SENATE STATE GOVERNMENT, WAGERING, TOURISM & HISTORIC PRESERVATION COMMITTEE

STATEMENT TO

SENATE, No. 4122

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 19, 2025

      The Senate State Government, Wagering, Tourism & Historic Preservation Committee reports favorably and with committee amendments Senate Bill No. 4122.

      As amended by the committee, this bill revises the apportionment of State lottery contributions.

      Under current law, the State lottery contributions made pursuant to the Lottery Enterprise Contribution Act require a minimum of 30 percent of the proceeds accruing from the sale of lottery tickets or shares to be dedicated to the Common Pension Fund L investment account established by the Lottery Enterprise Contribution Act.

      This bill, as amended by the committee, revises the apportionment of State lottery contributions to require a minimum of 27 percent of the proceeds accruing from the sale of lottery tickets or shares to be dedicated to the Common Pension Fund L investment account, commencing with State Fiscal Year 2026.  State Fiscal Year 2026 begins on July 1, 2025 and ends on June 30, 2026.

      The bill designates State Fiscal Year 2025, which began on July 1, 2024 and ends on June 30, 2025, as the “base fiscal year” for means of assessing changes in contributions made to the Common Pension Fund L by the State Lottery.

      Commencing with the fourth fiscal year following the base fiscal year, if the average annual total sales of lottery tickets or shares and the total revenues accruing from the sale of lottery tickets or shares of the three consecutive fiscal years are equal to or greater than those figures from the base fiscal year, then the apportionment of State lottery contributions to Common Pension Fund L will remain at a minimum of 27 percent of the proceeds accruing from the sale of lottery tickets or shares.  If the average annual total sales of lottery tickets or shares and the total revenues accruing from the sale of lottery tickets or shares of the three consecutive fiscal years are less than those figures from the base fiscal year, then the apportionment of State lottery contributions to Common Pension Fund L will revert to a minimum of 30 percent of the proceeds accruing from the sale of lottery tickets or shares. 

      However, under the bill, as amended, commencing with the fourth fiscal year following the base fiscal year, if, at any time, the required dedications to Common Pension Fund L have been decreased to 27 percent of the proceeds accruing from the sale of lottery tickets or shares, and the State fails to make the full annual required contribution for the benefit of retirement systems as recommended in the annual actuarial valuations of the retirement systems, then the Director of the Division of the State Lottery will procure and conduct a third party review of the apportionment of proceeds to evaluate the effect of reducing the required dedications.  If that review determines that the reduction from 30 percent to 27 percent has not resulted in higher transfers to Common Pension Fund L, then the required dedications to Common Pension Fund L will be permanently reverted to not less than 30 percent of the proceeds accruing from the sale of lottery tickets or shares.  The reversion will become effective in the second fiscal year following the fiscal year containing the shortfall and no further reviews will be conducted in subsequent fiscal years if the reversion occurs.

COMMITTEE AMENDMENTS:

      The committee amendments revise the minimum contributions from the State Lottery to the Common Pension Fund L from 25 percent of proceeds from the sale of lottery tickets or shares to 27 percent.  The amendments also make the lower contribution requirements effective for State Fiscal Year 2026, so that the lower rate will apply beginning July 1, 2025.  The “base fiscal year” will be State Fiscal Year 2025, which began on July 1, 2024 and ends on June 30, 2025.

      The committee amendments also require that, commencing with the fourth fiscal year following the base fiscal year, if, at any time, the required dedications to Common Pension Fund L have been decreased to 27 percent of the proceeds accruing from the sale of lottery tickets or shares, and the State fails to make the full annual required contribution for the benefit of retirement systems as recommended in the annual actuarial valuations of the retirement systems, then the Director of the Division of the State Lottery will conduct a third party review of the apportionment of proceeds to evaluate the effect of reducing the required dedications.  If that review determines that the reduction from 30 percent to 27 percent has not resulted in higher transfers to Common Pension Fund L, then the required dedications will be permanently reverted to not less than 30 percent.