HOUSE BILL No. 5608

 

May 9, 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 sections 12, 33, and 41 (MCL 432.12, 432.33, and

 

432.41), section 12 as amended by 2011 PA 279, section 33 as

 

amended by 1996 PA 167, and section 41 as amended by 2009 PA 25,

 

and by adding sections 10 and 45.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 10. (1) The commissioner may establish a separate city

 

lottery game.

 

     (2) The commissioner may promulgate rules, including rules on

 

the topics listed in section 11, to implement a separate lottery

 

game established under this section. The rules may provide that

 

tickets or shares in the separate lottery game be sold under the

 


name of 1 or more cities receiving money from the city lottery fund

 

created in section 45. The rules shall be promulgated under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328.

 

     (3) Tickets or shares of a separate lottery game established

 

under this section shall be sold by all lottery agents that sell

 

tickets for the state lottery.

 

     (4) Money from the sale of tickets or shares of a separate

 

lottery game established under this section shall be deposited in

 

the city lottery fund created in section 45.

 

     (5) Except as specifically provided otherwise, the provisions

 

of this act that are generally applicable to the conduct of the

 

state lottery apply to the conduct of a separate lottery game

 

established under this section.

 

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

 

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

 

annual revenue accruing from the sale of lottery tickets or shares

 

shall be apportioned for payment of prizes to the holders of

 

winning 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.

 

     (3) Notwithstanding subsection (1), revenue from the sale of

 

lottery tickets or shares to a separate lottery game established

 

under section 10 shall be apportioned for payment of prizes as

 


provided in rules promulgated by the commissioner under section 10.

 

     Sec. 33. (1) Unclaimed prize money for the prize on a winning

 

ticket or share of the state lottery shall be retained by the

 

commissioner 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 prize money within the year, the prize money shall be

 

deposited in the state school aid fund and distributed pursuant to

 

law.

 

     (2) Unclaimed prize money for the prize on a winning ticket or

 

share of any joint enterprise shall be treated in the manner

 

provided for in the joint enterprise participation agreement

 

executed by the commissioner. To the extent that the state of

 

Michigan is entitled to any unclaimed prize money, that money

 

received shall be deposited into the state school aid fund and

 

distributed pursuant to law.

 

     (3) Unclaimed prize money for the prize on a winning ticket or

 

share of a separate lottery game established under section 10 shall

 

be retained by the commissioner 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 prize money within the year,

 

the prize money shall be deposited in the city lottery fund created

 

in section 45.

 

     Sec. 41. (1) The state lottery fund is created in the

 

department of treasury. Except as provided in section 10 and

 

subsection (3), the state lottery fund consists of all money

 

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

 

other money credited or transferred to the fund from any other fund

 


or source pursuant to law including interest earnings on common

 

cash attributable to the state lottery fund. Money derived from the

 

sale of tickets or shares of any joint enterprise shall be treated

 

in the manner provided for in the joint enterprise participation

 

agreement executed by the commissioner. The commissioner shall

 

deposit net revenue from any joint enterprise in the state lottery

 

fund. Earnings resulting from installment payment of any lottery

 

prizes shall be used for payment of prizes to lottery winners and

 

the prize structure formulated pursuant to sections 11 and 12 shall

 

be established accordingly.

 

     (2) The investment authority of the state treasurer with

 

regard to the state lottery fund is the same as his or her

 

investment authority with regard to retirement system funds. The

 

state treasurer may also invest all or part of the money in the

 

state lottery fund in obligations issued by this state pursuant to

 

section 14, 15, or 16 of article IX of the state constitution of

 

1963 if the treasurer determines that the obligations are full

 

faith and credit obligations of this state and provide a rate of

 

return at the time of investment that is not less than the rate of

 

return at the time of investment on United States treasury

 

obligations of comparable maturity. The state treasurer shall

 

comply with the divestment from terror act, 2008 PA 234, MCL

 

129.291 to 129.301, in making investments under this act. To assure

 

a continuing availability of money with which to pay state lottery

 

prize installments and to compensate for variations in the yield on

 

investments, every 6 months the commissioner and the state

 

treasurer shall review the status of the installment prize

 


investments and shall agree on an amount to be restricted out of

 

the total revenues of the state lottery fund as a reserve against a

 

drop in yield. If the commissioner and the state treasurer fail to

 

agree on the amount to be reserved, the matter shall be referred to

 

the state administrative board for a decision on the amount to be

 

reserved.

 

     (3) Except as provided in subsection (4), after the payment of

 

prizes to the holders of winning state lottery tickets or shares or

 

the payment pursuant to under section 32 of the liabilities to this

 

state of holders of winning state lottery tickets or shares, and

 

the payment of the reasonable expenses of the bureau in its

 

operation of the lottery, the net revenue in the state lottery fund

 

and any money or interest generated by the state lottery fund and

 

share of common cash shall be deposited in the state school aid

 

fund and shall be distributed as provided by law.

 

     (4) Ten percent of each year's state lottery advertising

 

budget but not more than $1,000,000.00 shall be deposited in the

 

compulsive gaming prevention fund created in section 3 of the

 

compulsive gaming prevention act, 1997 PA 70, MCL 432.253.

 

     Sec. 45. (1) The city lottery fund is created within the state

 

treasury.

 

     (2) The state treasurer may receive money or other assets from

 

the sale of tickets or shares in a separate lottery game

 

established under section 10 and from any other source for deposit

 

into the city lottery fund. The state treasurer shall direct the

 

investment of the city lottery fund. The state treasurer shall

 

credit to the city lottery fund interest and earnings from city

 


lottery fund investments.

 

     (3) Money in the city lottery fund at the close of the fiscal

 

year shall remain in the city lottery fund and shall not lapse to

 

the general fund.

 

     (4) The bureau shall be the administrator of the city lottery

 

fund for auditing purposes.

 

     (5) The bureau shall expend money from the city lottery fund

 

as follows in the following order:

 

     (a) For the payment of prizes in accordance with the rules

 

promulgated by the commissioner under section 10.

 

     (b) For payment under section 32 of liabilities to this state

 

of holders of winning tickets or shares in the separate lottery

 

game established under section 10.

 

     (c) As appropriated, for the payment of the reasonable

 

expenses of the bureau in its operation of the separate lottery

 

game.

 

     (d) The commissioner shall distribute the balance in the city

 

lottery fund to cities in this state with populations of 600,000 or

 

more. If more than 1 city is entitled to distribution of money

 

under this subdivision, the money shall be distributed

 

proportionately according to population.