Senate Study Bill 1035 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF REVENUE BILL) A BILL FOR An Act relating to the Iowa lottery. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 1391XD (2) 91 ll/ns
S.F. _____ H.F. _____ Section 1. Section 99G.3, Code 2025, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 9A. Lotto means a lottery game connected 3 to a central computer via telecommunications in which a 4 specified group of numbers, symbols, or characters are selected 5 out of a predetermined range. 6 Sec. 2. Section 99G.3, subsection 13, Code 2025, is amended 7 by striking the subsection. 8 Sec. 3. Section 99G.3, subsection 17, Code 2025, is amended 9 to read as follows: 10 17. Self-service kiosk means a machine or other similar 11 electronic device that dispenses only on-line lotto tickets, 12 instant tickets, pull-tab tickets, or other printed lottery 13 products, and that does not provide a visual or audio 14 representation of lottery game play. A self-service kiosk 15 is not a monitor vending machine or player-activated gaming 16 machine for purposes of this chapter . 17 Sec. 4. Section 99G.7, subsection 1, paragraph e, Code 2025, 18 is amended by striking the paragraph. 19 Sec. 5. Section 99G.7, subsection 1, paragraph f, Code 2025, 20 is amended to read as follows: 21 f. Report quarterly and annually to the commission , the 22 governor, the auditor of state, and the general assembly a full 23 and complete statement of lottery revenues and expenses for the 24 preceding quarter, and with respect to the annual report, for 25 the preceding year, and transfer proceeds to the general fund 26 within thirty days following the end of the quarter . 27 Sec. 6. Section 99G.7, subsection 4, Code 2025, is amended 28 to read as follows: 29 4. The administrator director or the administrators 30 directors designee may conduct hearings and administer 31 oaths to persons for the purpose of assuring the security 32 or integrity of lottery operations or to determine the 33 qualifications of or compliance by vendors and retailers. 34 Sec. 7. Section 99G.9, subsection 2, unnumbered paragraph 35 -1- LSB 1391XD (2) 91 ll/ns 1/ 7
S.F. _____ H.F. _____ 1, Code 2025, is amended to read as follows: 1 Adopt policies and procedures and promulgate administrative 2 rules pursuant to chapter 17A relating that relate exclusively 3 to the management and operation of the Iowa lottery , but not 4 policies, procedures, or administrative rules that relate to 5 the operation of the department in general . The administrative 6 rules promulgated pursuant to this subsection may include but 7 shall not be limited to the following: 8 Sec. 8. Section 99G.9, subsection 2, paragraph h, Code 2025, 9 is amended to read as follows: 10 h. The means of conducting drawings, provided that drawings 11 shall be open to the public and witnessed by an independent 12 certified public accountant . Equipment used to select winning 13 tickets or shares or participants for prizes shall be examined 14 by an independent certified public accountant prior to and 15 after each drawing. 16 Sec. 9. Section 99G.10, subsection 4, Code 2025, is amended 17 to read as follows: 18 4. A person who has been convicted of a felony or bookmaking 19 or other form of illegal gambling or shall not be employed by 20 the department under this chapter. The director shall have 21 discretion to determine the relevance of a crime involving 22 moral turpitude shall not be employed by other crimes when 23 making decisions regarding employment with the department under 24 this chapter . 25 Sec. 10. Section 99G.31, subsection 3, paragraphs g and h, 26 Code 2025, are amended by striking the paragraphs and inserting 27 in lieu thereof the following: 28 g. A ticket or share issued by the division shall not 29 be purchased by and no prize shall be paid to any of the 30 following: 31 (1) A member of the commission. 32 (2) An officer or employee of the department. 33 (3) An officer or employee of the state providing services 34 to the department to administer this chapter if such officer 35 -2- LSB 1391XD (2) 91 ll/ns 2/ 7
S.F. _____ H.F. _____ or employee has access to confidential information which may 1 compromise the integrity of the lottery. 2 (4) A spouse, child, sibling, or parent residing as a member 3 of the same household in the principal place of residence of 4 any person described in subparagraphs (1) through (3). For 5 purposes of this subparagraph, a spouse, child, sibling, or 6 parent of a person described in subparagraphs (1) through (3) 7 is considered to be residing as a member of the same household 8 if the spouse, child, sibling, or parent lived in the principal 9 place of residence for one hundred eighty-three days or more in 10 the immediately preceding three hundred sixty-five days. 11 h. A ticket or share issued by the division shall not 12 be purchased by and no prize shall be paid to any of the 13 following: 14 (1) An officer, employee, agent, or subcontractor of any 15 vendor if such officer, employee, agent, or subcontractor has 16 access to confidential information which may compromise the 17 integrity of the lottery. 18 (2) A spouse, child, sibling, or parent residing as a member 19 of the same household in the principal place of residence of 20 any person described in subparagraph (1). For purposes of this 21 subparagraph, a spouse, child, sibling, or parent of a person 22 described in subparagraph (1) is considered to be residing as 23 a member of the same household if the spouse, child, sibling, 24 or parent lived in the principal place of residence for one 25 hundred eighty-three days or more in the immediately preceding 26 three hundred sixty-five days. 27 Sec. 11. Section 99G.34, Code 2025, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 9. Ticket order history; ticket inventory; 30 or any records that if disclosed could impair or adversely 31 impact the security, integrity, or fairness of a lottery game 32 or the security of lottery retailers. 33 Sec. 12. Section 99G.35, subsection 1, unnumbered paragraph 34 1, Code 2025, is amended to read as follows: 35 -3- LSB 1391XD (2) 91 ll/ns 3/ 7
S.F. _____ H.F. _____ The departments lottery security staff under this chapter 1 shall be investigators that support the division may include 2 staff qualified by training and experience in law enforcement 3 to perform their respective duties in support of the activities 4 of the security office to the extent necessary to perform 5 the duties . Lottery security staff Staff that have training 6 and experience in law enforcement shall not have sworn peace 7 officer status. The lottery security office department 8 shall perform security duties including all of the following 9 activities in support of the mission of the department under 10 this chapter : 11 Sec. 13. Section 99G.35, subsection 1, paragraphs c and g, 12 Code 2025, are amended to read as follows: 13 c. Report Determine whether to report any suspected 14 violations of this chapter to the appropriate county attorney 15 or the attorney general and to any law enforcement agencies 16 having jurisdiction over the violation. 17 g. Provide Ensure physical security at the central 18 operations facilities used by the department for purposes of 19 this chapter . 20 Sec. 14. Section 99G.39, subsection 2, Code 2025, is amended 21 to read as follows: 22 2. The director of the department of management shall 23 not include lottery revenues in the directors director of 24 the department of managements fiscal year revenue estimates 25 for the general fund of the state. This subsection does not 26 apply for purposes of revenue estimates of lottery revenues as 27 described in section 8.22A . 28 Sec. 15. Section 99G.40, subsection 2, Code 2025, is amended 29 to read as follows: 30 2. A lottery fund is created in the office of the treasurer 31 of state and shall exist as the recipient fund for department 32 receipts under this chapter . The fund consists of all revenues 33 received from the sale of lottery tickets or shares and all 34 other moneys lawfully credited or transferred to the fund. 35 -4- LSB 1391XD (2) 91 ll/ns 4/ 7
S.F. _____ H.F. _____ The director shall certify before the last day of the month 1 following each quarter that portion of the lottery fund 2 resulting from the previous quarters sales to be transferred 3 to the general fund of the state. The director shall certify 4 quarterly that portion of the fund that has been transferred 5 to the general fund of the state under this chapter and shall 6 cause that portion to be transferred to the general fund of the 7 state within forty-five days following the end of the quarter . 8 However, upon the request of the director and subject to the 9 approval by the treasurer of state, an amount sufficient to 10 cover the foreseeable administrative expenses of the lottery 11 for a period of twenty-one days may be retained from the 12 lottery fund. Prior to the quarterly transfer to the general 13 fund of the state, the director may direct that lottery revenue 14 shall be deposited in the lottery fund and in interest-bearing 15 accounts designated by the treasurer of state. Interest or 16 earnings paid on the deposits or investments is considered 17 lottery revenue and shall be transferred to the general fund of 18 the state in the same manner as other lottery revenue. 19 Sec. 16. Section 99G.40, subsection 3, Code 2025, is amended 20 by striking the subsection. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanations substance by the members of the general assembly. 24 This bill relates to the Iowa lottery. 25 The bill removes the word on-line from the term on-line 26 lotto, strikes reporting requirements duplicative of 27 those under Code section 99G.40, and moves duties of the 28 administrator of the Iowa lottery regarding conducting hearings 29 and administering oaths to assure the security or integrity of 30 the lottery to the director of revenue (director). The bill 31 specifies that the Iowa lottery commission is prohibited from 32 adopting policies, procedures, or rules that relate to the 33 department of revenue (IDR) in general, and removes from the 34 suggested policies, procedures, and rules that lottery drawings 35 -5- LSB 1391XD (2) 91 ll/ns 5/ 7
S.F. _____ H.F. _____ be witnessed by an independent certified public accountant. 1 Under current law, IDR is prohibited from hiring 2 persons convicted of a felony, bookmaking, other form of 3 illegal gambling, or a crime involving moral turpitude for 4 lottery-related employment. The bill removes crimes involving 5 moral turpitude from the prohibition and gives the director 6 discretion to determine the relevance of other crimes on 7 employment decisions. 8 The bill updates and expands the list of persons prohibited 9 from purchasing a lottery ticket or being awarded a prize, 10 including by adding a state officer or employee providing 11 services to IDR to administer lottery provisions if such person 12 has access to confidential information which may compromise the 13 integrity of the lottery. 14 The bill adds ticket order history, ticket inventory, or any 15 other records that could affect the security, integrity, or 16 fairness of a lottery game or the security of lottery retailers 17 to the list of exceptions to an open records request governed 18 by Code chapter 22. 19 The bill changes lottery security staff requirements to 20 include investigators that support the division and updates the 21 activities performed by investigators supporting the lottery 22 division. 23 Under current law, the director of the department of 24 management is prohibited from including lottery revenues in 25 fiscal year revenue estimates. The bill specifies that this is 26 for general fund revenue estimates, and that the prohibition 27 does not apply for purposes of Code section 8.22A (revenue 28 estimating conference). 29 Under current law, the director is required to certify 30 quarterly that portion of the lottery fund that has been 31 transferred to the general fund and to transfer that portion 32 to the general fund. The administrator of the Iowa lottery 33 is required to transfer proceeds from the lottery fund to the 34 general fund within 30 days following the end of the quarter. 35 -6- LSB 1391XD (2) 91 ll/ns 6/ 7
S.F. _____ H.F. _____ The bill eliminates the duplicative transfer requirement by 1 removing the duty from the administrator of the Iowa lottery, 2 and increases the transfer deadline to 45 days for the 3 director. 4 -7- LSB 1391XD (2) 91 ll/ns 7/ 7