KRS 154A.060: Conduct and administration of lottery games -- Powers and duties of

corporation -- Authorized contracts -- Withholding lottery prize money for

child support arrearages and default on higher education loans.

(1) The corporation shall conduc t and administer lottery games which will result in

maximization of revenues to the Commonwealth of Kentucky while at the same

time provide entertainment to its citizens. It shall be the duty of the corporation, its

employees, and the members of the board to provide for the effective operation of

lottery games which insure the integrity of the lottery and maintain the dignity of

the Commonwealth and the general welfare of its citizens. The corporation, in

pursuit of the attainment of the objectives and the purposes of this chapter, may:

(a) Sue and be sued in its corporate name;

(b) Adopt a corporate seal and a symbol;

(c) Hold copyrights, trademarks, and service marks, and enforce its rights with

respect thereto;

(d) Appoint agents upon which process may be served;

(e) Enter into written agreements with one (1) or more other states for the

operation, marketing, and promotion of a joint lottery or joint lottery games;

(f) Acquire real property and make improvements thereon. These acquisitions

shall be reported to the Capital Projects and Bond Oversight Committee for its

review and determination in accordance with KRS 45.750 to 45.810; and

(g) Make, execute, and effectuate any and all agreements or contracts, including:

1. Contracts for the purchase of such goo ds and services as are necessary

for the operation and promotion of the state lottery. Proposed purchases

of major items of equipment estimated to cost one hundred thousand

dollars ($100,000) or more and proposed purchases of items of

equipment where the e stimated contract price for all the items of

equipment taken together is four hundred thousand dollars ($400,000) or

more shall be reported to the Capital Projects and Bond Oversight

Committee for its review and determination in accordance with the

provisions of KRS 45.750 to 45.810. A contract shall not be artificially

divided to cause an estimated contract price to fall below the four

hundred thousand dollar ($400,000) threshold. Contracts for personal

service shall be reviewed in accordance with KRS 45A. 690 to 45A.725;

and

2. Contracts to incur debt in its own name and enter into financing

agreements with the Commonwealth, its own agencies, or with a

commercial bank, excluding the authority to issue bonds.

(2) The corporation shall:

(a) Supervise and administer the lottery in a ccordance with the provisions of this

chapter and the administrative regulations adopted by the board;

(b) Submit monthly and annual reports to the Governor, the President of the

Senate, and the Speaker of the House of Representatives containing financial

statements which include but are not limited to disclosure of gross revenues,

expenses, and net proceeds for the period;

(c) Adopt by administrative regulation a system of continuous internal audits;

(d) Maintain weekly or more frequent records of lottery transactions, including

distribution of tickets to lottery retailers, revenues received, claims for prizes,

prizes paid, and all other financial transactions of the corporation;

(e) Adopt by administrative regulation a code of ethics for officers and

employees of the corporation to carry out the standards of conduct established

by the provisions of this chapter;

(f) Include capital projects, as defined in KRS 45.750(1)(f), which exceed the

thresholds set forth in KRS 154A.060(1)(g)1. in the budget unit requ est

submitted by the corporation to the Finance and Administration Cabinet

pursuant to KRS 48.050. In the budget unit request submitted by the

corporation, a contingency item for acquisition of the on -line central system,

all related equipment, and any oth er equipment owned by vendors of the

corporation relating to computer -generated lottery games from the

corporation's vendors shall be stated separately from all other equipment.

Further, if the identification of specific projects requiring the acquisition of

equipment in the nature of computer systems, communications equipment and

related peripheral devices, and operating system software cannot be

ascertained with absolute certainty at the time the corporation is required to

submit its budget unit request, the corporation shall be entitled to submit a

general request for the equipment without individually identifying specific

projects, together with a maximum amount to be allocated for the equipment,

in the budget unit request;

(g) The Kentucky Lottery Corpo ration and the Office of the Attorney General

shall develop a system to allow the Kentucky Lottery Corporation to receive a

list of delinquent child support obligors from the Office of the Attorney

General on a monthly basis. The Kentucky Lottery Corporation shall withhold

delinquent amounts from prizes of winners that appear on the list. This system

shall be timely and shall not create an unavoidable delay in the payment of a

lottery prize; and

(h) The Kentucky Lottery Corporation and the authority shall develop a system to

allow the Kentucky Lottery Corporation to receive on a periodic basis a list of

persons declared in default of repayment obligations under financial

assistance programs in KRS Chapters 164 and 164A. The Kentucky Lottery

Corporation shall withhold from a person's prize winnings the amount of the

defaulted loan and shall transfer the amount to the authority to credit the

account of the person in default. Any amount remaining after the deduction of

the loan amount shall be paid to the person.