Substitute Senate Bill No. 54
Substitute Senate Bill No. 54
PUBLIC ACT NO. 96-212
AN ACT ESTABLISHING THE CONNECTICUT LOTTERY
CORPORATION.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. (NEW) Sections 1 to 19, inclusive,
of this act may be cited as the "Connecticut
Lottery Corporation Act".
Sec. 2. (NEW) As used in sections 1 to 19,
inclusive, of this act, the following terms shall
have the following meanings unless the context
clearly indicates another meaning:
(1) "Board" or "board of directors" means the
board of directors of the corporation;
(2) "Corporation" means the Connecticut
Lottery Corporation as created under section 3 of
this act;
(3) "Lottery" means (A) the Connecticut state
lottery conducted prior to the transfer authorized
under section 9 of this act by the Division of
Special Revenue, (B) after such transfer, the
Connecticut state lottery conducted by the
corporation pursuant to sections 1 to 19,
inclusive, of this act, and (C) the state lottery
referred to in subsection (a) of section 53-278g
of the general statutes;
(4) "Lottery Fund" means a fund or funds
established by, and under the management and
control of, the corporation, into which all
lottery revenues of the corporation are deposited,
from which all payments and expenses of the
corporation are paid and from which transfers to
the General Fund are made pursuant to section 13
of this act;
(5) "Operating revenue" means total revenue
received from lottery sales less all canceled
sales and amounts paid as prizes but before
payment or provision for payment of any other
expenses.
Sec. 3. (NEW) (a) There is created a body
politic and corporate, constituting a public
instrumentality and political subdivision of the
state created for the performance of an essential
governmental revenue-raising function, which shall
be named the Connecticut Lottery Corporation, and
which may exercise the functions, powers and
duties set forth in sections 1 to 19, inclusive,
of this act, to implement the purposes set forth
in said sections, which are public purposes for
which public funds may be expended. The
Connecticut Lottery Corporation shall not be
construed to be a department, institution or
agency of the state with respect to budgeting,
procurement or personnel requirements, except as
provided in this act.
(b) The corporation shall be governed by a
board of thirteen directors. The Governor, with
the advice and consent of the General Assembly,
shall appoint four directors who shall have skill,
knowledge and experience in the fields of
management, finance or operations in the private
sector. Three directors shall be the State
Treasurer, the Secretary of the Office of Policy
and Management and the Executive Director of the
Division of Special Revenue, all of whom shall
serve ex officio and shall have all of the powers
and privileges of a member of the board of
directors. Each ex-officio director may designate
his deputy or any member of his staff to represent
him at meetings of the corporation with full power
to act and vote on his behalf. The Executive
Director of the Division of Special Revenue shall
cease to be a director one year from the effective
date of this act, or earlier at the discretion of
the Governor. The Governor, with the advice and
consent of the General Assembly, shall fill the
vacancy created by the removal or departure of the
Executive Director of the Division of Special
Revenue with a person who shall have skill,
knowledge and experience in the fields of
management, finance or operations in the private
sector. The Governor shall thereafter have the
power to appoint a total of five members to the
board. The procedures of section 4-7 shall apply
to the confirmation of the Governor's appointments
by both houses of the General Assembly. Six
directors shall be appointed as follows: One by
the president pro tempore of the Senate, one by
the majority leader of the Senate, one by the
minority leader of the Senate, one by the speaker
of the House of Representatives, one by the
majority leader of the House of Representatives
and one by the minority leader of the House of
Representatives. Each director appointed by the
Governor shall serve at the pleasure of the
Governor but no longer than the term of office of
the Governor or until the director's successor is
appointed and qualified, whichever term is longer.
Each director appointed by a member of the General
Assembly shall serve in accordance with the
provisions of section 4-1a of the general
statutes. The Governor shall fill any vacancy for
the unexpired term of a member appointed by the
Governor. The appropriate legislative appointing
authority shall fill any vacancy for the unexpired
term of a member appointed by such authority. Any
director, other than the Executive Director of the
Division of Special Revenue, shall be eligible for
reappointment. Any director may be removed by
order of the Superior Court upon application of
the Attorney General for misfeasance, malfeasance
or wilful neglect of duty. Such actions shall be
tried to the court without a jury and shall be
privileged in assignment for hearing. If the
court, after hearing, finds there is clear and
convincing evidence of such misfeasance,
malfeasance or wilful neglect of duty it shall
order the removal of such director. Any director
so removed shall not be reappointed to the board.
Each appointing authority shall make his initial
appointment to the board no later than six months
following the effective date of this act.
(c) The chairperson of the board shall be
appointed by the Governor from among the members
of the board. The directors shall annually elect
one of their number as vice chairperson. The board
may elect such other officers of the board as it
deems proper. Directors shall receive no
compensation for the performance of their duties
under sections 1 to 19, inclusive, of this act,
but shall be reimbursed for necessary expenses
incurred in the performance of their duties.
(d) Meetings of the corporation shall be held
at such times as shall be specified in the bylaws
adopted by the corporation and at such other time
or times as the chairperson deems necessary. The
corporation shall, within the first ninety days of
the transfer to the corporation of the lottery,
pursuant to section 9 of this act, and on a fiscal
quarterly basis thereafter, report on its
operations for the preceding fiscal quarter to the
Governor and the joint standing committees of the
General Assembly having cognizance of matters
relating to finance, revenue and bonding, and
public safety. The report shall include a summary
of the activities of the corporation, a statement
of operations and, if necessary, recommendations
for legislation to promote the purposes of the
corporation. The accounts of the corporation shall
be subject to audit by the state auditors of
public accounts. The corporation shall have
independent certified public accountants audit its
books and accounts at least once each fiscal year.
The books, records and financial statements of the
corporation shall be prepared in accordance with
generally accepted accounting principles.
(e) (1) Connecticut Lottery Corporation shall
be a successor employer to the state and shall
recognize existing bargaining units and collective
bargaining agreements existing at the time of
transfer of the lottery to the corporation. The
employees of the corporation shall be considered
state employees under the provisions of sections
5-270 to 5-280, inclusive, of the general
statutes, as amended. The corporation shall not be
required to comply with personnel policies and
procedures of the Department of Administrative
Services and the Office of Policy and Management
with regard to approval for the creation of new
positions, the number of such positions, the
decision to fill such positions or the time for
filling such positions. The corporation, not the
executive branch, shall have the power to
determine whether an individual is qualified to
fill a vacancy at the corporation. Nonmanagerial
employees of the corporation shall be members of
the classified service. Managerial employees shall
be exempt from the classified service. The
corporation shall have the ability to determine
the qualifications and set the terms and
conditions of employment of managerial employees
including the establishment of incentive plans.
(2) Existing lottery employees of the Division
of Special Revenue in collective bargaining units
shall be offered the opportunity to transfer with
their position to the corporation. If the
corporation elects to employ a smaller number of
persons in such positions at the corporation than
exist in the lottery at the Division of Special
Revenue, the opportunity to transfer to the
corporation shall be offered on the basis of
seniority. Employees who are offered the
opportunity to transfer to the corporation may
decline to do so. Any person who is covered by a
collective bargaining agreement as an employee of
the Division of Special Revenue who accepts
employment with the corporation shall transfer
with his position and shall remain in the same
bargaining unit of which he was a member as an
employee of the Division of Special Revenue.
(3) No employee who is covered by a collective
bargaining agreement as an employee of the
Division of Special Revenue shall be laid off as a
result of the creation of the corporation. Each
employee of the Division of Special Revenue who is
not employed by the corporation and by virtue of
sections 1 to 19, inclusive, of this act is no
longer employed by the Division of Special Revenue
shall be assigned with his position to another
state agency. Such opportunities shall be offered
in the order of seniority. Seniority shall be
defined in the same way as cases of transfer under
the appropriate collective bargaining agreements.
Such assignments shall be made only with the
approval of the Office of Policy and Management
and shall be reported at the end of the fiscal
year to the Finance Advisory Committee. Employees
may choose to be laid off in lieu of accepting any
such assignment. In such case, they shall be
entitled to all collective bargaining rights under
their respective collective bargaining agreements
including the State Employees Bargaining Agent
Coalition (SEBAC). This act shall in no way affect
the collective bargaining rights of employees of
the Division of Special Revenue.
(f) (1) In addition to the sales positions
transferred to the corporation under subdivision
(2) of subsection (e) of this section, the
corporation may create one or more new
classifications of entrepreneurial sales employees
as determined by the board of directors. Such
classifications shall not be deemed comparable to
other classifications in state service.
(2) For the period commencing on the effective
date of this act until the expiration of the
collective bargaining agreement in effect for
transferred sales employees or the date of
approval by the legislature of any interim
agreement, whichever is earlier, the corporation
may hire employees into a new entrepreneurial
sales classification without regard to any
collective bargaining agreement then in effect and
may set the initial terms and conditions of
employment for all employees in a new
entrepreneurial sales classification.
(3) Six months after the hiring of the first
employee in any such new entrepreneurial sales
classification, the collective bargaining agent of
the transferred sales employees and the executive
branch on behalf of the corporation shall engage
in mid-term bargaining for such classification at
the request of either party. The scope of such
mid-term bargaining shall include all terms of
employment, except that provisions relating to
compensation shall not be subject to arbitration,
provided that the average annualized compensation
for such entrepreneurial sales classification
shall not be less than the average annualized
compensation for transferred sales employees.
(4) Upon the expiration of the collective
bargaining agreement covering transferred sales
employees, all terms and conditions of employment
in a new entrepreneurial sales classification
shall be subject to collective bargaining as part
of the negotiation of a common successor
agreement.
(g) The executive branch shall be authorized
and empowered to negotiate on behalf of the
corporation for employees of the corporation
covered by collective bargaining and represent the
corporation in all other collective bargaining
matters. The corporation shall be entitled to have
a representative present at all such bargaining.
(h) In any interest arbitration regarding
employees of the corporation, the arbitrator shall
take into account as a factor, in addition to
those factors specified in section 5-276a of the
general statutes, the purposes of this act, the
entrepreneurial mission of the corporation and the
necessity to provide flexibility and innovation to
facilitate the success of the Connecticut Lottery
Corporation in the marketplace. In any arbitration
regarding any classification of entrepreneurial
sales employees, the arbitrator shall include a
term awarding incentive compensation for such
employees for the purpose of motivating employees
to maximize lottery sales.
(i) The officers and all other employees of
the corporation shall be state employees for the
purposes of group welfare benefits and retirement,
including, but not limited to, those provided
under chapter 66 of the general statutes and
sections 5-257 and 5-259 of the general statutes.
The corporation shall reimburse the appropriate
state agencies for all costs incurred by such
designation.
Sec. 4. (NEW) The corporation shall have
perpetual succession. Such succession shall
continue until the existence of the corporation is
terminated by law, provided no such termination
shall affect any outstanding contractual
obligation of the corporation and the state shall
succeed to the obligations of the corporation
under any such contract. Upon termination of the
corporation, its rights and properties shall pass
to and be vested in the state.
Sec. 5. (NEW) (a) The powers of the
corporation shall be vested in and exercised by
the board of directors. Notwithstanding subsection
(a) of section 1-121 of the general statutes,
until the appointment of five directors, a
majority of the ex-officio directors then in
office or their deputy or member of their staff
designated to represent them as a member may take
such action, including, without limitation, the
adoption of interim bylaws, and approval of the
transfer of lottery operations contemplated under
section 9 of this act, as is necessary to organize
the corporation. From and after the five or more
directors, including ex-officio directors, have
been seated a majority of the directors of the
board then seated shall constitute a quorum. The
affirmative vote of a majority of the directors
present at a meeting of the board at which a
quorum is present shall be necessary and
sufficient for any action taken by the board. No
vacancy in the membership of the board shall
impair the right of a quorum to exercise all the
rights and perform all the duties of the board.
Any action taken by the board may be authorized by
resolution at any regular or special meeting and
shall take effect immediately unless otherwise
provided in the resolution. Following the initial
seating of five or more directors, the board shall
have the power, from time to time, to ratify,
adopt, amend and repeal bylaws for the conduct of
its affairs. Notice of any regular meeting shall
be given to directors as set forth in the bylaws
of the corporation.
(b) The board may delegate to three or more of
the directors powers and duties as it deems
proper. The board shall establish such committees,
subcommittees or other entities as it deems
necessary to further the purposes of the
corporation including, but not limited to, an
executive committee and a finance committee.
Sec. 6. (NEW) (a) The board shall appoint
officers of the corporation, which shall include a
president, a secretary, and such other officers as
the board may approve. Such officers shall not be
members of the board, shall serve at the pleasure
of the board and shall receive such compensation
as shall be determined by the board. The president
and secretary shall not be the same person. The
president shall be the chief executive officer of
the corporation. The president shall have the
general charge, supervision and control of the
operation and management of business and affairs
of the corporation subject to the direction of the
board of directors. The president shall have such
other powers and duties as are generally incident
to the office of the president and as may be
assigned by the board of directors. The president
shall not be a state employee. The president shall
attend all meetings of the board. The secretary
shall keep a true, faithful and correct record of
all proceedings and maintain and be custodian of
all books, documents and papers filed with the
corporation and of the book of minutes of the
corporation and of its official seal. The
secretary may cause copies to be made of all
minutes and other records and documents of the
corporation and may give certificates under the
official seal of the corporation to the effect
that such copies are true copies, and all persons
dealing with the corporation may rely upon such
certificates. The president or his designee may
serve as a member of such other boards or
committees as may be necessary or desirable to
carry out the purposes of the corporation.
(b) The president shall take all such action
as to the operation and management of the
corporation as he in his discretion deems
advisable in order to enhance the monetary value
of the corporation and the lottery.
Sec. 7. (NEW) (a) The purposes of the
corporation shall be to: (1) Operate and manage
the lottery in an entrepreneurial and
business-like manner free from the budgetary and
other constraints that affect state agencies; (2)
provide continuing and increased revenue to the
people of the state through the lottery by being
responsive to market forces and acting generally
as a corporation engaged in entrepreneurial
pursuits; and (3) ensure that the lottery
continues to be operated with integrity and for
the public good.
(b) The corporation shall have the following
powers:
(1) To receive as transferee from the state of
Connecticut all of the tangible and intangible
assets constituting the lottery including the
exclusive right to operate the lottery as the
exclusive lottery of the state and, subject to
subsection (b) of section 9 of this act, to assume
and discharge all of the agreements, covenants and
obligations of the Division of Special Revenue
entered into which constitute a part of the
operation and management of the lottery;
(2) To operate and manage the lottery
consistent with the provisions of this act, and as
specifically provided in section 13 of this act;
(3) To have perpetual succession as a body
corporate and to adopt bylaws, policies and
procedures for the operation of its affairs and
conduct of its businesses;
(4) To introduce new lottery games, modify
existing lottery games, utilize existing and new
technologies, determine distribution channels for
the sale of lottery tickets and, to the extent
specifically authorized by regulations adopted by
the Division of Special Revenue pursuant to
chapter 54 of the general statutes, introduce
instant ticket vending machines, kiosks and
automated wagering systems or machines, with all
such rights being subject to regulatory oversight
by the Division of Special Revenue;
(5) To establish an annual budget of revenues
and expenditures, along with reasonable reserves
for working capital, capital expenditures, debt
retirement, and other anticipated expenditures, in
a manner and at levels considered by the board of
directors as appropriate and prudent;
(6) To adopt such administrative and operating
procedures which the board of directors deems
appropriate;
(7) To enter into agreements with one or more
states for the promotion and operation of joint
lottery games;
(8) Subject to the provisions of section 16 of
this act, to enter into agreements with vendors
with respect to the operation and management of
the lottery, including operation of lottery
terminals, management services, printing of
lottery tickets, management expertise, marketing
expertise, advertising, or such other goods or
services as the board of directors deems necessary
and appropriate;
(9) To purchase or lease operating equipment,
including, but not limited to, computer gaming and
automated wagering systems and to employ agents or
employees to operate such systems;
(10) To retain unclaimed prize funds as
additional revenue for the state, or to use
unclaimed prize funds to increase sales, or to
return to participants unclaimed prize funds in a
manner designed to increase sales;
(11) To establish prize reserve accounts as
the board of directors deems appropriate;
(12) To pay lottery prizes as awarded under
section 13 of this act, to purchase annuities to
fund such prizes, and to assure that all annuities
from which payments to winners of lottery prizes
are made are invested in instruments issued by
agencies of the United States government and
backed by the full faith and credit of the United
States, or are issued by insurance companies
licensed to do business in the state, provided the
issuer has been determined by the Division of
Special Revenue to be financially stable and meets
the minimum investment rating as determined by the
division;
(13) To pay or to reimburse the Division of
Special Revenue, the Office of Policy and
Management and other affected state agencies, for
the reasonable direct and indirect costs of the
planning for and implementation of the
transactions contemplated by sections 1 to 19,
inclusive, of this act including, without
limitation, expenses related to such transactions
arising prior to the effective date of this act,
and the operation and management of the lottery,
including, without limitation, regulatory
oversight of the corporation, costs arising
directly or indirectly from the licensing of
lottery agents, performance of state police
background investigations, and the planning for
and implementation of the transactions
contemplated by section 9 of this act;
(14) In the event that the operation or
management of the corporation becomes subject to
the federal gaming occupation tax, to pay such tax
on behalf of lottery sales agents and to assist
agents subject thereto;
(15) To determine the commissions payable to
lottery sales agents, provided any agent's
commission shall not average less than five per
cent of such agent's lottery sales;
(16) To invest in, acquire, lease, purchase,
own, manage, hold and dispose of real property and
lease, convey or deal in or enter into agreements
with respect to such property on any terms
necessary or incidental to carrying out the
purposes of sections 1 to 19, inclusive, of this
act, provided such transactions shall not be
subject to approval, review or regulation pursuant
to title 4b of the general statutes or any other
statute by any state agency, except that real
property transactions shall be subject to review
by the State Properties Review Board;
(17) To borrow money for the purpose of
obtaining working capital;
(18) To hold patents, copyrights, trademarks,
marketing rights, licenses, or any other evidence
of protection or exclusivity issued under the laws
of the United States or any state;
(19) To employ such assistants, agents and
other employees as may be necessary or desirable
to carry out its purposes in accordance with
sections 1 to 19, inclusive, of this act, to fix
their compensation and, subject to the provisions
of subsections (e) and (f) of section 3 of this
act, establish all necessary and appropriate
personnel practices and policies; to engage
consultants, accountants, attorneys and financial
and other independent professionals as may be
necessary or desirable to assist the corporation
in performing its purposes in accordance with
sections 1 to 19, inclusive, of this act;
(20) To make and enter into all contracts and
agreements necessary or incidental to the
performance of its duties and the execution of its
powers under sections 1 to 19, inclusive, of this
act;
(21) In its own name, to sue and be sued,
plead and be impleaded, adopt a seal and alter the
same at pleasure;
(22) Subject to the approval of the board and
to the requirement to remit excess lottery funds
to the General Fund as set forth in section 13 of
this act, to invest any funds not needed for
immediate use or disbursement, including any funds
held in approved reserve accounts, in investments
permitted by sections 3-20 and 3-27a of the
general statutes for the proceeds of state bonds;
(23) To procure insurance against any loss in
connection with its property and other assets in
such amounts and from such insurers as it deems
desirable;
(24) To the extent permitted under any
contract with other persons to which the
corporation is a party, to consent to any
termination, modification, forgiveness or other
change of any term of any contractual right,
payment, royalty, contract or agreement of any
kind;
(25) To acquire, lease, purchase, own, manage,
hold and dispose of personal property, and lease,
convey or deal in or enter into agreements with
respect to such property on any terms necessary or
incidental to the carrying out of these purposes;
(26) To account for and audit funds of the
corporation;
(27) To pay or provide for payment from
operating revenues all expenses, costs and
obligations incurred by the corporation in the
exercise of the powers of the corporation under
sections 1 to 19, inclusive, of this act; and
(28) To exercise any powers necessary to carry
out the purposes of sections 1 to 19, inclusive,
of this act.
Sec. 8. (NEW) (a) The corporation shall:
(1) Comply with all laws, rules and
regulations of the United States and the state of
Connecticut;
(2) Comply with regulations, adopted by the
Division of Special Revenue in accordance with
chapter 54 of the general statutes;
(b) The corporation shall not:
(1) Sell, transfer, assign, deliver, license,
grant or otherwise alienate any portion or aspect
of the lottery or lottery operations, but may sell
real or personal property, provided any revenue
from such sale shall be remitted to the state;
(2) Take any action with respect to the
introduction or modification of lottery games
which would cause a violation of any compact or
any memorandum of understanding or agreement from
time to time in force between the state and the
Mashantucket Pequot Tribal Nation or the Mohegan
Tribe of Montville, Connecticut, or any future
compact or agreement with a federally recognized
tribe.
Sec. 9. (NEW) (a) As soon as practicable after
July 1, 1996, and the organization of the
corporation, the corporation shall enter into such
agreements as the board shall authorize in order
to effect the transfer, assignment and delivery to
the corporation from the state of all the tangible
and intangible assets constituting the lottery,
including the exclusive right to operate the
lottery, and, subject to subsection (b) of this
section, to effect the assignment to and
assumption by the corporation of all agreements,
covenants and obligations of the Division of
Special Revenue and other agencies of the state,
relating to the operation and management of the
lottery. Such agreements may contain such other
provisions as the board deems necessary or
appropriate for the continued operation of the
lottery by the corporation pursuant to sections 1
to 19, inclusive, of this act.
(b) The state shall retain ownership of all
annuities it purchased for payment of lottery
prizes prior to the date of transfer described in
subsection (a) of this section, and shall remain
liable for all lottery awards occurring prior to
such transfer, but payable thereafter. In
addition, the state shall remain liable for all
obligations of the lottery arising prior to the
date of such transfer, other than those arising in
the ordinary course of business under existing
contracts specifically assumed by the corporation.
Unless otherwise agreed to in writing with the
Division of Special Revenue, the corporation shall
be solely responsible for the payment of all
lottery prizes arising on and after the date of
such transfer to the corporation and the purchase
of all annuities to provide revenue for such
payment.
(c) The corporation shall request and obtain
all approvals, consents and rulings of and from
all state and federal governmental agencies
necessary or in order to effect the transactions
contemplated by section 9 of this act.
Sec. 10. (NEW) Each director and the president
shall execute a surety bond in the penal sum of
fifty thousand dollars. The chairman of the board
may execute a blanket position surety bond, or
arrange for separate surety bonds covering each
director, the president and the employees of the
corporation at amounts determined by the board,
but in no event less than the sum of fifty
thousand dollars per person. Each surety bond
shall be conditioned upon the faithful performance
of the duties of the office or offices covered, be
executed by a surety company authorized to
transact business in this state as surety, be
approved by the Attorney General and be filed in
the office of the Secretary of State. The cost of
each such bond shall be paid by the corporation.
Sec. 11. (NEW) (a) Sections 1-15, 1-18a to
1-21a, inclusive, and 1-21c to 1-21l, inclusive,
of the general statutes, as amended, shall apply
to all actions, meetings and records of the
corporation, except (1) where otherwise limited by
subsection (c) of this section as to new lottery
games and serial numbers of unclaimed lottery
tickets, and (2) with respect to financial, credit
and proprietary information submitted by any
person to the corporation in connection with any
proposal to provide goods, services or
professional advice to the corporation as provided
in section 16 of this act.
(b) The records of proceedings as provided in
subsection (a) of section 6 of this act shall be
subject to disclosure pursuant to the provisions
of subsection (a) of section 1-19 of the general
statutes, as amended.
(c) Any new lottery game and the procedures
for such game, until the game is publicly
announced by the corporation, and any serial
number of an unclaimed lottery ticket shall not be
deemed public records, as defined in section 1-18a
of the general statutes, as amended, and shall not
be available to the public under the provisions of
section 1-19 of the general statutes, as amended.
The president shall submit a fiscal note prepared
by the corporation with respect to the procedures
for a new lottery game to the joint standing
committees of the General Assembly having
cognizance of matters relating to finance,
revenue, bonding and public safety after approval
of such game by the board.
Sec. 12. (NEW) (a) The president and all
directors, officers and employees of the
corporation shall be state employees for purposes
of sections 1-79 to 1-89, inclusive, of the
general statutes.
(b) No director, officer or employee of the
corporation shall, directly or indirectly,
participate in, or share in the winnings from, a
game conducted pursuant to sections 1 to 19,
inclusive, of this act.
Sec. 13. (NEW) (a) The president of the
corporation, subject to the direction of the
board, shall conduct daily, weekly, multi-state,
special instant or other lottery games and shall
determine the number of times a lottery shall be
held each year, the form and price of the tickets
and the aggregate amount of prizes, which shall
not be less than forty-five per cent of the sales
unless required by the terms of any agreement
entered into for the conduct of multi-state
lottery games. The proceeds of the sale of tickets
shall be deposited in the lottery fund of the
corporation from which prizes shall be paid, upon
vouchers signed by the president, or by either of
two persons designated and authorized by him, in
such numbers and amounts as the president
determines. The corporation may limit its
liability in games with fixed payouts and may
cause a cessation of sales of tickets of certain
designation when such liability limit has been
reached.
(b) The president, subject to the direction of
the board, may enter into agreements for the sale
of product advertising on lottery tickets, play
slips and other lottery media.
(c) On a weekly basis, the president shall
estimate, and certify to the state Treasurer, that
portion of the balance in the lottery fund which
exceeds the current needs of the corporation for
the payment of prizes, the payment of current
operating expenses and funding of approved
reserves of the corporation. The corporation shall
transfer the amount so certified from the lottery
fund of the corporation to the General Fund, upon
notification of receipt of such certification by
the Treasurer.
Sec. 14. (NEW) (a) The corporation may sell
lottery tickets at any location in the state
determined by the president which, in the opinion
of the president, will best enhance lottery
revenues, except that no license shall be issued
by the Division of Special Revenue to any person
to engage in business exclusively as a lottery
sales agent. Subject to the provisions of
subdivision (15) of subsection (b) of section 7 of
this act, the president may authorize compensation
to such agents in such manner and amounts and
subject to such limitations as he may determine if
he finds such compensation is necessary to assure
adequate availability of lottery tickets,
provided, if such agent is a lessee of state
property and his rental fee is based upon the
gross receipts of his business conducted thereon,
all receipts from the sale of such lottery tickets
shall be excluded from such gross receipts for
rental purposes. The president may suspend for
cause any licensed agent, subject to a final
determination through a hearing provided by the
Division of Special Revenue.
(b) All moneys received by lottery sales
agents from the sale of lottery tickets constitute
property of the corporation while in such agent's
possession and shall be held in trust for the
corporation by such agents. The president shall
require lottery sales agents to deposit, in a
special or suspense account in the name of the
corporation to the credit of the corporation,
which the president shall establish, in
institutions which are legal for the deposit of
state funds under section 4-33 of the general
statutes, as amended, all moneys received by such
agents from the sale of lottery tickets, less the
amount of compensation authorized under subsection
(a) of this section and less the amounts paid out
as prizes and, if requested by the president, to
conform with the corporation their recorded
receipts and transactions in the sale of lottery
tickets, in such form and with such information as
the president may require. Lottery sales agents
shall not commingle lottery sales funds with other
funds.
(c) The president may impose surety bonding
requirements on lottery sales agents.
(d) No ticket shall be sold at a price greater
than that fixed by the president, subject to the
direction of the board and no sale shall be made
other than by a licensed lottery sales agent or
his designated employee, or by such other lawful
means. No person shall sell a lottery ticket to a
minor and no minor shall purchase a lottery
ticket. Any person who violates the provisions of
this subsection shall be guilty of a class A
misdemeanor. A minor may receive a lottery ticket
as a gift.
Sec. 15. (NEW) (a) In each advertisement
intended to promote the purchase of lottery
tickets issued for games authorized under sections
1 to 19, inclusive, of this act, the corporation
shall include a prominent and clear statement of
the average chances of winning per lottery ticket.
(b) The provisions of subsection (a) of this
section shall apply only to (1) advertisements in
newspapers, magazines, brochures and on posters
and (2) television and radio advertisements thirty
seconds or longer for one game.
Sec. 16. (NEW) (a) The corporation shall
establish and adopt specific policies, rules and
procedures on purchasing and contracting. Such
policies, rules and procedures or amendments
thereto shall be approved by a two-thirds vote of
the entire board. Notwithstanding any other
provision of law to the contrary, the corporation
may enter into management, consulting and other
agreements for the provision of goods, services
and professional advisors necessary or useful in
connection with the operation and management of
the lottery (1) pursuant to a process of open or
competitive bidding, provided (A) the corporation
shall first determine the format, content and
scope of any agreement for any procurement of
goods or services, the conditions under which
bidding will take place and the schedule and
stipulations for contract award, and (B) the
corporation may select the contractor deemed to
have submitted the most favorable bid, considering
price and other factors, when, in the judgment of
the corporation, such award is in the best
interests of the corporation, or (2) if the
corporation, in its discretion, determines that,
due to the nature of the agreement to be
contracted for or procured, open or public bidding
is either impracticable or not in the best
interests of the corporation, by negotiation with
such prospective providers as the corporation may
determine. The terms and conditions of agreements
and the fees or other compensation to be paid to
such persons shall be determined by the
corporation. The agreements entered into by the
corporation in accordance with the provisions of
this section shall not be subject to the approval
of any state department, office or agency, except
as provided in regulations adopted by the Division
of Special Revenue. Nothing in this section shall
be deemed to restrict the discretion of the
corporation to utilize its own staff and workforce
for the performance of any of its assigned
responsibilities and functions whenever, in the
discretion of the corporation, it becomes
necessary, convenient or desirable to do so.
Copies of all agreements of the corporation shall
be maintained by the corporation at its offices as
public records, subject to said exemption.
(b) The corporation shall not be subject to
rules, regulations or restrictions on purchasing
or procurement or the disposition of assets
generally applicable to Connecticut state
agencies, including those contained in titles 4a
and 4b of the general statutes and the
corresponding rules and regulations. The board
shall adopt rules and procedures on purchasing,
procurement and the disposition of assets
applicable to the corporation. The adoption of
such rules or procedures shall not be subject to
chapter 54 of the general statutes. Any such rules
or procedures shall be a public record as defined
in section 1-18a of the general statutes, as
amended.
Sec. 17. (NEW) The exercise of the powers
granted by this act constitute the performance of
an essential governmental function and all
operations of the corporation shall be free from
any form of federal or state taxation. In
addition, except pursuant to any federal
requirements, the corporation shall not be
required to pay any taxes or assessments upon or
in respect to sales of lottery tickets, or any
property or moneys of the corporation, levied by
the state or any political subdivision or
municipal taxing authority. The corporation and
its assets, property and revenues shall at all
times be free from taxation of every kind by the
state and by the municipalities and all other
political subdivisions or special districts having
taxing powers in the state.
Sec. 18. (NEW) (a) The Superior Court shall
have jurisdiction to enter judgment against the
corporation founded upon any express contract
between the corporation and any person or party
thereto for the provision of goods, services or
professional advice to the corporation or the
lottery.
(b) Any action brought under subsection (a) of
this section shall be brought in the superior
court for the judicial district of Hartford-New
Britain. The jurisdiction conferred upon the
Superior Court by this section includes any
setoff, claim or demand whatsoever on the part of
the corporation against any plaintiff commencing
an action under this section. Such action shall be
tried to the court without a jury. All legal
defenses, except governmental immunity, shall be
reserved to the corporation. Any action brought
under this section shall be privileged in respect
to assignment for trial upon matters of either
party. Nothing in this section shall be construed
to authorize any action against the state of
Connecticut or to abrogate any defense available
to the state of Connecticut, including
governmental immunity.
Sec. 19. (NEW) (a) The executive director of
the Division of Special Revenue shall, within
available resources, prepare and distribute
informational materials designed to inform the
public of the programs available for the
prevention, treatment and rehabilitation of
compulsive gamblers in this state. The executive
director shall require any person or business
organization which is licensed to sell lottery
tickets, operate an off-track betting system or
conduct wagering on racing events or jai alai
games, to display such informational materials at
each licensed premise.
(b) For the fiscal year ending June 30, 1997,
and each fiscal year thereafter, the Connecticut
Lottery Corporation shall transfer the sum of two
hundred fifty thousand dollars of the revenue
received from the sale of lottery tickets to the
Chronic Gamblers Fund for educational, prevention
and treatment programs.
Sec. 20. Section 1-120 of the general statutes
is repealed and the following is substituted in
lieu thereof:
As used in sections 1-120 to 1-123, inclusive,
AS AMENDED:
(1) "Quasi-public agency" means the
Connecticut Development Authority, Connecticut
Innovations, Incorporated, Connecticut Health and
Educational Facilities Authority, Connecticut
Higher Education Supplemental Loan Authority,
Connecticut Housing Finance Authority, Connecticut
Housing Authority, Connecticut Resources Recovery
Authority, Connecticut Hazardous Waste Management
Service, [and] Connecticut Coastline Port
Authority AND CONNECTICUT LOTTERY CORPORATION.
(2) "Procedure" means each statement, by a
quasi-public agency, of general applicability,
without regard to its designation, that
implements, interprets, or prescribes law or
policy, or describes the organization or procedure
of any such agency. The term includes the
amendment or repeal of a prior regulation, but
does not include, unless otherwise provided by any
provision of the general statutes, (A) statements
concerning only the internal management of any
agency and not affecting procedures available to
the public and (B) intra-agency memoranda.
(3) "Proposed procedure" means a proposal by a
quasi-public agency under the provisions of
section 1-121, AS AMENDED BY SECTION 21 OF THIS
ACT, for a new procedure or for a change in,
addition to or repeal of an existing procedure.
Sec. 21. Section 1-121 of the general statutes
is repealed and the following is substituted in
lieu thereof:
(a) A quasi-public agency, before adopting a
proposed procedure, shall give at least thirty
days' notice by publication in the Connecticut Law
Journal of its intended action. The notice shall
include (1) either a statement of the terms or of
the substance of the proposed procedure or a
description sufficiently detailed so as to apprise
persons likely to be affected of the issues and
subjects involved in the proposed procedure, (2) a
statement of the purposes for which the procedure
is proposed and (3) when, where and how interested
persons may present their views on the proposed
procedure. A quasi-public agency may only adopt a
proposed procedure by a two-thirds vote of the
full membership of the board of directors of the
quasi-public agency.
(b) If a quasi-public agency finds that an
imminent peril to the public health, safety or
welfare requires adoption of a proposed procedure
upon fewer than thirty days' notice, states in
writing its reasons for such finding and the
agency's board of directors, by a three-fourths
vote of the statutory membership, approves the
finding in writing, the agency may proceed without
prior notice or hearing or upon any abbreviated
notice and hearing that it finds practicable, to
adopt an emergency proposed procedure not later
than ten days, excluding Saturdays, Sundays and
holidays, prior to the proposed effective date of
the proposed procedure. An approved emergency
procedure may be effective for a period of not
more than one hundred twenty days and renewable
once for a period of not more than sixty days. If
the necessary steps to adopt a permanent
procedure, including publication of notice of
intent to adopt, are not completed prior to the
expiration date of an emergency procedure, the
emergency procedure shall cease to be effective on
that date.
(c) THE PROVISIONS OF SUBSECTIONS (a) AND (b)
OF THIS SECTION SHALL NOT APPLY TO THE CONNECTICUT
LOTTERY CORPORATION, ESTABLISHED PURSUANT TO
SECTION 3 OF THIS ACT, PRIOR TO JULY 1, 1997.
Sec. 22. Section 1-125 of the general statutes
is repealed and the following is substituted in
lieu thereof:
The directors, officers and employees of the
Connecticut Development Authority, Connecticut
Innovations, Incorporated, Connecticut Higher
Education Supplemental Loan Authority, Connecticut
Housing Finance Authority, Connecticut Housing
Authority, Connecticut Resources Recovery
Authority, Connecticut Health and Educational
Facilities Authority, CONNECTICUT LOTTERY
CORPORATION and Connecticut Coastline Port
Authority and any person executing the bonds or
notes of the agency shall not be liable personally
on such bonds or notes or be subject to any
personal liability or accountability by reason of
the issuance thereof, nor shall any director or
employee of the agency be personally liable for
damage or injury, not wanton, reckless, wilful or
malicious, caused in the performance of his or her
duties and within the scope of his or her
employment or appointment as such director,
officer or employee. The agency shall protect,
save harmless and indemnify its directors,
officers or employees from financial loss and
expense, including legal fees and costs, if any,
arising out of any claim, demand, suit or judgment
by reason of alleged negligence or alleged
deprivation of any person's civil rights or any
other act or omission resulting in damage or
injury, if the director, officer or employee is
found to have been acting in the discharge of his
or her duties or within the scope of his or her
employment and such act or omission is found not
to have been wanton, reckless, wilful or
malicious.
Sec. 23. (NEW) The Division of Special Revenue
shall adopt regulations, in accordance with
chapter 54 of the general statutes, concerning the
regulation of the state lottery under the
operation and management of the Connecticut
Lottery Corporation. Such regulations may include
but need not be limited to offerings of lottery
games, minimum prize payouts and payments,
regulation of lottery sales agents including
qualifications for licensure and license
suspension and revocation, lottery sales including
categories of sales and limitations on sales,
assurance of the integrity of the state lottery
including the computer gaming system, computer
internal control and system testing, and
limitations on advertising and marketing content
to assure public information as to the odds of
winning the lottery and the prohibition of sales
of tickets to minors.
Sec. 24. Section 12-557e of the general
statutes is repealed and the following is
substituted in lieu thereof:
The Gaming Policy Board shall work in
cooperation with the Division of Special Revenue
to implement and administer the provisions of this
chapter and chapter 226b. In carrying out its
duties the board shall be responsible for: (1)
Approving, suspending or revoking licenses issued
under subsection (a) of section 12-574; (2)
approving contracts for facilities, goods,
components or services necessary to carry out the
provisions of [sections 12-568 and] SECTION
12-572; (3) setting racing and jai alai meeting
dates, except that the board may delegate to the
executive director the authority for setting
make-up performance dates within the period of a
meeting set by the board; (4) imposing fines on
licensees under subsection (j) of section 12-574;
(5) approving the types of pari-mutuel betting to
be permitted; (6) advising the executive director
concerning the conduct of [the state lotteries
and] off-track betting facilities; (7) assisting
the executive director in developing regulations
to carry out the provisions of this chapter and
chapter 226b, and approving such regulations prior
to their adoption; (8) hearing all appeals taken
under subsection (j) of section 12-574; and (9)
advising the Governor on state-wide plans and
goals for legalized gambling.
Sec. 25. Section 12-563 of the general
statutes is repealed and the following is
substituted in lieu thereof:
All regulations of the division shall be
adopted in the manner provided in chapter 54. The
executive director shall, at least annually, on or
before December thirty-first of each year, publish
in convenient pamphlet form all regulations then
in force and shall furnish copies of such
pamphlets to every establishment authorized to
engage in the activities authorized under section
12-567 [, to every agent licensed under section
12-569,] and to such other persons as desire such
pamphlets.
Sec. 26. Section 12-564 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) The executive director shall make an
annual report in writing to the Governor as
provided in section 4-60 and shall make such
additional reports as the Governor may from time
to time reasonably request. The annual report
shall include a statement of the receipts and
disbursements of the division, a statement of the
costs of administering the division, [including
its advertising budget,] a summary of its
activities, and any additional information and
recommendations which the executive director may
deem of value or which the Governor may request.
(b) The executive director shall, with the
advice and consent of the board, conduct studies
concerning the effect of legalized gambling on the
citizens of this state, including but not limited
to, studies to determine the types of gambling
activity engaged in by the public and the
desirability of expanding, maintaining or reducing
the amount of legalized gambling permitted in this
state. Such studies shall be conducted as often as
the executive director deems necessary but in no
event shall a study be conducted less than once
every five years. The joint standing committees of
the General Assembly having cognizance of matters
relating to legalized gambling shall each receive
a report concerning each study carried out,
stating the findings of the study and the costs of
conducting the study.
Sec. 27. Section 12-566 of the general
statutes is repealed and the following is
substituted in lieu thereof:
[(a)] The executive director and the board
shall provide books in which shall be kept a true,
faithful and correct record of all of their
proceedings, which books shall be open to the
public as provided in section 1-19, AS AMENDED.
[(b) A new lottery game and the procedures for
such game, until the game is publicly announced by
the division, and any serial number of an
unclaimed lottery or pari-mutuel ticket shall not
be deemed to be public records, as defined in
section 1-18a, and shall not be available to the
public under the provisions of section 1-19. The
executive director shall submit a fiscal note
prepared by the division with respect to the
procedures for a new lottery game to the joint
standing committee of the General Assembly having
cognizance of matters relating to finance, revenue
and bonding at the time he submits such procedures
to the board for its consideration.]
Sec. 28. Section 12-567 of the general
statutes is repealed and the following is
substituted in lieu thereof:
Notwithstanding the provisions of section 4-8
the executive director, with the advice and
consent of the board, shall establish within the
division such organizational units as he deems
necessary for the effective operation of the
division. Such units shall be responsible for the
following functions: Division administration;
licensing and integrity assurance; planning and
research; gambling regulation; and state off-track
betting and state lottery [administration]
REGULATION. Each unit shall be under the direction
of a unit head who shall administer and coordinate
the operation of his respective unit. The division
shall maintain full and complete records of the
operation of each unit which shall be open to the
public as provided in section 1-19, AS AMENDED.
The executive director shall establish procedures
for record keeping.
Sec. 29. Section 12-569 of the general
statutes is repealed and the following is
substituted in lieu thereof:
[(a) The division may sell lottery tickets at
its main office and at any of its branch offices
or off-track betting facilities and may license as
agents to sell such tickets such persons as, in
its opinion, will best serve public convenience,
except that no license shall be issued to any
person to engage in business exclusively as a
lottery sales agent. The executive director may
authorize compensation to such agents in such
manner and amounts and subject to such limitations
as he may determine if he finds such compensation
is necessary to assure adequate availability of
lottery tickets, provided, if such agent is a
lessee of state property and his rental fee is
based upon the gross receipts of his business
conducted thereon, all receipts from the sale of
such lottery tickets shall be excluded from such
gross receipts for rental purposes. No ticket
shall be sold at a price greater than that fixed
by the executive director, with the advice and
consent of the board, and no sale shall be made
other than by a licensed lottery sales agent or
his designated employee. Any person who violates
the provisions of this subsection shall be guilty
of a class A misdemeanor.
(b) All moneys received by lottery sales
agents from the sale of lottery tickets constitute
property of the state while in such agent's
possession and shall be held in trust for the
state by such agents. The executive director shall
require lottery sales agents to deposit in a
special or suspense account in the name of the
division, to the credit of the division, which the
executive director is authorized to establish, in
institutions designated by him which are legal for
the deposit of state funds under section 4-33, all
moneys received by such agents from the sale of
lottery tickets, less the amount of compensation,
if any, authorized under subsection (a), and to
file with the division reports of their receipts
and transactions in the sale of lottery tickets in
such form and containing such information as the
executive director may require.] If the [executive
director] PRESIDENT OF THE CONNECTICUT LOTTERY
determines that any lottery sales agent has
breached his fiduciary responsibility to the
[state] CORPORATION in that the account of such
lottery sales agent with respect to moneys
received from the sale of lottery tickets has
become delinquent in accordance with regulations
adopted as provided in [this subsection] SECTION
23 OF THIS ACT, the PRESIDENT SHALL NOTIFY THE
executive director OF THE BREACH OF FIDUCIARY DUTY
AND THE EXECUTIVE DIRECTOR shall impose a
delinquency assessment upon such account equal to
ten per cent of the amount due or ten dollars,
whichever amount is greater, plus interest at the
rate of one and one-half per cent of such amount
for each month or fraction of a month from the
date such amount is due to the date of payment.
Subject to the provisions of section 12-3a, AS
AMENDED, the executive director may waive all or
part of the penalties provided under this
subsection when it is proven to his satisfaction
that the failure to pay such moneys to the state
within the time allowed was due to reasonable
cause and was not intentional or due to neglect.
Any such delinquent lottery sales agent shall be
notified of such delinquency assessment and shall
be afforded an opportunity to contest the validity
and amount of such assessment before the executive
director who is hereby authorized to conduct such
hearing. [Thereafter, the executive director is
authorized to designate or employ collection
agents to collect such delinquent amounts. The]
UPON REQUEST OF THE PRESIDENT OF THE CONNECTICUT
LOTTERY CORPORATION, THE executive director may
prepare and sign a warrant directed to any
sheriff, deputy sheriff, constable or any [such]
collection agent EMPLOYED BY THE CONNECTICUT
LOTTERY CORPORATION for distraint upon any
property of such delinquent lottery sales agent
within the state, whether personal or real
property. An itemized bill shall be attached
thereto certified by the executive director as a
true statement of the amount due from such lottery
sales agent. Such warrant shall have the same
force and effect as an execution issued in
accordance with chapter 906. Such warrant shall be
levied on any real, personal, tangible or
intangible property of such agent and sale made
pursuant to such warrant in the same manner and
with the same force and effect as a levy and sale
pursuant to an execution. The executive director,
with the advice and consent of the board, shall
adopt regulations in accordance with chapter 54 to
carry out the purposes of this [subsection]
SECTION.
[(c) The executive director may authorize
compensation to such depositories in such manner
and amounts and subject to such limitation as he
may determine. The depositories referred to in
subsection (b) shall transfer the deposits made
pursuant to subsection (b) less any compensation
for the services rendered by the depositories to
the division, and less any amounts due the agents
or depositories by adjustments authorized by the
executive director because of agent or bank
errors, to the treasury account of the state of
Connecticut, pursuant to section 4-32. The
depositories shall file reports of their receipts
and transactions pursuant to this section with the
division in such form and containing such
information as the executive director may require.
(d) The executive director may authorize
compensation to claim centers in such manner and
amounts and subject to such limitation as he may
determine.]
Sec. 30. Subsection (d) of section 12-574 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(d) No person or business organization awarded
the primary contract by [the state] THE
CONNECTICUT LOTTERY CORPORATION or by an
association licensee to provide facilities,
components, goods or services which are necessary
for the operation of the activities authorized by
the provisions of [sections 12-568 and] SECTION
12-572 OR SECTIONS 1 TO 19, INCLUSIVE, OF THIS
ACT, may do so unless such person or business
organization is licensed as a vendor licensee by
the executive director.
Sec. 31. Sections 12-568 and 12-569a of the
general statutes are repealed.
Sec. 32. This act shall take effect from its
passage, except that sections 1, 2, 4 and 7 to 31,
inclusive, shall take effect July 1, 1996.
Approved June 4, 1996