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AN ACT

RELATING TO THE NEW MEXICO LOTTERY; REQUIRING THAT A

PERCENTAGE OF EACH MONTH'S GROSS REVENUE BE DEPOSITED IN THE

LOTTERY TUITION FUND; ELIMINATING THE LOTTERY RESERVE FUND;

REQUIRING THE AUTHORITY TO COMPLY WITH THE PROVISIONS OF THE

PROCUREMENT CODE; PROVIDING DUTIES; NAMING THE TUITION

SCHOLARSHIP THE "LEGISLATIVE LOTTERY SCHOLARSHIP".

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 6-24-1 NMSA 1978 (being Laws 1995,

Chapter 155, Section 1) is amended to read:

"6-24-1. SHORT TITLE.-- Chapter 6, Article 24 NMSA 1978

may be cited as the "New Mexico Lottery Act"."

Section 2. Section 6-24-4 NMSA 1978 (being Laws 1995,

Chapter 155, Section 4) is amended to read:

"6-24-4. DEFINITIONS.--As used in the New Mexico

Lottery Act:

A. "authority" means the New Mexico lottery

authority;

B. "board" means the board of directors of the

authority;

C. "chief executive officer" means the chief

executive officer of the authority appointed by the board

pursuant to the New Mexico Lottery Act;

D. "lottery" means the New Mexico state lottery

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established and operated by the authority pursuant to the New

Mexico Lottery Act;

E. "lottery contractor" means a person with whom

the authority has contracted for the purpose of providing

goods or services for the lottery;

F. "lottery game" means any variation of the

following types of games, but does not include any video

lottery game:

(1) an instant-win game in which disposable

tickets contain certain preprinted winners that are

determined by rubbing or scraping an area or areas on the

tickets to match numbers, letters, symbols or configurations,

or any combination thereof, as provided by the rules of the

game; provided, an instant-win game may also provide for

preliminary and grand prize drawings conducted pursuant to

the rules of the game; and

(2) an on-line lottery game in which a

lottery game is hooked up to a central computer via a

telecommunications system through which a player selects a

specified group of numbers or symbols out of a predetermined

range of numbers or symbols and purchases a ticket bearing

the player-selected numbers or symbols for eligibility in a

drawing regularly scheduled in accordance with game rules;

G. "lottery retailer" means a person with whom the

authority has contracted for the purpose of selling tickets

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in lottery games to the public;

H. "lottery vendor" means any person who submits a

bid, proposal or offer as part of a major procurement

contract and any person who is awarded a major procurement

contract; and

I. "person" means an individual or any other legal

entity."

Section 3. Section 6-24-7 NMSA 1978 (being Laws 1995,

Chapter 155, Section 7) is amended to read:

"6-24-7. BOARD OF DIRECTORS--DUTIES.--The board shall

provide the authority with the private-sector perspective of

a large marketing enterprise and shall make every effort to

exercise sound and prudent business judgment in its

management and promotion of the lottery. It is the duty of

the board to:

A. adopt all rules, policies and procedures

necessary for the establishment and operation of the lottery;

B. maximize the revenue for the public purposes of

the New Mexico Lottery Act and to that end assure that all

rules, policies and procedures adopted further revenue

maximization;

C. appoint a chief executive officer, prescribe

the chief executive officer's qualifications, duties and

salary and set the salaries of the other officers and

employees of the authority;

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D. approve, disapprove, amend or modify the annual

budget recommended by the chief executive officer for the

operation of the authority;

E. approve or disapprove all procurements over

seventy-five thousand dollars ($75,000);

F. supervise the chief executive officer and the

other officers and employees of the authority and meet with

the chief executive officer at least once every three months

to make and consider recommendations, set policies, determine

types and forms of lottery games to be operated by the

lottery and transact other necessary business;

G. conduct, with the chief executive officer, a

continuing study of the lottery and other state lotteries to

improve the efficiency, profitability and security of the

authority and the lottery;

H. prepare quarterly and annual reports and

maintain records as required under the New Mexico Lottery

Act;

I. pursue other matters necessary, desirable or

convenient for the efficient and effective operation of

lottery games, the continued entertainment and convenience of

the public and the integrity of the lottery; and

J. support problem gambling initiatives and

provide information to players about where to obtain problem

gambling assistance in New Mexico."

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Section 4. Section 6-24-19 NMSA 1978 (being Laws 1995,

Chapter 155, Section 19) is amended to read:

"6-24-19. PROCUREMENT--COMPETITIVE PROPOSALS.-- The

authority shall enter into a contract for a procurement after

evaluating competitive proposals and shall not design

requests for proposals to provide only for sole source

contracts. The authority shall conduct its own procurement,

but the authority shall conduct all procurement in accordance

with the Procurement Code. In all procurement decisions, the

authority shall take into account the particularly sensitive

nature of the lottery and shall act to promote and ensure

security, honesty, fairness and integrity in the operation

and administration of the lottery and the objectives of

raising revenue for the public purposes of the New Mexico

Lottery Act. Procurements shall not be artificially divided

to reduce the cost of the procurement below the procurement

thresholds provided in the Procurement Code."

Section 5. Section 6-24-24 NMSA 1978 (being Laws 1995,

Chapter 155, Section 24, as amended) is amended to read:

"6-24-24. DISPOSITION OF REVENUE.--

A. As nearly as practical, an amount equal to at

least fifty percent of the gross annual revenue from the sale

of lottery tickets shall be returned to the public in the

form of lottery prizes.

B. No later than the last business day of each

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month, the authority shall transmit at least twenty-seven

percent of the gross revenue of the previous month until

December 31, 2008 and at least thirty percent of the gross

revenue of the previous month thereafter to the state

treasurer, who shall deposit it in the lottery tuition fund.

C. Operating expenses of the lottery include all

costs incurred in the operation and administration of the

lottery and all costs resulting from any contracts entered

into for the purchase or lease of goods or services required

by the lottery, including the costs of supplies, materials,

tickets, independent audit services, independent studies,

data transmission, advertising, promotion, incentives, public

relations, communications, commissions paid to lottery

retailers, printing, distribution of tickets, purchases of

annuities or investments to be used to pay future

installments of winning lottery tickets, debt service and

payment of any revenue bonds issued, contingency reserves,

transfers to the reserve fund and any other necessary costs

incurred in carrying out the provisions of the New Mexico

Lottery Act."

Section 6. Section 6-24-27 NMSA 1978 (being Laws 1995,

Chapter 155, Section 27, as amended) is amended to read:

"6-24-27. REVENUE AND BUDGET REPORTS--RECORDS--

INDEPENDENT AUDITS.--

A. The board shall:

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(1) submit quarterly and annual reports to

the governor and the legislative finance committee disclosing

the total lottery revenue, prizes, commissions, ticket costs,

operating expenses and other revenue of the authority during

the reporting period and, in the annual report, describe the

organizational structure of the authority and summarize the

functions performed by each organizational division within

the authority;

(2) maintain weekly or more frequent records

of lottery transactions, including the distribution of

lottery tickets to retailers, revenue received, claims for

prizes, prizes paid, prizes forfeited and other financial

transactions of the authority; and

(3) use the state government fiscal year.

B. The board shall provide, for informational

purposes, to the department of finance and administration and

the legislative finance committee, by December 1 of each

year, a copy of the annual proposed operating budget for the

authority for the succeeding fiscal year. This budget

proposal shall also be accompanied by an estimate of the

revenue to be deposited in the lottery tuition fund for the

current and succeeding fiscal years.

C. The board shall contract with an independent

certified public accountant or firm for an annual financial

audit of the authority. The certified public accountant or

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firm shall have no financial interest in any lottery

contractor. The certified public accountant or firm shall

present an audit report no later than March 1 for the prior

fiscal year. The certified public accountant or firm shall

evaluate the internal auditing controls in effect during the

audit period. The cost of this financial audit shall be an

operating expense of the authority. The legislative finance

committee may, at any time, order an audit of any phase of

the operations of the authority, at the expense of the

authority, and shall receive a copy of the annual independent

financial audit. A copy of any audit performed by the

certified public accountant or ordered by the legislative

finance committee shall be transmitted to the governor, the

speaker of the house of representatives, the president pro

tempore of the senate, the legislative finance committee and

the legislative council service library."

Section 7. Section 21-1-4.3 NMSA 1978 (being Laws 1996,

Chapter 71, Section 3, as amended) is amended to read:

"21-1-4.3. LEGISLATIVE LOTTERY SCHOLARSHIPS

AUTHORIZED--CERTAIN EDUCATIONAL INSTITUTIONS.--

A. To the extent that funds are made available by

the legislature from the lottery tuition fund, the boards of

regents of New Mexico state university, New Mexico institute

of mining and technology, eastern New Mexico university,

western New Mexico university, the university of New Mexico,

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New Mexico highlands university and northern New Mexico

college shall award legislative lottery scholarships for

tuition for qualified resident students attending their

respective institutions and branches of those institutions.

B. Except as authorized in Subsections C and D of

this section, the legislative lottery scholarships authorized

in this section shall apply only to full-time resident

students who, immediately upon completion of a high school

curriculum at a public or accredited private New Mexico high

school or upon receiving a graduate equivalent diploma, are

accepted for entrance to and attend one of the state

educational institutions set forth in this section or one of

the branches of those institutions. Each legislative lottery

scholarship shall be awarded for up to four consecutive years

beginning the second semester of the recipient's first year

of enrollment, provided that the recipient has maintained

residency in New Mexico and maintained a grade point average

of 2.5 or higher on a 4.0 scale during the first semester of

full-time enrollment.

C. The legislative lottery scholarships authorized

in this section shall also apply to full-time resident

students who, immediately upon completion of a high school

curriculum at a public or accredited private New Mexico high

school or upon receiving a graduate equivalent diploma,

attend a two-year public post-secondary educational

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institution in New Mexico and who, upon the completion of

that curriculum or at the end of two years, whichever is

sooner, transfer to one of the post-secondary state

educational institutions set forth in this section. Those

students shall be eligible for a legislative lottery

scholarship for two consecutive years, provided that those

students maintain residency in New Mexico, maintain a grade

point average of 2.5 or higher on a 4.0 scale and attend the

institution full time during the regular academic year.

D. The legislative lottery scholarships authorized

in this section shall also apply to full-time resident

students who:

(1) within one hundred twenty days of

completion of a high school curriculum at a public or

accredited private New Mexico high school, or of receiving a

graduate equivalent diploma, begin service in the United

States armed forces; and

(2) within one hundred twenty days of

completion of honorable service or medical discharge from the

service are accepted for entrance to and attend one of the

state educational institutions set forth in this section.

E. The higher education department shall prepare

guidelines setting forth explicit student continuing

eligibility criteria and guidelines for administration of the

legislative lottery scholarship program. Guidelines shall be

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distributed to the board of regents of each institution to

enable a uniform availability of the resident student

legislative lottery scholarships."

Section 8. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2007.