HB 1177

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 operation of
7	the lottery under a management agreement; amending s.
8	24.103, F.S.; providing and revising definitions; amending
9	s. 24.104, F.S.; revising language concerning the purpose
10	of the Department of the Lottery to permit contracting
11	with a manager; amending s. 24.105, F.S.; revising
12	provisions concerning the powers and duties of the
13	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 language; 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 a
29	minimum amount to be retained annually by the state after
30	payment of prizes and expenses; providing for payments by
31	a manager; providing for collection of funds in excess of
32	a specified baseline growth percentage to ensure that the
33	manager does not earn excess revenue; providing
34	requirements for the contents of a management agreement;
35	requiring periodic investigations of the performance by a
36	manager; providing for a request for qualifications
37	process to select a manager; providing for the public
38	records status of specified materials under existing
39	exemptions; providing for negotiations between one or more
40	offerors and the department; providing selection
41	procedures; requiring a public hearing; providing for
42	designation of a manager by the Governor; providing for
43	status of debt offering by the manager; providing for a
44	time period for challenges to designation of a manager;
45	providing department powers; prohibiting the department
46	from selling the authorization to manage the lottery;
47	providing that there is no prohibition on additional
48	legislative authorization of other forms of gambling;
49	amending s. 24.112, F.S.; revising provisions concerning
50	retailers of lottery tickets to conform to the possibility
51	of contracting with a manager; amending s. 24.113, F.S.;
52	providing that provisions concerning minority
53	participation also apply if the lottery contracts with a
54	manager; amending s. 24.114, F.S.; correcting a reference;
55	amending ss. 24.115, 24.1153, 24.117, 24.118, and 24.120,
56	F.S.; revising provisions relating to bank deposits and
57	control of lottery transactions, payment of prizes,
58	assignment of prizes payable in installments, penalties
59	for unlawful sale of lottery tickets, breach of
60	confidentiality, and unlawful representation, and
61	financial matters to conform to the possibility of
62	contracting with a manager; amending s. 24.121, F.S.;
63	revising provisions relating to allocation of revenues and
64	expenditure of funds for public education to conform to
65	the possibility of contracting with a manager; providing
66	for a minimum allocation of proceeds received under a
67	management agreement to the Florida Bright Futures
68	Scholarship Program; amending ss. 24.122, 24.123, and
69	24.124, F.S.; revising provisions relating to exemption
70	from taxation, state preemption, inapplicability of other
71	laws, annual audit of financial records and reports,
72	responsibility for ticket accuracy, and liability to
73	conform to the possibility of contracting with a manager;
74	providing an effective date.
75
76	Be It Enacted by the Legislature of the State of Florida:
77
78	Section 1.  Subsection (3) of section 20.317, Florida
79	Statutes, is amended to read:
80	20.317  Department of the Lottery.--There is created a
81	Department of the Lottery.
82	(3)  The headquarters of the department shall be located in
83	Tallahassee. However, the department may establish such regional
84	offices throughout the state as the secretary deems necessary to
85	perform its duties concerning the efficient operation of the
86	state lottery.
87	Section 2.  Section 24.101, Florida Statutes, is amended to
88	read:
89	24.101  Short title.--This chapter act may be cited as the
90	"Florida Public Education Lottery Act."
91	Section 3.  Section 24.102, Florida Statutes, is amended to
92	read:
93	24.102  Purpose and intent.--
94	(1)  The purpose of this chapter act is to implement s. 15,
95	Art. X of the State Constitution in a manner that enables the
96	people of the state to benefit from significant additional
97	moneys for education and also enables the people of the state to
98	play the best lottery games available.
99	(2)  The intent of the Legislature is:
100	(a)  That the net proceeds of lottery games conducted
101	pursuant to this chapter act be used to support improvements in
102	public education and that such proceeds not be used as a
103	substitute for existing resources for public education.
104	(b)  That the lottery games be operated by a department of
105	state government that functions as much as possible in the
106	manner of an entrepreneurial business enterprise or with the
107	assistance of an entrepreneurial business enterprise under a
108	management agreement overseen by the department. The Legislature
109	recognizes that the operation of a lottery is a unique activity
110	for state government and that structures and procedures
111	appropriate to the performance of other governmental functions
112	are not necessarily appropriate to the operation of a state
113	lottery.
114	(c)  That the lottery games be operated by a self-
115	supporting, revenue-producing department or with the assistance
116	of an entrepreneurial business enterprise under a management
117	agreement with government oversight.
118	(d)  That the department be accountable to the Legislature
119	and the people of the state through a system of audits and
120	reports and through compliance with financial disclosure, open
121	meetings, and public records laws and that any entity contracted
122	with under a management agreement must also be accountable to
123	the Legislature and the people of the state.
124	Section 4.  Section 24.103, Florida Statutes, is amended to
125	read:
126	24.103  Definitions.--As used in this chapter act:
127	(1)  "Department" means the Department of the Lottery.
128	(2)(4)  "Major procurement" means a procurement for a
129	contract for the printing of tickets for use in any lottery
130	game, consultation services for the startup of the lottery, any
131	goods or services involving the official recording for lottery
132	game play purposes of a player's selections in any lottery game
133	involving player selections, any goods or services involving the
134	receiving of a player's selection directly from a player in any
135	lottery game involving player selections, any goods or services
136	involving the drawing, determination, or generation of winners
137	in any lottery game, the security report services provided for
138	in this chapter act, or any goods and services relating to
139	marketing and promotion that which exceed a value of $25,000.
140	(3)  "Management agreement" means that agreement entered
141	into pursuant to which the state may contract with a manager to
142	provide management services to the lottery, although under such
143	an agreement the department shall continue to manage and operate
144	the lottery, and further pursuant to which the manager may
145	receive certain lottery ticket or share sales and related
146	proceeds in consideration of the payment of a fee or fees to the
147	state.
148	(4)  "Manager" means an entity that provides management
149	services to the lottery on behalf of the department under a
150	management agreement.
151	(5)(3)  "Person" means any individual, firm, association,
152	joint adventure, partnership, estate, trust, syndicate,
153	fiduciary, corporation, or other group or combination and shall
154	include any agency or political subdivision of the state.
155	(6)(5)  "Retailer" means a person who sells lottery tickets
156	on behalf of the department or the manager pursuant to a
157	contract.
158	(7)(2)  "Secretary" means the secretary of the department.
159	(8)(6)  "Vendor" means a person who provides or proposes to
160	provide goods or services to the department, but does not
161	include an employee of the department, a retailer, or a state
162	agency.
163	Section 5.  Section 24.104, Florida Statutes, is amended to
164	read:
165	24.104  Department; purpose.--The purpose of the department
166	is to operate the state lottery as authorized by s. 15, Art. X
167	of the State Constitution with or without a manager so as to
168	maximize revenues in a manner consonant with the dignity of the
169	state and the welfare of its citizens.
170	Section 6.  Subsections (2), (4), (6), (7), (8), (9), (11),
171	(15), (17), (18), and (19) of section 24.105, Florida Statutes,
172	are amended to read:
173	24.105  Powers and duties of department.--The department
174	shall:
175	(2)  Supervise and administer the operation of the lottery
176	with or without a manager in accordance with the provisions of
177	this chapter act and rules adopted pursuant thereto.
178	(4)  Submit monthly and annual reports to the Governor, the
179	Chief Financial Officer, the President of the Senate, and the
180	Speaker of the House of Representatives disclosing the total
181	lottery revenues, prize disbursements, and other expenses of the
182	department during the preceding month or, if the lottery has
183	entered into a management agreement, comparable information
184	provided by the manager. The annual report shall additionally
185	describe the organizational structure of the department,
186	including its hierarchical structure, and shall identify the
187	divisions and bureaus created by the secretary and summarize the
188	departmental functions performed by each.
189	(6)  Maintain weekly or more frequent records of lottery
190	transactions, including the distribution of tickets to
191	retailers, revenues received, claims for prizes, prizes paid,
192	and other financial transactions of the department. If the
193	department has entered into a management agreement, the
194	agreement shall require the manager to maintain comparable
195	information.
196	(7)  Make a continuing study of the lottery to ascertain
197	any defects of this chapter act or rules adopted thereunder
198	which could result in abuses in the administration of the
199	lottery; make a continuing study of the operation and the
200	administration of similar laws in other states and of federal
201	laws that which may affect the lottery; and, if the department
202	has not entered into a management agreement, make a continuing
203	study of the reaction of the public to existing and potential
204	features of the lottery.
205	(8)  If the department does not enter into a management
206	agreement, conduct such market research as is necessary or
207	appropriate, which may include an analysis of the demographic
208	characteristics of the players of each lottery game and an
209	analysis of advertising, promotion, public relations,
210	incentives, and other aspects of communications.
211	(9)  Adopt rules governing the establishment and operation
212	of the state lottery, including:
213	(a)1.  If the department does not enter into a management
214	agreement, the type of lottery games to be conducted.
215	2.  Regardless of whether the department has entered into a
216	management agreement, except that:
217	a.1.  No name of an elected official shall appear on the
218	ticket or play slip of any lottery game or on any prize or on
219	any instrument used for the payment of prizes, unless such prize
220	is in the form of a state warrant.
221	b.2.  No coins or currency shall be dispensed from any
222	electronic computer terminal or device used in any lottery game.
223	c.3.  Other than as provided in sub-subparagraph d.
224	subparagraph 4., no terminal or device may be used for any
225	lottery game that which may be operated solely by the player
226	without the assistance of the retailer.
227	d.4.  The only player-activated machine that which may be
228	utilized is a machine that which dispenses instant lottery game
229	tickets following the insertion of a coin or currency by a
230	ticket purchaser. To be authorized a machine must: be under the
231	supervision and within the direct line of sight of the lottery
232	retailer to ensure that the machine is monitored and only
233	operated by persons at least 18 years of age and; be capable of
234	being electronically deactivated by the retailer to prohibit use
235	by persons less than 18 years of age through the use of a
236	lockout device that maintains the machine's deactivation for a
237	period of no less than 5 minutes unless the machine uses a
238	method of verifying the age of an operator that the department
239	certifies is equivalent or superior to line-of-sight monitoring
240	and lockout by the retailer. Such a machine must also; and be
241	designed to prevent its use or conversion for use in any manner
242	other than the dispensing of instant lottery tickets. Authorized
243	machines may dispense change to players purchasing tickets but
244	may not be utilized for paying the holders of winning tickets of
245	any kind. At least one clerk must be on duty at the lottery
246	retailer while the machine is in operation. However, at least
247	two clerks must be on duty at any lottery location that which
248	has violated s. 24.1055.
249	(b)  If the department does not enter into a management
250	agreement, the sales price of tickets.
251	(c)  If the department does not enter into a management
252	agreement, the number and sizes of prizes.
253	(d)  If the department does not enter into a management
254	agreement, the method of selecting winning tickets. However,
255	regardless of whether the department has entered into a
256	management agreement, if a lottery game involves a drawing, the
257	drawing shall be public and witnessed by an accountant employed
258	by an independent certified public accounting firm. The
259	equipment used in the drawing shall be inspected before and
260	after the drawing.
261	(e)  If the department does not enter into a management
262	agreement, the manner of payment of prizes to holders of winning
263	tickets.
264	(f)  If the department does not enter into a management
265	agreement, the frequency of drawings or selections of winning
266	tickets.
267	(g)  If the department does not enter into a management
268	agreement, the number and type of locations at which tickets may
269	be purchased.
270	(h)  If the department does not enter into a management
271	agreement, the method to be used in selling tickets.
272	(i)  If the department does not enter into a management
273	agreement, the manner and amount of compensation of retailers.
274	(j)  Such other matters necessary or desirable for the
275	efficient or economical operation of the lottery or for the
276	convenience of the public.
277	(11)  In the selection of games and method of selecting
278	winning tickets, be sensitive to the impact of the lottery upon
279	the pari-mutuel industry and, accordingly, the department or the
280	manager, if any, may use for any game the theme of horseracing,
281	dogracing, or jai alai and may allow a lottery game to be based
282	upon a horserace, dograce, or jai alai activity so long as the
283	outcome of such lottery game is determined entirely by chance.
284	(15)  Or the manager, if any, shall have the authority to
285	charge fees to persons applying for contracts as vendors or
286	retailers, which fees are reasonably calculated to cover the
287	costs of investigations and other activities related to the
288	processing of the application.
289	(17)  Or the manager, if any, shall, in accordance with the
290	provisions of this chapter act, enter into contracts with
291	retailers so as to provide adequate and convenient availability
292	of tickets to the public for each game.
293	(18)  Or the manager, if any, shall have the authority to
294	enter into agreements with other states for the operation and
295	promotion of a multistate lottery if such agreements are in the
296	best interest of the state lottery. The authority conferred by
297	this subsection is not effective until 1 year after the first
298	day of lottery ticket sales.
299	(19)  Employ division directors and other staff as may be
300	necessary to carry out the provisions of this chapter act;
301	however:
302	(a)  No person shall be employed by the department who has
303	been convicted of, or entered a plea of guilty or nolo
304	contendere to, a felony committed in the preceding 10 years,
305	regardless of adjudication, unless the department determines
306	that:
307	1.  The person has been pardoned or his or her civil rights
308	have been restored; or
309	2.  Subsequent to such conviction or entry of plea the
310	person has engaged in the kind of law-abiding commerce and good
311	citizenship that would reflect well upon the integrity of the
312	lottery.
313	(b)  No officer or employee of the department having
314	decisionmaking authority shall participate in any decision
315	involving any vendor or retailer with whom the officer or
316	employee has a financial interest. No such officer or employee
317	may participate in any decision involving any vendor or retailer
318	with whom the officer or employee has discussed employment
319	opportunities without the approval of the secretary or, if such
320	officer is the secretary, without the approval of the Governor.
321	Any officer or employee of the department shall notify the
322	secretary of any such discussion or, if such officer is the
323	secretary, he or she shall notify the Governor. A violation of
324	this paragraph is punishable in accordance with s. 112.317.
325	(c)  No officer or employee of the department who leaves
326	the employ of the department shall represent any vendor or
327	retailer or the manager, if any, before the department regarding
328	any specific matter in which the officer or employee was
329	involved while employed by the department, for a period of 1
330	year following cessation of employment with the department. A
331	violation of this paragraph is punishable in accordance with s.
332	112.317.
333	(d)  The department shall establish and maintain a
334	personnel program for its employees, including a personnel
335	classification and pay plan which may provide any or all of the
336	benefits provided in the Senior Management Service or Selected
337	Exempt Service. Each officer or employee of the department shall
338	be a member of the Florida Retirement System. The retirement
339	class of each officer or employee shall be the same as other
340	persons performing comparable functions for other agencies.
341	Employees of the department shall serve at the pleasure of the
342	secretary and shall be subject to suspension, dismissal,
343	reduction in pay, demotion, transfer, or other personnel action
344	at the discretion of the secretary. Such personnel actions are
345	exempt from the provisions of chapter 120. All employees of the
346	department are exempt from the Career Service System provided in
347	chapter 110 and, notwithstanding the provisions of s.
348	110.205(5), are not included in either the Senior Management
349	Service or the Selected Exempt Service. However, all employees
350	of the department are subject to all standards of conduct
351	adopted by rule for career service and senior management
352	employees pursuant to chapter 110. In the event of a conflict
353	between standards of conduct applicable to employees of the
354	Department of the Lottery the more restrictive standard shall
355	apply. Interpretations as to the more restrictive standard may
356	be provided by the Commission on Ethics upon request of an
357	advisory opinion pursuant to s. 112.322(3)(a), for purposes of
358	this subsection the opinion shall be considered final action.
359	(e)  If the department enters into a management agreement,
360	no employee or contractor of the manager shall receive
361	membership in the Florida Retirement System or any other state
362	retirement or other state employee benefits on the basis of such
363	employment or contract.
364	Section 7.  Section 24.107, Florida Statutes, is amended to
365	read:
366	24.107  Advertising and promotion of lottery games.--
367	(1)  The Legislature recognizes the need for extensive and
368	effective advertising and promotion of lottery games. It is the
369	intent of the Legislature that such advertising and promotion be
370	consistent with the dignity and integrity of the state. In
371	advertising the value of a prize that will be paid over a period
372	of years, the department or the manager, if any, may refer to
373	the sum of all prize payments over the period.
374	(2)  The department or the manager, if any, may act as a
375	retailer and may conduct promotions that which involve the
376	dispensing of lottery tickets free of charge.
377	Section 8.  Subsections (2), (5), (6), and (7) of section
378	24.108, Florida Statutes, are amended to read:
379	24.108  Division of Security; duties; security report.--
380	(2)  The director and all investigators employed by the
381	division shall meet the requirements for employment and
382	appointment provided by s. 943.13 and shall satisfy the
383	requirements for certification established by the Criminal
384	Justice Standards and Training Commission pursuant to chapter
385	943. The director and such investigators shall be designated law
386	enforcement officers and shall have the power to investigate and
387	arrest for any alleged violation of this chapter act or any rule
388	adopted pursuant thereto, or any law of this state. Such law
389	enforcement officers may enter upon any premises in which
390	lottery tickets are sold, manufactured, printed, or stored
391	within the state for the performance of their lawful duties and
392	may take with them any necessary equipment, and such entry shall
393	not constitute a trespass. In any instance in which there is
394	reason to believe that a violation has occurred, such officers
395	have the authority, without warrant, to search and inspect any
396	premises where the violation is alleged to have occurred or is
397	occurring. Any such officer may, consistent with the United
398	States and Florida Constitutions, seize or take possession of
399	any papers, records, tickets, currency, or other items related
400	to any alleged violation.
401	(5)  The Department of Law Enforcement shall provide
402	assistance in obtaining criminal history information relevant to
403	investigations required for honest, secure, and exemplary
404	lottery operations, and such other assistance as may be
405	requested by the secretary and agreed to by the executive
406	director of the Department of Law Enforcement. Any other state
407	agency, including the Department of Business and Professional
408	Regulation and the Department of Revenue, shall, upon request,
409	provide the Department of the Lottery with any information
410	relevant to any investigation conducted pursuant to this chapter
411	act. The Department of the Lottery shall maintain the
412	confidentiality of any confidential information it receives from
413	any other agency. The Department of the Lottery shall reimburse
414	any agency for the actual cost of providing any assistance
415	pursuant to this subsection.
416	(6)  If the department does not enter into a management
417	agreement, the division shall monitor ticket validation and
418	lottery drawings.
419	(7)(a)  If the department does not enter into a management
420	agreement After the first full year of sales of tickets to the
421	public, or sooner if the secretary deems necessary, the
422	department shall, as it deems appropriate, but at least once
423	every 2 years engage an independent firm experienced in security
424	procedures, including, but not limited to, computer security and
425	systems security, to conduct a comprehensive study and
426	evaluation of all aspects of security in the operation of the
427	department.
428	(b)  The portion of the security report containing the
429	overall evaluation of the department in terms of each aspect of
430	security shall be presented to the Governor, the President of
431	the Senate, and the Speaker of the House of Representatives. The
432	portion of the security report containing specific
433	recommendations shall be confidential and shall be presented
434	only to the secretary, the Governor, and the Auditor General;
435	however, upon certification that such information is necessary
436	for the purpose of effecting legislative changes, such
437	information shall be disclosed to the President of the Senate
438	and the Speaker of the House of Representatives, who may
439	disclose such information to members of the Legislature and
440	legislative staff as necessary to effect such purpose. However,
441	any person who receives a copy of such information or other
442	information that which is confidential pursuant to this chapter
443	act or rule of the department shall maintain its
444	confidentiality. The confidential portion of the report is
445	exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I
446	of the State Constitution.
447	(c)  Thereafter, similar studies of security shall be
448	conducted as the department deems appropriate but at least once
449	every 2 years.
450	Section 9.  Subsection (1) and paragraph (h) of subsection
451	(2) of section 24.111, Florida Statutes, are amended to read:
452	24.111  Vendors; disclosure and contract requirements.--
453	(1)  The department may enter into contracts for the
454	purchase, lease, or lease-purchase of such goods or services as
455	are necessary for effectuating the purposes of this chapter act.
456	The department may not contract with any person or entity for
457	the total operation and administration of the state lottery
458	established by this chapter as provided in s. 24.1115 or act but
459	may make procurements that which integrate functions such as
460	lottery game design, supply of goods and services, and
461	advertising. In all procurement decisions, the department shall
462	take into account the particularly sensitive nature of the state
463	lottery and shall consider the competence, quality of product,
464	experience, and timely performance of the vendors in order to
465	promote and ensure security, honesty, fairness, and integrity in
466	the operation and administration of the lottery and the
467	objective of raising net revenues for the benefit of the public
468	purpose described in this chapter act.
469	(2)  The department shall investigate the financial
470	responsibility, security, and integrity of each vendor with
471	which it intends to negotiate a contract for major procurement.
472	Such investigation may include an investigation of the financial
473	responsibility, security, and integrity of any or all persons
474	whose names and addresses are required to be disclosed pursuant
475	to paragraph (a). Any person who submits a bid, proposal, or
476	offer as part of a major procurement must, at the time of
477	submitting such bid, proposal, or offer, provide the following:
478	(h)  If the department does not enter into a management
479	agreement, it The department shall lease all instant ticket
480	vending machines.
481
482	The department shall not contract with any vendor who fails to
483	make the disclosures required by this subsection, and any
484	contract with a vendor who has failed to make the required
485	disclosures shall be unenforceable. Any contract with any vendor
486	who does not comply with such requirements for periodically
487	updating such disclosures during the tenure of such contract as
488	may be specified in such contract may be terminated by the
489	department. This subsection shall be construed broadly and
490	liberally to achieve the ends of full disclosure of all
491	information necessary to allow for a full and complete
492	evaluation by the department of the competence, integrity,
493	background, and character of vendors for major procurements.
494	Section 10.  Section 24.1115, Florida Statutes, is created
495	to read:
496	24.1115  Management agreement.--
497	(1)  In construing this section, it is the intent of the
498	Legislature that the manager be accountable to the Legislature
499	and the people of this state through a system of audits and
500	reports and by complying with the financial disclosure
501	requirements of this section. The powers conferred by this
502	section are in addition and supplemental to the powers conferred
503	by any other law. If any other law or rule is inconsistent with
504	this section, this section is controlling as to any management
505	agreement entered into under this section.
506	(2)  As used in this section, the term:
507	(a)  "Offeror" means a person or group of persons that
508	responds to a request for qualifications under this section.
509	(b)  "Request for qualifications" means all materials and
510	documents prepared by the department to solicit the following
511	from offerors:
512	1.  Statements of qualifications.
513	2.  Proposals to enter into a management agreement.
514	(c)  "Selected offer" means the final offer of an offeror
515	that is the preliminary selection to be the manager for the
516	lottery under subsection (12).
517	(3)(a)  This section contains full and complete authority
518	for a management agreement between the department and a manager
519	and any rules adopted thereunder. No law, procedure, proceeding,
520	publication, notice, consent, approval, order, or act by the
521	department or any other officer, department, agency, or
522	instrumentality of the state or any political subdivision is
523	required for the department to enter into a management agreement
524	under this section.
525	(b)  This section contains full and complete authority for
526	the department to approve any subcontracts entered into by a
527	manager under the terms of a management agreement.
528	(4)  Subject to the other provisions of this section, the
529	department may enter into a management agreement with a manager
530	for a term not to exceed 30 years.
531	(5)  The department may not enter into a management
532	agreement that authorizes a manager to operate any of the
533	following games or a game simulating any of the following games:
534	(a)  Video lottery games.
535	(b)  Pari-mutuel wagering on any form of racing.
536	(c)  A game in which winners are selected on the results of
537	a race or sporting event.
538	(d)  Any other game commonly considered to be a form of
539	gambling that is not a game or a variation of a game that the
540	department operated before the management agreement is executed
541	or is operating on the date the management agreement is
542	executed.
543	(6)(a)  The management agreement must establish a
544	substantial benchmark amount. The management agreement must
545	require the manager to make an initial payment to the department
546	on the effective date of the management agreement in an amount
547	that exceeds the benchmark amount established in the management
548	agreement.
549	(b)  The initial payment required under paragraph (a) shall
550	be deposited as provided in s. 24.121.
551	(c)  If the manager fails to make any payment under this
552	section by the due date of the payment, the management agreement
553	is terminated.
554	(7)(a)  The management agreement must require that all
555	lottery proceeds initially be directly deposited with the state.
556	The state shall provide sums due to the manager under the
557	agreement only after the state annuity requirement in paragraph
558	(b) has been satisfied.
559	(b)  The state shall retain an annual amount at least equal
560	to the lottery proceeds for the last fiscal year preceding the
561	agreement beginning on a date that is specified in the
562	management agreement and that occurs during the first year after
563	the execution of the management agreement. For the purposes of
564	this subsection, this annual amount is referred to as the "state
565	annuity." The state annuity received under this subsection shall
566	be deposited as provided in s. 24.121.
567	(c)  The management agreement must include the following
568	provisions to ensure that the manager does not earn excess
569	revenue under the management agreement:
570	1.  The Office of Policy and Budget in the Executive Office
571	of the Governor shall calculate the percentage rate of average
572	annual growth in gross revenue earned by the department during
573	the last 5 full state fiscal years preceding the commencement of
574	the management agreement. For purposes of this subsection, this
575	percentage is referred to as the "baseline growth percentage."
576	2.  Beginning with the second full state fiscal year after
577	the execution of the management agreement, the Office of Policy
578	and Budget in the Executive Office of the Governor shall for
579	each state fiscal year calculate the growth, expressed as a
580	percentage, in gross revenue earned by the manager under the
581	management agreement, as compared to the preceding state fiscal
582	year.
583	3.  The department shall establish an excess payments
584	account for purposes of this paragraph. Any earnings from money
585	in the excess payments account accrue to the account. Money in
586	the excess payments account may be used only to make payments to
587	a manager as required by this paragraph and to receive payments
588	from a manager as required by this paragraph.
589	4.  If the percentage calculated by the Office of Policy
590	and Budget in the Executive Office of the Governor under
591	subparagraph 2. for a particular state fiscal year exceeds the
592	baseline growth percentage, the manager must make an additional
593	payment to the department. The amount of the additional payment
594	for the state fiscal year is equal to the gross revenue earned
595	by the manager from lottery tickets in the previous state fiscal
596	year multiplied by one-half the difference between the
597	percentage calculated by the Office of Policy and Budget in the
598	Executive Office of the Governor under subparagraph 2. for the
599	state fiscal year and the baseline growth percentage. The
600	department shall deposit any additional payment made by the
601	manager under this subparagraph into the excess payments
602	account.
603	5.  If the baseline growth percentage exceeds the
604	percentage calculated by the Office of Policy and Budget in the
605	Executive Office of the Governor under subparagraph 2. for a
606	particular state fiscal year, the department must make a payment
607	to the manager from the excess payments account. However, the
608	department is required to make a payment to the manager only if
609	the excess payments account has a positive balance. The amount
610	of the payment by the department for the state fiscal year is
611	equal to the lesser of:
612	a.  The result of the gross revenue earned by the manager
613	from lottery tickets in the previous state fiscal year
614	multiplied by one-half the difference between the baseline
615	growth percentage and the percentage calculated by the Office of
616	Policy and Budget in the Executive Office of the Governor under
617	subparagraph 2. for the state fiscal year; or
618	b.  The balance in the excess payments account.
619	6.  The management agreement must specify the time by which
620	a payment required under this paragraph shall be made.
621	7.  If at the expiration or termination of the management
622	agreement there is money remaining in the excess payments
623	account, it shall be retained by the department and deposited as
624	provided in s. 24.121.
625	(8)  A management agreement must contain the following:
626	(a)  The original term of the management agreement.
627	(b)  A requirement that the manager locate its principal
628	office within this state.
629	(c)  A requirement that so long as manager complies with
630	all the conditions of the agreement under the oversight of the
631	department, the manager shall perform its duties and obligations
632	with respect to management of the operation of the lottery,
633	including the following:
634	1.  The right to use equipment and other assets used in the
635	operation of the lottery.
636	2.  The rights and obligations under contracts with
637	retailers and vendors.
638	3.  The implementation of a comprehensive security program
639	by the manager.
640	4.  The implementation of a comprehensive system of
641	internal audits.
642	5.  The implementation of a program by the manager to curb
643	compulsive gambling by persons playing the lottery.
644	6.  A system for determining the following:
645	a.  The type of lottery games to be conducted.
646	b.  The method of selecting winning tickets.
647	c.  The manner of payment of prizes to holders of winning
648	tickets.
649	d.  The frequency of drawings of winning tickets.
650	e.  The method to be used in selling tickets.
651	f.  A system for verifying the validity of tickets claimed
652	to be winning tickets.
653	g.  The basis upon which retailer commissions are
654	established by the manager.
655	h.  Minimum payouts.
656	(d)  A requirement that advertising and promotion must be
657	consistent with the dignity and integrity of the state.
658	(e)  Guidelines to ensure that advertising and promoting of
659	the lottery by the manager are not misleading and fairly balance
660	the potential benefits and the potential costs and risks of
661	playing lottery games.
662	(f)  A code of ethics for the manager's officers and
663	employees.
664	(g)  A requirement for the department to monitor and
665	oversee the manager's practices and take action that the
666	department considers appropriate to ensure that the manager is
667	in compliance with the terms of the management agreement, while
668	allowing the manager, unless specifically prohibited by law or
669	the management agreement, to negotiate and sign its own
670	contracts with vendors.
671	(h)  A provision requiring the manager to periodically file
672	appropriate financial statements in a form and manner acceptable
673	to the department.
674	(i)  Cash reserve requirements.
675	(j)  Procedural requirements for obtaining approval by the
676	department when a management agreement or an interest in a
677	management agreement is sold, assigned, transferred, or pledged
678	as collateral to secure financing. A management agreement or an
679	interest in a management agreement may not be sold, assigned,
680	transferred, or pledged as collateral to secure financing
681	without the approval of the department.
682	(k)  Grounds for termination of the management agreement by
683	the department or the manager.
684	(l)  Procedures for amendment of the agreement.
685	(m)  A provision prohibiting the department from entering
686	into another management agreement under this section as long as
687	the original management agreement has not been terminated.
688	(n)  The transition of rights and obligations, including
689	any associated equipment or other assets used in the operation
690	of the lottery, from the manager to any successor manager of the
691	lottery, including the department, following the termination of
692	or foreclosure upon the management agreement.
693	(o)  Right of use of copyrights, trademarks, and service
694	marks held by the department in the name of the state. The
695	agreement must provide that any use of them by the manager shall
696	only be for the purpose of fulfilling its obligations under the
697	management agreement during the term of the agreement.
698	(p)  Minority participation as provided in s. 24.113.
699	(9)(a)  The manager shall undergo a complete investigation
700	every 3 years by the department to determine whether the manager
701	remains in compliance with this chapter and the management
702	agreement.
703	(b)  The manager shall bear the cost of an investigation or
704	reinvestigation of the manager under this subsection.
705	(10)(a)  Before the department enters into a management
706	agreement pursuant to this section, the secretary, as provided
707	in subsection (17), may retain an advisor or advisors to the
708	assess fiscal feasibility of such an agreement and help
709	determine whether to proceed. Such an advisor may also be
710	retained by the department to represent the department in the
711	request for qualifications process, if one is commenced. If the
712	secretary decides to pursue the possibility of a management
713	agreement, a request for manager qualifications must be issued
714	as set forth in this section. A request for qualifications for a
715	management agreement may be issued in one or more phases.
716	(b)  A request for qualifications must include the
717	following:
718	1.  The factors or criteria that will be used in evaluating
719	an offeror's statement of qualifications and proposal.
720	2.  A statement that a proposal must be accompanied by
721	evidence of the offeror's financial responsibility.
722	3.  A statement concerning whether discussions may be
723	conducted with the offerors for the purpose of clarification to
724	ensure full understanding of and responsiveness to the
725	solicitation requirements.
726	4.  A statement concerning any other information to be
727	considered in evaluating the offeror's qualifications and
728	proposal.
729	(c)  Notice of a request for qualifications shall be
730	published twice at least 7 calendar days apart, with the second
731	publication made at least 7 days before any initial submission
732	is due.
733	(d)  As provided in a request for qualifications,
734	discussions may be conducted with the offerors for the purpose
735	of clarification to ensure full understanding of and
736	responsiveness to the solicitation requirements.
737	(11)  The contents of proposals are competitive sealed
738	replies in response to an invitation to negotiate for purposes
739	of s. 119.071(1)(b) and are exempt from s. 119.07(1) and s.
740	24(a), Art. I of the State Constitution until disclosure of the
741	contents that are not otherwise exempt under s. 119.071 or other
742	law is required under s. 119.071(1)(b).
743	(12)(a)  The department may negotiate with one or more
744	offerors the department determines are responsible and
745	reasonably capable of managing the lottery and may seek to
746	obtain a final offer from one or more of those offerors.
747	(b)  The department shall consider the statement of
748	qualifications and the proposals to enter into a management
749	agreement that are submitted in response to a request for
750	qualifications in making a determination under this section,
751	including the following as they apply to the offeror and its
752	partners, if any:
753	1.  Expertise, qualifications, competence, skills, and plan
754	to perform obligations under the management agreement in
755	accordance with the management agreement.
756	2.  Financial strength, including capitalization and
757	available financial resources.
758	3.  Experience in operating government-authorized lotteries
759	and gaming and other similar projects and the quality of any
760	past or present performance on similar or equivalent
761	engagements.
762	4.  Integrity, background, and reputation.
763	(c)  The requirements set forth in paragraph (b) also apply
764	to the approval of any successor manager.
765	(13)(a)  After the final offers from offerors have been
766	negotiated under subsection (12), the department shall:
767	1.  Make a preliminary selection of an offeror as the
768	manager for the lottery; or
769	2.  Terminate the request for qualifications process.
770	(b)  If the department makes a preliminary selection of the
771	manager under this subsection, the department shall schedule a
772	public hearing on the preliminary selection and provide public
773	notice of the hearing at least 7 days before the hearing. The
774	notice must include the following:
775	1.  The date, time, and place of the hearing.
776	2.  The subject matter of the hearing.
777	3.  A brief description of the management agreement to be
778	awarded.
779	4.  The identity of the offeror that has been preliminarily
780	selected as the manager.
781	5.  The address and telephone number of the department.
782	6.  A statement indicating that, subject to subsection
783	(11), and except for those parts that are confidential under s.
784	s. 119.071 or other applicable law, the selected offer and an
785	explanation of the basis upon which the preliminary selection
786	was made are available for public inspection and copying at the
787	principal office of the department during regular business hours
788	and, to the extent feasible, on the Internet.
789	(c)  Subject to subsection (11), and except for those parts
790	that are confidential under s. 119.071 or other applicable law,
791	the selected offer and a written explanation of the basis upon
792	which the preliminary selection was made shall be made available
793	for inspection and copying in accordance with s. 119.07 and, to
794	the extent feasible, on the Internet at least 7 calendar days
795	before the hearing scheduled under this section.
796	(d)  At the hearing, the department shall allow the public
797	to be heard on the preliminary selection.
798	(14)(a)  After the hearing required under subsection (13),
799	the department shall determine if a management agreement should
800	be entered into with the offeror that submitted the selected
801	offer. If the department makes a favorable determination, the
802	department shall submit the determination to the Governor.
803	(b)  After review of the department's determination, the
804	Governor may accept or reject the department's determination. If
805	the Governor accepts the department's determination, the
806	Governor shall designate the offeror who submitted the selected
807	offer as the manager for the lottery.
808	(c)  After the Governor designates the manager, the
809	department may execute a management agreement with the
810	designated manager.
811	(15)  The manager may finance its obligations with respect
812	to the lottery and the management agreement in the amounts and
813	upon the terms and conditions determined by the manager.
814	However, any bonds, debt, other securities, or other financing
815	issued for the purposes of this section shall not be considered
816	to constitute a debt of the state or any political subdivision
817	of the state or a pledge of the faith and credit of the state or
818	any political subdivision of the state.
819	(16)  An action to contest the validity of a management
820	agreement entered into under this section may not be brought
821	after the 15th day after the publication of the notice of the
822	designation of the manager under the management agreement as
823	provided in subsection (14).
824	(17)(a)  The department must use appropriate experts and
825	professionals needed to conduct a competitive bidding proceeding
826	as required under this section and may use the services of
827	outside professionals to the extent necessary to carry out its
828	obligations under this section.
829	(b)  The department may exercise any powers provided under
830	this section in participation or cooperation with any other
831	governmental entity and enter into any contracts to facilitate
832	that participation or cooperation without compliance with any
833	other statute.
834	(c)  The department may make and enter into all contracts
835	and agreements necessary or incidental to the performance of the
836	department's duties under this section and the execution of the
837	department's powers under this section. These contracts or
838	agreements are not subject to any approval by any other
839	governmental entity and may be for any term of years within the
840	time period of the management agreement under subsection (4) and
841	contain any terms that are considered reasonable by the
842	department.
843	(d)  The department may make and enter into all contracts
844	and agreements with a state agency necessary or incidental to
845	the performance of the duties and the execution of the powers
846	granted to the department or the state agency in accordance with
847	this section or the management agreement. These contracts or
848	agreements are not subject to approval by any other governmental
849	entity and may be for any term of years and contain any terms
850	that are considered reasonable by the department or the state
851	agency.
852	(18)(a)  The department may not sell the authorization to
853	operate the lottery.
854	(b)  Any tangible personal property used exclusively in
855	connection with the lottery that is owned by the department and
856	leased to the manager shall be owned by the department in the
857	name of the state and shall be considered to be public property
858	devoted to an essential public and governmental function.
859	(19)  The department may exercise any of its powers under
860	this chapter or any other law as necessary or desirable for the
861	execution of the department's powers under this section.
862	(20)  Neither this section nor any management agreement
863	entered into under this section prohibits the Legislature from
864	authorizing forms of gambling that are not in direct competition
865	with the lottery.
866	Section 11.  Section 24.112, Florida Statutes, is amended
867	to read:
868	24.112  Retailers of lottery tickets.--
869	(1)  If the department does not enter into a management
870	agreement, the department shall promulgate rules specifying the
871	terms and conditions for contracting with retailers who will
872	best serve the public interest and promote the sale of lottery
873	tickets.
874	(2)  If the department does not enter into a management
875	agreement, in the selection of retailers, the department shall
876	consider factors such as financial responsibility, integrity,
877	reputation, accessibility of the place of business or activity
878	to the public, security of the premises, the sufficiency of
879	existing retailers to serve the public convenience, and the
880	projected volume of the sales for the lottery game involved. In
881	the consideration of these factors, the department may require
882	the information it deems necessary of any person applying for
883	authority to act as a retailer. However, the department may not
884	establish a limitation upon the number of retailers and shall
885	make every effort to allow small business participation as
886	retailers. It is the intent of the Legislature that retailer
887	selections be based on business considerations and the public
888	convenience and that retailers be selected without regard to
889	political affiliation.
890	(3)  If the department does not enter into a management
891	agreement, the department shall not contract with any person as
892	a retailer who:
893	(a)  Is less than 18 years of age.
894	(b)  Is engaged exclusively in the business of selling
895	lottery tickets; however, this paragraph shall not preclude the
896	department from selling lottery tickets.
897	(c)  Has been convicted of, or entered a plea of guilty or
898	nolo contendere to, a felony committed in the preceding 10
899	years, regardless of adjudication, unless the department
900	determines that:
901	1.  The person has been pardoned or the person's civil
902	rights have been restored;
903	2.  Subsequent to such conviction or entry of plea the
904	person has engaged in the kind of law-abiding commerce and good
905	citizenship that would reflect well upon the integrity of the
906	lottery; or
907	3.  If the person is a firm, association, partnership,
908	trust, corporation, or other entity, the person has terminated
909	its relationship with the individual whose actions directly
910	contributed to the person's conviction or entry of plea.
911	(4)  If the department does not enter into a management
912	agreement, the department shall issue a certificate of authority
913	to each person with whom it contracts as a retailer for purposes
914	of display pursuant to subsection (6). The issuance of the
915	certificate shall not confer upon the retailer any right apart
916	from that specifically granted in the contract. The authority to
917	act as a retailer shall not be assignable or transferable.
918	(5)  Any contract executed by the department under pursuant
919	to this section shall specify the reasons for any suspension or
920	termination of the contract by the department, including, but
921	not limited to:
922	(a)  Commission of a violation of this chapter act or rule
923	adopted pursuant thereto.
924	(b)  Failure to accurately account for lottery tickets,
925	revenues, or prizes as required by the department.
926	(c)  Commission of any fraud, deceit, or misrepresentation.
927	(d)  Insufficient sale of tickets.
928	(e)  Conduct prejudicial to public confidence in the
929	lottery.
930	(f)  Any material change in any matter considered by the
931	department in executing the contract with the retailer.
932	(6)  Every retailer shall post and keep conspicuously
933	displayed in a location on the premises accessible to the public
934	its certificate of authority and, with respect to each game, a
935	statement supplied by the department or the manager of the
936	estimated odds of winning some prize for the game.
937	(7)  No contract with a retailer shall authorize the sale
938	of lottery tickets at more than one location, and a retailer may
939	sell lottery tickets only at the location stated on the
940	certificate of authority.
941	(8)  If the department does not enter into a management
942	agreement, with respect to any retailer whose rental payments
943	for premises are contractually computed, in whole or in part, on
944	the basis of a percentage of retail sales, and where such
945	computation of retail sales is not explicitly defined to include
946	sales of tickets in a state-operated lottery, the compensation
947	received by the retailer from the department shall be deemed to
948	be the amount of the retail sale for the purposes of such
949	contractual compensation.
950	(9)  If the department does not enter into a management
951	agreement:
952	(a)  The department may require every retailer to post an
953	appropriate bond as determined by the department, using an
954	insurance company acceptable to the department, in an amount not
955	to exceed twice the average lottery ticket sales of the retailer
956	for the period within which the retailer is required to remit
957	lottery funds to the department. For the first 90 days of sales
958	of a new retailer, the amount of the bond may not exceed twice
959	the average estimated lottery ticket sales for the period within
960	which the retailer is required to remit lottery funds to the
961	department. This paragraph shall not apply to lottery tickets
962	that which are prepaid by the retailer.
963	(b)  In lieu of such bond, the department may purchase
964	blanket bonds covering all or selected retailers or may allow a
965	retailer to deposit and maintain with the Chief Financial
966	Officer securities that are interest bearing or accruing and
967	that, with the exception of those specified in subparagraphs 1.
968	and 2., are rated in one of the four highest classifications by
969	an established nationally recognized investment rating service.
970	Securities eligible under this paragraph shall be limited to:
971	1.  Certificates of deposit issued by solvent banks or
972	savings associations organized and existing under the laws of
973	this state or under the laws of the United States and having
974	their principal place of business in this state.
975	2.  United States bonds, notes, and bills for which the
976	full faith and credit of the government of the United States is
977	pledged for the payment of principal and interest.
978	3.  General obligation bonds and notes of any political
979	subdivision of the state.
980	4.  Corporate bonds of any corporation that is not an
981	affiliate or subsidiary of the depositor.
982
983	Such securities shall be held in trust and shall have at all
984	times a market value at least equal to an amount required by the
985	department.
986	(10)  Every contract entered into by the department
987	pursuant to this section shall contain a provision for payment
988	of liquidated damages to the department for any breach of
989	contract by the retailer.
990	(11)  If the department does not enter into a management
991	agreement, the department shall establish procedures by which
992	each retailer shall account for all tickets sold by the retailer
993	and account for all funds received by the retailer from such
994	sales. The contract with each retailer shall include provisions
995	relating to the sale of tickets, payment of moneys to the
996	department, reports, service charges, and interest and
997	penalties, if necessary, as the department shall deem
998	appropriate.
999	(12)  No payment by a retailer to the department for
1000	tickets shall be in cash. All such payments shall be in the form
1001	of a check, bank draft, electronic fund transfer, or other
1002	financial instrument authorized by the secretary.
1003	(13)  Each retailer shall provide accessibility for
1004	disabled persons on habitable grade levels. This subsection does
1005	not apply to a retail location that which has an entrance door
1006	threshold more than 12 inches above ground level. As used herein
1007	and for purposes of this subsection only, the term
1008	"accessibility for disabled persons on habitable grade levels"
1009	means that retailers shall provide ramps, platforms, aisles and
1010	pathway widths, turnaround areas, and parking spaces to the
1011	extent these are required for the retailer's premises by the
1012	particular jurisdiction where the retailer is located.
1013	Accessibility shall be required to only one point of sale of
1014	lottery tickets for each lottery retailer location. The
1015	requirements of this subsection shall be deemed to have been met
1016	if, in lieu of the foregoing, disabled persons can purchase
1017	tickets from the retail location by means of a drive-up window,
1018	provided the hours of access at the drive-up window are not less
1019	than those provided at any other entrance at that lottery
1020	retailer location. Inspections for compliance with this
1021	subsection shall be performed by those enforcement authorities
1022	responsible for enforcement pursuant to s. 553.80 in accordance
1023	with procedures established by those authorities. Those
1024	enforcement authorities shall provide to the Department of the
1025	Lottery a certification of noncompliance for any lottery
1026	retailer not meeting such requirements.
1027	(14)  If the department does not enter into a management
1028	agreement, the secretary may, after filing with the Department
1029	of State his or her manual signature certified by the secretary
1030	under oath, execute or cause to be executed contracts between
1031	the department and retailers by means of engraving, imprinting,
1032	stamping, or other facsimile signature.
1033	Section 12.  Section 24.113, Florida Statutes, is amended
1034	to read:
1035	24.113  Minority participation.--
1036	(1)  It is the intent of the Legislature that the
1037	department or the manager, if any, encourage participation by
1038	minority business enterprises as defined in s. 288.703.
1039	Accordingly, 15 percent of the retailers shall be minority
1040	business enterprises as defined in s. 288.703(2); however, no
1041	more than 35 percent of such retailers shall be owned by the
1042	same type of minority person, as defined in s. 288.703(3). The
1043	department or the manager, if any, is encouraged to meet the
1044	minority business enterprise procurement goals set forth in s.
1045	287.09451 in the procurement of commodities, contractual
1046	services, construction, and architectural and engineering
1047	services. This section shall not preclude or prohibit a minority
1048	person from competing for any other retailing or vending
1049	agreement awarded by the department or the manager.
1050	(2)  The department or the manager, if any, shall is
1051	directed to undertake training programs and other educational
1052	activities to enable minority persons to compete for such
1053	contracts on an equal basis.
1054	Section 13.  Subsection (1) of section 24.114, Florida
1055	Statutes, is amended to read:
1056	24.114  Bank deposits and control of lottery
1057	transactions.--
1058	(1)  All moneys received by each retailer from the
1059	operation of the state lottery, including, but not limited to,
1060	all ticket sales, interest, gifts, and donations, less the
1061	amount retained as compensation for the sale of the tickets and
1062	the amount paid out as prizes, shall be remitted to the
1063	department or deposited in a qualified public depository, as
1064	defined in s. 280.02, as directed by the department. The
1065	department shall have the responsibility for all administrative
1066	functions related to the receipt of funds. The department may
1067	also require each retailer to file with the department reports
1068	of the retailer's receipts and transactions in the sale of
1069	lottery tickets in such form and containing such information as
1070	the department may require. The department may require any
1071	person, including a qualified public depository, to perform any
1072	function, activity, or service in connection with the operation
1073	of the lottery as it may deem advisable pursuant to this chapter
1074	act and rules of the department, and such functions, activities,
1075	or services shall constitute lawful functions, activities, and
1076	services of such person.
1077	Section 14.  Section 24.115, Florida Statutes, is amended
1078	to read:
1079	24.115  Payment of prizes.--
1080	(1)  If the department does not enter into a management
1081	agreement, the department shall promulgate rules to establish a
1082	system of verifying the validity of tickets claimed to win
1083	prizes and to effect payment of such prizes; however, the
1084	following shall apply whether the department does or does not
1085	enter into a management agreement:
1086	(a)  The right of any person to a prize, other than a prize
1087	that is payable in installments over time, is not assignable.
1088	However, any prize, to the extent that it has not been assigned
1089	or encumbered pursuant to s. 24.1153, may be paid to the estate
1090	of a deceased prize winner or to a person designated pursuant to
1091	an appropriate court order. A prize that is payable in
1092	installments over time is assignable, but only pursuant to an
1093	appropriate court order as provided in s. 24.1153.
1094	(b)  No prize shall be paid to any person under the age of
1095	18 years unless the winning ticket was lawfully purchased and
1096	made a gift to the minor. In such case, the department or the
1097	manager, if a management agreement is in force, shall direct
1098	payment to an adult member of the minor's family or the legal
1099	guardian of the minor as custodian for the minor. The person
1100	named as custodian shall have the same powers and duties as
1101	prescribed for a custodian pursuant to chapter 710, the Florida
1102	Uniform Transfers to Minors Act.
1103	(c)  No prize may be paid arising from claimed tickets that
1104	are stolen, counterfeit, altered, fraudulent, unissued, produced
1105	or issued in error, unreadable, not received or not recorded by
1106	the department or the manager, if a management agreement is in
1107	force, by applicable deadlines, lacking in captions that confirm
1108	and agree with the lottery play symbols as appropriate to the
1109	lottery game involved, or not in compliance with such additional
1110	specific rules and public or confidential validation and
1111	security tests of the department or the manager, if a management
1112	agreement is in force, appropriate to the particular lottery
1113	game involved.
1114	(d)  No particular prize in any lottery game may be paid
1115	more than once, and in the event of a binding determination that
1116	more than one claimant is entitled to a particular prize, the
1117	sole remedy of such claimants is the award to each of them of an
1118	equal share in the prize.
1119	(e)  For the convenience of the public, retailers may be
1120	authorized to pay winners amounts less than $600 after
1121	performing validation procedures on their premises appropriate
1122	to the lottery game involved.
1123	(f)  Holders of tickets shall have the right to claim
1124	prizes for 180 days after the drawing or the end of the lottery
1125	game or play in which the prize was won; except that with
1126	respect to any game in which the player may determine instantly
1127	if he or she has won or lost, such right shall exist for 60 days
1128	after the end of the lottery game. If a valid claim is not made
1129	for a prize within the applicable period, the prize shall
1130	constitute an unclaimed prize for purposes of subsection (2).
1131	(g)  No prize shall be paid upon a ticket purchased or sold
1132	in violation of this chapter act or to any person who is
1133	prohibited from purchasing a lottery ticket pursuant to this
1134	chapter act. Any such prize shall constitute an unclaimed prize
1135	for purposes of subsection (2).
1136	(2)(a)  If the department does not enter into a management
1137	agreement, 80 eighty percent of all unclaimed prize money shall
1138	be deposited in the Educational Enhancement Trust Fund
1139	consistent with the provisions of s. 24.121(2). Subject to
1140	appropriations provided in the General Appropriations Act, these
1141	funds may be used to match private contributions received under
1142	the postsecondary matching grant programs established in ss.
1143	1011.32, 1011.85, 1011.94, and 1013.79.
1144	(b)  The remaining 20 percent of unclaimed prize money
1145	shall be added to the pool from which future prizes are to be
1146	awarded or used for special prize promotions.
1147	(3)  The department or the manager, if a management
1148	agreement is in force, shall be discharged of all liability upon
1149	payment of a prize.
1150	(4)  It is the responsibility of the appropriate state
1151	agency and of the judicial branch to identify to the department
1152	or the manager, if a management agreement is in force, in the
1153	form and format prescribed by the department or the manager,
1154	persons owing an outstanding debt to any state agency or owing
1155	child support collected through a court, including spousal
1156	support or alimony for the spouse or former spouse of the
1157	obligor if the child support obligation is being enforced by the
1158	Department of Revenue. Prior to the payment of a prize of $600
1159	or more to any claimant having such an outstanding obligation,
1160	the department or the manager shall transmit the amount of the
1161	debt to the agency claiming the debt and shall authorize payment
1162	of the balance to the prize winner after deduction of the debt.
1163	If a prize winner owes multiple debts subject to offset under
1164	this subsection and the prize is insufficient to cover all such
1165	debts, the amount of the prize shall be transmitted first to the
1166	agency claiming that past due child support is owed. If a
1167	balance of lottery prize remains after payment of past due child
1168	support, the remaining lottery prize amount shall be transmitted
1169	to other agencies claiming debts owed to the state, pro rata,
1170	based upon the ratio of the individual debt to the remaining
1171	debt owed to the state.
1172	Section 15.  Section 24.1153, Florida Statutes, is amended
1173	to read:
1174	24.1153  Assignment of prizes payable in installments.--
1175	(1)  The right of any person to receive payments under a
1176	prize that is paid in installments over time by the department
1177	or the manager, if a management agreement is in force, may be
1178	voluntarily assigned, in whole or in part, if the assignment is
1179	made to a person or entity designated pursuant to an order of a
1180	court of competent jurisdiction located in the judicial district
1181	where the assigning prize winner resides or where the
1182	headquarters of the department is located or where in the state
1183	the headquarters of the manager is located, if a management
1184	agreement is in force. A court may issue an order approving a
1185	voluntary assignment and directing the department or the manager
1186	to make prize payments in whole or in part to the designated
1187	assignee, if the court finds that all of the following
1188	conditions have been met:
1189	(a)  The assignment is in writing, is executed by the
1190	assignor, and is, by its terms, subject to the laws of this
1191	state.
1192	(b)  The purchase price being paid for the payments being
1193	assigned represents a present value of the payments being
1194	assigned, discounted at an annual rate that does not exceed the
1195	state's usury limit for loans.
1196	(c)  The assignor provides a sworn affidavit attesting that
1197	he or she:
1198	1.  Is of sound mind, is in full command of his or her
1199	faculties, and is not acting under duress;
1200	2.  Has been advised regarding the assignment by his or her
1201	own independent legal counsel, who is unrelated to and is not
1202	being compensated by the assignee or any of the assignee's
1203	affiliates, and has received independent financial or tax advice
1204	concerning the effects of the assignment from a lawyer or other
1205	professional who is unrelated to and is not being compensated by
1206	the assignee or any of the assignee's affiliates;
1207	3.  Understands that he or she will not receive the prize
1208	payments or portions thereof for the years assigned;
1209	4.  Understands and agrees that with regard to the assigned
1210	payments the department or the manager and its officials and
1211	employees will have no further liability or responsibility to
1212	make the assigned payments to him or her;
1213	5.  Has been provided with a one-page written disclosure
1214	statement setting forth, in bold type of not less than 14
1215	points, the payments being assigned, by amounts and payment
1216	dates; the purchase price being paid; the rate of discount to
1217	present value, assuming daily compounding and funding on the
1218	contract date; and the amount, if any, of any origination or
1219	closing fees that will be charged to him or her; and
1220	6.  Was advised in writing, at the time he or she signed
1221	the assignment contract, that he or she had the right to cancel
1222	the contract, without any further obligation, within 3 business
1223	days following the date on which the contract was signed.
1224	(d)  Written notice of the proposed assignment and any
1225	court hearing concerning the proposed assignment is provided to
1226	the department's or the manager's counsel at least 10 days prior
1227	to any court hearing. The department or the manager is not
1228	required to appear in or be named as a party to any such action
1229	seeking judicial confirmation of an assignment under this
1230	section, but may intervene as of right in any such proceeding.
1231	(2)  A certified copy of a court order approving a
1232	voluntary assignment must be provided to the department or the
1233	manager no later than 14 days before the date on which the
1234	payment is to be made.
1235	(3)  In accordance with the provisions of s. 24.115(4), a
1236	voluntary assignment may not include or cover payments or
1237	portions of payments that are subject to offset on account of a
1238	defaulted or delinquent child support obligation or on account
1239	of a debt owed to a state agency. Each court order issued under
1240	subsection (1) shall provide that any delinquent child support
1241	obligations of the assigning prize winner and any debts owed to
1242	a state agency by the assigning prize winner, as of the date of
1243	the court order, shall be offset by the department or the
1244	manager first against remaining payments or portions thereof due
1245	the prize winner and then against payments due the assignee.
1246	(4)  The department or the manager, and its respective
1247	officials and employees, shall be discharged of all liability
1248	upon payment of an assigned prize under this section.
1249	(5)  The department or the manager may establish a
1250	reasonable fee to defray any administrative expenses associated
1251	with assignments made under this section, including the cost to
1252	the department or the manager of any processing fee that may be
1253	imposed by a private annuity provider. The fee amount shall
1254	reflect the direct and indirect costs associated with processing
1255	such assignments.
1256	(6)  If at any time the Internal Revenue Service or a court
1257	of competent jurisdiction issues a determination letter, revenue
1258	ruling, other public ruling of the Internal Revenue Service, or
1259	published decision to any state lottery or prize winner of any
1260	state lottery declaring that the voluntary assignment of prizes
1261	will affect the federal income tax treatment of prize winners
1262	who do not assign their prizes, the secretary of the department
1263	shall immediately file a copy of that letter, ruling, or
1264	published decision with the Secretary of State and the Office of
1265	the State Courts Administrator. A court may not issue an order
1266	authorizing a voluntary assignment under this section after the
1267	date any such ruling, letter, or published decision is filed.
1268	Section 16.  Section 24.117, Florida Statutes, is amended
1269	to read:
1270	24.117  Unlawful sale of lottery tickets; penalty.--Any
1271	person who knowingly:
1272	(1)  Sells a state lottery ticket when not authorized by
1273	the department or this chapter act to engage in such sale;
1274	(2)  Sells a state lottery ticket to a minor; or
1275	(3)  If the department does not enter into a management
1276	agreement, sells a state lottery ticket at any price other than
1277	that established by the department;
1278
1279	commits is guilty of a misdemeanor of the first degree,
1280	punishable as provided in s. 775.082 or s. 775.083.
1281	Section 17.  Subsections (4) and (5) of section 24.118,
1282	Florida Statutes, are amended to read:
1283	24.118  Other prohibited acts; penalties.--
1284	(4)  BREACH OF CONFIDENTIALITY.--Any person who, with
1285	intent to defraud or with intent to provide a financial or other
1286	advantage to himself, herself, or another, knowingly and
1287	willfully discloses any information relating to the lottery
1288	designated as confidential and exempt from the provisions of s.
1289	119.07(1) pursuant to this chapter commits act is guilty of a
1290	felony of the first degree, punishable as provided in s.
1291	775.082, s. 775.083, or s. 775.084.
1292	(5)  UNLAWFUL REPRESENTATION.--
1293	(a)  Any person who uses point-of-sale materials issued by
1294	the department or the manager or otherwise holds himself or
1295	herself out as a retailer without being authorized by the
1296	department or the manager to act as a retailer commits is guilty
1297	of a misdemeanor of the first degree, punishable as provided in
1298	s. 775.082 or s. 775.083.
1299	(b)  Any person who without being authorized by the
1300	department or the manager in writing uses the term "Florida
1301	Lottery," "State Lottery," "Florida State Lottery," or any
1302	similar term in the title or name of any charitable or
1303	commercial enterprise, product, or service commits is guilty of
1304	a misdemeanor of the first degree, punishable as provided in s.
1305	775.082 or s. 775.083.
1306	Section 18.  Subsections (1) and (2) of section 24.120,
1307	Florida Statutes, are amended to read:
1308	24.120  Financial matters; Operating Trust Fund;
1309	interagency cooperation.--
1310	(1)  There is hereby created in the State Treasury an
1311	Operating Trust Fund to be administered in accordance with
1312	chapters 215 and 216 by the department. If the department does
1313	not enter into a management agreement, all money received by the
1314	department which remains after payment of prizes and initial
1315	compensation paid to retailers shall be deposited into the
1316	Operating Trust Fund. All moneys in the trust fund are
1317	appropriated to the department for the purposes specified in
1318	this chapter act.
1319	(2)  Moneys available for the payment of prizes awarded by
1320	the department, if the department does not enter into a
1321	management agreement, on a deferred basis shall be invested by
1322	the State Board of Administration in accordance with a trust
1323	agreement approved by the secretary and entered into between the
1324	department and the State Board of Administration in accordance
1325	with ss. 215.44-215.53. The investments authorized by this
1326	subsection shall be done in a manner designed to preserve
1327	capital and to ensure the integrity of the lottery disbursement
1328	system by eliminating the risk of payment of funds when due and
1329	to produce equal annual sums of money over the required term of
1330	the investments.
1331	Section 19.  Subsections (1), (2), and (3) of section
1332	24.121, Florida Statutes, are amended to read:
1333	24.121  Allocation of revenues and expenditure of funds for
1334	public education.--
1335	(1)  If the department does not enter into a management
1336	agreement, variable percentages of the gross revenue from the
1337	sale of online and instant lottery tickets shall be returned to
1338	the public in the form of prizes paid by the department or
1339	retailers as authorized by this chapter act. The variable
1340	percentages of gross revenue from the sale of online and instant
1341	lottery tickets returned to the public in the form of prizes
1342	shall be established by the department in a manner designed to
1343	maximize the amount of funds deposited under subsection (2).
1344	(2)  Each fiscal year, variable percentages of the gross
1345	revenue from the sale of online and instant lottery tickets as
1346	determined by the department or the manager, if any, consistent
1347	with subsection (1), and other earned revenue up to the state
1348	annuity requirement, excluding application processing fees,
1349	shall be deposited in the Educational Enhancement Trust Fund,
1350	which is hereby created in the State Treasury to be administered
1351	by the Department of Education. If the department enters into a
1352	management agreement, the proceeds received by the department
1353	from the management agreement under s. 24.1115(7)(b) and (c)
1354	shall be deposited in the Educational Enhancement Trust Fund,
1355	with, at minimum, the greater of $400 million or one-third of
1356	the funds deposited into the trust fund to be allocated the
1357	Florida Bright Futures Scholarship Program. The Department of
1358	the Lottery shall transfer moneys to the Educational Enhancement
1359	Trust Fund at least once each quarter. Funds in the Educational
1360	Enhancement Trust Fund shall be used to the benefit of public
1361	education in accordance with the provisions of this chapter act.
1362	Notwithstanding any other provision of law, lottery revenues
1363	transferred to the Educational Enhancement Trust Fund shall be
1364	reserved as needed and used to meet the requirements of the
1365	documents authorizing the bonds issued by the state pursuant to
1366	s. 1013.68, s. 1013.70, or s. 1013.737 or distributed to school
1367	districts for the Classrooms First Program as provided in s.
1368	1013.68. Such lottery revenues are hereby pledged to the payment
1369	of debt service on bonds issued by the state pursuant to s.
1370	1013.68, s. 1013.70, or s. 1013.737. Debt service payable on
1371	bonds issued by the state pursuant to s. 1013.68, s. 1013.70, or
1372	s. 1013.737 shall be payable from, and is secured by a first
1373	lien on, the first lottery revenues transferred to the
1374	Educational Enhancement Trust Fund in each fiscal year. Amounts
1375	distributable to school districts that request the issuance of
1376	bonds pursuant to s. 1013.68(3) are hereby pledged to such bonds
1377	pursuant to s. 11(d), Art. VII of the State Constitution.
1378	(3)  The funds remaining in the Operating Trust Fund after
1379	transfers to the Educational Enhancement Trust Fund shall be
1380	used for the payment of administrative expenses of the
1381	department. These expenses shall include all costs incurred in
1382	the department's direct operation and administration of the
1383	lottery or the management agreement and all costs resulting from
1384	any contracts entered into for the purchase or lease of goods or
1385	services required by the lottery, including, but not limited to:
1386	(a)  The compensation paid to retailers;
1387	(b)  The costs of supplies, materials, tickets, independent
1388	audit services, independent studies, data transmission,
1389	advertising, promotion, incentives, public relations,
1390	communications, security, bonding for retailers, printing,
1391	distribution of tickets, and reimbursing other governmental
1392	entities for services provided to the lottery; and
1393	(c)  The costs of any other goods and services necessary
1394	for effectuating the purposes of this chapter act.
1395	Section 20.  Section 24.122, Florida Statutes, is amended
1396	to read:
1397	24.122  Exemption from taxation; state preemption;
1398	inapplicability of other laws.--
1399	(1)  This chapter act shall not be construed to authorize
1400	any lottery except the lottery operated by the department or the
1401	manager under pursuant to this chapter act.
1402	(2)  No state or local tax shall be imposed upon any prize
1403	paid or payable under this chapter act or upon the sale of any
1404	lottery ticket pursuant to this chapter act.
1405	(3)  All matters relating to the operation of the state
1406	lottery are preempted to the state, and no county, municipality,
1407	or other political subdivision of the state shall enact any
1408	ordinance relating to the operation of the lottery authorized by
1409	this chapter act. However, this subsection shall not prohibit a
1410	political subdivision of the state from requiring a retailer to
1411	obtain an occupational license for any business unrelated to the
1412	sale of lottery tickets.
1413	(4)  Any state or local law providing any penalty,
1414	disability, restriction, or prohibition for the possession,
1415	manufacture, transportation, distribution, advertising, or sale
1416	of any lottery ticket, including chapter 849, shall not apply to
1417	the tickets of the state lottery operated pursuant to this
1418	chapter act; nor shall any such law apply to the possession of a
1419	ticket issued by any other government-operated lottery. In
1420	addition, activities of the department under this chapter act
1421	are exempt from the provisions of:
1422	(a)  Chapter 616, relating to public fairs and expositions.
1423	(b)  Chapter 946, relating to correctional work programs.
1424	(c)  Chapter 282, relating to communications and data
1425	processing.
1426	(d)  Section 110.131, relating to other personal services.
1427	Section 21.  Section 24.123, Florida Statutes, is amended
1428	to read:
1429	24.123  Annual audit of financial records and reports.--
1430	(1)  The Legislative Auditing Committee shall contract with
1431	a certified public accountant licensed pursuant to chapter 473
1432	for an annual financial audit of the department. The certified
1433	public accountant shall have no financial interest in any vendor
1434	or manager with whom the department is under contract. The
1435	certified public accountant shall present an audit report no
1436	later than 7 months after the end of the fiscal year and shall
1437	make recommendations to enhance the earning capability of the
1438	state lottery or the management agreement and to improve the
1439	efficiency of department operations. The certified public
1440	accountant shall also perform a study and evaluation of internal
1441	accounting controls and shall express an opinion on those
1442	controls in effect during the audit period. The cost of the
1443	annual financial audit shall be paid by the department.
1444	(2)  The Auditor General may at any time conduct an audit
1445	of any phase of the operations of the state lottery or the
1446	management agreement and shall receive a copy of the yearly
1447	independent financial audit and any security report prepared
1448	pursuant to s. 24.108.
1449	(3)  A copy of any audit performed pursuant to this section
1450	shall be submitted to the secretary, the Governor, the President
1451	of the Senate, the Speaker of the House of Representatives, and
1452	members of the Legislative Auditing Committee.
1453	Section 22.  Section 24.124, Florida Statutes, is amended
1454	to read:
1455	24.124  Responsibility for ticket accuracy; department,
1456	retailer, and vendor liability.--
1457	(1)  If the department does not enter into a management
1458	agreement, purchasers of online games tickets shall be
1459	responsible for verifying the accuracy of their tickets,
1460	including the number or numbers printed on the tickets. In the
1461	event of an error, the ticket may be canceled and a replacement
1462	ticket issued pursuant to rules promulgated by the department of
1463	the Lottery.
1464	(2)  If the department does not enter into a management
1465	agreement, other than the issuance of a replacement ticket,
1466	there shall be no right or cause of action and no liability on
1467	the part of the department, retailer, vendor, or any other
1468	person associated with selling an online games ticket, with
1469	respect to errors or inaccuracies contained in the ticket,
1470	including errors in the number or numbers printed on the ticket.
1471	Section 23.  This act shall take effect January 1, 2010.

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