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HOUSE BILL NO. 239
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FIRST LEGISLATURE - SECOND SESSION
BY REPRESENTATIVES THOMPSON, Edgmon, Stutes
Introduced: 2/5/20
Referred: State Affairs, Finance
A BILL
FOR AN ACT ENTITLED
1 "An Act establishing a state lottery; providing for participation in multi-state lotteries;
2 establishing the Alaska State Lottery Board in the Department of Revenue; relating to
3 confidentiality of information regarding lottery winners; requiring background
4 investigations by the Department of Public Safety; and providing for an effective date."
5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
6 * Section 1. AS 05 is amended by adding a new chapter to read:
7 Chapter 18. State Lotteries.
8 Article 1. Administration.
9 Sec. 05.18.010. Creation and membership of board. (a) The Alaska State
10 Lottery Board is established in the Department of Revenue for the purpose of
11 generating revenue for the state by conducting a state lottery and facilitating
12 participation in multi-state lotteries. The board consists of five members appointed by
13 the governor and confirmed by a majority of the members of the legislature in joint
14 session. One member shall be appointed from each of the four judicial districts of the
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1 state. The fifth member shall be an at-large member. The board shall select a chair
2 from among its members.
3 (b) Members of the board serve staggered terms of three years. Except as
4 provided in AS 39.05.080(4), a member of the board serves at the pleasure of the
5 governor or until a successor is appointed. A vacancy occurring in the membership of
6 the board shall be filled within 30 days by appointment of the governor for the
7 unexpired portion of the vacated term. A member who has served all or part of three
8 successive terms on the board may not be reappointed to the board unless three years
9 have elapsed since the person has last served on the board.
10 (c) Members of the board do not receive a salary but are entitled to per diem
11 and travel expenses authorized for boards and commissions under AS 39.20.180.
12 (d) A member of the board may not have a pecuniary interest in a contract or
13 agreement entered into by the board or the director.
14 (e) A person may not serve as a member of the board if that person
15 (1) has been convicted of
16 (A) a felony; or
17 (B) an offense under this chapter, AS 11.66.200 - 11.66.280, or
18 a comparable provision of municipal, state, or federal law;
19 (2) holds a license, permit, or registration under AS 05.15; or
20 (3) is an elected official of the state or of a political subdivision of the
21 state.
22 (f) A person may not serve as a member of the board until the investigation
23 required under AS 18.65.080(b) is completed.
24 (g) Three members of the board constitute a quorum for the transaction of
25 business.
26 Sec. 05.18.020. Meetings. (a) The board shall meet at least quarterly at the call
27 of the chair, at the request of a majority of the members, or at a regularly scheduled
28 time set by the board.
29 (b) An action of the board is not binding unless taken at a meeting where three
30 or more of the members are present and vote in favor of the action.
31 Sec. 05.18.030. Duties and powers of board. (a) The board shall
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1 (1) enter into contracts and agreements necessary to carry out the
2 provisions of this chapter;
3 (2) adopt regulations necessary to implement this chapter;
4 (3) report to the governor and the legislature all state lottery revenue,
5 multi-state lottery revenue, prize disbursement, and other expenses;
6 (4) report to the governor and the legislature as frequently as the board
7 determines necessary on conclusions from the analysis of the reaction of state
8 residents to the state and multi-state lotteries, and on matters that require changes in
9 state law to prevent violations or evasions of this chapter or to correct undesirable
10 conditions in connection with the operation or administration of the state or multi-state
11 lotteries;
12 (5) monitor the operation of the state and multi-state lotteries
13 throughout the state;
14 (6) study and investigate the operation and administration of the state
15 and multi-state lottery laws of other states and of federal laws that affect multi-state
16 lotteries;
17 (7) conduct the state lottery; and
18 (8) facilitate participation in multi-state lotteries.
19 (b) The board shall deliver the reports required under (a) of this section to the
20 senate secretary and the chief clerk of the house of representatives and notify the
21 legislature that the reports are available.
22 Sec. 05.18.040. Regulations. The board shall adopt regulations under
23 AS 44.62 (Administrative Procedure Act) to establish
24 (1) the manner of conducting the state and multi-state lotteries and
25 awarding prizes;
26 (2) the procedures for contracting with persons to be agents;
27 (3) the manner in which and amount of compensation agents are to be
28 paid;
29 (4) other matters necessary or desirable to carry out this chapter, to
30 operate the state and multi-state lotteries efficiently and economically, and to make the
31 purchase of state and multi-state lottery tickets and the distribution of prizes
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1 convenient.
2 Sec. 05.18.050. Executive director and employees. (a) The board shall
3 employ an executive director who is qualified by training and experience to conduct
4 the day-to-day work of the board. The director may not engage in another profession
5 or occupation.
6 (b) Subject to the approval of the board, the director may appoint deputies as
7 required to carry out the functions and duties of the board. The director may appoint
8 professional, technical, and clerical employees necessary to perform the duties of the
9 board.
10 (c) The director and other employees of the board are in the exempt service
11 under AS 39.25.110.
12 (d) The board may not employ a person who has been convicted, including
13 conviction based on a guilty plea or plea of nolo contendere, of an offense listed in
14 AS 05.18.010(e)(1).
15 (e) A person may not serve as director until the investigation required under
16 AS 18.65.080(b) is completed.
17 Sec. 05.18.060. Duties of director. The director shall
18 (1) supervise the operation and administration of the state and multi-
19 state lotteries;
20 (2) act as secretary to the board;
21 (3) contract with agents to sell lottery tickets;
22 (4) meet at least quarterly with the board on the operation and
23 administration of the state and multi-state lotteries;
24 (5) make available for inspection by the board, upon request, all books,
25 records, files, and other information and documents of the board;
26 (6) advise the board and make recommendations to improve the
27 operation and administration of the state and multi-state lotteries;
28 (7) suspend or revoke a contract issued under this chapter for a
29 violation of this chapter or the regulations adopted under this chapter;
30 (8) subject to the approval of the board, enter into contracts for the
31 operation and administration of the state and multi-state lotteries, except that agent
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1 contracts are not subject to the approval of the board; and
2 (9) every six months, provide to the board a full and complete
3 statement of all state and multi-state lottery revenue, prize disbursements, and other
4 expenses for the preceding period.
5 Sec. 05.18.070. Subpoenas. (a) The director or the board may subpoena
6 witnesses and documents in a matter over which the board has jurisdiction, control, or
7 supervision. The director or the board may administer oaths and affirmations to
8 persons whose testimony is required.
9 (b) If a person fails to obey a subpoena, or if a person refuses to answer a
10 relevant question or exhibit a document when ordered to do so by the director or the
11 board, the director or the board may apply to the superior court for an order directing
12 the person to comply with the subpoena or the order. The court may order the person
13 to comply.
14 Article 2. Lottery Retail Sales Agents.
15 Sec. 05.18.100. Lottery retail sales agents. (a) The director may enter into a
16 contract on behalf of the board with a person who is qualified under AS 05.18.110 to
17 be a lottery retail sales agent.
18 (b) An agent may sell lottery tickets and hire employees to sell lottery tickets
19 under the agent's supervision.
20 Sec. 05.18.110. Qualifications for agent contracts. (a) A person who wishes
21 to contract with the director to be an agent shall apply on a form provided by the
22 board. The director shall charge the applicant a fee to cover the costs of processing the
23 application and checking the background of the applicant. The applicant shall submit
24 to the board, with the application, the applicant's fingerprints and the fees required by
25 the Department of Public Safety under AS 12.62.160 for criminal justice information
26 and a national criminal history record check under AS 12.62.400. The Department of
27 Public Safety may submit the fingerprints to the Federal Bureau of Investigation for a
28 national criminal history record check. The director shall use the information obtained
29 under this subsection when determining an applicant's qualification to be an agent.
30 (b) Before contracting with an applicant to be an agent, the director shall
31 consider
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1 (1) the financial responsibility and security of the applicant and the
2 applicant's business or activity;
3 (2) the accessibility of the applicant's place of business or activity to
4 the public;
5 (3) the ability of the applicant to promote the retail sale of lottery
6 tickets;
7 (4) the sufficiency of existing agent contracts to serve the public
8 convenience;
9 (5) the volume of expected sales; and
10 (6) other factors the director determines are relevant.
11 (c) The director may not contract with an applicant to be an agent if the
12 applicant
13 (1) would be engaged in business exclusively as an agent;
14 (2) is an individual under 18 years of age; or
15 (3) has been convicted, including conviction based on a guilty plea or
16 plea of nolo contendere, of an offense listed in AS 05.18.010(e)(1).
17 (d) The director may contract with an agent for a term of not more than two
18 years, but may renew the contract.
19 Sec. 05.18.120. Revocation or suspension of agent contracts. (a) The
20 director shall, after a hearing, suspend or cancel the contract of an agent who violates
21 AS 05.18.320.
22 (b) The director may, after a hearing, suspend or cancel the contract of an
23 agent who violates a regulation adopted under this chapter or a provision of this
24 chapter other than AS 05.18.320.
25 (c) The director shall conduct proceedings to suspend or cancel an agent
26 contract under AS 44.62 (Administrative Procedure Act).
27 Sec. 05.18.130. Deposit and reporting of receipts. (a) Each agent shall
28 deposit to the credit of the state in a bank designated by the director all money
29 received by the agent from the sale of lottery tickets.
30 (b) Each agent shall file with the director on a form provided by the board a
31 weekly report of the receipts and transactions related to the sale of lottery tickets.
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1 (c) The director shall impose a service charge on an agent if the payor bank
2 dishonors
3 (1) a check that is deposited to the credit of the state by the agent; or
4 (2) an electronic transfer of funds to the state lottery fund established
5 in AS 05.18.300 from the account of the agent for money received from the sale of
6 lottery tickets.
7 (d) The director may charge an agent interest on money that is not paid to the
8 state within 10 days after the due date and may impose an additional service charge in
9 an amount to cover administrative costs if the debt is referred for collection.
10 (e) The amount, including any interest or service charge, owed to the board by
11 an agent is a lien on the property of the agent at the time that the board files a claim of
12 lien in the recorder's office of the recording district of the principal place of business
13 of the agent.
14 Sec. 05.18.140. Bond. (a) Each applicant for an agent contract shall, at the
15 time of application under AS 05.18.110, file with the board and maintain during the
16 term of the agent contract a bond running to the state with a corporate surety qualified
17 to do business in the state. The board shall determine the amount of the bond.
18 (b) The bond required by this section remains in effect until cancelled by
19 action of the surety, the principal, or the board.
20 (c) The state or another person may not bring an action on the bond if more
21 than three years have elapsed since its cancellation.
22 Article 3. Types of Games and Prizes.
23 Sec. 05.18.200. Types of lotteries. Under this chapter, the board may conduct
24 a state lottery and facilitate participation in a multi-state lottery. The board may not
25 conduct or authorize instant lotteries, scratch-off ticket games, video lottery terminals,
26 or any other electronic game involving direct physical contact between the player and
27 a machine.
28 Sec. 05.18.210. Assignment of prizes. A person may not assign a right to a
29 prize. However, a prize may be paid to a person other than the prize winner under a
30 court order or to the estate of a deceased prize winner. The state is discharged of all
31 further liability when a prize has been paid under this section.
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