Senate Bill No. 597
(By Senator Snyder)
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[Introduced February 17, 2003; referred to the Committee on
Economic Development; and then to the Committee on Finance.]
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A BILL to amend and reenact section eighteen-a, article twenty-two,
chapter twenty-nine of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to excess
lottery funds; requiring that said funds set aside for
economic development grants be appropriated by the
Legislature; and striking out provisions for an economic
development grant committee.
Be it enacted by the Legislature of West Virginia:
That section eighteen-a, article twenty-two, chapter
twenty-nine of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted to read as
follows:
ARTICLE 22. STATE LOTTERY ACT.
§29-22-18a. State excess lottery revenue fund.
(a) There is hereby created a special revenue fund within the state lottery fund in the state treasury which shall be designated
and known as the "state excess lottery revenue fund." The fund
shall consist 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 under
the provisions of sections ten-b and ten-c, article twenty-two-a of
this chapter and under article twenty-two-b of this chapter, except
the amounts due the commission under section 29-22B-1408(a)(1)
subdivision (1), subsection (a), section one thousand four hundred
eight, article twenty-two-b of this chapter shall be deposited in
the state treasury and placed into the "state excess lottery
revenue 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 or the state
treasurer as part of the general revenue of the state.
(b) For the fiscal year beginning the first day of July, two
thousand one, the moneys of the fund established in this section
shall be used for the purpose of subsidizing salary increases and
associated employee benefits paid from the state general revenue
fund as determined by the secretary of administration effective the
first day of July, two thousand one or thereafter, including, but
not limited to, the salary increase for teachers provided in
section two, article four, chapter eighteen-a of this code, by
enactment of the Legislature in two thousand one; the salary increase for members of the state police provided in section five,
article two, chapter fifteen of this code by enactment of the
Legislature in two thousand one; and general salary increases for
state employees: Provided, That effective the first day of
October, two thousand one, the full year salary increases for state
employees other than correctional officers and members of the state
police equal seven hundred fifty-six dollars for each full-time
employee: Provided, however, That effective the first day of July,
two thousand one, the full year salary increases for uniformed
correctional officers equal two thousand dollars for each full-time
employee; and that the full year salary increases for non-uniformed
correctional staff, whose core duties include contact with inmates
or juvenile detainees on a regular and frequent basis, equal one
thousand two hundred fifty dollars for each full-time employee; but
that for all other division of correction and division of juvenile
services employees, the full year salary increase equals seven
hundred fifty-six dollars for each full-time employee. Until the
thirtieth day of June, two thousand two, the lottery commission
shall, upon direction from the governor, transfer the moneys of the
account to the state general revenue fund in the amounts specified
in the governor's official revenue estimates to subsidize the
funding of the salary increases described in this subsection.
Beginning the first day of July, two thousand two, and thereafter,
the transfer authority granted by this subsection is terminated. After first satisfying the funding requirements directed by this
subsection, the moneys remaining in the fund shall be disbursed in
the manner provided by subsection (c) of this section.
(c) For the fiscal year beginning the first day of July, two
thousand one, the commission shall deposit: (1) Five million five
hundred thousand dollars into the account hereby created in the
state treasury to be known as the "education improvement fund" for
appropriation by the Legislature to the "promise scholarship fund"
created in section seven, article seven, chapter eighteen-c of this
code; (2) twenty-five million dollars to the school building debt
service fund created in section six, article nine-d, chapter
eighteen of this code for the issuance of revenue bonds; (3)
twenty-five million dollars in the West Virginia infrastructure
fund created in section nine, article fifteen-a, chapter thirty-one
of this code to be spent in accordance with the provisions of that
article; (4) ten million dollars into a separate account within the
state lottery fund to be known as the higher education improvement
fund for higher education; and (5) nine million dollars into a
separate account within the state lottery fund to be known as the
state park improvement fund for park improvements. For the fiscal
year beginning the first day of July, two thousand two, the
commission shall deposit: (1) Sixty-five million dollars into the
subaccount of the state excess lottery revenue fund hereby created
in the state treasury to be known as the "general purpose account" to be expended pursuant to appropriation of the Legislature; (2)
ten million dollars into the education improvement fund for
appropriation by the Legislature to the "promise scholarship fund"
created in section seven, article seven, chapter eighteen-c of this
code; (3) nineteen million dollars into the economic development
project fund created in subsection (d) of this section, for the
issuance of revenue bonds and to be spent in accordance with the
provisions of said subsection; (4) twenty million dollars to the
school building debt service fund created in section six, article
nine-d, chapter eighteen of this code for the issuance of revenue
bonds; (5) forty million dollars in the West Virginia
infrastructure fund created in section nine, article fifteen-a,
chapter thirty-one of this code to be spent in accordance with the
provisions of that article; (6) ten million dollars into the higher
education improvement fund for higher education; and (7) five
million dollars into the state park improvement fund for park
improvements. For the fiscal year beginning the first day of July,
two thousand three, the commission shall deposit: (1) Sixty-five
million dollars into the general purpose account to be expended
pursuant to appropriation of the Legislature; (2) seventeen million
dollars into the education improvement fund for appropriation by
the Legislature to the "promise scholarship fund" created in
section seven, article seven, chapter eighteen-c of this code; (3)
nineteen million dollars into the economic development project fund created in subsection (d) of this section, for the issuance of
revenue bonds and to be spent in accordance with the provisions of
said subsection; (4) twenty million dollars to the school building
debt service fund created in section six, article nine-d, chapter
eighteen of this code for the issuance of revenue bonds; (5) forty
million dollars in the West Virginia infrastructure fund created in
section nine, article fifteen-a, chapter thirty-one of this code to
be spent in accordance with the provisions of that article; (6) ten
million dollars into the higher education improvement fund for
higher education; and (7) five million dollars into the state park
improvement fund for park improvements. For the fiscal year
beginning the first day of July, two thousand four, and subsequent
fiscal years, the commission shall deposit: (1) Sixty-five million
dollars into the general purpose account to be expended pursuant to
appropriation of the Legislature; (2) twenty-seven million dollars
into the education improvement fund for appropriation by the
Legislature to the "promise scholarship fund" created in section
seven, article seven, chapter eighteen-c of this code; (3) nineteen
million dollars into the economic development project fund created
in subsection (d) of this section, for the issuance of revenue
bonds and to be spent in accordance with the provisions of said
subsection; (4) nineteen million dollars to the school building
debt service fund created in section six, article nine-d, chapter
eighteen of this code for the issuance of revenue bonds; (5) forty million dollars in the West Virginia infrastructure fund created in
section nine, article fifteen-a, chapter thirty-one of this code to
be spent in accordance with the provisions of that article; (6) ten
million dollars into the higher education improvement fund for
higher education; and (7) five million dollars into the state park
improvement fund for park improvements. No portion of the
distributions made as provided in subsection (c) of this section
except distributions made in connection with bonds issued under
subsection (d) of this section, may be used to pay debt service on
bonded indebtedness until after the Legislature expressly
authorizes issuance of the bonds and payment of debt service on the
bonds through statutory enactment or the passage of a concurrent
resolution by both houses of the Legislature. Until subsequent
legislative enactment or adoption of a resolution that expressly
authorizes issuance of the bonds and payment of debt service on the
bonds with funds distributed under this subsection, (c) of this
section, except distributions made in connection with bonds issued
under subsection (d) of this section, the distributions may be used
only to fund capital improvements that are not financed by bonds
and only pursuant to appropriation of the Legislature.
(d) The Legislature finds and declares that in order to
attract new business, commerce and industry to this state, to
retain existing business and industry providing the citizens of
this state with economic security and to advance the business prosperity of this state and the economic welfare of the citizens
of this state, it is necessary to provide public financial support
for constructing, equipping, improving and maintaining economic
development projects, capital improvement projects and
infrastructure which promote economic development in this state.
(1) The West Virginia economic development authority created
and provided for in article fifteen, chapter thirty-one of this
code, shall, by resolution, in accordance with the provisions of
this article, and article fifteen, chapter thirty-one of this code,
and upon direction of the governor, issue revenue bonds of the
economic development authority in no more than two series to pay
for all or a portion of the cost of constructing, equipping,
improving or maintaining projects under this section or to refund
the bonds, at the discretion of the authority. Any revenue bonds
issued on or after the first day of July, two thousand two, which
are secured by state excess lottery revenue proceeds shall mature
at a time or times not exceeding thirty years from their respective
dates. The principal of, and the interest and redemption premium,
if any, on the bonds shall be payable solely from the special fund
provided in this section for the payment.
(2) There is hereby created in the state treasury a special
revenue fund named the "economic development project fund" into
which shall be deposited on and after the first day of July, two
thousand two, the amounts to be deposited in said fund as specified in subsection (c), section eighteen-a of this article. The
economic development project fund shall consist of all such moneys,
all appropriations to the fund, all interest earned from investment
of the fund, and any gifts, grants or contributions received by the
fund. All amounts deposited in the fund shall be pledged to the
repayment of the principal, interest and redemption premium, if
any, on any revenue bonds or refunding revenue bonds authorized by
this section, including any and all commercially customary and
reasonable costs and expenses which may be incurred in connection
with the issuance, refunding, redemption or defeasance thereof.
The West Virginia economic development authority may further
provide in the resolution and in the trust agreement for priorities
on the revenues paid into the economic development project fund as
may be necessary for the protection of the prior rights of the
holders of bonds issued at different times under the provisions of
this section. The bonds issued pursuant to this section shall be
separate from all other bonds which may be or have been issued from
time to time under the provisions of this article.
After the West Virginia economic development authority has
issued bonds authorized by this section, and after the requirements
of all funds have been satisfied, including any coverage and
reserve funds established in connection with the bonds issued
pursuant to this section, any balance remaining in the economic
development project fund may be used for the redemption of any of the outstanding bonds issued under this section which, by their
terms, are then redeemable or for the purchase of the outstanding
bonds at the market price, but not to exceed the price, if any, at
which redeemable, and all bonds redeemed or purchased shall be
immediately canceled and shall not again be issued.
(3) The West Virginia economic development authority shall
expend the bond proceeds from the revenue bond issues authorized
and directed by this section of this code for such projects as may
be certified under the provision of this subsection: only as
appropriated by the Legislature: Provided, That the bond proceeds
shall be expended in accordance with the requirements and
provisions of article five-a, chapter twenty-one of this code and
either article twenty-two or article twenty-two-a, chapter five of
this code, as the case may be: Provided, however, That if such
bond proceeds are expended pursuant to article twenty-two-a,
chapter five of this code, and if the design-build board created
under said article determines that the execution of a design-build
contract in connection with a project is appropriate pursuant to
the criteria set forth in said article, and that a competitive
bidding process was used in selecting the design builder and
awarding such contract, such determination shall be conclusive for
all purposes and shall be deemed to satisfy all the requirements of
said article. For the purpose of certifying the projects that will
receive funds from the bond proceeds, a committee is hereby established and comprised of the governor, or his or her designee,
the secretary of the department of tax and revenue, the executive
director of the West Virginia development office, three persons
appointed by the governor from a list of five names to be submitted
to the governor by the president of the West Virginia Senate, and
three persons appointed by the governor from a list of five names
to be submitted to the governor by the speaker of the West Virginia
House of Delegates. The committee shall meet as often as necessary
and take recommendations from any source whatever regarding
possible projects to be funded, in whole or in part, and make
certifications, from bond proceeds in accordance with this
subsection. The committee shall meet within thirty days of the
effective date of this section. Prior to making each
certification, the committee shall conduct at least one public
hearing, which may be held outside of Kanawha County. Notice of
the time, place, date and purpose of the hearing shall be published
in at least one newspaper in each of the three congressional
districts at least fourteen days prior to the date of the public
hearing. Prior to the issuance of bonds under this subsection,
the committee shall certify to the economic development authority
a list of those projects that will receive funds from the proceeds
of the bonds. Once certified, the list may not thereafter be
altered or amended other than by legislative enactment.
(e) If the commission receives revenues in an amount that is not sufficient to fully comply with the requirements of subsections
(c) and (h) of this section, the commission shall first make the
distribution to the economic development project fund, second, make
the distribution or distributions to the other funds from which
debt service is to be paid, third, make the distribution to the
education improvement fund for appropriation by the Legislature to
the promise scholarship fund, and fourth, make the distribution to
the general purpose account: Provided, That, subject to the
foregoing, to the extent such revenues are not pledged in support
of revenue bonds which are or may be issued from time to time under
this section, the aforesaid revenues shall be distributed on a pro
rata basis.
(f) For the fiscal year beginning on the first day of July,
two thousand two, and each fiscal year thereafter, the commission
shall, after meeting the requirements of subsections (c) and (h) of
this section, and after transferring to the state lottery fund
created under section eighteen of this article, an amount equal to
any transfer from the state lottery fund to the excess lottery fund
pursuant to subsection (f) of said section, deposit fifty percent
of the amount by which annual gross revenue deposited in the state
excess lottery revenue fund exceeds two hundred twenty-five million
dollars in a fiscal year in a separate account in the state lottery
fund to be available for appropriation by the Legislature.
(g) When bonds are issued for projects under subsection (d) of this section or for the school building authority, infrastructure,
higher education or park improvement purposes described in this
section that are secured by profits from lotteries deposited in the
state excess lottery revenue fund, the lottery director shall
allocate first, to the economic development project fund an amount
equal to one tenth of the projected annual principal, interest and
coverage requirements on any and all revenue bonds issued, or to be
issued, on or after the first day of July, two thousand two, as
certified to the lottery director, and second, to the fund or funds
from which debt service is paid on bonds issued under this section
for the school building authority, infrastructure, higher education
and park improvements an amount equal to one tenth of the projected
annual principal, interest and coverage requirements on any and all
revenue bonds issued, or to be issued, on or after the first day of
April, two thousand two, as certified to the lottery director. In
the event there are insufficient funds available in any month to
transfer the amounts required pursuant to this subsection, the
deficiency shall be added to the amount transferred in the next
succeeding month in which revenues are available to transfer the
deficiency.
(h) In fiscal year two thousand four, and thereafter, prior to
the distributions provided in subsection (c) of this section, the
lottery commission shall deposit into the general revenue fund
amounts necessary to provide reimbursement for the refundable credit allowable under section twenty-one, article twenty-one,
chapter eleven of this code.
(i) (1) The Legislature considers the following as priorities
in the expenditure of any surplus revenue funds:
(A) Providing salary and/or increment increases for
professional educators and public employees;
(B) Providing adequate funding for the public employees
insurance agency; and
(C) Providing funding to help address the shortage of
qualified teachers and substitutes in areas of need, both in number
of teachers and in subject matters areas.
(2) The provisions of this subsection may not be construed by
any court to require any appropriation or any specific
appropriation or level of funding for the purposes set forth in
this subsection.
(j) The Legislature further directs the governor to focus
resources on the creation of a prescription drug program for senior
citizens by pursuing a medicaid waiver to offer prescription drug
services to senior citizens; by investigating the establishment of
purchasing agreements with other entities to reduce costs; by
providing discount prices or rebate programs for seniors; by
coordinating programs offered by pharmaceutical manufacturers that
provide reduced cost or free drugs; by coordinating a collaborative
effort among all state agencies to ensure the most efficient and cost effective program possible for the senior citizens of this
state; and by working closely with the state's congressional
delegation to ensure that a national program is implemented. The
Legislature further directs that the governor report his progress
back to the joint committee on government and finance on an annual
basis beginning in November of the year two thousand one, until a
comprehensive program has been fully implemented.
NOTE: The purpose of this bill is to delete statutory
reference to the Economic Development Grant Committee and require
that excess lottery funds set aside for the purpose of funding
economic development projects be appropriated by the Legislature.
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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