SENATE 3rd Reading Unamended February 18, 2014 SENATE 2nd Reading Unamended February 14, 2014Second Regular Session Sixty-ninth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 14-0673.01 Jason Gelender x4330 SENATE BILL 14-126 SENATE SPONSORSHIP King, HOUSE SPONSORSHIP Sonnenberg, Senate Committees House Committees Finance A BILL FOR AN ACT Concerning the reclassification of the state lottery division as a type 1 agency. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Legislative Audit Committee. Under current law, a state agency that is a type 1 agency generally exercises its statutory powers, duties, and functions, including any administrative rule-making that it engages in, independently of the head of the principal department of state government that includes the agency. In contrast, the head of the principal department that includes a type 2 agency generally directs and supervises the exercise of such powers, duties, and functions by the type 2 agency and promulgates administrative rules for the agency. Effective July 1, 2004, the general assembly reclassified the state lottery division (division), which is a division of the department of revenue (department) that includes the Colorado lottery commission and that had previously been classified as a type 1 agency, as a type 2 agency, but nonetheless gave the commission full and exclusive authority to promulgate rules related to the lottery without any approval by, or delegation of authority from, the executive director of the department. The bill reverses the 2004 classification change by reclassifying the division as a type 1 agency and transferring the powers of lottery related contracting and budgeting from the executive director of the department to the director of the division. The commission retains full and exclusive authority to promulgate lottery related administrative rules. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 24-35-202, amend (2) as follows: 24-35-202. State lottery division - creation - location - enterprise status. (2) The state lottery division, including the Colorado lottery commission created in section 24-35-207, and the director of the state lottery division shall exercise their powers and perform their duties and functions specified in this part 2 under the department of revenue as if the same were transferred to the department by a type 2 type 1 transfer, as such transfer is defined in the "Administrative Organization Act of 1968", article 1 of this title. except that The commission shall have has full and exclusive authority to promulgate rules related to the lottery without any approval by, or delegation of authority from, the department. SECTION 2. In Colorado Revised Statutes, 24-35-204, add (3) (q) and (3) (r) as follows: 24-35-204. Director - qualifications - powers and duties. (3) The director, as administrative head of the division, shall direct and supervise all its administrative and technical activities. In addition to the duties imposed upon the director elsewhere in this part 2, it shall be the director's duty: (q) To enter into contracts for materials, equipment, and supplies to be used in the operation of the lottery, for the design and installation of games or lotteries, and for promotion of the lottery. No contract is legal or enforceable that provides for the management of the lottery or for the entire operation of its games by any private person, firm, or corporation, because management of the lottery and control over the operation of its games must remain with the state; except that management of and control over the operation of a multistate lottery must be determined by the terms of a multistate agreement. Except for advertising and promotional contracts, when a contract other than a multistate agreement is awarded, a performance bond satisfactory to the director, executed by a surety company authorized to do business in this state or otherwise secured in a manner satisfactory to the state, in an amount set annually by the director shall be delivered to the state and shall become binding on the parties upon execution of the contract. (r) To annually prepare and submit to the commission a proposed budget for the ensuing fiscal year, which shall present a complete financial plan setting forth all proposed expenditures and anticipated revenues of the division. SECTION 3. In Colorado Revised Statutes, repeal 24-35-204.5 as follows: 24-35-204.5. Executive director - duties. (1) It shall be the executive director's duty: (a) To enter into contracts for materials, equipment, and supplies to be used in the operation of the lottery, for the design and installation of games or lotteries, and for promotion of the lottery. No contract shall be legal or enforceable that provides for the management of the lottery or for the entire operation of its games by any private person, firm, or corporation, because management of the lottery and control over the operation of its games shall remain with the state; except that management of and control over the operation of a multistate lottery shall be determined by the terms of a multistate agreement. Except for advertising and promotional contracts, when a contract other than a multistate agreement is awarded, a performance bond satisfactory to the executive director, executed by a surety company authorized to do business in this state or otherwise secured in a manner satisfactory to the state, in an amount set annually by the executive director shall be delivered to the state and shall become binding on the parties upon execution of the contract. (b) To annually prepare and submit to the commission a proposed budget for the ensuing fiscal year, which budget shall present a complete financial plan setting forth all proposed expenditures and anticipated revenues of the division. The fiscal year of the division shall commence on July 1 and end on June 30 of each year. SECTION 4. Effective date. This act takes effect July 1, 2014. SECTION 5. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.