0001|                           HOUSE BILL 1025
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0002|     43rd legislature - STATE OF NEW MEXICO - first session, 1997
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0003|                            INTRODUCED BY
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0004|                          DEBBIE A. RODELLA
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0005|     
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0006|                                   
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0007|     
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0008|                                   
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0009|     
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0010|                                AN ACT
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0011|     RELATING TO NEW MEXICO LOTTERY REVENUES; AUTHORIZING A
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0012|     DISTRIBUTION OF FIFTY PERCENT OF NET LOTTERY REVENUES TO THE
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0013|     INSTRUCTIONAL MATERIAL FUND; ABOLISHING THE DISTRIBUTION OF
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0014|     LOTTERY REVENUES FOR PUBLIC SCHOOL CAPITAL OUTLAY; CREATING THE
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0015|     LOTTERY TUITION TRUST FUND; AMENDING AND ENACTING SECTIONS OF
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0016|     THE NMSA 1978; REPEALING LAWS 1995, CHAPTER 155, SECTION 38.
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0017|     
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0018|     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0019|          Section 1.  A new section of the New Mexico Lottery Act is
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0020|     enacted to read:
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0021|          "[<u>NEW MATERIAL</u>]  LOTTERY TUITION TRUST FUND CREATED--
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0022|     PURPOSE.--
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0023|               A.  The "lottery tuition trust fund" is created in
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0024|     the state treasury.  The fund shall be administered by the
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0025|     commission on higher education as a permanent trust fund. 
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0001|     Earnings from investment of the fund shall accrue to the credit
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0002|     of the fund.  Any balance in the fund at the end of any fiscal
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0003|     year shall remain in the fund and shall not be appropriated for
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0004|     any purpose as provided in this section.
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0005|               B.  Beginning in fiscal year 2003, an amount not to
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0006|     exceed five percent of the balance in the lottery tuition trust
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0007|     fund on June 30 of the prior fiscal year may be appropriated
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0008|     annually by the legislature to the commission on higher
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0009|     education for distribution to New Mexico's public post-
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0010|     secondary educational institutions to provide tuition
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0011|     assistance for New Mexico resident undergraduates as provided
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0012|     by law."
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0013|          Section 2.  Section 6-24-3 NMSA 1978 (being Laws 1995,
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0014|     Chapter 155, Section 3) is amended to read:
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0015|          "6-24-3.  PURPOSES.--The purposes of the New Mexico
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0016|     Lottery Act are to:
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0017|               A.  establish and provide for the conduct of a fair
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0018|     and honest lottery for the entertainment of the public; and
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0019|               B.  provide the maximum amount of revenues, without
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0020|     imposing additional taxes or using other state revenues, for
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0021|     the purposes of:
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0022|                    (1)  funding <s>[critical capital outlay]</s>
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0023|     <u>instructional material</u> needs of the public schools; and 
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0024|                    (2)  providing tuition assistance to resident
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0025|     undergraduates at New Mexico post-secondary educational
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0001|     institutions."
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0002|          Section 3.  Section 6-24-24 NMSA 1978 (being Laws 1995,
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0003|     Chapter 155, Section 24) is amended to read:
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0004|          "6-24-24.  DISPOSITION OF REVENUE.--
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0005|               A.  As nearly as practical, an amount equal to at
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0006|     least fifty percent of the gross annual revenues from the sale
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0007|     of lottery tickets shall be returned to the public in the form
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0008|     of lottery prizes.
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0009|               B.  The authority shall transmit all net revenues to
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0010|     the state treasurer who shall deposit <s>[sixty]</s> <u>fifty</u> percent
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0011|     of the revenues in the <s>[public school capital outlay fund for
</s>    |
<s></s>0012| <s>    expenditure pursuant to the provisions of the Public School
</s>    |
<s></s>0013| <s>    Capital Outlay Act]</s> <u>instructional material fund pursuant to
</u>    |
<u></u>0014| <u>    the Instructional Material Law, ten percent in the lottery
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<u></u>0015| <u>    tuition trust fund</u> and forty percent in the lottery tuition
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0016|     fund.  Estimated net revenues shall be transmitted monthly to
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0017|     the state treasurer for deposit in the funds, provided the
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0018|     total amount of annual net revenues for the fiscal year shall
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0019|     be transmitted no later than August 1 each year.
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0020|               C.  In determining net revenues, operating expenses
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0021|     of the lottery include all costs incurred in the operation and
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0022|     administration of the lottery and all costs resulting from any
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0023|     contracts entered into for the purchase or lease of goods or
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0024|     services required by the lottery, including <s>[but not limited
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<s></s>0025| <s>    to]</s> the costs of supplies, materials, tickets, independent
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0001|     audit services, independent studies, data transmission,
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0002|     advertising, promotion, incentives, public relations,
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0003|     communications, commissions paid to lottery retailers,
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0004|     printing, distribution of tickets, purchases of annuities or
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0005|     investments to be used to pay future installments of winning
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0006|     lottery tickets, debt service and payment of any revenue bonds
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0007|     issued, contingency reserves, transfers to the reserve fund and
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0008|     any other necessary costs incurred in carrying out the
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0009|     provisions of the New Mexico Lottery Act.
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0010|               D.  An amount up to two percent of the gross annual
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0011|     revenues shall be set aside as a reserve fund to cover bonuses
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0012|     and incentive plans for lottery retailers, special promotions
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0013|     for retailers, purchasing special promotional giveaways,
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0014|     sponsoring special promotional events, compulsive gambling
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0015|     rehabilitation and such other purposes as the board deems
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0016|     necessary to maintain the integrity and meet the revenue goals
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0017|     of the lottery.  The board shall report annually to the
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0018|     governor and each regular session of the legislature on the use
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0019|     of the money in the reserve fund.  Any balance in excess of
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0020|     fifty thousand dollars ($50,000) at the end of any fiscal year
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0021|     shall be transferred to the lottery tuition fund."
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0022|          Section 4.  Section 6-24-27 NMSA 1978 (being Laws 1995,
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0023|     Chapter 155, Section 27) is amended to read:
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0024|          "6-24-27.  REVENUE AND BUDGET REPORTS--RECORDS--
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0025|     INDEPENDENT AUDITS.--
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0001|               A.  The board shall:
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0002|                    (l)  submit quarterly and annual reports to the
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0003|     governor, legislative finance committee and lottery oversight
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0004|     committee disclosing the total lottery revenue, prizes,
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0005|     commissions, ticket costs, operating expenses and net revenues
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0006|     of the authority during the reporting period and, in the annual
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0007|     report, describe the organizational structure of the authority
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0008|     and summarize the functions performed by each organizational
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0009|     division within the authority;
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0010|                    (2)  maintain weekly or more frequent records
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0011|     of lottery transactions, including the distribution of lottery
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0012|     tickets to retailers, revenue received, claims for prizes,
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0013|     prizes paid, prizes forfeited and other financial transactions
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0014|     of the authority; and
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0015|                    (3)  use the state government fiscal year.
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0016|               B.  The board shall provide, for informational
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0017|     purposes, to the department of finance and administration and
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0018|     the legislative finance committee, by December 1 of each year,
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0019|     a copy of the annual proposed operating budget for the
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0020|     authority for the succeeding fiscal year.  This budget proposal
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0021|     shall also be accompanied by an estimate of the net revenues to
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0022|     be deposited in the <s>[public school capital outlay]</s>
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0023|     <u>instructional material</u> fund, <u>the lottery tuition trust fund</u>
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0024|     and the lottery tuition fund for the current and succeeding
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0025|     fiscal years.  
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0001|               C.  The board shall contract with an independent
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0002|     certified public accountant or firm for an annual financial
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0003|     audit of the authority.  The certified public accountant or
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0004|     firm shall have no financial interest in any lottery
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0005|     contractor.  The certified public accountant or firm shall
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0006|     present an audit report no later than March 1 for the prior
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0007|     fiscal year.  The certified public accountant or firm shall
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0008|     evaluate the internal auditing controls in effect during the
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0009|     audit period.  The cost of this financial audit shall be an
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0010|     operating expense of the authority.  The legislative finance
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0011|     committee may, at any time, order an audit of any phase of the
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0012|     operations of the authority, at the expense of the authority,
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0013|     and shall receive a copy of the annual independent financial
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0014|     audit.  A copy of any audit performed by the certified public
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0015|     accountant or ordered by the legislative finance committee
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0016|     shall be transmitted to the governor, the speaker of the house
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0017|     of representatives, the president pro tempore of the senate,
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0018|     the legislative finance committee and the lottery oversight
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0019|     committee."
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0020|          Section 5.  REPEAL.--Laws 1995, Chapter 155, Section 38 is
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0021|     repealed.
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0022|          Section 6.  EFFECTIVE DATE.--The effective date of the
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0023|     provisions of this act is July 1, 1997.
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0024|                              
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