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SB 188: "An Act establishing the Alaska Lottery Corporation; relating to the powers, duties, and laws applicable to the Alaska Lottery Corporation; establishing a lottery profits fund as an account of the general fund; establishing the crime of unlawful sale of a lottery ticket; and providing for an effective date."

00 SENATE BILL NO. 188 01 "An Act establishing the Alaska Lottery Corporation; relating to the powers, duties, and 02 laws applicable to the Alaska Lottery Corporation; establishing a lottery profits fund as 03 an account of the general fund; establishing the crime of unlawful sale of a lottery ticket; 04 and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 05 is amended by adding a new chapter to read: 07 Chapter 18. Alaska Lottery Corporation. 08 Article 1. Creation and Organization. 09 Sec. 05.18.010. Alaska Lottery Corporation. (a) The Alaska Lottery 10 Corporation is established. The purpose of the corporation is to establish and operate a 11 lottery to generate revenue for the state. The corporation is a public corporation and an 12 instrumentality of the state within the Department of Revenue but with a legal 13 existence independent of and separate from the state. 14 (b) The corporation shall continue until it is terminated by law. Upon

01 termination of the corporation, its rights and property pass to the state. 02 Sec. 05.18.020. Board of directors. (a) The corporation shall be governed by a 03 board of directors consisting of seven members. One director shall be the 04 commissioner of revenue and one director shall be the head of another principal 05 department of the state the governor designates. Five directors shall be members of the 06 public appointed by the governor. The directors other than the commissioner of 07 revenue serve at the pleasure of the governor for purposes of board membership. A 08 vacancy in a public director position shall be filled in the same manner as the original 09 appointment but only for the remainder of the unexpired term. 10 (b) A public director must be a resident of the state. A person may not serve as 11 a public director if the person has been convicted of an offense under AS 11.66.200 - 12 11.66.280 or 11.66.400, or of a felony involving gambling, a racketeering activity, or 13 fraud, including a guilty plea or plea of nolo contendere as prohibited by federal, state, 14 or municipal law or the laws of another jurisdiction. A public director may not be an 15 elected official of the state or a municipality or other political subdivision of the state. 16 (c) The public directors shall serve five-year terms and shall hold office until 17 their successors are appointed and qualified. A person appointed as a public director 18 shall be qualified to serve on the board after a criminal background check required 19 under AS 12.62.400 has been completed and once the person has taken the oath of 20 office in accordance with AS 39.05.040. 21 (d) A public director who has served all or part of three successive terms may 22 not be reappointed unless a period of at least three years has passed since the person 23 served on the board. 24 Sec. 05.18.030. Board officials; director compensation. (a) The board shall 25 elect a public director to serve as chair. The chair shall preside over the meetings of 26 the board and perform other functions the board designates. The board may elect any 27 director to serve as vice-chair. The vice-chair shall preside over the meetings of the 28 board in the absence of the chair and shall perform other functions the board 29 designates. The chair and vice-chair shall serve for a term established by the board. 30 (b) The directors may not receive compensation from the corporation for their 31 services, except the public directors shall receive per diem and travel expenses

01 authorized for boards under AS 39.20.180. The departments with commissioners who 02 serve as directors are responsible for the per diem and travel expenses for their 03 respective commissioners to attend meetings of the board or conduct official business 04 for the corporation. 05 Sec. 05.18.040. Board meetings. (a) The board shall meet at least once each 06 calendar quarter. Meetings may be called by the chair. The chair shall call a meeting 07 when four or more directors request a meeting. The board by resolution or bylaw may 08 establish a schedule of regular meetings. 09 (b) The board shall provide public notice of the time and place of the meeting 10 at least three days before the meeting. Board meetings are subject to AS 44.62.310 - 11 44.62.319 (Open Meetings Act). 12 (c) Four directors constitute a quorum to transact business. An affirmative 13 vote of a majority of the directors on a resolution or motion is required to constitute an 14 action or approval of the board. 15 (d) The board may meet and transact business by electronic means if 16 (1) public notice of the time and locations where the meeting will be 17 held by electronic means has been given in the same manner as if the meeting were 18 held in a single location; 19 (2) participants and members of the public in attendance can hear and 20 have the same right to participate in the meeting as if the meeting were conducted in 21 person; and 22 (3) resolutions, documents, reports, and other materials pertinent to the 23 meeting are reasonably available to participants and the public. 24 (e) The corporation shall keep minutes of each board meeting and make the 25 minutes available to the public. 26 Sec. 05.18.050. Bylaws. The board may adopt, amend, and repeal bylaws for 27 the corporation that do not conflict with this chapter or other applicable law. The 28 bylaws may include provisions regarding the corporation's board meetings, 29 organization, duties and delegated authorities of its officers and employees, and 30 management of its internal affairs. The bylaws may allow for the establishment of one 31 or more committees of directors to perform specified tasks that the board delegates or

01 to make recommendations for board action. 02 Sec. 05.18.060. Officers. (a) The corporation shall employ a chief executive 03 officer who shall be a full-time employee of the corporation that works exclusively for 04 the corporation. The chief executive officer may not be a director of the corporation. 05 The chief executive officer shall be appointed by the board and serve at the pleasure of 06 the board. The board shall determine the compensation the corporation pays the chief 07 executive officer. Subject to the oversight of the board, the chief executive officer 08 shall manage the day-to-day business of the corporation, serve as the secretary for 09 board meetings, and perform other duties and functions the board designates. 10 Notwithstanding the appointment of the chief executive officer, the board shall retain 11 the discretionary authority to outsource the corporation's operations or portions of 12 them to a lottery contractor the board selects. 13 (b) The corporation may employ a chief financial officer who shall be 14 appointed by the board and serve at the pleasure of the board. The chief financial 15 officer shall report to the chief executive officer. The chief financial officer may not 16 be a director or the chief executive officer. The board shall determine the 17 compensation the corporation pays the chief financial officer. The compensation paid 18 to the chief financial officer may not exceed the compensation paid to the chief 19 executive officer. Subject to the oversight of the board and the chief executive officer, 20 the chief financial officer shall manage the financial affairs of the corporation, 21 maintain the accounts of the corporation, and perform other duties and functions the 22 board or the chief executive officer designates. 23 (c) The board may create other officer positions it determines necessary. The 24 chief executive officer may appoint any person to an officer position, except that a 25 director may not serve as an officer. All persons appointed to an officer position, other 26 than the chief financial officer, shall report to and serve at the pleasure of the chief 27 executive officer. The board shall determine the compensation the corporation pays 28 the other officers. The board and the chief executive officer may assign duties to the 29 other officers as determined appropriate. 30 Sec. 05.18.070. Legal counsel. The attorney general is the legal counsel for the 31 corporation. The corporation may not contract for the services of outside legal counsel

01 without the approval of the attorney general. 02 Sec. 05.18.080. Employees and advisors. (a) The corporation may hire 03 employees to perform duties assigned by the board or the chief executive officer. The 04 board shall determine the compensation the corporation pays the employees or, if the 05 board delegates the authority, the chief executive officer may determine the 06 compensation. 07 (b) The corporation may engage a professional, technical, or financial advisor 08 under contract. The board shall determine the compensation the corporation pays a 09 professional or technical advisor or, if the board delegates the authority, the chief 10 executive officer may determine the compensation. 11 Sec. 05.18.090. Officer and employee qualifications. A person may not serve 12 as an officer or employee of the corporation if the person has been convicted of a 13 felony, an offense under AS 11.66.200 - 11.66.280 or 11.66.400, or unlawful 14 gambling activities as prohibited by federal, state, or municipal law or the laws of 15 another jurisdiction. 16 Sec. 05.18.100. Exemption from State Personnel Act. The officers and 17 employees of the corporation are in the exempt service under AS 39.25 (State 18 Personnel Act). 19 Sec. 05.18.110. Lottery contractors. (a) The corporation may engage a lottery 20 contractor to provide services on terms and conditions established by the board. A 21 lottery contractor shall receive compensation for the lottery contractor's services as 22 determined by the board. 23 (b) Before executing a contract with a lottery contractor, the proposed lottery 24 contractor shall provide to the corporation the lottery contractor's fingerprints. If the 25 proposed lottery contractor is a business organization, the lottery contractor shall 26 provide to the corporation the fingerprints of the directors, officers, managers of the 27 organization, and individuals with control of the organization. When the proposed 28 lottery contractor is a corporation that is required by law to file periodic reports with 29 the United States Securities and Exchange Commission or similar international 30 regulatory entity, the lottery contractor shall submit to the corporation the fingerprints 31 of not more than three individuals who are the principal officers of the corporation.

01 (c) The corporation shall submit the fingerprints provided by a proposed 02 lottery contractor to the Department of Public Safety to obtain a report of criminal 03 justice information under AS 12.62 and a national criminal history record check under 04 AS 12.62.400. The Department of Public Safety may submit the fingerprints to the 05 Federal Bureau of Investigation for a national criminal history record check. The 06 corporation shall use the information obtained under this subsection to determine a 07 lottery contractor's qualifications for a contract with the corporation. 08 (d) The corporation may not enter into a contract with a lottery contractor who 09 has been convicted in this state or another jurisdiction of a felony involving gambling, 10 a racketeering activity, or fraud, including a conviction based on a guilty plea or plea 11 of nolo contendere. If a proposed lottery contractor is a business organization, the 12 corporation may not enter into contract with the lottery contractor when an officer, 13 manager, or individual with control of the organization has been convicted in this state 14 or another jurisdiction of a felony involving gambling, a racketeering activity, or 15 fraud, including a conviction based on a guilty plea or plea of nolo contendere. 16 Article 2. Powers and Duties. 17 Sec. 05.18.200. Powers. In addition to other powers granted by this chapter, 18 the corporation may 19 (1) create, operate, manage, and maintain a lottery in the state and 20 participate in one or more multi-jurisdiction lotteries operated in conjunction with 21 other jurisdictions and governmental lottery authorities; 22 (2) set prices and fees for the lottery; 23 (3) determine, pay, and award prizes for lottery winners; 24 (4) appoint, contract with, monitor the performance of, and terminate 25 agents for the sale and distribution of lottery tickets on terms and conditions 26 established by law or by the corporation; 27 (5) enter into a contract relating to the lottery or its corporate purposes 28 or to exercise any of its powers, including a contract with a lottery contractor; 29 (6) lease or rent offices, facilities, or properties for the corporation's 30 lottery operations and corporate purposes; 31 (7) purchase, lease, develop, modify, or license the use of lottery

01 supplies, materials, game pieces and equipment, either inside or outside the state; 02 (8) collect, hold, invest, use, and disburse the corporation's income, 03 revenues, funds, and money in accordance with the law, including AS 37.07 04 (Executive Budget Act) and AS 37.10.071; 05 (9) apply for, accept, and perform the corporation's obligations with 06 respect to gifts, grants, or loans from a federal agency or an agency or instrumentality 07 of the state, or from a municipality, private organization, or other source; 08 (10) review or study the operation and administration of other lotteries 09 and the laws concerning those lotteries and report to the governor and the legislature 10 with any recommended modifications to the laws of this state affecting the lottery or 11 the corporation; 12 (11) sue and be sued; 13 (12) adopt a corporate seal; and 14 (13) do all acts and things necessary, convenient, or desirable to carry 15 out the powers expressly granted or necessarily implied in this chapter. 16 Sec. 05.18.210. Regulations. The board may adopt regulations under AS 44.62 17 (Administrative Procedure Act) regarding the board's operations and to carry out the 18 board's powers. The board shall adopt regulations for the following purposes: 19 (1) to establish the manner of conducting the lottery; 20 (2) to provide a schedule of prizes; 21 (3) to establish procedures for prize disbursement, including provisions 22 to coordinate with the court system, the child support services agency, and other 23 government agencies regarding attachment of or execution on money for past due 24 obligations; 25 (4) to establish procedures for the corporation's handling of disputes 26 regarding the lottery, prizes, and the corporation's contracts, subject to any 27 adjudicative administrative hearings being conducted and decided by the office of 28 administrative hearings under AS 44.64.030; 29 (5) to establish procedures for soliciting and contracting with sales 30 agents and managing sales agent contracts; and 31 (6) to establish procedures and guidelines for a purchaser to assign a

01 lottery ticket. 02 Sec. 05.18.220. Procurement. (a) Except as provided in (b) of this section, the 03 corporation shall comply with the provisions of AS 36.30 (State Procurement Code) 04 with respect to the procurement of supplies, services, and professional services, 05 including the services of a lottery contractor. The corporation also shall comply with 06 the provisions of AS 36.30 with respect to the procurement of construction and the 07 disposition of surplus property. 08 (b) The provisions of AS 36.30 do not apply to the corporation's solicitation of 09 sales agents and contracts made with sale agents. 10 Sec. 05.18.230. Public records. The corporation shall comply with 11 AS 40.25.100 - 40.25.295 (Alaska Public Records Act). 12 Sec. 05.18.240. Insurance. (a) The corporation shall keep in force public 13 liability insurance in an amount reasonably calculated to cover potential claims for 14 bodily injury, death, or disability and property damage that may arise from or be 15 related to the corporation's operations and activities. 16 (b) The corporation shall insure the assets and property of the corporation 17 against loss, damage, or loss of use from hazards or casualties as the board determines 18 to be reasonable to protect the corporation's interests. 19 Sec. 05.18.250. Annual report. The corporation shall provide an annual report 20 to the governor and the legislature on the operations of the corporation. The annual 21 report shall include a complete statement of the corporation's activities during the 22 year. The annual report shall be provided to the legislature and the governor each year 23 by the 10th day of each regular session of the legislature and, at the same time, the 24 corporation shall make the annual report available to the public. 25 Article 3. Financial Matters. 26 Sec. 05.18.300. Lottery profits fund; disbursement of net profits to state. 27 (a) The lottery profits fund is established in the corporation and consists of money 28 appropriated to it and the income, revenue, and other receipts of the corporation. The 29 corporation has the powers and responsibilities established in AS 37.10.071 with 30 respect to amounts held in the lottery profits fund. 31 (b) Subject to appropriation by the legislature, the corporation may expend

01 money in the lottery fund for the corporation's lottery and for other corporate 02 purposes. 03 (c) On a schedule determined by the corporation with the concurrence of the 04 commissioner, but not less than once each calendar quarter, the corporation shall 05 disburse from the lottery profits fund to the commissioner the corporation's net profit 06 from its operations for the preceding calendar quarter. The commissioner shall deposit 07 each disbursement in the lottery profits fund within the general fund under 08 AS 37.14.900. With each disbursement the corporation makes to the commissioner, 09 the corporation shall provide a report on the calculation of net profit for the preceding 10 calendar quarter. 11 Sec. 05.18.310. Executive Budget Act. The corporation shall comply with the 12 provisions of AS 37.07 (Executive Budget Act). 13 Sec. 05.18.320. Annual audit. The corporation shall have the corporation's 14 financial statements audited annually by a certified public accountant approved by the 15 legislative auditor. The legislative auditor may prescribe the form and content of the 16 financial statements of the corporation and shall have access to those statements at any 17 reasonable time. The corporation's audited financial statements shall be made 18 available to the legislature, governor, and the public at the same time the corporation's 19 annual report is provided to the governor and the legislature under AS 05.18.250. 20 Sec. 05.18.330. Use of lottery sale receipts. The corporation shall make 21 withdrawals from an account authorized for the deposit of lottery ticket receipts under 22 AS 05.18.450(a) in accordance with the reports of and subject to audit by the 23 corporation. 24 Article 4. Sales Agents. 25 Sec. 05.18.400. Sales agents for corporation. (a) The corporation may 26 contract with a person to serve as a sales agent to sell lottery tickets for the corporation 27 at prices established by the corporation. The contract shall be on terms and conditions 28 established by the corporation. The terms and conditions must be consistent with this 29 chapter and other applicable law. A sales agent shall be an independent contractor and 30 not an employee of the corporation. A sales agent may not be a lottery contractor 31 under AS 05.18.110 or an officer or employee of a lottery contractor.

01 (b) The corporation's contract with a sales agent may be for a term not to 02 exceed two years, and the contract may grant the corporation the option to extend the 03 contract for one or more additional terms of two years each. The corporation may 04 exercise the option to extend if the corporation determines, after a review of the sales 05 agent's performance of the contract, that the sales agent has satisfactorily performed 06 the obligations of the contract. The corporation may establish by regulation other 07 factors the corporation will consider in determining whether to exercise the option to 08 extend a sales agent contract. 09 (c) A sales agent's rights under and interest in a contract with the corporation 10 may be assigned in whole or in part, or otherwise transferred, only with the prior 11 written approval of the corporation. The board may delegate to the chief executive 12 officer the authority to approve proposed assignments of sales agent contracts. 13 (d) A sales agent may utilize the sales agent's employees to perform the 14 contract with the corporation. The sales agent shall be responsible for supervising its 15 employees to ensure compliance with the contract, this chapter, and other applicable 16 laws. A sales agent may not use the services of an independent contractor to perform 17 the contract with the corporation. 18 Sec. 05.18.410. Application for a sales agent contract. (a) A person seeking 19 a sales agent contract with the corporation shall file a written application on a form 20 approved by the corporation. The corporation may charge an application a fee to cover 21 the cost of processing the application, including the cost of conducting background 22 checks on the applicant. 23 (b) If the person applying for a sales agent contract is a business organization, 24 the application must include the names and addresses of the directors, officers, and 25 managers, and individuals with control of the organization. 26 (c) An applicant for a sales agent contract must provide to the corporation, 27 with the application, the applicant's fingerprints. If the applicant is a business 28 organization, the applicant must provide to the corporation, with the application, the 29 fingerprints of the directors, officers, managers, and individuals with control of the 30 organization. When the applicant is a corporation that is required by law to file 31 periodic reports with the United States Securities and Exchange Commission or

01 similar international regulatory entity, the applicant shall submit to the corporation 02 with the application the fingerprints of not more than three individuals who are the 03 principal officers of the corporation. 04 (d) The corporation shall submit the fingerprints provided by an applicant to 05 the Department of Public Safety to obtain a report of criminal justice information 06 under AS 12.62 and a national criminal history record check under AS 12.62.400. The 07 Department of Public Safety may submit the fingerprints to the Federal Bureau of 08 Investigation for a national criminal history record check. The corporation shall use 09 the information obtained under this subsection to determine an applicant's 10 qualification for a sales agent contract. 11 Sec. 05.18.420. Sales agent qualifications. (a) The corporation may enter into 12 a sales agent contract with an applicant if 13 (1) the applicant is conducting a retail sales business that is not 14 exclusively limited to the sale of lottery tickets; 15 (2) in the case of an individual, the applicant is 18 years of age or 16 older; and 17 (3) the applicant meets other qualifications established by the board. 18 (b) The corporation may not enter into a sales agent contract with an applicant 19 who has been convicted of a felony in this state or another jurisdiction involving 20 gambling, a racketeering activity, or fraud, including a conviction based on a guilty 21 plea or plea of nolo contendere. If an applicant is a business organization, the 22 corporation may not enter into a sales agent contract with the applicant when any 23 officer, manager, or individual with control of the organization has been convicted in 24 this state or another jurisdiction of a felony involving gambling, a racketeering 25 activity, or fraud, including a conviction based on a guilty plea or plea of nolo 26 contendere. 27 Sec. 05.18.430. Evaluation of applicants. Before entering into a sales agent 28 contract with an applicant, the corporation shall consider 29 (1) the applicant's finances, including the assets, liabilities, and cash 30 flow of the applicant's business; 31 (2) the public's ability to access the applicant's place of business or

01 other points of sale; 02 (3) the applicant's ability to promote the retail sale of lottery tickets; 03 (4) the applicant's expected sales volume; 04 (5) the number and sufficiency of existing sales agent contracts serving 05 the area; and 06 (6) other factors the corporation determines to be appropriate. 07 Sec. 05.18.440. Sales agent compensation. (a) The corporation shall establish 08 levels of compensation for sales agents, including any bonus or incentive 09 compensation the corporation determines to be appropriate. 10 (b) In establishing compensation for sales agents, the corporation shall 11 consider 12 (1) the time and costs necessary for a sales agent to make lottery 13 tickets available to the public; 14 (2) the time and costs for a sales agent to maintain records of lottery 15 ticket sales, handle deposits, and provide reports to the corporation; and 16 (3) other criteria the corporation determines to be appropriate. 17 Sec. 05.18.450. Sales agent receipts and reports. (a) Each business day, or 18 periodically as set by contract, a sales agent shall deposit the receipts from the sale of 19 lottery tickets into an account the corporation authorizes, less any amount the sales 20 agent is authorized to retain under the contract with the corporation. Each week, or 21 periodically as set by contract, a sales agent shall provide to the corporation, on a form 22 the corporation approves, a report of the receipts for and transactions in lottery ticket 23 sales for the preceding week. 24 (b) If a sales agent fails to comply with (a) of this section and the failure is not 25 corrected within 10 days of the agreed date of deposit or reporting, the failure shall 26 constitute a material breach of the sales agent's contract and the corporation may 27 pursue any right or remedy available to the corporation for the breach, including 28 suspending or terminating the sales agent's contract. The corporation may also report 29 the sales agent to Department of Public Safety and the Department of Law for criminal 30 investigation. 31 (c) An amount a sales agent owes the corporation that is not paid within 10

01 days of the agreed date of deposit under (a) of this section shall bear interest at a rate 02 established by the corporation. The corporation may impose a service charge on a 03 sales agent if a check the sales agent provides to the corporation is dishonored or if an 04 electronic transfer of funds the sales agent originates is reversed. 05 Sec. 05.18.460. Lien against sales agent's property. (a) If a sales agent fails 06 to deposit money received from the sale of lottery tickets as required by 07 AS 05.18.450(a) or a sales agent fails to pay interest or service charges the corporation 08 assesses, the corporation shall have a right to a lien against the sales agent's property 09 to secure payment for the amount owed. The lien shall be effective upon the 10 corporation recording a claim of lien in the district recorder's office for the recording 11 district in which the sales agent's principal place of business is located. 12 (b) The corporation may record a claim of lien if more than 30 days has 13 passed from the date the sales agent's payment to the corporation was due and the 14 sales agent failed to make payment in full. The corporation shall record a claim of lien 15 not later than 12 months after the date the sales agent's payment to the corporation was 16 due. 17 (c) The corporation's claim of lien must be verified by an officer or an 18 authorized representative of the corporation. The claim of lien must state the name and 19 address of the sales agent and the amount owed. The claim of lien must generally 20 describe the sales agent's property against which the lien is claimed, and AS 45.29.108 21 applies in determining the sufficiency of the description. 22 (d) The corporation's lien shall have priority over unrecorded or unperfected 23 liens or interests in the same property and over any liens or interests that are created, 24 recorded, or perfected in the same property after the date the corporation's claim of 25 lien is recorded. 26 (e) The corporation may enforce a lien under AS 34.35.005 - 34.35.045. If the 27 corporation is the prevailing party in foreclosing a lien, the court shall award the 28 corporation its full attorney fees and litigation costs in addition to any other relief the 29 court grants. 30 (f) Recording a claim of lien or enforcing a lien may not preclude the 31 corporation from bringing an action against the sales agent to enforce the contract or

01 prevent the corporation from pursuing any other remedy it has. 02 Sec. 05.18.470. Suspension or termination of sales agent contracts. (a) The 03 corporation may suspend or terminate a sales agent's contract if the sales agent 04 materially breaches the contract, violates a regulation the corporation adopts, violates 05 any provision of this chapter, or violates AS 11.66.200 - 11.66.280 or 11.66.400. 06 (b) Upon suspension or termination of a sales agent's contract, the sales agent 07 shall immediately deliver to the corporation all unsold lottery tickets. The corporation 08 may obtain a court order compelling a suspended or terminated sales agent to deliver 09 unsold lottery tickets to the corporation, and the corporation may not be required to 10 post any bond to obtain the order. 11 Article 5. Lottery Provisions. 12 Sec. 05.18.500. Types of games. The corporation may conduct any type or 13 kind of lottery game, including single-jurisdiction and multi-jurisdiction draw games, 14 instant tickets, sports betting, and keno. The corporation may conduct lottery games 15 through the use of any media, including electronic terminals, computers, and the 16 Internet. 17 Sec. 05.18.510. Statement of odds. Each lottery ticket of the corporation must 18 state the odds of winning a prize in the game the lottery ticket represents. 19 Sec. 05.18.520. Winner anonymity. A winner of a prize in the corporation's 20 lottery shall remain anonymous absent written consent by the winner to waive 21 anonymity. The corporation, a lottery contractor, or a sales agent may publicize 22 information identifying a prize winner only with the prior written consent of the 23 winner. A winner's right to anonymity may not preclude the corporation, a lottery 24 contractor, or a sales agent from publicly identifying the sales agent selling the 25 winning lottery ticket and the specific date of the sale. A winner's right to anonymity 26 may not preclude the corporation or a lottery contractor from coordinating with the 27 court system, the child support services agency, and other government agencies 28 regarding attachment of or execution on money for the winner's past due obligations. 29 Sec. 05.18.530. Minors. (a) A sales agent may not sell a lottery ticket to a 30 minor. A person who has purchased a lottery ticket with money not belonging to a 31 minor may gift a lottery ticket to a minor.

01 (b) If a minor receives a lottery ticket as a gift and the lottery ticket wins a 02 prize, the corporation shall pay the prize 03 (1) to a conservator appointed for the minor under AS 13.26; or 04 (2) if there is no conservator, to the custodian the person making the 05 gift of the lottery ticket nominates to receive the prize for the minor under 06 AS 13.46.020; or 07 (3) if there is no conservator or custodian, to an adult member of the 08 minor's family so long as the cash value of the prize is less than $5,000. 09 (c) An adult member of the minor's family who receives a prize from the 10 corporation for the minor under (b)(3) of this section shall have the duties and powers 11 of a custodian under AS 13.46. 12 (d) The corporation's payment of a prize under (b) of this section discharges 13 the corporation from all obligations with respect to the prize and no minor or 14 representative of the minor may bring a claim or legal action against the corporation 15 for the prize. 16 Sec. 05.18.540. Participation in lottery prohibited. (a) A director, officer, or 17 employee of the corporation may not purchase lottery tickets or qualify for or collect a 18 prize awarded in the lottery. A winning lottery ticket held by a director, officer, or 19 employee of the corporation shall be void and not eligible for any prize. 20 (b) A lottery contractor under contract with the corporation may not purchase 21 lottery tickets or qualify for or collect a prize in the lottery. A winning lottery ticket 22 held by a lottery contractor shall be void and not eligible for any prize. 23 Sec. 05.18.550. Assignment. (a) A person purchasing a lottery ticket may 24 assign the lottery ticket if the assignment occurs before the corporation determines that 25 the lottery ticket has won a prize. 26 (b) Once the corporation has determined a lottery ticket has won a prize, the 27 lottery ticket and the prize may not be assigned, except that 28 (1) the corporation may pay a prize to the estate of a deceased prize 29 winner; and 30 (2) the corporation may pay a prize to the court system under a writ of 31 attachment or execution or to a person entitled to receive the prize under a court order.

01 (c) The corporation's payment of a prize under (b) of this section discharges 02 the corporation from all obligations with respect to the prize and no person may bring 03 a claim or legal action against the corporation for the prize. 04 Sec. 05.18.560. Unclaimed prizes. (a) A prize not claimed in accordance with 05 established procedures within one year of the prize being announced shall be forfeited. 06 Forfeited prizes are property of the corporation and shall be considered in calculating 07 the corporation's net profit under AS 05.18.300(c). 08 (b) In accordance with 5 U.S.C. 3931 - 3938 (Servicemembers Civil Relief 09 Act), an active military service member may claim an exemption from the one-year 10 limitation under (a) of this section if 11 (1) the person notifies the corporation of the claim within one year of 12 the prize being announced and provides satisfactory evidence of possession of a 13 winning lottery ticket; and 14 (2) the person claims the prize not later than one year after discharge 15 from active military service. 16 Article 6. General Provisions. 17 Sec. 05.18.600. Tax exemption. (a) The corporation, and the corporation's real 18 and personal property and income and receipts are exempt from all taxes and 19 assessments of the state or a municipality of the state. This subsection does not create 20 a tax exemption for a lottery contractor or a sales agent or any other person with 21 respect to the interest any person or entity, other than the corporation, has in real or 22 personal property or the income or receipts of the lottery, regardless of whether the 23 interest of the person or entity was created by contract, lease, concession, investment, 24 or by other means. 25 (b) A municipality of the state may not impose a sales tax on the sale of lottery 26 tickets or a use tax on property or materials used in the sale of lottery tickets, whether 27 the tax is imposed on the corporation, a lottery contractor, or a sales agent. 28 Sec. 05.18.610. Exemption from local regulation. (a) A municipality of the 29 state may not prohibit or regulate the activities of the corporation, including the 30 creation or operation of a lottery or the sale of lottery tickets directly or through a sales 31 agent.

01 (b) The exemption under (a) of this section does not preclude a municipality 02 of the state from enacting or enforcing building, zoning, land use planning, permitting, 03 or similar laws applicable to a lottery contractor or sales agent. 04 Sec. 05.18.690. Definitions. In this chapter, 05 (1) "adult" means a person who is at least 18 years of age; 06 (2) "board" means the board of directors of the corporation; 07 (3) "business organization" means any form of organization for 08 conducting business, including a corporation, nonprofit corporation, limited liability 09 company, cooperative, joint venture, general partnership, limited partnership, 10 foundation, or trust; 11 (4) "commissioner" means the commissioner of the Department of 12 Revenue; 13 (5) "corporation" means the Alaska Lottery Corporation; 14 (6) "department" means the Department of Revenue unless the context 15 otherwise requires; 16 (7) "individual with control of the organization" means a natural 17 person who directly or through another business organization that the individual 18 controls has the right to direct the activities of the organization or holds an equity 19 ownership position in the organization of 10 percent or more; 20 (8) "lottery" means a lottery game the corporation approves and 21 operates directly or through a lottery contractor; 22 (9) "lottery contractor" means a business or enterprise that provides 23 lottery services to the corporation on a contract basis; "lottery contractor" does not 24 include a sales agent; 25 (10) "lottery ticket" means a ticket, receipt, card, game piece, or other 26 item evidencing participation in the corporation's lottery; 27 (11) "minor" means an individual who is under 18 years of age; 28 (12) "municipality" has the meaning given in AS 01.10.060; 29 (13) "net profit" means the gross profit of the corporation from all 30 sources, including forfeited prizes, reduced by the corporation's operating expenses 31 and a reserve allowance the corporation establishes for the anticipated operating

01 expenses, including the payment of prizes; 02 (14) "person" has the meaning given in AS 01.10.060; 03 (15) "prize" means an award of cash or goods, payable in amounts and 04 at times as may be established by the corporation under the rules for the lottery; 05 (16) "public director" means an individual member of the public who 06 the governor appoints to the board under AS 05.18.020; 07 (17) "racketeering activity" has the meaning given in 18 U.S.C. 1961; 08 (18) "sales agent" means a person the corporation engages under a 09 contract to make retail sales of lottery tickets. 10 Sec. 05.18.695. Short title. This chapter may be cited as the Alaska Lottery 11 Corporation Act. 12 * Sec. 2. AS 11.66.280(3) is amended to read: 13 (3) "gambling" means that a person stakes or risks something of value 14 upon the outcome of a contest of chance or a future contingent event not under the 15 person's control or influence, upon an agreement or understanding that that person or 16 someone else will receive something of value in the event of a certain outcome; 17 "gambling" does not include 18 (A) bona fide business transactions valid under the law of 19 contracts for the purchase or sale at a future date of securities or commodities 20 and agreements to compensate for loss caused by the happening of chance, 21 including contracts of indemnity or guaranty and life, health, or accident 22 insurance; 23 (B) playing an amusement device that 24 (i) confers only an immediate right of replay not 25 exchangeable for something of value other than the privilege of 26 immediate replay and does not contain a method or device by which the 27 privilege of immediate replay may be cancelled or revoked; 28 (ii) confers only tickets, credits, allowances, tokens, or 29 anything of value that can be redeemed for toys, candy, or electronic 30 novelties offered at the same facility where the amusement device is 31 located; or

01 (iii) allows a player to manipulate a claw machine or 02 similar device within an enclosure and enables a person to receive 03 merchandise directly from the machine; 04 (C) an activity authorized by the Department of Revenue under 05 AS 05.15; [OR] 06 (D) the permanent fund dividend raffle authorized under 07 AS 43.23.230; or 08 (E) the activities of the Alaska Lottery Corporation and the 09 corporation's contractors and sales agents as authorized under AS 05.18; 10 * Sec. 3. AS 11.66 is amended by adding a new section to read: 11 Article 4. Lottery Offenses. 12 Sec. 11.66.400. Unlawful sale of a lottery ticket. (a) A person commits the 13 crime of unlawful sale of a lottery ticket if the person knowingly 14 (1) sells or offers to sell a lottery ticket and the person or the person's 15 employer does not have a sales agent contract in effect with the Alaska Lottery 16 Corporation under AS 05.18 authorizing the sale of lottery tickets; 17 (2) sells or offers to sell a lottery ticket at a price greater than the price 18 established by the Alaska Lottery Corporation under AS 05.18; or 19 (3) sells or offers to sell a lottery ticket to an individual who is under 20 18 years of age. 21 (b) In this section, 22 (1) "lottery ticket" has the meaning given in AS 05.18.690; and 23 (2) "sales agent" has the meaning given in AS 05.18.690. 24 (c) Unlawful sale of a lottery ticket is a class A misdemeanor punishable as 25 provided in AS 12.55. 26 * Sec. 4. AS 12.62.400(a) is amended to read: 27 (a) To obtain a national criminal history record check for determining a 28 person's qualifications for a license, permit, registration, employment, or position, a 29 person shall submit the person's fingerprints to the department with the fee established 30 by AS 12.62.160. The department may submit the fingerprints to the Federal Bureau 31 of Investigation to obtain a national criminal history record check of the person for the

01 purpose of evaluating a person's qualifications for 02 (1) a license or conditional contractor's permit to manufacture, sell, 03 offer for sale, possess for sale or barter, traffic in, or barter an alcoholic beverage 04 under AS 04.11; 05 (2) licensure as a mortgage lender, a mortgage broker, or a mortgage 06 loan originator under AS 06.60; 07 (3) admission to the Alaska Bar Association under AS 08.08; 08 (4) licensure as a collection agency operator under AS 08.24; 09 (5) a certificate of fitness to handle explosives under AS 08.52; 10 11 (6) licensure as a massage therapist under AS 08.61; 12 (7) licensure to practice nursing or certification as a nurse aide under 13 AS 08.68; 14 (8) certification as a real estate appraiser under as 08.87; 15 (9) a position involving supervisory or disciplinary power over a minor 16 or dependent adult for which criminal justice information may be released under 17 AS 12.62.160(b)(9); 18 (10) a teacher certificate under AS 14.20; 19 (11) a registration or license to operate a marijuana establishment 20 under AS 17.38; 21 (12) admittance to a police training program under AS 18.65.230 or for 22 certification as a police officer under AS 18.65.240 if that person's prospective 23 employer does not have access to a criminal justice information system; 24 (13) licensure as a security guard under AS 18.65.400 - 18.65.490; 25 (14) a concealed handgun permit under AS 18.65.700 - 18.65.790; 26 (15) licensure as an insurance producer, managing general agent, 27 reinsurance intermediary broker, reinsurance intermediary manager, surplus lines 28 broker, or independent adjuster under AS 21.27; 29 (16) serving and executing process issued by a court by a person 30 designated under AS 22.20.130; 31 (17) a school bus driver license under AS 28.15.046;

01 (18) licensure as an operator or an instructor for a commercial driver 02 training school under AS 28.17; 03 (19) registration as a broker-dealer, agent, investment adviser 04 representative, or investment adviser under AS 45.56.300 - 45.56.350; 05 (20) licensure, license renewal, certification, certification renewal, or 06 payment from the Department of Health and Social Services of an individual and an 07 entity subject to the requirements for a criminal history check under AS 47.05.310, 08 including 09 (A) a public home care provider described in AS 47.05.017; 10 (B) a provider of home and community-based waiver services 11 financed under AS 47.07.030(c); 12 (C) a case manager to coordinate community mental health 13 services under AS 47.30.530; 14 (D) an entity listed in AS 47.32.010(b), including an owner, 15 officer, director, member, partner, employee, volunteer, or contractor of an 16 entity; or 17 (E) an individual or entity not described in (A) - (D) of this 18 paragraph that is required by statute or regulation to be licensed or certified by 19 the Department of Health and Social Services or that is eligible to receive 20 payments, in whole or in part, from the Department of Health and Social 21 Services to provide for the health, safety, and welfare of persons who are 22 served by the programs administered by the Department of Health and Social 23 Services; 24 (21) a position as a public director, officer, or employee of the 25 Alaska Lottery Corporation under AS 05.18. 26 * Sec. 5. AS 12.62.400(c) is amended to read: 27 (c) To obtain a national criminal history record check for determining a 28 current or prospective employee's qualifications under AS 39.90.210, [OR] a 29 contractor's qualifications under AS 36.30.960, or a prospective lottery contractor 30 or sales agent to the Alaska Lottery Corporation under AS 05.18, the agency or 31 the procurement officer shall submit the current or prospective employee's, [OR]

01 contractor's, lottery contractor's, or sales agent's fingerprints to the department with 02 the fee established by AS 12.62.160. The department shall submit the fingerprints to 03 the Federal Bureau of Investigation to obtain a national criminal history record check 04 of the current or prospective employee, [OR] contractor, lottery contractor, or sales 05 agent for the purpose of evaluating a person's qualifications under AS 36.30.960, 06 [AND] AS 39.90.210, and AS 05.18. In this subsection, unless the context otherwise 07 requires, 08 (1) "agency" has the meaning given in AS 39.90.290; 09 (2) "contractor" has the meaning given in AS 36.30.960; 10 (3) "employee" has the meaning given in AS 39.90.290; 11 (4) "lottery contractor" has the meaning given in AS 05.18.690; 12 and 13 (5) "sales agent" has the meaning given in AS 05.18.690. 14 * Sec. 6. AS 18.65.090 is amended to read: 15 Sec. 18.65.090. Department to assist other agencies. The Department of 16 Public Safety shall assist other departments of the state, municipal, and federal 17 governments in the enforcement of criminal laws and regulations pertaining to those 18 departments. The Department of Public Safety shall conduct a criminal 19 background check on an individual selected to serve as a public director, officer, 20 or employee of the Alaska Lottery Corporation to ascertain whether the 21 individual has been convicted of a crime listed in AS 05.18.020(b) or 22 AS 05.18.090. 23 * Sec. 7. AS 36.30.990(1) is amended to read: 24 (1) "agency" 25 (A) means a department, institution, board, commission, 26 division, authority, public corporation, the Alaska Pioneers' Home, the Alaska 27 Veterans' Home, or other administrative unit of the executive branch of state 28 government; 29 (B) does not include 30 (i) the University of Alaska; 31 (ii) the Alaska Railroad Corporation;

01 (iii) the Alaska Housing Finance Corporation; 02 (iv) a regional Native housing authority created under 03 AS 18.55.996 or a regional electrical authority created under 04 AS 18.57.020; 05 (v) the Department of Transportation and Public 06 Facilities, in regard to the repair, maintenance, and reconstruction of 07 vessels, docking facilities, and passenger and vehicle transfer facilities 08 of the Alaska marine highway system; 09 (vi) the Alaska Aerospace Corporation; 10 (vii) the Alaska Retirement Management Board; 11 (viii) the Alaska Seafood Marketing Institute; 12 (ix) the Alaska children's trust and the Alaska 13 Children's Trust Board; 14 (x) the Alaska Industrial Development and Export 15 Authority; 16 (xi) the Alaska Lottery Corporation in regard to the 17 solicitation of and contracts with sales agents; 18 * Sec. 8. AS 37.14 is amended by adding new sections to read: 19 Article 11. Lottery Profits Fund. 20 Sec. 37.14.900. Lottery profits fund established. (a) The lottery profits fund 21 is established as a separate account in the general fund. The lottery profits fund 22 consists of 23 (1) money the Alaska Lottery Corporation disburses to the 24 commissioner of revenue under AS 05.18.300(c); 25 (2) money the legislature appropriates to the fund; and 26 (3) income earned on the investment of the fund. 27 (b) The legislature may appropriate money from the lottery profits fund 28 (1) for programs in the state addressing domestic violence prevention, 29 drug abuse prevention, foster care, seniors, or homelessness; or 30 (2) to the education endowment fund established in AS 43.23.220. 31 (c) Nothing in this section creates a dedicated fund.

01 (d) Money appropriated to the lottery profits fund does not lapse. 02 Sec. 37.14.910. Powers and duties of the commissioner of revenue. (a) The 03 commissioner of revenue is the fiduciary of the lottery profits fund. 04 (b) In managing the lottery profits fund, the commissioner of revenue shall 05 have the power and duties set out in AS 37.10.071 and shall 06 (1) consider the status of the fund's capital, the income generated by 07 investments, and disbursements expected to be received from the Alaska Lottery 08 Corporation; 09 (2) determine appropriate investment objectives; 10 (3) establish investment policies to achieve the objectives; and 11 (4) act only in regard to the best financing interests of the fund. 12 (c) On July 1 each year, the commissioner shall 13 (1) determine the balance of the lottery profits fund for the previously 14 closed fiscal year, including the earnings of the fund; 15 (2) identify the 90 percent of the balance of the lottery profits fund as 16 being available for appropriation in accordance with AS 37.14.900(b)(1); 17 (3) identify the remaining 10 percent of the balance of the lottery 18 profits fund as being available for appropriation in accordance with 19 AS 37.14.900(b)(2). 20 * Sec. 9. AS 39.25.110(11) is amended to read: 21 (11) the officers and employees of the following boards, commissions, 22 and authorities: 23 (A) [REPEALED] 24 (B) Alaska Permanent Fund Corporation; 25 (C) Alaska Industrial Development and Export Authority; 26 (D) Alaska Commercial Fisheries Entry Commission; 27 (E) Alaska Commission on Postsecondary Education; 28 (F) Alaska Aerospace Corporation; 29 (G) [REPEALED] 30 (H) Alaska Gasline Development Corporation and subsidiaries 31 of the Alaska Gasline Development Corporation;

01 (I) Alaska Lottery Corporation; 02 * Sec. 10. AS 39.50.200(b) is amended by adding a new paragraph to read: 03 (65) Alaska Lottery Corporation (AS 05.18). 04 * Sec. 11. AS 40.25.120 is amended to read: 05 Sec. 40.25.120. Public records; exceptions; certified copies. (a) Every 06 person has a right to inspect a public record in the state, including public records in 07 recorders' offices, except 08 (1) records of vital statistics and adoption proceedings, which shall be 09 treated in the manner required by AS 18.50; 10 (2) records pertaining to juveniles unless disclosure is authorized by 11 law; 12 (3) medical and related public health records; 13 (4) records required to be kept confidential by a federal law or 14 regulation or by state law; 15 (5) to the extent the records are required to be kept confidential under 16 20 U.S.C. 1232g and the regulations adopted under 20 U.S.C. 1232g in order to secure 17 or retain federal assistance; 18 (6) records or information compiled for law enforcement purposes, but 19 only to the extent that the production of the law enforcement records or information 20 (A) could reasonably be expected to interfere with enforcement 21 proceedings; 22 (B) would deprive a person of a right to a fair trial or an 23 impartial adjudication; 24 (C) could reasonably be expected to constitute an unwarranted 25 invasion of the personal privacy of a suspect, defendant, victim, or witness; 26 (D) could reasonably be expected to disclose the identity of a 27 confidential source; 28 (E) would disclose confidential techniques and procedures for 29 law enforcement investigations or prosecutions; 30 (F) would disclose guidelines for law enforcement 31 investigations or prosecutions if the disclosure could reasonably be expected to

01 risk circumvention of the law; or 02 (G) could reasonably be expected to endanger the life or 03 physical safety of an individual; 04 (7) names, addresses, and other information identifying a person as a 05 participant in the Alaska Higher Education Savings Trust under AS 14.40.802 or the 06 advance college tuition savings program under AS 14.40.803 - 14.40.817; 07 (8) public records containing information that would disclose or might 08 lead to the disclosure of a component in the process used to execute or adopt an 09 electronic signature if the disclosure would or might cause the electronic signature to 10 cease being under the sole control of the person using it; 11 (9) reports submitted under AS 05.25.030 concerning certain 12 collisions, accidents, or other casualties involving boats; 13 (10) records or information pertaining to a plan, program, or 14 procedures for establishing, maintaining, or restoring security in the state, or to a 15 detailed description or evaluation of systems, facilities, or infrastructure in the state, 16 but only to the extent that the production of the records or information 17 (A) could reasonably be expected to interfere with the 18 implementation or enforcement of the security plan, program, or procedures; 19 (B) would disclose confidential guidelines for investigations or 20 enforcement and the disclosure could reasonably be expected to risk 21 circumvention of the law; or 22 (C) could reasonably be expected to endanger the life or 23 physical safety of an individual or to present a real and substantial risk to the 24 public health and welfare; 25 (11) [REPEALED] 26 (12) records that are 27 (A) proprietary, privileged, or a trade secret in accordance with 28 AS 43.90.150 or 43.90.220(e); 29 (B) applications that are received under AS 43.90 until notice is 30 published under AS 43.90.160; 31 (13) information of the Alaska Gasline Development Corporation

01 created under AS 31.25.010 or a subsidiary of the Alaska Gasline Development 02 Corporation that is confidential by law or under a valid confidentiality agreement; 03 (14) information under AS 38.05.020(b)(11) that is subject to a 04 confidentiality agreement under AS 38.05.020(b)(12); 05 (15) records relating to proceedings under AS 09.58 (Alaska Medical 06 Assistance False Claim and Reporting Act); 07 (16) names, addresses, and other information identifying a person as a 08 participant in the Alaska savings program for eligible individuals under AS 06.65; 09 (17) artists' submissions made in response to an inquiry or solicitation 10 initiated by the Alaska State Council on the Arts under AS 44.27.060; 11 (18) records that are 12 (A) investigative files under AS 45.55.910; or 13 (B) confidential under AS 45.56.620. 14 (b) Every public officer having the custody of records not included in the 15 exceptions shall permit the inspection, and give on demand and on payment of the fees 16 under AS 40.25.110 - 40.25.115 a certified copy of the record, and the copy shall in all 17 cases be evidence of the original. 18 (c) Recorders shall permit memoranda, transcripts, and copies of the public 19 records in their offices to be made by photography or otherwise for the purpose of 20 examining titles to real estate described in the public records, making abstracts of title 21 or guaranteeing or insuring the titles of the real estate, or building and maintaining title 22 and abstract plants, subject to reasonable rules and regulations as are necessary for the 23 protection of the records and to prevent interference with the regular discharge of the 24 duties of the recorders and their employees; 25 (19) names, addresses, and other information identifying a person 26 who is entitled to anonymity as a lottery winner under AS 05.18.520. 27 * Sec. 12. AS 43.23.220(a) is amended to read: 28 (a) The education endowment fund is established as a separate account in the 29 general fund. The fund consists of appropriations from 30 (1) donations to the fund under AS 43.23.230(b); 31 (2) transfers to the fund under AS 43.23.230(a);

01 (3) interest earned on the fund; [AND] 02 (4) any other money appropriated to the fund; and 03 (5) transfers to the fund under AS 37.14.900(b). 04 * Sec. 13. AS 44.64.030(a) is amended by adding a new paragraph to read: 05 (52) AS 05.18 (Alaska Lottery Corporation). 06 * Sec. 14. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: BOARD OF DIRECTORS; STAGGERED TERMS. Notwithstanding 09 AS 39.05.055, in making initial appointments to the board of directors of the Alaska Lottery 10 Corporation, the governor shall appoint the initial members' terms as follows: 11 (1) one member shall be appointed for one year; 12 (2) two members shall be appointed for three years; 13 (3) two members shall be appointed for five years. 14 * Sec. 15. This Act takes effect July 1, 2020.