COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 567
(By Senator Bowman)
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[Originating in the Committee on the Judiciary;
reported April 4, 2001.]
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A BILL to amend and reenact sections five and eighteen, article
twenty-two, chapter twenty-nine of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all relating
to the state lottery commission's power to enter into
international lottery agreements; and creating prize payment
bank account.
Be it enacted by the Legislature of West Virginia:
That sections five and eighteen, article twenty-two, chapter
twenty-nine of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted, all to read as
follows:
ARTICLE 22. STATE LOTTERY ACT.
§29-22-5. State lottery commission; powers and duties; cooperation
of other agencies.
(a) The commission shall have the authority to:
(1) Promulgate rules in accordance with chapter twenty-nine-a
of this code: Provided, That those rules promulgated by the
commission that are necessary to begin the lottery games selected
shall be exempted from the provisions of chapter twenty-nine-a of
this code in order that the selected games may commence as soon as
possible;
(2) Establish rules for conducting lottery games, a manner of
selecting the winning tickets and manner of payment of prizes to
the holders of winning tickets;
(3) Select the type and number of public gaming systems or
games, to be played in accordance with the provisions of this
article;
(4) Contract, if deemed desirable, with the educational
broadcasting authority to provide services through its microwave
interconnection system to make available to public broadcasting
stations servicing this state and, at no charge, for rebroadcast to
commercial broadcasting stations within this state, any public
gaming system or games drawing;
(5) Enter into interstate and international lottery agreements
with other states or foreign countries, or any combination of one
or more states and one or more foreign countries;
(6) Adopt an official seal;
(7) Maintain a principal office and, if necessary, regional
suboffices at locations properly designated or provided;
(8) Prescribe a schedule of fees and charges;
(9) Sue and be sued;
(10) Lease, rent, acquire, purchase, own, hold, construct,
equip, maintain, operate, sell, encumber and assign rights of any
property, real or personal, consistent with the objectives of the
commission as set forth in this article;
(11) Designate one of the deputy directors to serve as acting
director during the absence of the director;
(12) Hold hearings on any matter of concern to the commission
relating to the lottery, subpoena witnesses, administer oaths, take
testimony, require the production of evidence and documentary
evidence and designate hearing examiners and employees to so act;
and
(13) To make and enter into all agreements and do all acts
necessary or incidental to the performance of its duties and the
exercise of its powers under this article.
(b) Departments, boards, commissions or other agencies of this
state shall provide assistance to the state lottery office upon the
request of the director.
(c) Upon the request of the deputy director for the security
and licensing division in conjunction with the director, the attorney general, department of public safety and all other law-
enforcement agencies shall furnish to the director and the deputy
director such information as may tend to assure the security,
honesty, fairness and integrity in the operation and administration
of the lottery as they may have in their possession, including, but
not limited to, manual or computerized information and data. The
director is to designate such employees of the security and
licensing division as may be necessary to act as enforcement
agents. Such agents are authorized to investigate complaints made
to the commission or the state lottery office concerning possible
violation of the provisions of this article and determine whether
to recommend criminal prosecution. If it is determined that action
is necessary, an agent, after approval of the director, is to make
such recommendation to the prosecuting attorney in the county
wherein the violation occurred or to any appropriate law-
enforcement agency.
§29-22-18. State lottery fund; appropriations and deposits; not part
of general revenue; no transfer of state funds after initial
appropriation; use and repayment of initial appropriation;
allocation of fund for prizes, net profit and expenses; surplus;
state
lottery education fund; state lottery senior citizens
fund; allocation and appropriation of net profits.
(a) There is hereby continued a special fund in the state
treasury which shall be designated and known as the "state lottery
fund." The fund shall consist consists of all appropriations to the
fund and all interest earned from investment of the fund, and any
gifts, grants or contributions received by the fund. All revenues
received from the sale of lottery tickets, materials and games shall
be deposited with the state treasurer and placed into the "state
lottery fund." The revenue shall be disbursed in the manner provided
in this section for the purposes stated in this section and shall may
not be treated by the auditor and treasurer as part of the general
revenue of the state.
(b) No appropriation, loan or other transfer of state funds
shall may be made to the commission or lottery fund after the initial
appropriation.
(c) A minimum annual average of forty-five percent of the gross
amount received from each lottery shall be allocated and disbursed as
prizes. The amounts necessary to meet the commission's prize
expenses shall be paid from the state lottery fund to the commission
to be deposited by the commission in a banking institution of its
choice in a special account to be known as "West Virginia Lottery
Prize Account". The purpose of the account is to create payment
checks to exchange for winning lottery tickets.
(d) Not more than fifteen percent of the gross amount received
from each lottery shall may be allocated to and may be disbursed as
necessary for fund operation and administration expenses.
(e) The excess of the aggregate of the gross amount received
from all lotteries over the sum of the amounts allocated by
subsections (c) and (d) of this section shall be allocated as net
profit. In the event that the percentage allotted for operations and
administration generates a surplus, the surplus shall be allowed to
accumulate to an amount not to exceed two hundred fifty thousand
dollars. On a monthly basis the director shall report to the joint
committee on government and finance of the Legislature any surplus in
excess of two hundred fifty thousand dollars and remit to the state
treasurer the entire amount of those surplus funds in excess of two
hundred fifty thousand dollars which shall be allocated as net
profit.
(f) After first satisfying the requirements for funds dedicated
to the school building debt service fund in subsection (h) of this
section to retire the ten-year bonds authorized to be issued pursuant
to section eight, article nine-d, chapter eighteen of this code and
then satisfying the requirements for funds dedicated to the
education, arts, sciences and tourism debt service fund in subsection
(i) of this section to retire the bonds authorized to be issued
pursuant to section eleven-a, article six, chapter five of this code, the Legislature shall annually appropriate all of the remaining
amounts allocated as net profits in subsection (e) of this section,
in such proportions as it considers beneficial to the citizens of
this state, to: (1) The lottery education fund created in subsection
(g) of this section; (2) the school construction fund as created in
section six, article nine-d, chapter eighteen of this code; (3) the
lottery senior citizens fund created in subsection (j) of this
section; and (4) the division of natural resources created in section
four, article five, chapter twenty of this code and the West Virginia
development office as created by section one, article two, chapter
five-b of this code in accordance with subsection (k) of this
section. No transfer to any account other than the school building
debt service account and the education, arts, sciences and tourism
debt service fund may be made in any period of time in which a
default exists in respect to debt service on bonds issued by the
school building authority and the state building commission which are
secured by lottery proceeds. No additional transfer shall may be
made to any account other than the school building debt service
account and the education, arts, sciences and tourism debt service
fund when net profits for the preceding twelve
months are not at
least equal to one hundred fifty percent of debt service on bonds
issued by the school building authority and the state building
commission which are secured by net profits.
(g) There is hereby continued a special fund in the state
treasury which shall may be designated and known as the "lottery
education fund". The fund shall consist of the amounts allocated
pursuant to subsection (f) of this section, which shall be deposited
into the lottery education fund by the state treasurer. The lottery
education fund shall also consist of all interest earned from
investment of the lottery education fund, and any other
appropriations, gifts, grants, contributions or moneys received by
the lottery education fund from any source. The revenues received or
earned by the lottery education fund shall be disbursed in the manner
provided below and shall may not be treated by the auditor and
treasurer as part of the general revenue of the state. Annually, the
Legislature shall appropriate the revenues received or earned by the
lottery education fund to the state system of public and higher
education for such educational programs as it considers beneficial to
the citizens of this state.
(h) On or before the twenty-eighth day of each month through the
twentieth day of June, two thousand five, the lottery director shall
allocate to the school building debt service fund created pursuant to
the provisions of section six, article nine-d, chapter eighteen of
this code, as a first priority from the net profits of the lottery
for the preceding month, an amount equal to one tenth of the
projected annual principal, interest and coverage ratio requirements on any and all revenue bonds and refunding bonds issued, or to be
issued, on or after the first day of April, one thousand nine hundred
ninety-four, as certified to the lottery director in accordance with
the provisions of section six, article nine-d, chapter eighteen of
this code. In no event may the monthly amount exceed one million
eight hundred thousand dollars, nor shall may the total allocation of
the net profits to be paid into the school building debt service
fund, as provided in this section, in any fiscal year exceed the
lesser of the principal and interest requirements certified to the
lottery director or eighteen million dollars. In the event there are
insufficient funds available in any month to transfer the amount
required to be transferred pursuant to this subsection to the school
debt service fund, the deficiency shall be added to the amount
transferred in the next succeeding month in which revenues are
available to transfer the deficiency. A lien on the proceeds of the
state lottery fund up to a maximum amount equal to the projected
annual principal, interest and coverage ratio requirements, not to
exceed twenty-seven million dollars annually, may be granted by the
authority in favor of the bonds issued by the authority which are
secured by the net profits.
When the school improvement bonds, secured by profits from the
lottery and deposited in the school debt service fund, mature, the
lottery director shall allocate monthly, from the net profits of the lottery for the preceding month, an amount equal to one million
five hundred thousand dollars into the school construction fund
created pursuant to the provisions of section six, article nine-d,
chapter eighteen of this code.
(i) Beginning on or before the twenty-eighth day of each
month, July, one thousand nine hundred ninety-six, and continuing
on or before the twenty-eighth day of each succeeding month
thereafter through the twenty-eighth day of June, two thousand
twenty-one, the lottery director shall allocate to the education,
arts, sciences and tourism debt service fund created pursuant to
the provisions of section eleven-a, article six, chapter five of
this code as a second priority from the net profits of the lottery
for the preceding month, an amount equal to one tenth of the
projected annual principal, interest and coverage ratio
requirements on any and all revenue bonds and refunding bonds
issued, or to be issued, on or after the first day of April, one
thousand nine hundred ninety-six, as certified to the lottery
director in accordance with the provisions of that section. In no
event shall may the
monthly amount allocated exceed one million
dollars nor shall may the total allocation paid into the education,
arts, sciences and tourism debt service fund, as provided in this
section, in any fiscal year exceed the lesser of the principal and
interest requirements certified to the lottery director or ten million dollars. In the event there are insufficient funds
available in any month to transfer the amount required pursuant to
this subsection to the education, arts, sciences and tourism debt
service fund, the deficiency shall be added to the amount
transferred in the next succeeding month in which revenues are
available to transfer the deficiency. A second-in-priority lien on
the proceeds of the state lottery fund up to a maximum amount equal
to the projected annual principal, interest and coverage ratio
requirements, not to exceed fifteen million dollars annually, may
be granted by the state building commission in favor of the bonds
it issues which are secured by the net lottery profits.
(j) There is hereby continued a special revenue fund in the
state treasury which shall be designated and known as the lottery
senior citizens fund. The fund shall consist of the amounts
allocated pursuant to subsection (f) of this section which amounts
shall be deposited into the lottery senior citizens fund by the state
treasurer. The lottery senior citizens fund shall also consist of
all interest earned from investment of the lottery senior citizens
fund and any other appropriations, gifts, grants, contributions or
moneys received by the lottery senior citizens fund from any source.
The revenues received or earned by the lottery senior citizens fund
shall be disbursed in the manner provided below and shall may not be
treated by the auditor or treasurer as part of the general revenue of the state. Annually, the Legislature shall appropriate the revenues
received or earned by the lottery senior citizens fund to such senior
citizens medical care and other programs as it considers beneficial
to the citizens of this state.
(k) The division of natural resources and the West Virginia
development office, as appropriated by the Legislature, may use the
amounts allocated to it pursuant to subsection (f) of this section
for one or more of the following purposes: (1) The payment of any or
all costs incurred in the development, construction, reconstruction,
maintenance or repair of any project or recreational facility, as
these terms are defined in section four, article five, chapter twenty
of this code, pursuant to the authority granted to it under article
five, chapter twenty of this code; (2) the payment, funding or
refunding of the principal of, interest on or redemption premiums on
any bonds, security interests or notes issued by the parks and
recreation section of the division of natural resources under article
five, chapter twenty of this code; or (3) the payment of any
advertising and marketing expenses for the promotion and development
of tourism or any tourist facility or attraction in this state.
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(NOTE: The purpose of this bill is to allow the lottery
commission to create its own checking account to pay lottery prizes.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)
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