New Jersey § 5:9-22

§ 5:9-22.

The Legislature finds and declares that: a. The State Lottery, as established by and operated pursuant to Article IV, Section VII, paragraph 2 of the Constitution of the State of New Jersey and the “State Lottery Law,” P.L.1970, c. 13 ( C.5:9-1 et seq. ), is a valuable asset of the State of New Jersey. b. The Lottery Enterprise has been and is a business-like entity, consisting of all

of the assets, properties, interests, and rights of every nature and kind, tangible

and intangible, of the State useful or necessary to operate the State Lottery. c. The Division of the State Lottery in the Department of the Treasury is constantly

evolving the brand, marketing, and game offerings of the Lottery Enterprise in order

to retain existing players and attract new ones. d. The Lottery Enterprise, as operated by the Division of the State Lottery, is recognized

as one of the most profitable and well-operated lotteries in the United States and

the world. The division operates the Lottery Enterprise in a manner that is consonant with

the dignity of the State and general welfare of its people, as demonstrated by the

division having earned the highest level of achievement in responsible gaming, and

having received the Best Innovation in Responsible Gambling Award from the World Lottery

Association in November 2016. e. The continued operation, management, conduct, and control of the Lottery Enterprise

by the Division of the State Lottery is necessary for the Lottery Enterprise to remain

operating at these high standards, consistent with the “State Lottery Law,” P.L.1970,

c. 13 ( C.5:9-1 et seq. ), and with applicable federal law. f. The Teachers' Pension and Annuity Fund, the Public Employees' Retirement System,

and the Police and Firemen's Retirement System are established as qualified governmental

defined benefit plans pursuant to sections 401(a) and 414(d) of the federal Internal Revenue Code of 1986 (26 U.S.C. ss.401(a) and 414(d)), as amended, and exempt under section 501(a) of the federal Internal Revenue Code of 1986 ( 26 U.S.C. s.501(a) ), as amended, and such other provision of the federal Internal Revenue Code, as applicable,

regulations of the United States Department of the Treasury, and other guidance of

the federal Internal Revenue Service, and this act, P.L.2017, c. 98 ( C.5:9-22.5 et al.). The contribution of the Lottery Enterprise to these retirement systems is intended

to comply with all requirements of the federal Internal Revenue Code governing the

tax qualified status of the retirement systems, and this act shall at all times be

applied and construed in a manner consistent with all such requirements. g. The members of the Teachers' Pension and Annuity Fund are serving or have served

as teachers, educators, and administrators in the schools of this State and are eligible

members of the retirement system, and contributing the Lottery Enterprise for their

benefit pursuant to this act constitutes State aid for education within the meaning

of Article IV, Section VII, paragraph 2 of the State Constitution . h. Some of the members of the Public Employees' Retirement System are serving or have

served as employees of State institutions defined in R.S.30:1-7 , but excluding adult or juvenile correctional facilities or institutions, or are

serving or have served as employees of public institutions of higher education, and

are eligible members of the retirement system, and contributing the Lottery Enterprise

for their benefit pursuant to this act constitutes support for State institutions

and State aid for education within the meaning of Article IV, Section VII, paragraph 2 of the State Constitution . i. Some of the members of the Police and Firemen's Retirement System are serving or

have served as employees of State institutions defined in R.S.30:1-7 , but excluding adult or juvenile correctional facilities or institutions, or are

serving or have served as employees of public institutions of higher education, and

are eligible members of the retirement system, and contributing the Lottery Enterprise

for their benefit pursuant to this act constitutes support for State institutions

and State aid for education within the meaning of Article IV, Section VII, paragraph 2 of the State Constitution . j. The New Jersey Supreme Court has recognized the compelling need for action to solve

the tenuous state of New Jersey's pension funding, observing that “the State must

get its financial house in order.” k. The New Jersey Pension and Health Benefit Study Commission emphasized the dire

condition of the public employee pension systems, which continues to be a matter of

grave concern for public employees, retirees, their families, and all of the residents

of this State. The commission found that “by any measure, the amount of the unfunded liability

is grievous.” l . The contribution of the Lottery Enterprise to the retirement systems pursuant to

and in the manner contemplated by this act is in the public interest in alleviating

the underfunded status of such retirement systems. m. The State, pursuant to a competitive process, engaged an independent valuation

service provider to conduct a review and due diligence of the Lottery Enterprise,

including its cash flows, operating history, legal structure, and projections, and

the independent valuation service provider issued a report which represents its opinion

as to the valuation of the Lottery Enterprise. n. The allocable percentages established in section 5 of this act were determined

based on: (1) the relative percentages of the total actuarial accrued liabilities

of the retirement systems; (2) the relative percentages of the total actuarial accrued

liabilities of the eligible member portions of such retirement systems; (3) the relative

percentages of the total unfunded actuarially accrued liabilities of the retirement

systems; (4) the relative percentages of the total unfunded actuarially accrued liabilities

of the eligible member portions of such retirement systems; (5) the relative percentages

of the total number of members in each retirement system; and (6) the relative percentages

of eligible members participating in each such retirement system. o . Following the lottery contribution, the Division of the State Lottery will operate,

manage, conduct, and control the Lottery Enterprise with a goal of maximizing net

proceeds for the benefit of the retirement systems, consonant with the dignity of

the State and general welfare of its people.