SB320 Alabama 2021 Session

Summary

Primary Sponsor

Jim McClendon

Republican

Co-Sponsors

Garlan GudgerDel Marsh

Session

Regular Session 2021

Title

Lottery, legislative intent, Alabama Lottery Commission, powers and duties, distrib. of proceeds, allocation of state and local tax on gaming revenue, limitations on retailers of lottery tickets, Alabama Lottery Act

Summary

SB320 would create a state‑run Alabama Lottery with a five‑member Commission and a governing Lottery Corporation to operate games, distribute proceeds to education and other funds, and adjust the grocery tax based on lottery revenue if voters approve a related constitutional amendment.

What This Bill Does

It establishes the Alabama Lottery Commission and the Alabama Lottery Corporation to run lottery games with audits and budget oversight. It sets up a statewide network of retailers, rules for ticket sales, prize verification, and retailer payments, and requires protections around proceeds and contracts. It directs lottery proceeds to the Education Trust Fund (with 5% to the Education Retirees' Trust Fund until $100 million) for a postsecondary scholarship program with teacher‑focused loan forgiveness, and to the General Fund for capital/nonrecurring expenses, while linking grocery tax rates to lottery revenue and funding unclaimed prizes for future prizes and public health programs.

Who It Affects

• Students and educators in Alabama, who gain through education funding and the teacher‑focused scholarship/loan forgiveness program.
• Lottery retailers and vendors, who must obtain certificates, follow sale and prize rules, make deposits, and may be subject to liens to secure lottery proceeds.
• General consumers and shoppers, who could see changes to the state food tax rates based on lottery revenue and who must meet age restrictions when purchasing tickets.
• Public health and higher education agencies, which administer programs funded by lottery proceeds (including compulsive gaming programs and scholarship initiatives).

Key Provisions

• Creates a five‑member Alabama Lottery Commission (appointed by Governor, Lt. Governor, President Pro Tempore, and Speaker) with a four‑year term and a director who oversees daily operations; members cannot participate in the lottery.
• Establishes a separate Alabama Lottery Corporation to run games, conduct internal audits, maintain detailed records, and manage contracts; corporation employees are not state employees and conflict of interest rules apply to vendors.
• Allows the commission to adopt rules for game types, ticket pricing, prizes, draw methods, prize payments, retailer compensation, and related operational matters.
• Directs lottery proceeds to the Education Trust Fund (with 5% to the Education Retirees' Trust Fund until $100 million) and the General Fund for capital/nonrecurring expenses; funds a postsecondary scholarship program with loan forgiveness for educators who work in Alabama.
• Implements a grocery tax provision that sets a 2% state food tax starting 2023, potentially reduces to 1% or eliminates the tax entirely if lottery proceeds meet defined revenue thresholds, and prohibits increasing local food taxes.
• Requires a statewide network of lottery retailers with display certificates; outlines placement of vending machines and use of ID‑reader technology for age verification.
• Prohibits sale of tickets to anyone under 21 (with limited gift exception directing payments to an adult guardian for gifts).
• Establishes prize verification and payment rules, including deadlines for claiming prizes, rules against fraudulent tickets, and anonymity options for large prizes; unclaimed prizes may fund future prizes and public health programs.
• Gives the corporation and related parties liens on retailer assets to secure lottery proceeds, with liens prioritized similarly to state and local taxes and require county clerk notice to be valid against third parties.
• Gives the executive director authority to suspend or terminate contracts for cause, with hearings or temporary suspensions as allowed.
• States the act takes effect immediately upon ratification of the related constitutional amendment (SB319) and otherwise is void; the commission remains subject to sunset review.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Lotteries