Senate Bill No. 449
(By Senators Tomblin (Mr. President) and Boley
By Request of the Executive)
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[Introduced February 19, 1996; referred to the Committee
on Education; and then to the Committee on Finance.]
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A BILL to amend and reenact section eighteen, article twenty-two,
chapter twenty-nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; and to amend
article fifteen, chapter thirty-one of said code by adding
thereto a new section, designated section six-b, all
relating to developing a West Virginia educational center
for arts and sciences; dedicating lottery proceeds for
financing revenue bonds to be issued by the economic
development authority; creating a special fund in the state
treasury for the economic development authority; permitting
the economic development authority to pledge funds as
security for payment of revenue bonds; providing for issuance of such bonds; specifying use of bond proceeds to
fund development of an educational center for arts and
sciences; providing for annual certification of amounts
needed to pay principal, interest and coverage ratios for
each fiscal year on bonds to be issued by the economic
development authority; allocating and limiting dollar
amounts of lottery proceeds that may be used to provide debt
service on such bonds; specifying uses of moneys in the West
Virginia center for arts and sciences debt service fund; and
providing for payment of certain lottery proceeds into said
fund for use in bond financing.
Be it enacted by the Legislature of West Virginia:
That section 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; and
that article fifteen, chapter thirty-one of said code be amended
by adding thereto a new section, designated section six-b, all to
read as follows:
CHAPTER 29. MISCELLANEOUS BOARDS AND OFFICERS.
ARTICLE 22. STATE LOTTERY ACT.
§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 created a special fund in the state
treasury which shall be designated and known as the "state
lottery 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 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 herein provided for the purposes stated herein and shall
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
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.
(d) Not more than fifteen percent of the gross amount received from each lottery shall 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. The director is authorized to expend the necessary
percentage of the amount allocated as net profit, not to exceed
six percent of the gross amount received, for the purposes of
entering into contractual arrangements for the acquisition,
financing, lease and lease-purchase, and other financing
transactions, of lottery goods and services, including tickets,
equipment, machinery, electronic computer systems and terminals,
and supplies and maintenance therefor, for the first thirty-six
months of operation, and may apportion the costs, expenses and
expenditures related thereto among the commission, vendor or
vendors and licensed lottery sales agents. In the event that the
percentage allotted for operations and administration generates
a surplus, the surplus will 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 West Virginia center for arts and sciences
debt service fund in subsection (i) of this section to retire the
twenty-five year bonds authorized to be issued pursuant to
section six-b, article fifteen, chapter thirty-one of this code,
the Legislature shall annually appropriate all of the remaining
amounts allocated as net profits above, in such proportions as it
deems 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
(i)(j) of this section; and (4) the commerce division created in article one,
chapter five-b of this code, in accordance with subsection
(j)(k)
of this section:
Provided, That no transfer to any account other
than the school building debt service account
and the West
Virginia center for arts and sciences debt service account may be
made in any period in which a default exists in respect to debt
service on bonds issued by the school building authority
or the
economic development authority which are secured by lottery
proceeds:
Provided, however, That no additional transfer shall
be made to any account other than the school building debt
service account
and the West Virginia center for arts and
sciences debt service account 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 economic development authority which are secured by net
profits.
(g) There is hereby created a special fund in the state
treasury which shall 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 amounts 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 monies
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 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) Beginning on or before the twenty-eighth day of July,
one thousand nine hundred ninety-four, and continuing on or
before the twenty-eighth day of each succeeding month thereafter
through the thirtieth 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 said
section:
Provided, That in no event shall said monthly amount
exceed one million eight hundred thousand dollars:
Provided,
however, That in no event shall the total allocation of said 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 as aforesaid, or eighteen million dollars:
Provided
further, That 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 said
deficiency:
And provided further, That 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 lottery
profits.
(i) Beginning on or before the twenty-eighth day of July,
one thousand nine hundred ninety-six, and continuing on or before
the twenty-eighth day of each succeeding month thereafter through
the thirtieth day of June, two thousand twenty-one, the lottery
director shall allocate to the West Virginia center for arts and
sciences debt service fund created pursuant to the provisions of
section six-b, article fifteen, chapter thirty-one 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 said section: Provided, That
in no event shall said monthly amount exceed two hundred fifty
thousand dollars: Provided, however, That in no event shall the
total allocation of said net profits to be paid into the West
Virginia center for arts and sciences 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 as aforesaid, or two million five hundred thousand
dollars: Provided further, That 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
West Virginia center for arts and sciences debt service fund, the
deficiency shall be added to the amount transferred in the next
succeeding month in which revenues are available to transfer said
deficiency: And provided further, That 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 three million seven hundred
fifty thousand dollars annually, may be granted by the authority
in favor of the bonds issued by the authority which are secured
by the net lottery profits.
(i)(j) There is hereby created a special 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 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.
(j)(k) The commerce division 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 of the
costs incurred in the development, construction, reconstruction,
maintenance or repair of any project or recreational facility, as
such terms are defined in section thirteen-a, article one,
chapter five-b of this code, pursuant to the authority granted to
it under said article; (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 commerce division under article one,
chapter five-b 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.
CHAPTER 31. CORPORATIONS.
ARTICLE 15. WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY.
§31-15-6b. Special power of authority to construct and lease a
West Virginia educational center for arts and
sciences; limitations; economic development
authority authorized to issue revenue bonds; fund
created; use of funds to pay for development of a
West Virginia educational center for arts and
sciences.
(a) The Legislature finds and declares that in order to
attract new business and industry to this state, to retain
existing business and industry providing the citizens of this
state with economic security, to advance the business prosperity
and economic welfare of this state and to assure that adequate
infrastructure and facilities are available for: (i) Hands-on
arts and science training for the youth of West Virginia; (ii)
programs using the performing arts as an educational tool; and, (iii) state-of-the-art educational opportunities for all citizens
of this state, it is necessary that public financial support be
provided for constructing and equipping a centrally located West
Virginia educational center for arts and sciences.
(b) The economic development authority may, by resolution,
in accordance with the applicable provisions of this article,
issue revenue bonds of the authority from time to time, to pay
for a portion of the cost of constructing and equipping a West
Virginia center for arts and sciences or to refund, at the
discretion of the authority, such bonds:
Provided, That such
bond proceeds shall not exceed forty percent of the total project
cost, including site acquisition, capital costs and endowments
for operation and maintenance:
Provided, however, That the
principal amount of such bonds shall not exceed twenty-five
million dollars:
Provided further, That revenue bonds issued on
or after the first day of January, one thousand nine hundred
ninety-six, which are secured by lottery proceeds shall mature at
such time or times not exceeding twenty-five years from their
respective dates. The principal of, and the interest and
redemption premium, if any, on, such bonds shall be payable
solely from the special fund herein provided for such payment.
(c) There is hereby created in the state treasury a special
fund named the "West Virginia center for arts and sciences debt
service fund" into which shall be deposited on and after the
first day of July, one thousand nine hundred ninety-six, the
amounts specified in section eighteen, article twenty-two,
chapter twenty-nine of this code. 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. The authority may
further provide in the resolution and in the trust agreement for
priorities on the revenues paid into the West Virginia center for
arts and sciences debt service 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. On or
prior to the first day of May of each year, commencing the first
day of May, one thousand nine hundred ninety-six, the authority
shall certify to the state lottery director the principal and
interest and coverage ratio requirements for the following fiscal
year on any revenue bonds or refunding revenue bonds issued
pursuant to this section, and for which moneys deposited in the
West Virginia center for arts and sciences debt service fund have been pledged, or will be pledged, for repayment pursuant to this
section.
After the authority has issued bonds authorized by this
section, and after the requirements of all funds have been
satisfied, including coverage and reserve funds established in
connection with the bonds issued pursuant to this section, any
balance remaining in the West Virginia center for arts and
sciences debt service fund may be used for the redemption of any
of the outstanding bonds issued hereunder 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
forthwith canceled and shall not again be issued.
(d) The authority is hereby empowered to: (i) Acquire by
purchase or lease real property to be used as a site for a West
Virginia educational center for arts and sciences; (ii) use the
proceeds of the bonds authorized by this section to pay a portion
of the costs of constructing and equipping a West Virginia center
for arts and sciences located on such site; and (iii) enter into
a long-term lease agreement with a nonprofit corporation
organized under the laws of this state for operation and maintenance of such center:
Provided, That such nonprofit
corporation shall, as consideration for such long-term lease
agreement, complete the construction and equipping of such center
and demonstrate to the satisfaction of the authority its
financial ability to operate and maintain such center during the
term of the lease agreement.
NOTE: The purpose of this bill is to authorize use of
lottery proceeds to retire revenue bonds issued by the West
Virginia economic development authority for funding a portion of
the cost of development of a West Virginia educational center for
arts and sciences to be operated and maintained by a nonprofit
corporation under lease from the economic development authority.
Strike-throughs indicate language that would be stricken
from the present law and underscoring indicates new language that
would be added.
Section six-b, article fifteen, chapter thirty-one is an
entirely new section in which strike-throughs and underlining
have been eliminated.