HB5230 103RD GENERAL ASSEMBLY

LRB103 38853 AWJ 68990 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5230

Introduced 2/9/2024, by Rep. Margaret Croke

SYNOPSIS AS INTRODUCED:

20 ILCS 1605/20	from Ch. 120, par. 1170
20 ILCS 1605/20.1	from Ch. 120, par. 1170.1
20 ILCS 1605/24	from Ch. 120, par. 1174
20 ILCS 1605/27	from Ch. 120, par. 1177

Amends the Illinois Lottery Law. Provides that the State Lottery Fund shall receive from the sale of lottery tickets or shares consisting of the net of commissions and fees representing those expenses that are directly proportionate to the sale of tickets or shares at the agent location and prizes of $600 or less (rather than less than $600) which have been validly paid at the agent level. Makes a conforming change. Provides that the Department of Lottery may pay any prize (rather than prizes up to $25,000) from funds held by the Department in an account separate and apart from all public moneys of the State. Removes provisions allowing moneys in the account to be deposited by the Department into the Public Treasurers' Investment Pool or used to pay amounts to deferred prize winners. Allows the Department to contract (rather than the State Treasurer with the consent of the Director of the Lottery) with any person or corporation, including, without limitation, a bank, banking house, trust company or investment banking firm, to perform such financial functions, activities, or services in connection with operation of the lottery. Allows, with the consent of the Director, the State Treasurer to act as an agent of the Department to perform the financial functions as the Director may prescribe. Removes language requiring the Director to prepare and send to the State Comptroller vouchers requesting payment from the Deferred Lottery Prize Winners Trust Fund to deferred prize winners.

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Lottery Law is amended by changing Sections 20, 20.1, 24, and 27 as follows:

(20 ILCS 1605/20) (from Ch. 120, par. 1170)

Sec. 20. State Lottery Fund.

(a) There is created in the State Treasury a special fund to be known as the State Lottery Fund. Such fund shall consist of all revenues received from (1) the sale of lottery tickets or shares, (net of commissions, fees representing those expenses that are directly proportionate to the sale of tickets or shares at the agent location, and prizes of less than $600 or less which have been validly paid at the agent level), (2) application fees, and (3) all other sources including moneys credited or transferred thereto from any other fund or source pursuant to law. Interest earnings of the State Lottery Fund shall be credited to the Common School Fund.

(a-5) The receipt and distribution of moneys under Section 21.4 of this Act shall be in accordance with Section 21.4.

(b) The receipt and distribution of moneys under Section 21.5 of this Law shall be in accordance with Section 21.5.

(c) The receipt and distribution of moneys under Section 21.6 of this Law shall be in accordance with Section 21.6.

(d) The receipt and distribution of moneys under Section 21.7 of this Law shall be in accordance with Section 21.7.

(e) The receipt and distribution of moneys under Section 21.8 of this Law shall be in accordance with Section 21.8.

(f) The receipt and distribution of moneys under Section 21.9 of this Law shall be in accordance with Section 21.9.

(g) The receipt and distribution of moneys under Section 21.10 of this Law shall be in accordance with Section 21.10.

(h) The receipt and distribution of moneys under Section 21.11 of this Law shall be in accordance with Section 21.11.

(i) (Blank).

(j) The receipt and distribution of moneys under Section 21.13 of this Law shall be in accordance with Section 21.13.

(k) The receipt and distribution of moneys under Section 25-70 of the Sports Wagering Act shall be in accordance with Section 25-70 of the Sports Wagering Act.

(l) The receipt and distribution of moneys under Section 21.15 of this Law shall be in accordance with Section 21.15.

(m) The receipt and distribution of moneys under Section 21.16 of this Law shall be in accordance with Section 21.16.

(Source: P.A. 102-16, eff. 6-17-21; 103-381, eff. 7-28-23.)

(20 ILCS 1605/20.1) (from Ch. 120, par. 1170.1)

Sec. 20.1. Department account.

(a) The Department is authorized to pay validated prizes up to $25,000 from funds held by the Department in an account separate and apart from all public moneys of the State. Moneys in this account shall be administered by the Director exclusively for the purposes of issuing payments to prize winners authorized by this Section. Moneys in this account shall be deposited by the Department into the Public Treasurers' Investment Pool established under Section 17 of the State Treasurer Act. The Department shall submit vouchers from time to time as needed for reimbursement of this account from moneys appropriated for prizes from the State Lottery Fund. Investment income earned from this account shall be deposited monthly by the Department into the Common School Fund. The Department shall file quarterly fiscal reports specifying the activity of this account as required under Section 16 of the State Comptroller Act, and shall file quarterly with the General Assembly, the Auditor General, the Comptroller, and the State Treasurer a report indicating the costs associated with this activity.

(b) The Department is authorized to enter into an interagency agreement with the Office of the Comptroller or any other State agency to establish responsibilities, duties, and procedures for complying with the Comptroller's Offset System under Section 10.05 of the State Comptroller Act. All federal and State tax reporting and withholding requirements relating to prize winners under this Section shall be the responsibility of the Department. Moneys from this account may not be used to pay amounts to deferred prize winners. Moneys may not be transferred from the State Lottery Fund to this account for payment of prizes under this Section until procedures are implemented to comply with the Comptroller's Offset System and sufficient internal controls are in place to validate prizes.

(Source: P.A. 97-464, eff. 10-15-11; 98-499, eff. 8-16-13.)

(20 ILCS 1605/24) (from Ch. 120, par. 1174)

Sec. 24. The State Comptroller shall conduct a preaudit of all accounts and transactions of the Department in connection with the operation of the State Lottery under the State Comptroller Act, excluding payments issued by the Department for prizes of $25,000 or less.

The Auditor General or a certified public accountant firm appointed by him shall conduct an annual post-audit of all accounts and transactions of the Department in connection with the operation of the State Lottery and other special post audits as the Auditor General, the Legislative Audit Commission, or the General Assembly deems necessary. The annual post-audits shall include payments made by lottery sales agents of prizes of less than $600 or less authorized under Section 20, and payments made by the Department of prizes up to $25,000 authorized under Section 20.1. The Auditor General or his agent conducting an audit under this Act shall have access and authority to examine any and all records of the Department or the Board, its distributing agents and its licensees.

(Source: P.A. 94-776, eff. 5-19-06.)

(20 ILCS 1605/27) (from Ch. 120, par. 1177)

Sec. 27. (a) The Department may State Treasurer may, with the consent of the Director, contract with any person or corporation, including, without limitation, a bank, banking house, trust company or investment banking firm, to perform such financial functions, activities or services in connection with operation of the lottery. The State Treasurer may, with the consent of the Director, act as an agent of the Department to perform the financial functions as the Director may prescribe as the State Treasurer and the Director may prescribe.

(b) All proceeds from investments made pursuant to contracts executed by the Department or the State Treasurer, with the consent of the Director, to perform financial functions, activities or services in connection with operation of the lottery, shall be deposited and held by the State Treasurer as ex-officio custodian thereof, separate and apart from all public money or funds of this State in a special trust fund outside the State treasury. Such trust fund shall be known as the "Deferred Lottery Prize Winners Trust Fund", and shall be administered by the Director.

The Director shall, at such times and in such amounts as shall be necessary, prepare and send to the State Comptroller vouchers requesting payment from the Deferred Lottery Prize Winners Trust Fund to deferred prize winners, in a manner that will insure the timely payment of such amounts owed.

This Act shall constitute an irrevocable appropriation of all amounts necessary for that purpose, and the irrevocable and continuing authority for and direction to the Director and the State Treasurer to make the necessary payments out of such trust fund for that purpose.

(c) Moneys invested pursuant to subsection (a) of this Section may be invested only in bonds, notes, certificates of indebtedness, treasury bills, or other securities constituting direct obligations of the United States of America and all securities or obligations the prompt payment of principal and interest of which is guaranteed by a pledge of the full faith and credit of the United States of America. Interest earnings on moneys in the Deferred Lottery Prize Winners Trust Fund shall remain in such fund and be used to pay the winners of lottery prizes deferred as to payment until such obligations are discharged. Proceeds from bonds purchased and interest accumulated as a result of a grand prize multi-state game ticket that goes unclaimed will be transferred after the termination of the relevant claim period directly from the lottery's Deferred Lottery Prize Winners Trust Fund to each respective multi-state partner state according to its contribution ratio.

(c-5) If a deferred lottery prize is not claimed within the claim period established by game rule, then the securities or other instruments purchased to fund the prize shall be liquidated and the liquidated amount shall be transferred to the State Lottery Fund for disposition pursuant to Section 19 of this Act.

(c-10) The Director may use a portion of the moneys in the Deferred Lottery Prize Winners Trust Fund to purchase bonds to pay a lifetime prize if the prize duration exceeds the length of available securities. If the winner of a lifetime prize exceeds his or her life expectancy as determined using actuarial assumptions and the securities or moneys set aside to pay the prize have been exhausted, moneys in the State Lottery Fund shall be used to make payments to the winner for the duration of the winner's life.

(c-15) From time to time, the Director may request that the State Comptroller transfer any excess moneys in the Deferred Lottery Prize Winners Trust Fund to the State Lottery Fund.

(d) This amendatory Act of 1985 shall be construed liberally to effect the purposes of the Illinois Lottery Law.

(Source: P.A. 97-464, eff. 10-15-11; 98-463, eff. 8-16-13; 98-499, eff. 8-16-13.)