SB 130

Sponsor
Session
Regular Session 2019
Title
Lottery, authorized, Alabama Lottery Corporation, created, distrib. of revenues for college scholarships, Sec. 65, Constitution of Alabama of 1901 am'd., const. amend.
Description

Under existing law, lotteries and gift enterprises are prohibited

This bill would propose an amendment to Section 65 of the Constitution of Alabama of 1901, to establish an Alabama Lottery; to establish the Lottery Trust Fund; to provide for the allocation of lottery proceeds to the Lottery Trust Fund; to establish the Alabama Lottery Corporation; to establish the Alabama Lottery Commission to regulate and supervise the operation of the Alabama Lottery Corporation; to provide for the appointment of members to the commission; to authorize the levy of a state gaming gross revenue tax; to authorize the levy of a local gaming gross revenue tax; to authorize the levy of an video lottery terminal vendor tax; and to authorize the Legislature to pass general laws to implement the amendment

Proposing an amendment to Section 65 of the Constitution of Alabama of 1901, now appearing as Section 65 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, to establish an Alabama Lottery; to establish the Lottery Trust Fund; to provide for the allocation of the lottery proceeds; to establish the Alabama Lottery Corporation to administer the lottery; to establish the Alabama Lottery Commission to regulate and supervise the Alabama Lottery Corporation; to provide for the appointment of members to the commission; to authorize the levy of a state gaming gross revenue tax; to authorize the levy of a local gaming gross revenue tax; to authorize the levy of an video lottery terminal vendor tax; and to authorize the Legislature to implement the amendment through enabling legislation.

Subjects
Constitutional Amendments
View Original PDF: SB 130 - Introduced - PDF

Under existing law, lotteries and gift enterprises are prohibited

This bill would propose an amendment to Section 65 of the Constitution of Alabama of 1901, to establish an Alabama Lottery; to establish the Lottery Trust Fund; to provide for the allocation of lottery proceeds to the Lottery Trust Fund; to establish the Alabama Lottery Corporation; to establish the Alabama Lottery Commission to regulate and supervise the operation of the Alabama Lottery Corporation; to provide for the appointment of members to the commission; to authorize the levy of a state gaming gross revenue tax; to authorize the levy of a local gaming gross revenue tax; to authorize the levy of an video lottery terminal vendor tax; and to authorize the Legislature to pass general laws to implement the amendment

Proposing an amendment to Section 65 of the Constitution of Alabama of 1901, now appearing as Section 65 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, to establish an Alabama Lottery; to establish the Lottery Trust Fund; to provide for the allocation of the lottery proceeds; to establish the Alabama Lottery Corporation to administer the lottery; to establish the Alabama Lottery Commission to regulate and supervise the Alabama Lottery Corporation; to provide for the appointment of members to the commission; to authorize the levy of a state gaming gross revenue tax; to authorize the levy of a local gaming gross revenue tax; to authorize the levy of an video lottery terminal vendor tax; and to authorize the Legislature to implement the amendment through enabling legislation.

Section 1

The following amendment to the Constitution of Alabama of 1901, as amended, is proposed and shall become valid as a part thereof when approved by a majority of the qualified electors voting thereon and in accordance with Sections 284, 285, and 287 of the Constitution of Alabama of 1901, now appearing as Sections 284, 285 and 287 of the Official Recompilation of the Constitution of Alabama of 1901, as amended: PROPOSED AMENDMENT Section 65 of Article IV of the Constitution of Alabama of 1901, as amended, is amended to read as follows:

Section 65.

PART I.

The Except as provided in Part II of this amendment, the Legislature shall have no power to authorize lotteries or gift enterprises for any purposes, and shall pass laws to prohibit the sale in this state of lottery or gift enterprise tickets, or tickets in any scheme in the nature of a lottery; and except as provided in Part II, all acts, or parts of acts heretofore passed by the Legislature of this state, authorizing a lottery or lotteries, and all acts amendatory thereof, or supplemental thereto, are hereby avoided.

PART II.

Section 2

For the purposes of this amendment, the following terms shall have the following meanings: (1) COMMISSION. The Alabama Lottery Commission. (2) CORPORATION. The Alabama Lottery Corporation. (3) EXECUTIVE DIRECTOR. The Executive Director of the Alabama Lottery Corporation who shall also serve as the chief executive officer of the corporation. (4) GAMING GROSS REVENUE. The total amount of money or value in any form received by a licensed facility with respect to the playing of any form of video lottery, less the total money or value in any form paid as prizes or winnings to the players of the video lottery and free play or promotional credits, but before deduction of any expenses incurred to operate the establishment, including, but not limited to, depreciation or leasing costs of physical facilities and equipment, wages, and other employment costs, utilities, interest, and taxes. Gaming gross revenue may not be included in a pari-mutuel pool for the purpose of determining any tax levied on pari-mutuel wagering or for any other purpose. (5) LICENSED FACILITIES. The existing entities currently licensed to conduct pari-mutuel wagering at the four existing racetracks located in Jefferson, Mobile, Macon, and Greene counties, and one location in Lowndes county to be selected by the Lottery Commission. There will be no more than one licensed facility in a county, and the Lottery Commission will award the license. (6) RACETRACK. A corporation, limited liability company, or other business entity authorized by a local racing commission pursuant to law to operate and conduct pari-mutuel wagering on live or simulcast races upon the ratification of the amendment adding this part, in Mobile County, Macon County, the city of Birmingham in Jefferson County, or Greene County. (7) RETAILER. Any person with whom the corporation has contracted to sell lottery tickets to the public. (8) VENDOR. Any person who has entered into a major lottery specific procurement contract with the corporation or licensed facility. (9) VIDEO LOTTERY TERMINAL. A video and/or electronic device located in a licensed facility in which currency or credits are deposited and a selection is made by a player in order to play any lottery game. A terminal shall be considered a video lottery terminal notwithstanding the use of an electronic credit system making the deposit of bills or coins necessary. (10) VIDEO LOTTERY TERMINAL VENDOR. Any person who manufactures, distributes, supplies, vends or leases an video lottery terminal or equipment necessary to conduct an video lottery by a licensed facility.

Section 3

Establishment of an Alabama Lottery.

(a) There is hereby created and established a state lottery which shall be administered by an independent, de jure municipal corporation and political subdivision of the State of Alabama which shall be a public body corporate and politic created and designated as the Alabama Lottery Corporation. No employee of the corporation, including the members of the Alabama Lottery Commission, shall be a state employee or entitled to any benefits of a state employee. (b) The affairs of the corporation shall be administered by a board of directors composed of five (5) members, established and known as the Alabama Lottery Commission. Members of the commission shall be residents of the State of Alabama, United States citizens, and prominent persons in their business or profession. (c) Members of the commission may not have been any of the following: (i) Convicted of a felony. (ii) An officer of or occupy an official position in any political party. (iii) An elected official. (iv) Actively engaged in the business of or have a pecuniary interest in a licensed facility. (d) The members of the commission shall be appointed as follows: (1) Two members by the Governor; (2) One member by the Lieutenant Governor; (3) One member by the President Pro Tempore of the Senate; and (4) One member by the Speaker of the House of Representatives. (e) The existence of the corporation shall begin when the five members are appointed, without confirmation by the Senate. Subsequent appointments shall be subject to Senate confirmation. If a vacancy occurs when the Legislature is not in session, an interim appointment shall be made by the appropriate appointing authority, and shall be subject to Senate confirmation upon the next meeting of the Senate. (f) Members shall serve a term of four years and may serve two complete terms and any portion of an initial term less than four years or any portion of an unexpired term to which appointed. Any vacancy occurring on the commission shall be filled for the unexpired term by the appointing authority as described in this amendment or as otherwise provided by an act of the Legislature. The initial term of office upon the effective date of this amendment shall be as follows: (1) Three years for the member appointed by the Speaker of the House of Representatives. (2) Four years for the member appointed by the President Pro Tempore of the Senate. (3) Three years for the member appointed by the Lieutenant Governor. (4) Four years for the members appointed by the Governor. (g) Each member shall serve for the duration of his or her term and until his or her successor is duly appointed and confirmed by the Senate. (i) The corporation shall conduct and administer lottery games that provide continuing entertainment to the public and, maximize revenues and ensure that the lottery is operated with integrity and dignity and free of political influence. (j) No officer or employee of the corporation shall have a financial interest in any vendor doing business or proposing to do business with the corporation. (k) The corporation and its members and employees shall be subject to the Ethics Law, Section 36-25-1, et. seq., Code of Alabama, 1975; the Open Records Act, Section 36-12-40, Code of Alabama, 1975; and the Open Meetings Act, Section 36-25A-1, et. seq., Code of Alabama 1975.

Section 4

Lottery Trust Fund (a) The proceeds from the Alabama Lottery shall be applied first to the payment of the expenses of administering and operating the Alabama Lottery, including, without limitation, the payment of all prizes, without any further appropriation required by law, and the balance of the proceeds remaining after the payments shall be deposited and held in a special, separate account in the State Treasury hereby created and designated as the Lottery Trust Fund until such time as the proceeds are disbursed, as provided by general law. (b) The corporation shall be self-sustaining and self-funded and moneys in the state General Fund or the Education Trust Fund shall not be used or obligated to pay the expenses of the corporation or prizes of the lottery and no claim for the payment of an expense of the lottery or prizes of the lottery shall be made against any moneys other than moneys credited to the corporate operating account. (c) Monthly, no later than the last business day of the succeeding month, the corporation shall transfer to the Lottery Trust Fund, the amount of net revenues which the corporation determines surplus to its needs. (d) Moneys credited to the Lottery Trust Fund shall be invested in accordance with state investment practices and all earnings from the investment shall accrue to this account.

Section 5

Prizes Taxable. (a) Lottery prizes are subject to Alabama state income tax. Any attachment, garnishment, or execution authorized and issued pursuant to law shall also be withheld if served upon the process agent of the corporation. (b) No ticket may knowingly be sold to any person under the age of eighteen, but this section does not prohibit the purchase of a ticket by a person eighteen years of age or older for the purpose of making a gift to any person of any age. In that case, the corporation shall direct payments to an adult member of the person's family or the legal guardian of the person on behalf of the person. (c) No person may sell a ticket at a price other than that established by the corporation, unless authorized in writing by the executive director. (d) No person other than a duly certified lottery retailer shall sell lottery tickets, except that nothing in this amendment shall be construed to prevent a person who may lawfully purchase tickets from making a gift of lottery tickets to another. (e) Lottery tickets may be given by merchants as a means of promoting goods or services to customers or prospective customers subject to approval by the corporation. (f) No lottery retailer may sell a ticket away from the locations listed in the contract of the retailer.

Section 6

State Gross Receipts Tax; Local Gross Receipts Tax; Video Lottery Terminal Vendor Tax. (a) A state gross receipts tax shall be levied on the gaming gross revenue generated from video lotteries at each licensed facility. This rate shall be set at twenty-two percent. (b) An additional state gross receipts tax shall be levied on the gaming gross revenue generated from video lotteries at each licensed facility to the extent that the licensed facility owns and does not lease video lottery terminals and equipment. This rate shall be set at one percent. (c) A local gross receipts tax shall be levied on the gaming gross revenue generated from video lotteries at each licensed facility. This rate shall be set at two percent. (d) A state gross receipts tax shall be levied on the sports wagering gross revenue generated from sports wagers. The Legislature shall set this rate by general law. (e) A state video lottery terminal vendor tax shall be levied on video lottery terminal vendors conducting business in the state. This rate shall be set at four percent of the gross gaming revenue.

Section 7

Games Allowed; Games Not Allowed. (a) The corporation may allow lottery games of all types, including new lottery games. This may include but is not limited to draw lotteries of various types, unique to Alabama draw lottery, interstate lotteries such as Powerball and Mega Millions, instant winners such as scratch-offs, Keno, and iLottery or any other lottery offered in another state. Video lottery terminals shall only be made available at licensed facilities. The corporation shall make participation convenient to Alabamians by ensuring that purchases are available at retail outlets either by ticket purchase from an employee or from a kiosk or vending machine that does not require an employee to handle the transaction. The corporation may allow iLottery, mobile platforms, and computer purchases. (b) The corporation may not approve or operate any casino or similar gambling establishment and may not approve or operate any game played with playing cards, dice, dominos, slot machines, or roulette wheels. Any game using live dealers is strictly prohibited.

Section 8

Pari-mutuel Wagering to Continue. (a) Licensed facilities, as determined by the lottery commission, may legally continue to employ video bingo terminals until such times as the lottery commission mandates as termination date. This change must occur within twelve (12) months of the effective date of this amendment. (b) Nothing in this amendment affects, prohibits, or limits any activity that was legal at the time this amendment becomes effective including, without limitation, pari-mutuel betting and charity bingo as provided for by specific laws. (c) The operation of a lottery, lottery game, or video lottery terminal authorized by this amendment shall not be subject to or prohibited, limited, or impaired by otherwise applicable provisions of Article 8, commencing with Section 8-1-150, of Chapter 1 of Title 8, or article 2, commencing with Section 13A-12-20, of Chapter 12 of Title 13A of the Code of Alabama 1975.

Section 9

(a) To conduct the lottery authorized by this part at a licensed facility, the licensed facility shall remit a licensing fee of one hundred thousand dollars ($100,000) for a ten year license. The license may not be sold or transferred without the express consent of the lottery commission, whereupon a fee of one hundred thousand dollars ($100,000) will be due. Any approved purchaser or recipient of a license not originally approved by the lottery commission may not operate any video lottery terminals in the State of Alabama unless that facility remits gross receipts taxes consistent with this amendment. If the license holder is not operational for a period of 12 months the license shall be void and the commission shall seek another licensee in that county. (b) The Legislature shall provide for the control, management, and operation of the Alabama Lottery in one or more general laws subsequent to and supplemental to this amendment. (c) Nothing in this part affects, prohibits, or limits any activity that was legal at the time this part becomes effective, including, without limitation, pari-mutuel betting and charity bingo as provided for by specific laws. (d) This part and any enabling legislation enacted by the Legislature with respect to this part supersedes and takes precedence over any other provision of law that may conflict or be inconsistent with this part or the legislation, and this part and the legislation shall operate and be construed without regard to the conflict or inconsistency.

Section 10

The provisions of this amendment are severable. If any part of this amendment is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

Section 11

An election upon the above proposed amendment shall be held, in accordance with the provisions of Sections 284 and 285 of the Constitution of Alabama of 1901, now appearing as Sections 284 and 285 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, and the general election laws of this state on March 3, 2020.

Section 12

The appropriate election official shall assign ballot number one (1) for the proposed constitutional amendment on the election ballot and shall set forth the following description on the proposed constitutional amendment:

Proposing an amendment to the Constitution of Alabama of 1901, to establish an Alabama Lottery and an Alabama Lottery Trust Fund, to create an Alabama Lottery Corporation to administer the lottery; to establish the Alabama Lottery Commission to regulate and supervise the Alabama Lottery Corporation; and to allow the Legislature to implement the Alabama Lottery through appropriate general law." This description shall be followed by the following language:

Yes ( ) No ( )."

Action Date Chamber Action
March 19, 2019SRead for the first time and referred to the Senate committee on Tourism