UNOFFICIAL COPY 23 RS HB 189/GA
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AN ACT relating to lottery proceeds. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 154A.130 is amended to read as follows: 3
(1) All money received by the corporation from the sale of lottery tickets and all other 4
sources shall be deposited into a corporate operating account. The corporation is 5
authorized to use all money in the corporate operating account for the purposes of 6
paying prizes and the necessary expenses of the corporation and dividends to the 7
state. The corporation shall allocate the amount to be paid by the corporation to 8
prize winners. The amount in the corporate operating account which the corporation 9
anticipates will be available for the payment of prizes on an annuity basis may be 10
invested in direct United States Treasury obligations. These instruments may be in 11
varying maturities with respect to payment of annuities and may be in book-entry 12
form. Monthly, no later than the last business day of the succeeding month, the 13
corporation shall transfer to a lottery trust fund the amount of net revenues which 14
the corporation determines are surplus to its needs. These funds shall be held in 15
trust until 1990 at which time the General Assembly shall determine the manner in 16
which the funds will be allocated and appropriated. The net revenues shall be 17
determined by deducting from gross revenues the payment costs incurred in the 18
operation and administration of the lottery, including the expenses of the 19
corporation and the costs resulting from any contract or contracts entered into for 20
promotional, advertising, or operational services or for the purchase or lease of 21
lottery equipment and materials, fixed capital outlays, and the payment of prizes to 22
the holders of winning tickets. After the start-up costs are paid, it is the intent of the 23
Legislature that it shall be the goal of the corporation to transfer each year thirty-24
five percent (35%) of gross revenues to the general fund for the purposes stated 25
above. 26
(2) A Kentucky lottery trust account is established in the State Treasury. Net lottery 27 UNOFFICIAL COPY 23 RS HB 189/GA
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revenues shall be credited to this restricted account as provided in subsection (1) of 1
this section. Moneys credited to the Kentucky lottery trust account shall be invested 2
by the state in accordance with state investment practices and all earnings from the 3
investments shall accrue to this account. No moneys shall be allotted or expended 4
from this account unless pursuant to an appropriation by the General Assembly, 5
except that moneys as are needed shall be transferred to the general fund pursuant 6
to the provisions of the Acts of the Extraordinary Session of the 1988 General 7
Assembly. Moneys in the Kentucky lottery trust account shall not lapse at the close 8
of the state fiscal year. 9
(3) Each fiscal year, one million eight hundred thousand[three million] dollars 10
($1,800,000)[($3,000,000)] from net lottery revenues from the sale of lottery tickets 11
shall be credited from the general fund [as follows: 12
(a) To the Collaborative Center for Literacy Development, one million two 13
hundred thousand dollars ($1,200,000); and 14
(b) ]to the reading diagnostic and intervention fund[, one million eight hundred 15
thousand dollars ($1,800,000)]. 16
(4) After the allocation[ of three million dollars ($3,000,000) to literacy development,] 17
as provided in subsection (3) of this section, net lottery revenues from the sale of 18
lottery tickets shall be credited from the general fund as follows: 19
(a) To the Wallace G. Wilkinson Kentucky educational excellence scholarship 20
trust fund established in KRS 164.7877: 21
1. Forty percent (40%) in fiscal year 2003-2004; and 22
2. Forty-five percent (45%) in fiscal year 2004-2005 and each fiscal year 23
thereafter; and 24
(b) To the College Access Program and the Kentucky Tuition Grants Program 25
established in KRS Chapter 164: 26
1. Forty percent (40%) in fiscal year 2003-2004; 27 UNOFFICIAL COPY 23 RS HB 189/GA
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2. Forty-five percent (45%) in fiscal year 2004-2005; and 1
3. Fifty-five percent (55%) of net lottery revenues in fiscal year 2005-2006 2
and each fiscal year thereafter. 3
(5) The Auditor of Public Accounts shall be responsible for a financial postaudit of the 4
books and records of the corporation. The postaudit shall be conducted in 5
accordance with generally accepted accounting principles, shall be paid for by the 6
corporation, and shall be completed within ninety (90) days of the close of the 7
corporation's fiscal year. The Auditor of Public Accounts shall contract with an 8
independent, certified public accountant who meets the qualifications existing to do 9
business within the Commonwealth of Kentucky to perform the corporation 10
postaudit. The Auditor of Public Accounts shall remain responsible for the annual 11
postaudit and the corporation shall pay all audit costs. The Auditor of Public 12
Accounts may at any time conduct additional audits, including performance audits, 13
of the corporation as he or she deems necessary or desirable. Contracts shall be 14
entered into for audit services for a period not to exceed five (5) years and the same 15
firm shall not receive two (2) consecutive audit contracts. All audits shall be filed 16
with the Governor, the President of the Senate, and the Speaker of the House of 17
Representatives. The corporation shall reimburse the Auditor of Public Accounts 18
for the reasonable costs of any audits performed by him or her. The corporation 19
shall cooperate with the Auditor of Public Accounts by giving employees 20
designated by any of them access to facilities of the corporation for the purpose of 21
efficient compliance with their respective responsibilities. With respect to any 22
reimbursement that the corporation is required to pay to any agency, the corporation 23
shall enter into an agreement with that agency under which the corporation shall 24
pay to the agency an amount reasonably anticipated to cover the reimbursable 25
expenses in advance of the expenses being incurred. 26
(6) By no later than December 31 of each year, in an advertisement at least one-fourth 27 UNOFFICIAL COPY 23 RS HB 189/GA
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(1/4) of a page in size, the Kentucky Lottery Corporation shall publish the 1
following information in every general-circulation daily newspaper published in 2
Kentucky: 3
(a) The statements of revenue, expenses, and changes in retained earnings as 4
shown in the most recent annual audit report. It shall be explained that the 5
transfer of dividends is the amount of lottery earnings transferred to the 6
general fund; 7
(b) A statement identifying the auditing firm; 8
(c) A telephone number which citizens may call to obtain a complete copy of the 9
annual audit report; and 10
(d) The name of the president/chief executive officer of the Kentucky Lottery 11
Corporation and a complete list of board members. 12
The Kentucky Lottery Corporation shall pay for the cost of the advertisement. 13