SECTION 1. There shall be a special commission established for the purpose of making an examination and study relative to the distribution of lottery revenues to municipalities in the commonwealth. The commission shall consist of the following members: the governor, or a designee, who shall serve as chair; the executive director of the state lottery commission, or a designee; 2 members of the house of representatives, 1 of whom shall be appointed by the speaker and 1 of whom shall be appointed by the minority leader; 2 members of the senate, 1 of whom shall be appointed by the senate president and 1 of whom shall be appointed by the minority leader; 1 representative of the Massachusetts Municipal Association; and 11 persons to be appointed by the governor, 1 of whom shall be a mayor of a city in the commonwealth, 1 of whom shall be a select board member from a town in the commonwealth, 1 of whom shall be municipal finance officer, 1 of whom shall be a member of a municipality’s legislative body such as a city councilor, town councilor or town meeting member, 1 of whom shall be a representative from the Massachusetts council on gaming and health, 1 of whom shall be a member of the lottery commission, 1 of whom shall be a representative of the New England Convenience Store and Energy Marketers Association, Inc., 1 of whom shall be a representative from the Retailers Association of Massachusetts, Inc., 1 of whom shall be representative of SEIU local 888, 1 of whom shall be a representative operating as a licensed sales agent in a brick and mortar retail store in the commonwealth, and 1 of whom shall be a representative of the Massachusetts Restaurant Association, Inc.

 SECTION 2. The commission shall examine the current distribution of lottery revenues and provide recommendations to improve distributional equity of lottery revenues. 

 The commission’s examination shall include an analysis of:

 the current distribution’s equity by (i) geographic region, (ii) by the size and density of a municipality from rural to urban, (iii) municipality’s median household income and other economic variables, (iv) status of a municipality’s being a Gateway City versus not a Gateway City and (v) other demographic variables that the commission deems of interest;

 to what extent the current distribution mechanism distributes lottery revenues to municipalities in proportion to municipality’s residents’ spending on lottery;

 whether the formula equitably reflects the needs of municipalities based on (i) population, (ii) income levels, (iii) property tax base, (iv) reliance on state aid; and (v) other relevant factors; and

 the impact of lottery revenue distribution on local budgeting and public services;

 The commission’s recommendations shall include:

 (1) whether a specific formula should be established for distribution of lottery revenues to municipalities, notwithstanding how unrestricted general government aid is distributed pursuant to section 18C of chapter 58 of the General Laws, to enhance regional and economic equity; and

 (2) whether such a proposed distribution formula should: (i) apportion state lottery revenue to cities and towns proportionate to lottery sales in those cities and towns; (ii) establish a minimum distribution of lottery revenues to municipalities based on each municipality’s residents’ spending on lottery; and (iii) establish a maximum distribution of lottery revenues to municipalities based on each municipality’s residents’ spending on lottery, including whether a municipality without lottery ticket sale licensees, pursuant to section 27 of chapter 10 of the General Laws, shall receive any distribution of lottery revenues.

 SECTION 3. Not later than December 31, 2027, the commission shall report to the office of the state treasurer and receiver general and the general court’s joint committee on municipalities and regional government and the joint committee on revenue, the result of its examination and recommendations, together with drafts of legislation necessary to carry its recommendations into effect.