FISCAL NOTE
Date Requested: January 25, 2023
Time Requested: 03:50 PM |
| Agency: |
Lottery Commission, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2927 |
Introduced |
HB3031 |
|
|---|
| CBD Subject: |
Crime |
|---|
|
FUND(S):
State Excess Lottery Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Revenue, Decreases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
There are logistical/technical issues with HB 3031 (specifically with changes made to the Racetrack Video Lottery Act), which in its current form, will render it ineffective in distributing all Lottery RVL revenue. Those issues will be detailed below. Assuming these technical issues are resolved, the Lottery projects an increase of new revenue to the State Excess Lottery Fund of $9.2 million annually. Additionally, HB 3031 will free up approximately $8 million annually for appropriation and $800,000 annually of surplus appropriation that can be used by the legislature for various purposes. The technical issues are as follows:
1) HB 3031 proposes to add the following language to current 29-22A-10(b)(1): "Provided, that the commission shall transfer 15% of the amount deducted, generated from racetrack video lottery at licensed thoroughbred racetracks, to the West Virginia Racing Commission's General Administrative Account created in 19-23-11 of this code." This language does not allow the 15% transfer to the racing commission to be considered "actual costs and expenses" for the purposes of calculating surplus revenue, as lines 21 through 23 (P. 49) do with respect to the Modernization fund. Language such as "The 15% transfer by the commission will be considered actual costs and expenses of the amount deducted and transferred" will need to be added after the proposed addition in 29-22A-10(b)(1) to allow for the proper administration of funds and capture of surplus revenues.
2) HB 3031 proposes to strike provisions 29-22A-10(c)(9)(A) and (B). However, striking such language results in the Lottery Commission being unable to distribute 7% of NTI. To capture the 7% and ensure the result of its distribution is consistent with current day distribution, (9)(A) should be amended as follows, "(9)(A) On and after July 1, 2005, seven percent of net terminal income shall be deposited ... into a special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;" All other language than appears above can be stricken from sections (9)(A) and (B).
3) The revision set forth in #2, above, will need to be made to 29-22A-10b(a)(9)(A) and (B) to restore the distribution of 4% of NTI in such sections also. So the language would be as follows: "(9)(A) On and after July 1, 2005, four percent of net terminal income shall be deposited ... into a special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;" All other language than appears can be stricken from sections (9)(A) and (B).
4) 29-22A-10(c)(2)(pg 50, lines 58-61) and 29-22A-10b(a)(2) will need to re-direct the amount required by said subdivisions into the State Excess Lottery Fund after July 1, 2023, rather than the payment of purses, much like HB 3031 proposes in its amendment of 29-22C-27(b)(2). The following language can be added to the end of the current language to achieve this goal: "Provided, That effective July 1, 2023, and thereafter, the amount required to be transferred by this subdivision to the special funds established by the licensee and used for payment of regular racetrack purses shall instead be transferred to the State Excess Lottery Fund pursuant to 19-23-10a of this code."
Presuming the above changes are made, Lottery projects HB 3031 will result in an increase of new revenue to the State Excess Lottery Fund of $9.2 million annually. Additionally, HB 3031 will free up approximately $8 million annually for appropriation and $800,000 annually of surplus appropriation that can be used by the legislature for various purposes.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
There are logistical/technical issues with HB 3031 (specifically with changes made to the Racetrack Video Lottery Act), which in its current form, will render it ineffective in distributing all Lottery RVL revenue. Those issues will be detailed below. Assuming these technical issues are resolved, the Lottery projects an increase of new revenue to the State Excess Lottery Fund of $9.2 million annually. Additionally, HB 3031 will free up approximately $8 million annually for appropriation and $800,000 annually of surplus appropriation that can be used by the legislature for various purposes. The technical issues are as follows:
1) HB 3031 proposes to add the following language to current 29-22A-10(b)(1): "Provided, that the commission shall transfer 15% of the amount deducted, generated from racetrack video lottery at licensed thoroughbred racetracks, to the West Virginia Racing Commission's General Administrative Account created in 19-23-11 of this code." This language does not allow the 15% transfer to the racing commission to be considered "actual costs and expenses" for the purposes of calculating surplus revenue, as lines 21 through 23 (P. 49) do with respect to the Modernization fund. Language such as "The 15% transfer by the commission will be considered actual costs and expenses of the amount deducted and transferred" will need to be added after the proposed addition in 29-22A-10(b)(1) to allow for the proper administration of funds and capture of surplus revenues.
2) HB 3031 proposes to strike provisions 29-22A-10(c)(9)(A) and (B). However, striking such language results in the Lottery Commission being unable to distribute 7% of NTI. To capture the 7% and ensure the result of its distribution is consistent with current day distribution, (9)(A) should be amended as follows, "(9)(A) On and after July 1, 2005, seven percent of net terminal income shall be deposited ... into a special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;" All other language than appears above can be stricken from sections (9)(A) and (B).
3) The revision set forth in #2, above, will need to be made to 29-22A-10b(a)(9)(A) and (B) to restore the distribution of 4% of NTI in such sections also. So the language would be as follows: "(9)(A) On and after July 1, 2005, four percent of net terminal income shall be deposited ... into a special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;" All other language than appears can be stricken from sections (9)(A) and (B).
4) 29-22A-10(c)(2)(pg 50, lines 58-61) and 29-22A-10b(a)(2) will need to re-direct the amount required by said subdivisions into the State Excess Lottery Fund after July 1, 2023, rather than the payment of purses, much like HB 3031 proposes in its amendment of 29-22C-27(b)(2). The following language can be added to the end of the current language to achieve this goal: "Provided, That effective July 1, 2023, and thereafter, the amount required to be transferred by this subdivision to the special funds established by the licensee and used for payment of regular racetrack purses shall instead be transferred to the State Excess Lottery Fund pursuant to 19-23-10a of this code."
Presuming the above changes are made, Lottery projects HB 3031 will result in an increase of new revenue to the State Excess Lottery Fund of $9.2 million annually. Additionally, HB 3031 will free up approximately $8 million annually for appropriation and $800,000 annually of surplus appropriation that can be used by the legislature for various purposes.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
There are logistical/technical issues with HB 3031 (specifically with changes made to the Racetrack Video Lottery Act), which in its current form, will render it ineffective in distributing all Lottery RVL revenue. Those issues will be detailed below. Assuming these technical issues are resolved, the Lottery projects an increase of new revenue to the State Excess Lottery Fund of $9.2 million annually. Additionally, HB 3031 will free up approximately $8 million annually for appropriation and $800,000 annually of surplus appropriation that can be used by the legislature for various purposes. The technical issues are as follows:
1) HB 3031 proposes to add the following language to current 29-22A-10(b)(1): "Provided, that the commission shall transfer 15% of the amount deducted, generated from racetrack video lottery at licensed thoroughbred racetracks, to the West Virginia Racing Commission's General Administrative Account created in 19-23-11 of this code." This language does not allow the 15% transfer to the racing commission to be considered "actual costs and expenses" for the purposes of calculating surplus revenue, as lines 21 through 23 (P. 49) do with respect to the Modernization fund. Language such as "The 15% transfer by the commission will be considered actual costs and expenses of the amount deducted and transferred" will need to be added after the proposed addition in 29-22A-10(b)(1) to allow for the proper administration of funds and capture of surplus revenues.
2) HB 3031 proposes to strike provisions 29-22A-10(c)(9)(A) and (B). However, striking such language results in the Lottery Commission being unable to distribute 7% of NTI. To capture the 7% and ensure the result of its distribution is consistent with current day distribution, (9)(A) should be amended as follows, "(9)(A) On and after July 1, 2005, seven percent of net terminal income shall be deposited ... into a special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;" All other language than appears above can be stricken from sections (9)(A) and (B).
3) The revision set forth in #2, above, will need to be made to 29-22A-10b(a)(9)(A) and (B) to restore the distribution of 4% of NTI in such sections also. So the language would be as follows: "(9)(A) On and after July 1, 2005, four percent of net terminal income shall be deposited ... into a special fund established by the licensee and used for the payment of regular purses in addition to the other amounts provided in article twenty-three, chapter nineteen of this code;" All other language than appears can be stricken from sections (9)(A) and (B).
4) 29-22A-10(c)(2)(pg 50, lines 58-61) and 29-22A-10b(a)(2) will need to re-direct the amount required by said subdivisions into the State Excess Lottery Fund after July 1, 2023, rather than the payment of purses, much like HB 3031 proposes in its amendment of 29-22C-27(b)(2). The following language can be added to the end of the current language to achieve this goal: "Provided, That effective July 1, 2023, and thereafter, the amount required to be transferred by this subdivision to the special funds established by the licensee and used for payment of regular racetrack purses shall instead be transferred to the State Excess Lottery Fund pursuant to 19-23-10a of this code."
Presuming the above changes are made, Lottery projects HB 3031 will result in an increase of new revenue to the State Excess Lottery Fund of $9.2 million annually. Additionally, HB 3031 will free up approximately $8 million annually for appropriation and $800,000 annually of surplus appropriation that can be used by the legislature for various purposes.
Person submitting Fiscal Note: W. Brian Nickerson, General Counsel
Email Address: bnickerson@wvlottery.com