

treasury records show that the prizewinner has a current liability

 

to this state or a support arrearage. The department of treasury

 

shall provide each city lottery operator with a list or computer

 

access to a compilation of persons known to the department to have

 

a current liability to this state, including delinquent accounts of

 

amounts due and owing to a court that have been assigned to the

 

state for collection, or a support arrearage. The information shall

 

be updated not less than once a month. If a liability to this state

 

or a support arrearage is identified, a city lottery operator shall

 

first apply the amount of the prize to the liability to this state,

 

other than the amount of any assigned delinquent account of amounts

 

due and owing to a court, next to the support arrearage, and next

 

to the assigned delinquent account of amounts due and owing to a

 

court, and shall then pay the excess, if any, to the city lottery

 

winner.

 

     (2) A city lottery winner shall be given notice of the

 

existence of liability and the intended payment under subsection

 

(1) and be given an opportunity for a hearing before the department

 

of treasury or its designee with respect to the liability if the

 

liability has not been reduced to judgment or has not been

 

finalized under statutory review provisions of the statute under

 

which the liability arose. Notice under this subsection shall be

 

sent by regular mail.

 

     (3) A city lottery winner may request a hearing under

 

subsection (2) within 15 days of the date the notice was mailed by

 

making a written request to the state treasurer and sending a copy

 

of the request to the city lottery operator.

 

     (4) An amount applied to pay a support arrearage under this

 

section shall be paid by the city lottery operator to the

 

department of treasury which shall pay the amount to the office of

 

the friend of the court for the appropriate judicial circuit in the

 

same manner as is prescribed for a payment pursuant to an order of

 

income withholding under section 9 of the support and parenting

 

time enforcement act, 1982 PA 295, MCL 552.609.

 

     (5) Except for a disclosure pursuant to a judicial order, an

 

employee, authorized representative, or former employee or

 

authorized representative of a city lottery operator or anyone

 

connected with the city lottery operator shall not divulge the

 

information provided by the department of treasury to the city

 

lottery operator under this section.

 

     (6) A person who violates subsection (5) is guilty of a

 

felony, punishable by a fine of not more than $5,000.00, or

 

imprisonment for not more than 5 years, or both, together with the

 

costs of prosecution.

 

     (7) As used in this section:

 

     (a) "Office of the friend of the court" means an agency

 

created in section 3 of the friend of the court act, 1982 PA 294,

 

MCL 552.503.

 

     (b) "Support" means that term as defined in section 2a of the

 

friend of the court act, 1982 PA 294, MCL 552.502a.

 

     Sec. 75. (1) The right to a prize drawn in a city lottery is

 

not assignable, except as provided in this section. The city and

 

city lottery operator are discharged of all further liability on

 

payment of a prize as provided in this section.

 

     (2) A prize drawn in a city lottery may be paid to a person in

 

accordance with an appropriate judicial order.

 

     (3) A prize drawn in a city lottery may be paid to this state

 

under section 73.

 

     (4) If a prizewinner dies before collecting the full amount of

 

his or her prize, a city lottery operator shall continue to make

 

the remaining prize payments to the prizewinner's surviving spouse

 

and the prizewinner's living children, in equal proportions, unless

 

otherwise directed by the prizewinner. If there is no surviving

 

spouse or living children or other designated beneficiaries, the

 

remaining prize payments shall be made to the prizewinner's estate.

 

     (5) Except as provided in subsection (8), payment of a prize

 

drawn in a city lottery may be made to a person in accordance with

 

a voluntary assignment of the right to receive future prize

 

payments, in whole or in part, approved by the circuit or district

 

court, whichever has jurisdiction over the amount of the

 

assignment, for the circuit or district in which the city is

 

located. A court shall enter an order approving an assignment under

 

this subsection if the court finds that all of the following

 

circumstances exist:

 

     (a) The assignment is in writing, executed by the assignor in

 

accordance with the laws of this state, and the terms of the

 

assignment are disclosed, including the identity of the assignee,

 

the portion or portions of prize payments to be assigned, and the

 

amounts and dates of any payments given or to be given in exchange

 

for the assignment.

 

     (b) The court has been provided with an affidavit of the

 

assignor attesting that the assignor is of sound mind, is not

 

acting under duress, has received advice about the assignment from

 

his or her legal counsel, and understands and agrees that the city

 

and the city lottery operator will have no further liability or

 

responsibility to make prize payments, to the extent of the

 

assignment, to the assignor.

 

     (c) The proposed assignment does not include or cover payments

 

or portions of payments that are subject to section 73.

 

     (d) Not less than 5 days after the petition to approve the

 

assignment was filed and not less than 10 days before the hearing

 

on the petition, the petitioner served a copy of the petition and

 

notice of hearing on the petition on the city attorney and the city

 

lottery operator. The city's attorney or his or her assistant may

 

appear in the action in behalf of the city. The city lottery

 

operator may appear and protect its interests.

 

     (6) Soliciting or offering rights to city lottery prize

 

payments, either by assignment or through pledge as collateral for

 

a loan, does not constitute selling or offering city lottery

 

tickets for sale under this article.

 

     (7) A city lottery operator is authorized to charge a

 

reasonable fee to defray the cost of any administrative expenses

 

associated with assignments made under this section, including the

 

cost of a processing fee that may be imposed by a private annuity

 

provider. The amount of the fee shall reflect the direct and

 

indirect costs associated with processing the assignments.

 

     (8) If at any time the internal revenue service or a court of

 

competent jurisdiction issues a determination letter, revenue

 

ruling, other public ruling of the internal revenue service, or

 

published decision to a city lottery prizewinner declaring that the

 

voluntary assignment of prizes will affect the federal income tax

 

treatment of prizewinners who do not assign their prizes, the city

 

lottery operator shall immediately file a copy of that letter,

 

ruling, or published decision with the city clerk and the clerk of

 

each court described in subsection (5). A court shall not issue a

 

voluntary assignment order under subsection (5) after the date the

 

ruling, letter, or published decision is filed.

 

     (9) Except as otherwise provided by state or federal law, a

 

city, a city lottery operator, or an officer or employee of a city

 

or a city lottery operator shall not disclose the name or address

 

of or any other personal information about a winner of a prize

 

greater than $10,000.00 unless the winner of the prize agrees in

 

writing to the disclosure. The information protected against

 

disclosure under this section is exempt from disclosure under the

 

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

 

     Sec. 77. Unclaimed prize money for the prize on a winning city

 

lottery ticket shall be retained by a city lottery operator for the

 

person entitled to the prize money for 1 year after the drawing in

 

which the prize was won. If a claim is not made for the money

 

within the 1-year period, the prize money shall be deposited in the

 

city lottery fund.

 

     Sec. 79. As nearly as is practicable, 50% of the total annual

 

revenue accruing from the sale of city lottery tickets shall be

 

apportioned for payment of prizes to the holders of winning

 

tickets.

 

     Sec. 81. (1) The legislative body of a city that has

 

established a city lottery under this article shall establish a

 

city lottery fund. All money received from the sale of city lottery

 

tickets and all other money credited or transferred to the fund

 

from any other fund or sources shall be deposited in the fund.

 

     (2) The treasurer of the city is responsible for the

 

management and investment of money in the city lottery fund. To

 

assure a continuing availability of money with which to pay city

 

lottery prize installments and to compensate for variations in the

 

yield on investments, the city lottery operator and the city

 

treasurer shall, every 6 months, review the status of the

 

installment prize investments and shall agree on an amount to be

 

restricted out of the total revenues of the city lottery fund as a

 

reserve against a drop in yield. If a city lottery operator and the

 

city treasurer fail to agree on the amount to be reserved, the

 

matter shall be referred to the legislative body of the city for

 

decision.

 

     Sec. 83. (1) All money collected from the sale of city lottery

 

tickets shall be deposited in financial institutions as designated

 

by the city lottery operator in accordance with the contract under

 

section 55. At the time of each deposit, the licensed person shall

 

report all of his or her receipts and transactions in the sale of

 

city lottery tickets to the city lottery operator and provide any

 

other information required by the city lottery operator.

 

     (2) As used in this section, "financial institution" means a

 

state or nationally chartered bank or a state or federally

 

chartered savings and loan association, savings bank, or credit

 

union whose deposits are insured by an agency of the United States

 

government and that maintains a principal office or branch office

 

located in this state under the laws of this state or the United

 

States.

 

     Sec. 85. The legislative body of a city that has established a

 

city lottery shall appropriate money in the city lottery fund,

 

subject to section 79 and the reserve established under section 81,

 

only for the following purposes:

 

     (a) Payment of prizes to the holders of winning city lottery

 

tickets.

 

     (b) Payments required by section 73.

 

     (c) Payment of reasonable expenses of the city lottery

 

operator in its operation of the city lottery.

 

     (d) Economic development in the city.

 

     (e) Funding of public education by school districts located in

 

the city.

 

     Sec. 87. (1) A city lottery operator shall make a monthly

 

report to the city that includes the total city lottery revenue,

 

prize disbursements, and other expenses for the preceding month.

 

     (2) A city lottery operator shall make an annual report to the

 

city that includes a full and complete statement of city lottery

 

revenues, prize disbursements, and other expenses and

 

recommendations for changes in the operation of the city lottery

 

that the city lottery operator considers necessary or desirable.

 

     Sec. 89. A certified public accountant firm appointed by a

 

city shall conduct quarterly postaudits of all accounts and

 

transactions of the city lottery operator and other special

 

postaudits as the city considers necessary. The city or an

 

accountant or firm conducting an audit under this section shall

 

have access and authority to examine all records of the city

 

lottery operator, a person who has a contract with the city lottery

 

operator related to the conduct of the city lottery, and a person

 

licensed to sell city lottery tickets.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No. ____ or House Bill No. ____ (request no.

 

04552'11 a) of the 96th Legislature is enacted into law.

 

     Enacting section 2. This amendatory act shall be submitted as

 

provided by the Michigan election law, 1954 PA 116, MCL 168.1 to

 

168.992, to the qualified electors of this state at the next

 

general election after the date that this amendatory act is

 

enacted. This amendatory act does not take effect unless it is

 

approved by both of the following at that election:

 

     (a) A majority of the electors of this state voting in the

 

election.

 

     (b) A majority of the electors voting in the cities where

 

gambling as authorized under this amendatory act will take place.

 

     Enacting section 3. If approved by the electors under enacting

 

section 2, this amendatory act takes effect 60 days after the date

 

of the official declaration of the vote.