Bill Text: IL SB0303 | 2015-2016 | 99th General Assembly | Engrossed

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Bill Title: Amends the Native American Gaming Compact Act. Makes a technical change in a Section concerning the short title.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2017-01-03 - Rule 19(b) / Re-referred to Rules Committee [SB0303 Detail]

Download: Illinois-2015-SB0303-Engrossed.html

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AN ACT concerning gaming.
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 2, 9.1, and 20 and by adding Section 21.10 as follows:
(20 ILCS 1605/2) (from Ch. 120, par. 1152)
Sec. 2. This Act is enacted to implement and establish
within the State a lottery to be conducted by the State through
the Department. The entire net proceeds of the Lottery are to
be used for the support of the State's Common School Fund,
except as provided in subsection (o) of Section 9.1 and
Sections 21.2, 21.5, 21.6, 21.7, 21.8, and 21.9, and 21.10. The
General Assembly finds that it is in the public interest for
the Department to conduct the functions of the Lottery with the
assistance of a private manager under a management agreement
overseen by the Department. The Department shall be accountable
to the General Assembly and the people of the State through a
comprehensive system of regulation, audits, reports, and
enduring operational oversight. The Department's ongoing
conduct of the Lottery through a management agreement with a
private manager shall act to promote and ensure the integrity,
security, honesty, and fairness of the Lottery's operation and
administration. It is the intent of the General Assembly that

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the Department shall conduct the Lottery with the assistance of
a private manager under a management agreement at all times in
a manner consistent with 18 U.S.C. 1307(a)(1), 1307(b)(1),
1953(b)(4).
(Source: P.A. 98-649, eff. 6-16-14.)
(20 ILCS 1605/9.1)
Sec. 9.1. Private manager and management agreement.
(a) As used in this Section:
"Offeror" means a person or group of persons that responds
to a request for qualifications under this Section.
"Request for qualifications" means all materials and
documents prepared by the Department to solicit the following
from offerors:
(1) Statements of qualifications.
(2) Proposals to enter into a management agreement,
including the identity of any prospective vendor or vendors
that the offeror intends to initially engage to assist the
offeror in performing its obligations under the management
agreement.
"Final offer" means the last proposal submitted by an
offeror in response to the request for qualifications,
including the identity of any prospective vendor or vendors
that the offeror intends to initially engage to assist the
offeror in performing its obligations under the management
agreement.

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"Final offeror" means the offeror ultimately selected by
the Governor to be the private manager for the Lottery under
subsection (h) of this Section.
(b) By September 15, 2010, the Governor shall select a
private manager for the total management of the Lottery with
integrated functions, such as lottery game design, supply of
goods and services, and advertising and as specified in this
Section.
(c) Pursuant to the terms of this subsection, the
Department shall endeavor to expeditiously terminate the
existing contracts in support of the Lottery in effect on the
effective date of this amendatory Act of the 96th General
Assembly in connection with the selection of the private
manager. As part of its obligation to terminate these contracts
and select the private manager, the Department shall establish
a mutually agreeable timetable to transfer the functions of
existing contractors to the private manager so that existing
Lottery operations are not materially diminished or impaired
during the transition. To that end, the Department shall do the
following:
(1) where such contracts contain a provision
authorizing termination upon notice, the Department shall
provide notice of termination to occur upon the mutually
agreed timetable for transfer of functions;
(2) upon the expiration of any initial term or renewal
term of the current Lottery contracts, the Department shall

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not renew such contract for a term extending beyond the
mutually agreed timetable for transfer of functions; or
(3) in the event any current contract provides for
termination of that contract upon the implementation of a
contract with the private manager, the Department shall
perform all necessary actions to terminate the contract on
the date that coincides with the mutually agreed timetable
for transfer of functions.
If the contracts to support the current operation of the
Lottery in effect on the effective date of this amendatory Act
of the 96th General Assembly are not subject to termination as
provided for in this subsection (c), then the Department may
include a provision in the contract with the private manager
specifying a mutually agreeable methodology for incorporation.
(c-5) The Department shall include provisions in the
management agreement whereby the private manager shall, for a
fee, and pursuant to a contract negotiated with the Department
(the "Employee Use Contract"), utilize the services of current
Department employees to assist in the administration and
operation of the Lottery. The Department shall be the employer
of all such bargaining unit employees assigned to perform such
work for the private manager, and such employees shall be State
employees, as defined by the Personnel Code. Department
employees shall operate under the same employment policies,
rules, regulations, and procedures, as other employees of the
Department. In addition, neither historical representation

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rights under the Illinois Public Labor Relations Act, nor
existing collective bargaining agreements, shall be disturbed
by the management agreement with the private manager for the
management of the Lottery.
(d) The management agreement with the private manager shall
include all of the following:
(1) A term not to exceed 10 years, including any
renewals.
(2) A provision specifying that the Department:
(A) shall exercise actual control over all
significant business decisions;
(A-5) has the authority to direct or countermand
operating decisions by the private manager at any time;
(B) has ready access at any time to information
regarding Lottery operations;
(C) has the right to demand and receive information
from the private manager concerning any aspect of the
Lottery operations at any time; and
(D) retains ownership of all trade names,
trademarks, and intellectual property associated with
the Lottery.
(3) A provision imposing an affirmative duty on the
private manager to provide the Department with material
information and with any information the private manager
reasonably believes the Department would want to know to
enable the Department to conduct the Lottery.

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(4) A provision requiring the private manager to
provide the Department with advance notice of any operating
decision that bears significantly on the public interest,
including, but not limited to, decisions on the kinds of
games to be offered to the public and decisions affecting
the relative risk and reward of the games being offered, so
the Department has a reasonable opportunity to evaluate and
countermand that decision.
(5) A provision providing for compensation of the
private manager that may consist of, among other things, a
fee for services and a performance based bonus as
consideration for managing the Lottery, including terms
that may provide the private manager with an increase in
compensation if Lottery revenues grow by a specified
percentage in a given year.
(6) (Blank).
(7) A provision requiring the deposit of all Lottery
proceeds to be deposited into the State Lottery Fund except
as otherwise provided in Section 20 of this Act.
(8) A provision requiring the private manager to locate
its principal office within the State.
(8-5) A provision encouraging that at least 20% of the
cost of contracts entered into for goods and services by
the private manager in connection with its management of
the Lottery, other than contracts with sales agents or
technical advisors, be awarded to businesses that are a

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minority owned business, a female owned business, or a
business owned by a person with disability, as those terms
are defined in the Business Enterprise for Minorities,
Females, and Persons with Disabilities Act.
(9) A requirement that so long as the private manager
complies with all the conditions of the agreement under the
oversight of the Department, the private manager shall have
the following duties and obligations with respect to the
management of the Lottery:
(A) The right to use equipment and other assets
used in the operation of the Lottery.
(B) The rights and obligations under contracts
with retailers and vendors.
(C) The implementation of a comprehensive security
program by the private manager.
(D) The implementation of a comprehensive system
of internal audits.
(E) The implementation of a program by the private
manager to curb compulsive gambling by persons playing
the Lottery.
(F) A system for determining (i) the type of
Lottery games, (ii) the method of selecting winning
tickets, (iii) the manner of payment of prizes to
holders of winning tickets, (iv) the frequency of
drawings of winning tickets, (v) the method to be used
in selling tickets, (vi) a system for verifying the

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validity of tickets claimed to be winning tickets,
(vii) the basis upon which retailer commissions are
established by the manager, and (viii) minimum
payouts.
(10) A requirement that advertising and promotion must
be consistent with Section 7.8a of this Act.
(11) A requirement that the private manager market the
Lottery to those residents who are new, infrequent, or
lapsed players of the Lottery, especially those who are
most likely to make regular purchases on the Internet as
permitted by law.
(12) A code of ethics for the private manager's
officers and employees.
(13) A requirement that the Department monitor and
oversee the private manager's practices and take action
that the Department considers appropriate to ensure that
the private manager is in compliance with the terms of the
management agreement, while allowing the manager, unless
specifically prohibited by law or the management
agreement, to negotiate and sign its own contracts with
vendors.
(14) A provision requiring the private manager to
periodically file, at least on an annual basis, appropriate
financial statements in a form and manner acceptable to the
Department.
(15) Cash reserves requirements.

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(16) Procedural requirements for obtaining the prior
approval of the Department when a management agreement or
an interest in a management agreement is sold, assigned,
transferred, or pledged as collateral to secure financing.
(17) Grounds for the termination of the management
agreement by the Department or the private manager.
(18) Procedures for amendment of the agreement.
(19) A provision requiring the private manager to
engage in an open and competitive bidding process for any
procurement having a cost in excess of $50,000 that is not
a part of the private manager's final offer. The process
shall favor the selection of a vendor deemed to have
submitted a proposal that provides the Lottery with the
best overall value. The process shall not be subject to the
provisions of the Illinois Procurement Code, unless
specifically required by the management agreement.
(20) The transition of rights and obligations,
including any associated equipment or other assets used in
the operation of the Lottery, from the manager to any
successor manager of the lottery, including the
Department, following the termination of or foreclosure
upon the management agreement.
(21) Right of use of copyrights, trademarks, and
service marks held by the Department in the name of the
State. The agreement must provide that any use of them by
the manager shall only be for the purpose of fulfilling its

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obligations under the management agreement during the term
of the agreement.
(22) The disclosure of any information requested by the
Department to enable it to comply with the reporting
requirements and information requests provided for under
subsection (p) of this Section.
(e) Notwithstanding any other law to the contrary, the
Department shall select a private manager through a competitive
request for qualifications process consistent with Section
20-35 of the Illinois Procurement Code, which shall take into
account:
(1) the offeror's ability to market the Lottery to
those residents who are new, infrequent, or lapsed players
of the Lottery, especially those who are most likely to
make regular purchases on the Internet;
(2) the offeror's ability to address the State's
concern with the social effects of gambling on those who
can least afford to do so;
(3) the offeror's ability to provide the most
successful management of the Lottery for the benefit of the
people of the State based on current and past business
practices or plans of the offeror; and
(4) the offeror's poor or inadequate past performance
in servicing, equipping, operating or managing a lottery on
behalf of Illinois, another State or foreign government and
attracting persons who are not currently regular players of

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a lottery.
(f) The Department may retain the services of an advisor or
advisors with significant experience in financial services or
the management, operation, and procurement of goods, services,
and equipment for a government-run lottery to assist in the
preparation of the terms of the request for qualifications and
selection of the private manager. Any prospective advisor
seeking to provide services under this subsection (f) shall
disclose any material business or financial relationship
during the past 3 years with any potential offeror, or with a
contractor or subcontractor presently providing goods,
services, or equipment to the Department to support the
Lottery. The Department shall evaluate the material business or
financial relationship of each prospective advisor. The
Department shall not select any prospective advisor with a
substantial business or financial relationship that the
Department deems to impair the objectivity of the services to
be provided by the prospective advisor. During the course of
the advisor's engagement by the Department, and for a period of
one year thereafter, the advisor shall not enter into any
business or financial relationship with any offeror or any
vendor identified to assist an offeror in performing its
obligations under the management agreement. Any advisor
retained by the Department shall be disqualified from being an
offeror. The Department shall not include terms in the request
for qualifications that provide a material advantage whether

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directly or indirectly to any potential offeror, or any
contractor or subcontractor presently providing goods,
services, or equipment to the Department to support the
Lottery, including terms contained in previous responses to
requests for proposals or qualifications submitted to
Illinois, another State or foreign government when those terms
are uniquely associated with a particular potential offeror,
contractor, or subcontractor. The request for proposals
offered by the Department on December 22, 2008 as
"LOT08GAMESYS" and reference number "22016176" is declared
void.
(g) The Department shall select at least 2 offerors as
finalists to potentially serve as the private manager no later
than August 9, 2010. Upon making preliminary selections, the
Department shall schedule a public hearing on the finalists'
proposals and provide public notice of the hearing at least 7
calendar days before the hearing. The notice must include all
of the following:
(1) The date, time, and place of the hearing.
(2) The subject matter of the hearing.
(3) A brief description of the management agreement to
be awarded.
(4) The identity of the offerors that have been
selected as finalists to serve as the private manager.
(5) The address and telephone number of the Department.
(h) At the public hearing, the Department shall (i) provide

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sufficient time for each finalist to present and explain its
proposal to the Department and the Governor or the Governor's
designee, including an opportunity to respond to questions
posed by the Department, Governor, or designee and (ii) allow
the public and non-selected offerors to comment on the
presentations. The Governor or a designee shall attend the
public hearing. After the public hearing, the Department shall
have 14 calendar days to recommend to the Governor whether a
management agreement should be entered into with a particular
finalist. After reviewing the Department's recommendation, the
Governor may accept or reject the Department's recommendation,
and shall select a final offeror as the private manager by
publication of a notice in the Illinois Procurement Bulletin on
or before September 15, 2010. The Governor shall include in the
notice a detailed explanation and the reasons why the final
offeror is superior to other offerors and will provide
management services in a manner that best achieves the
objectives of this Section. The Governor shall also sign the
management agreement with the private manager.
(i) Any action to contest the private manager selected by
the Governor under this Section must be brought within 7
calendar days after the publication of the notice of the
designation of the private manager as provided in subsection
(h) of this Section.
(j) The Lottery shall remain, for so long as a private
manager manages the Lottery in accordance with provisions of

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this Act, a Lottery conducted by the State, and the State shall
not be authorized to sell or transfer the Lottery to a third
party.
(k) Any tangible personal property used exclusively in
connection with the lottery that is owned by the Department and
leased to the private manager shall be owned by the Department
in the name of the State and shall be considered to be public
property devoted to an essential public and governmental
function.
(l) The Department may exercise any of its powers under
this Section or any other law as necessary or desirable for the
execution of the Department's powers under this Section.
(m) Neither this Section nor any management agreement
entered into under this Section prohibits the General Assembly
from authorizing forms of gambling that are not in direct
competition with the Lottery.
(n) The private manager shall be subject to a complete
investigation in the third, seventh, and tenth years of the
agreement (if the agreement is for a 10-year term) by the
Department in cooperation with the Auditor General to determine
whether the private manager has complied with this Section and
the management agreement. The private manager shall bear the
cost of an investigation or reinvestigation of the private
manager under this subsection.
(o) The powers conferred by this Section are in addition
and supplemental to the powers conferred by any other law. If

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any other law or rule is inconsistent with this Section,
including, but not limited to, provisions of the Illinois
Procurement Code, then this Section controls as to any
management agreement entered into under this Section. This
Section and any rules adopted under this Section contain full
and complete authority for a management agreement between the
Department and a private manager. No law, procedure,
proceeding, publication, notice, consent, approval, order, or
act by the Department or any other officer, Department, agency,
or instrumentality of the State or any political subdivision is
required for the Department to enter into a management
agreement under this Section. This Section contains full and
complete authority for the Department to approve any contracts
entered into by a private manager with a vendor providing
goods, services, or both goods and services to the private
manager under the terms of the management agreement, including
subcontractors of such vendors.
Upon receipt of a written request from the Chief
Procurement Officer, the Department shall provide to the Chief
Procurement Officer a complete and un-redacted copy of the
management agreement or any contract that is subject to the
Department's approval authority under this subsection (o). The
Department shall provide a copy of the agreement or contract to
the Chief Procurement Officer in the time specified by the
Chief Procurement Officer in his or her written request, but no
later than 5 business days after the request is received by the

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Department. The Chief Procurement Officer must retain any
portions of the management agreement or of any contract
designated by the Department as confidential, proprietary, or
trade secret information in complete confidence pursuant to
subsection (g) of Section 7 of the Freedom of Information Act.
The Department shall also provide the Chief Procurement Officer
with reasonable advance written notice of any contract that is
pending Department approval.
Notwithstanding any other provision of this Section to the
contrary, the Chief Procurement Officer shall adopt
administrative rules, including emergency rules, to establish
a procurement process to select a successor private manager if
a private management agreement has been terminated. The
selection process shall at a minimum take into account the
criteria set forth in items (1) through (4) of subsection (e)
of this Section and may include provisions consistent with
subsections (f), (g), (h), and (i) of this Section. The Chief
Procurement Officer shall also implement and administer the
adopted selection process upon the termination of a private
management agreement. The Department, after the Chief
Procurement Officer certifies that the procurement process has
been followed in accordance with the rules adopted under this
subsection (o), shall select a final offeror as the private
manager and sign the management agreement with the private
manager.
Except as provided in Sections 21.2, 21.5, 21.6, 21.7,

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21.8, and 21.9, and 21.10, the Department shall distribute all
proceeds of lottery tickets and shares sold in the following
priority and manner:
(1) The payment of prizes and retailer bonuses.
(2) The payment of costs incurred in the operation and
administration of the Lottery, including the payment of
sums due to the private manager under the management
agreement with the Department.
(3) On the last day of each month or as soon thereafter
as possible, the State Comptroller shall direct and the
State Treasurer shall transfer from the State Lottery Fund
to the Common School Fund an amount that is equal to the
proceeds transferred in the corresponding month of fiscal
year 2009, as adjusted for inflation, to the Common School
Fund.
(4) On or before the last day of each fiscal year,
deposit any remaining proceeds, subject to payments under
items (1), (2), and (3) into the Capital Projects Fund each
fiscal year.
(p) The Department shall be subject to the following
reporting and information request requirements:
(1) the Department shall submit written quarterly
reports to the Governor and the General Assembly on the
activities and actions of the private manager selected
under this Section;
(2) upon request of the Chief Procurement Officer, the

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Department shall promptly produce information related to
the procurement activities of the Department and the
private manager requested by the Chief Procurement
Officer; the Chief Procurement Officer must retain
confidential, proprietary, or trade secret information
designated by the Department in complete confidence
pursuant to subsection (g) of Section 7 of the Freedom of
Information Act; and
(3) at least 30 days prior to the beginning of the
Department's fiscal year, the Department shall prepare an
annual written report on the activities of the private
manager selected under this Section and deliver that report
to the Governor and General Assembly.
(Source: P.A. 97-464, eff. 8-19-11; 98-463, eff. 8-16-13;
98-649, eff. 6-16-14.)
(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
which have been validly paid at the agent level), (2)
application fees, and (3) all other sources including moneys

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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.
(b) The receipt and distribution of moneys under Section
21.5 of this Act shall be in accordance with Section 21.5.
(c) The receipt and distribution of moneys under Section
21.6 of this Act shall be in accordance with Section 21.6.
(d) The receipt and distribution of moneys under Section
21.7 of this Act shall be in accordance with Section 21.7.
(e) The receipt and distribution of moneys under Section
21.8 of this Act shall be in accordance with Section 21.8.
(f) The receipt and distribution of moneys under Section
21.9 of this Act shall be in accordance with Section 21.9.
(g) The receipt and distribution of moneys under Section
21.10 of this Act shall be in accordance with Section 21.10.
(Source: P.A. 98-649, eff. 6-16-14.)
(20 ILCS 1605/21.10 new)
Sec. 21.10. The End of Alzheimer's Begins With Me
scratch-off game.
(a) The Department shall offer a special instant
scratch-off game with the title of "The End of Alzheimer's
Begins With Me". The game shall commence on January 1, 2017 or
as soon thereafter, at the discretion of the Director, as is
reasonably practical. The operation of the game shall be
governed by this Act and any rules adopted by the Department.

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If any provision of this Section is inconsistent with any other
provision of this Act, then this Section governs.
(b) The net revenue from the "The End of Alzheimer's Begins
With Me" scratch-off game shall be deposited into the
Alzheimer's Awareness Fund.
Moneys received for the purposes of this Section,
including, without limitation, net revenue from the special
instant scratch-off game and from gifts, grants, and awards
from any public or private entity, must be deposited into the
Fund. Any interest earned on moneys in the Fund must be
deposited into the Fund.
For the purposes of this subsection, "net revenue" means
the total amount for which tickets have been sold less the sum
of the amount paid out in the prizes and the actual
administrative expenses of the Department solely related to the
scratch-off game under this Section.
(c) During the time that tickets are sold for the "The End
of Alzheimer's Begins With Me" scratch-off game, the Department
shall not unreasonably diminish the efforts devoted to
marketing any other instant scratch-off lottery game.
(d) The Department may adopt any rules necessary to
implement and administer the provisions of this Section.
Section 99. Effective date. This Act takes effect upon
becoming law.