HB-5896, As Passed House, June 29, 2004

SUBSTITUTE FOR

HOUSE BILL NO. 5896

                                                                             A bill to amend 1972 PA 239, entitled                                             

"McCauley-Traxler-Law-Bowman-McNeely lottery act,"                          

by amending sections 11 and 23 (MCL 432.11 and 432.23), as                  

amended by 1996 PA 167.                                                     

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 11.  (1) The commissioner shall promulgate rules                       

2   pursuant to the administrative procedures act of 1969,  Act                 

3   No. 306 of the Public Acts of 1969, being sections 24.201 to                

4   24.328 of the Michigan Compiled Laws 1969 PA 306, MCL 24.201 to            

5   24.328, as necessary to implement this act.                                 

6       (2) The rules authorized under this section may include any                 

7   of the following subject to requirements and limitations in this            

8   act:                                                                        

9       (a) The type of lottery to be conducted.  subject to section                

10  9(2).

1       (b) The price of tickets or shares in the lottery.                          

2       (c) The number and size of the prizes on the winning tickets                

3   or shares.                                                                  

4       (d) The manner of selecting the winning tickets or shares.                  

5       (e) The manner of payment of prizes to the holders of winning               

6   tickets or shares.  , subject to section 32.

7       (f) The frequency of the drawings or selections of winning                  

8   tickets or shares.                                                          

9       (g) Without limit as to number, the type or types of                        

10  locations at which tickets or shares may be sold.   subject to              

11  section 23(10).

12      (h) The method to be used in selling tickets or shares,                     

13  except that a person's name shall not be printed on the tickets             

14  or shares.                                                                  

15      (i) The licensing of agents to sell tickets or shares, but a                

16  person under the age of 18 shall not be licensed as an agent.               

17      (j) The manner and amount of compensation to be paid licensed               

18  sales agents necessary to provide for the adequate availability             

19  of tickets or shares to prospective buyers and for the                      

20  convenience of the public.                                                  

21      (k) The apportionment of the total annual revenues accruing                 

22  from the sale of lottery tickets or shares and from all other               

23  sources for the payment of prizes to the holders of winning                 

24  tickets or shares, for the payment of costs incurred in the                 

25  operation and administration of the lottery, including the                  

26  expenses of the bureau and the costs resulting from any contract            

27  or contracts entered into for promotional, advertising,                     

1   consulting or operational services or for the purchase or lease             

2   of lottery equipment and materials, for the repayment of the                

3   money appropriated to the state lottery fund, and for transfer to           

4   the general fund.                                                           

5       (3) The commissioner may promulgate rules incorporating by                  

6   reference existing rules or regulations of any joint enterprise             

7   as required as a condition for participation in that joint                  

8   enterprise.  Any subsequent changes or additions to the rules or            

9   regulations of the joint enterprise may be adopted by the                   

10  commissioner through the promulgation of a rule.                            

11      (4) This section is repealed if the Michigan supreme court                  

12  rules that sections 45 and 46 of the administrative procedures              

13  act of 1969,  Act No. 306 of the Public Acts of 1969, being                 

14  sections 24.245 and 24.246 of the Michigan Compiled Laws 1969 PA           

15  306, MCL 24.245 and 24.246, are unconstitutional and a statute              

16  requiring legislative review of administrative rules is not                 

17  enacted within 90 days after the Michigan supreme court ruling.             

18  Nothing in this subsection invalidates rules that have been

19  This subsection does not invalidate rules promulgated prior to              

20  the effective date of the amendatory act that added this                   

21  subsection April 17, 1996.                                                 

22      Sec. 23.  (1)  A license as an agent to sell lottery tickets                

23  or shares shall not be issued to any The commissioner shall not            

24  issue a license to a person to engage in business exclusively as            

25  a lottery sales agent.  Before issuing a lottery sales license,

26  the commissioner shall consider factors such as the financial               

27  responsibility and security of the person and his or her business           

1   or activity, the accessibility of his or her place of business or           

2   activity to the public, the sufficiency of existing licenses to             

3   serve the public convenience, and the volume of expected sales.             

4       (2)  As used in this section, "person" means an individual,                 

5   association, corporation, club, trust, estate, society, company,            

6   joint stock company, receiver, trustee, referee, any other person           

7   acting in a fiduciary or representative capacity who is appointed           

8   by a court, or any combination of individuals.  Person includes             

9   any department, commission, agency, or instrumentality of the               

10  state, including any county, city, village, or township and any             

11  agency or instrumentality thereof. Beginning the effective date            

12  of the amendatory act that added subsection (12), the                       

13  commissioner shall issue an initial or renewal lottery sales                

14  license not later than 90 days after the applicant files a                  

15  completed application.  Receipt of the application is considered            

16  the date the application is received by any agency or department            

17  of this state.  If the application is determined to be incomplete           

18  by the commissioner, the commissioner shall notify the applicant            

19  in writing, or make information electronically available, within            

20  30 days after receipt of the incomplete application, describing             

21  the deficiency and requesting the additional information.  The              

22  90-day period is tolled upon notification by the commissioner of            

23  a deficiency until the date the requested information is received           

24  by the commissioner.  The determination of the completeness of an           

25  application does not operate as an approval of the application              

26  for the license and does not confer eligibility of an applicant             

27  determined otherwise ineligible for issuance of a license.                  

1       (3) If the commissioner fails to issue or deny a lottery                    

2   sales license within the time required by this section, the                 

3   commissioner shall return the license fee and shall reduce the              

4   license fee for the applicant's next renewal application, if any,           

5   by 15%.  The failure to issue a lottery sales license within the            

6   time required under this section does not allow the commissioner            

7   to otherwise delay the processing of the application, and that              

8   application, upon completion, shall be placed in sequence with              

9   other completed applications received at that same time.  The               

10  commissioner shall not discriminate against an applicant in the             

11  processing of the application based upon the fact that the                  

12  license fee was refunded or discounted under this subsection.               

13      (4) Beginning October 1, 2005, the commissioner shall submit                

14  a report by December 1 of each year to the standing committees              

15  and appropriations subcommittees of the senate and house of                 

16  representatives concerned with gaming issues.  The commissioner             

17  shall include all of the following information in the report                

18  concerning the preceding fiscal year:                                       

19      (a) The number of initial and renewal applications the                      

20  commissioner received and completed within the 90-day time period           

21  described in subsection (2).                                                

22      (b) The number of applications denied.                                      

23      (c) The number of applicants not issued a license within the                

24  90-day time period and the amount of money returned to licensees            

25  and applicants under subsection (3).                                        

26      (5)  (3)  Notwithstanding any other provision of law, a                     

27  person licensed  pursuant to this act may act  as a lottery sales           

1   agent may sell lottery tickets and shares.  A person lawfully               

2   engaged in nongovernmental business on state property may be                

3   licensed as a lottery sales agent.                                          

4   (6)  (4)  A lottery sales license is not assignable or                      

5   transferable.                                                               

6   (7)  (5)  A licensed agent or his or her employee may sell                  

7   lottery tickets or shares only on the premises stated in the                

8   lottery sales license.  of the agent.  Effective July 1, 1996, a

9   A licensed agent who violates this subsection is, at the                    

10  commissioner's discretion, subject to 1 or more of the                      

11  following:                                                                  

12      (a) Probation for not more than 2 years.                                    

13      (b) A fine of not more than $1,000.00.                                      

14      (c) Removal of his or her lottery terminal.                                 

15  (6) The commissioner may issue temporary licenses upon                      

16  conditions as he or she considers necessary for a term which                

17  shall not extend beyond 1 year after the effective date of this             

18  act.

19  (8)  (7)  The commissioner may require a bond from  any a

20  licensed agent in an amount  as  provided in  the  rules                    

21  promulgated under this act.                                                 

22  (9)  (8)  A licensed agent shall display his or her license                 

23  or a copy  thereof of the license conspicuously in accordance              

24  with  the  rules promulgated under this act.                                

25  (10)  (9)  The commissioner may suspend or revoke the license               

26  of  any an agent who violates this act or a rule promulgated               

27  pursuant to under this act.                                               

1   (11)  (10)  For purposes of terminal placement, the                         

2   commissioner shall take into account with equal emphasis both of            

3   the following:                                                              

4       (a) The total instant game sales for the 3 months immediately               

5   preceding a market evaluation.                                              

6       (b) The need to maximize net lottery revenues from the total                

7   number of terminals placed.                                                 

8   (12) As used in this section:                                               

9       (a) "Completed application" means an application complete on                

10  its face and submitted with any applicable licensing fees and any           

11  other information, records, approval, security, or similar item             

12  required by law or rule from a local unit of government, a                  

13  federal agency, or a private entity but not from another                    

14  department or agency of this state.                                         

15      (b) "Person" means an individual, association, corporation,                 

16  club, trust, estate, society, company, joint stock company,                 

17  receiver, trustee, referee, or other person acting in a fiduciary           

18  or representative capacity who is appointed by a court, or any              

19  combination of individuals.  Person includes a department,                  

20  commission, agency, or instrumentality of the state, including a            

21  county, city, village, or township and an agency or                         

22  instrumentality of the county, city, village, or township.