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Introduced Version Senate Bill 197 History

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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 197

(By Senators Tomblin (Mr. President) and Sprouse

By Request of the Executive)

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[Introduced January 19, 2004; referred to the Committee on the Judiciary; and then to the Committee on Finance.]

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A BILL to amend the code of West Virginia, 1931, as amended, by adding thereto a new section, designated §5B-2-3b; to amend said code by adding thereto a new section, designated §18B-1B- 10; and to amend and reenact §29-22A-10 of said code, all relating generally to distribution of net terminal income of racetrack video lottery terminals; reducing distributions to the tourism development fund; providing for portion of saved net lottery terminal income distribution to be deposited in the development office promotion fund and in the higher education policy commission's research challenge fund; creating such funds as special revenue funds; providing for uses and expenditures of such funds; and deleting obsolete language.

Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §5B-2-3b; that said code be amended by adding thereto a new section, designated §18B- 1B-10; and that §29-22A-10 of said code be amended and reenacted, all to read as follows:
CHAPTER 5B. ECONOMIC DEVELOPMENT ACT OF 1985.

ARTICLE 2. WEST VIRGINIA DEVELOPMENT OFFICE.
§5B-2-3b. Development office promotion fund.
(a) There is hereby established in the state treasury a special revenue fund known as the "development office promotion fund." Moneys deposited in this fund shall be administered by the development office and used solely to promote business formation, expansion, recruitment, and retention through aggressive marketing and international development and export assistance, which together lead to more and better jobs with higher wages for all geographic regions and communities of the state, including rural areas and urban core areas, and for all residents, including minorities.
CHAPTER 18B. HIGHER EDUCATION.

ARTICLE 1B. HIGHER EDUCATION POLICY COMMISSION.
§18B-1B-10. Research challenge.
(a) There is hereby established in the state treasury a special revenue fund known as the "Research Challenge Fund." Moneys deposited in this fund shall be administered by the higher education policy commission.
(1) Twenty-five percent of the moneys deposited in this fund shall be used to fund coal research and development projects at institutions of higher education located in this state, which research includes, but is not limited to, carbon sequestration and carbon technology research and development projects.
(2) The remainder of the moneys deposited in this fund shall be used to fund other research and development projects at institutions of higher education in this state.
(b) The policy commission shall utilize the recommendations of the EPSCoR State Advisory Council in its allocation of appropriations made to the research challenge fund and in its development of procedures for competitive application and review of proposals for funding. The research challenge is a critical component in the state's strategic plan for economic development and the contribution of higher education in the economic health of the state, and the EPSCoR State Advisory Council is well qualified, by virtue of its research-oriented mission and membership, to advise the policy commission in the allocation of research challenge funding.
The objectives of the research challenge are to:
(1) Increase the research capacity of institutions of higher education and the competitiveness of these institutions to apply for external funding;
(2) Stimulate the development of research and research products that are directly applicable in improving the economic competitiveness of existing West Virginia industries and the development of new business and jobs in the state;
(3) Leverage limited state resources with private and federal funds to support projects and activities directly related to economic development by requiring matching funds and cooperative agreements with external partners;
(4) Increase the production of undergraduate and graduate students of programs in the sciences, technology, engineering, and mathematics, with special attention to emerging disciplines such as biometrics; and
(5) Hold institutions more accountable for the success of research projects funded under this program with the expectation that state support will be phased out and the project or activity will be terminated if it is unable to generate ongoing external support.
(c) The priorities for the research challenge shall be:
(1) Research on energy generation, distribution and utilization that builds on the state's existing energy research strengths, related research products, and technology transfer programs shall receive twenty-five percent of the appropriation.
(2) Research, education, and outreach conducted by the EPSCoR program. This federal program is recognized by the National Science Foundation as the state's primary entity for developing the research capacity that is so important to the state's economic and educational development.
(3) Research projects that are related to the economic development of the state, and that have significant potential to attract participation and funding from industrial, federal, or foundation partners.
(4) Collaborative projects between higher education and public education to improve science and mathematics education.
(5) Graduate education in science (including medical education), technology, engineering, and mathematics. The allocation shall be used for the increase in doctoral students and programs at West Virginia University and Marshall University in these fields.
(6) Recruitment of eminent scholars to strengthen research capacity and competitiveness for external funding.
(d) The policy commission shall report to the legislative oversight committee on educational accountability annually on the results of the projects and activities funded by the research challenge appropriation.
(e) The priorities established in section (b) of this section shall be reviewed biannually by the policy commission and the EPSCoR Advisory Committee beginning in two thousand six. The policy commission shall include any recommended adjustments in its budget request for the two thousand seven budget.
CHAPTER 29. MISCELLANEOUS BOARDS AND COMMISSIONS.

ARTICLE 22A. RACETRACK VIDEO LOTTERY ACT.
§29-22A-10. Accounting and reporting; commission to provide communications protocol data; distribution of net terminal income; remittance through electronic transfer of funds; establishment of accounts and nonpayment penalties; commission control of accounting for net terminal income; settlement of accounts; manual reporting and payment may be required; request for reports; examination of accounts and records.

(a) The commission shall provide to manufacturers, or applicants applying for a manufacturer's permit, the protocol documentation data necessary to enable the respective manufacturer's video lottery terminals to communicate with the commission's central computer for transmitting auditing program information and for activation and disabling of video lottery terminals.
(b) The gross terminal income of a licensed racetrack shall be remitted to the commission through the electronic transfer of funds. Licensed racetracks shall furnish to the commission all information and bank authorizations required to facilitate the timely transfer of moneys to the commission. Licensed racetracks must provide the commission thirty days' advance notice of any proposed account changes in order to assure the uninterrupted electronic transfer of funds. From the gross terminal income remitted by the licensee to the commission, the commission shall deduct an amount sufficient to reimburse the commission for its actual costs and expenses incurred in administering racetrack video lottery at the licensed racetrack, and the resulting amount after the deduction is the net terminal income. The amount deducted for administrative costs and expenses of the commission may not exceed four percent of gross terminal income: Provided, That any amounts deducted by the commission for its actual costs and expenses that exceeds its actual costs and expenses shall be deposited into the state lottery fund. For all fiscal years beginning on or after the first day of July, two thousand one, the commission shall not receive an amount of gross terminal income in excess of the amount of gross terminal income received during the fiscal year ending on the thirtieth day of June, two thousand one, but four percent of any amount of gross terminal income received in excess of the amount of gross terminal income received during the fiscal year ending on the thirtieth day of June, two thousand one, shall be deposited into the fund established in section eighteen-a, article twenty-two of this chapter.
(c) Net terminal income shall be divided as set out in this subsection. For all fiscal years beginning on or after the first day of July, two thousand one, any amount of net terminal income received in excess of the amount of net terminal income received during the fiscal year ending on the thirtieth day of June, two thousand one, shall be divided as set out in section ten-b of this article. The licensed racetrack's share is in lieu of all lottery agent commissions and is considered to cover all costs and expenses required to be expended by the licensed racetrack in connection with video lottery operations. The division shall be made as follows:
(1) The commission shall receive thirty percent of net terminal income, which shall be paid into the state lottery fund as provided in section ten-a of this article.
(2) Fourteen percent of net terminal income at a licensed racetrack shall be deposited in the special fund established by the licensee, and used for payment of regular purses in addition to other amounts provided for in article twenty-three, chapter nineteen of this code;
(3) The county where the video lottery terminals are located shall receive two percent of the net terminal income: Provided, That:
(A) Beginning the first day of July, one thousand nine hundred ninety-nine, and thereafter, any amount in excess of the two percent received during fiscal year one thousand nine hundred ninety-nine by a county in which a racetrack is located that has participated in the West Virginia thoroughbred development fund since on or before the first day of January, one thousand nine hundred ninety-nine, shall be divided as follows:
(i) The county shall receive fifty percent of the excess amount; and
(ii) The municipalities of the county shall receive fifty percent of the excess amount, the fifty percent to be divided among the municipalities on a per capita basis as determined by the most recent decennial United States census of population; and
(B) Beginning the first day of July, one thousand nine hundred ninety-nine, and thereafter, any amount in excess of the two percent received during fiscal year one thousand nine hundred ninety-nine by a county in which a racetrack other than a racetrack described in paragraph (A) of this proviso is located and where the racetrack has been located in a municipality within the county since on or before the first day of January, one thousand nine hundred ninety-nine, shall be divided, if applicable, as follows:
(i) The county shall receive fifty percent of the excess amount; and
(ii) The municipality shall receive fifty percent of the excess amount; and
(C) This proviso shall not affect the amount to be received under this subdivision by any county other than a county described in paragraph (A) or (B) of this proviso;
(4) One half of one percent of net terminal income shall be paid for and on behalf of all employees of the licensed racing association by making a deposit into a special fund to be established by the racing commission to be used for payment into the pension plan for all employees of the licensed racing association;
(5) The West Virginia thoroughbred development fund created under section thirteen-b, article twenty-three, chapter nineteen of this code and the West Virginia greyhound breeding development fund created under section ten, article twenty-three, chapter nineteen of this code shall receive an equal share of a total of not less than one and one-half percent of the net terminal income: Provided, That for any racetrack which does not have a breeder's program supported by the thoroughbred development fund or the greyhound breeding development fund, the one and one-half percent provided for in this subdivision shall be deposited in the special fund established by the licensee and used for payment of regular purses, in addition to other amounts provided for in subdivision (2) of this subsection and article twenty-three, chapter nineteen of this code;
(6) The West Virginia racing commission shall receive one percent of the net terminal income which shall be deposited and used as provided in section thirteen-c, article twenty-three, chapter nineteen of this code;
(7) A licensee shall receive forty-seven percent of net terminal income;
(8) The tourism promotion fund established in section twelve, article two, chapter five-b of this code shall receive three percent of the net terminal income: Provided, That for the fiscal year beginning the first day of July, two thousand four, the tourism promotion fund shall receive no portion of the net terminal income and for fiscal years beginning on or after the first day of July, two thousand five, the tourism promotion fund shall receive one percent of the net terminal income;
(9) For the fiscal year beginning the first day of July, two thousand four, three percent of net terminal income shall be deposited as follows:
(A) The first ten million dollars shall be deposited in the development office promotion fund established in section three-b, article two, chapter five-b of this code;
(B) The next ten million dollars shall be deposited in the higher education policy commission's research challenge fund established in section ten, article one-b, chapter eighteen-b of this code; and
(C) The remainder of the three percent of net terminal income shall be deposited in equal amounts in the development office promotion fund and the research challenge fund;
(10) Beginning the first day of July, two thousand five, the development office promotion fund established in section three-b, article two, chapter five-b of this code shall receive one percent of net terminal income;
(11) Beginning the first day of July, two thousand five, the research challenge fund established in section ten, article one-b, chapter eighteen-b of this code, shall receive one percent of net terminal income;
and
(9) The veterans memorial program shall receive one percent of the net terminal income until sufficient moneys have been received to complete the veterans memorial on the grounds of the state capitol complex in Charleston, West Virginia. The moneys shall be deposited in the state treasury in the division of culture and history special fund created under section three, article one-i, chapter twenty-nine of this code: Provided, That only after sufficient moneys have been deposited in the fund to complete the veterans memorial and to pay in full the annual bonded indebtedness on the veterans memorial, not
(12) The remaining one percent of net terminal income shall be deposited as follows:
(A) Not
more than twenty thousand dollars of the one percent of net terminal income provided for in this subdivision shall be deposited into a special revenue fund in the state treasury, to be known as the "John F. 'Jack' Bennett Fund." The moneys in this fund shall be expended by the division of veterans affairs to provide for the placement of markers for the graves of veterans in perpetual cemeteries in this state. The division of veterans affairs shall promulgate legislative rules pursuant to the provisions of article three, chapter twenty-nine-a of this code specifying the manner in which the funds are spent, determine the ability of the surviving spouse to pay for the placement of the marker, and setting forth the standards to be used to determine the priority in which the veterans grave markers will be placed in the event that there are not sufficient funds to complete the placement of veterans grave markers in any one year, or at all; Upon payment in full of the bonded indebtedness on the veterans memorial, one
(B) One hundred thousand dollars of the one percent of net terminal income provided for in this subdivision shall be deposited in the special fund in the division of culture and history created under section three, article one-i, chapter twenty-nine of this code and be expended by the division of culture and history to establish a West Virginia veterans memorial archives within the cultural center to serve as a repository for the documents and records pertaining to the veterans memorial, to restore and maintain the monuments and memorial on the capitol grounds; Provided, however, That five
(C) Five hundred thousand dollars of the one percent of net terminal income shall be deposited in the state treasury in a special fund of the department of administration, created under section five, article four, chapter five-a of this code to be used for construction and maintenance of a parking garage on the state capitol complex; and Provided further, That the
(D) The remainder of the one percent of net terminal income shall be deposited in equal amounts in the capitol dome and improvements fund created under section two, article four, chapter five-a of this code and cultural facilities and capitol resources matching grant program fund created under section three, article one of this chapter.
(d) Each licensed racetrack shall maintain in its account an amount equal to or greater than the gross terminal income from its operation of video lottery machines, to be electronically transferred by the commission on dates established by the commission. Upon a licensed racetrack's failure to maintain this balance, the commission may disable all of a licensed racetrack's video lottery terminals until full payment of all amounts due is made. Interest shall accrue on any unpaid balance at a rate consistent with the amount charged for state income tax delinquency under chapter eleven of this code. The interest shall begin to accrue on the date payment is due to the commission.
(e) The commission's central control computer shall keep accurate records of all income generated by each video lottery terminal. The commission shall prepare and mail to the licensed racetrack a statement reflecting the gross terminal income generated by the licensee's video lottery terminals. Each licensed racetrack shall report to the commission any discrepancies between the commission's statement and each terminal's mechanical and electronic meter readings. The licensed racetrack is solely responsible for resolving income discrepancies between actual money collected and the amount shown on the accounting meters or on the commission's billing statement.
(f) Until an accounting discrepancy is resolved in favor of the licensed racetrack, the commission may make no credit adjustments. For any video lottery terminal reflecting a discrepancy, the licensed racetrack shall submit to the commission the maintenance log which includes current mechanical meter readings and the audit ticket which contains electronic meter readings generated by the terminal's software. If the meter readings and the commission's records cannot be reconciled, final disposition of the matter shall be determined by the commission. Any accounting discrepancies which cannot be otherwise resolved shall be resolved in favor of the commission.
(g) Licensed racetracks shall remit payment by mail if the electronic transfer of funds is not operational or the commission notifies licensed racetracks that remittance by this method is required. The licensed racetracks shall report an amount equal to the total amount of cash inserted into each video lottery terminal operated by a licensee, minus the total value of game credits which are cleared from the video lottery terminal in exchange for winning redemption tickets, and remit the amount as generated from its terminals during the reporting period. The remittance shall be sealed in a properly addressed and stamped envelope and deposited in the United States mail no later than noon on the day when the payment would otherwise be completed through electronic funds transfer.
(h) Licensed racetracks may, upon request, receive additional reports of play transactions for their respective video lottery terminals and other marketing information not considered confidential by the commission. The commission may charge a reasonable fee for the cost of producing and mailing any report other than the billing statements.
(i) The commission has the right to examine all accounts, bank accounts, financial statements and records in a licensed racetrack's possession, under its control or in which it has an interest and the licensed racetrack shall authorize all third parties in possession or in control of the accounts or records to allow examination of any of those accounts or records by the commission.




NOTE: The purpose of this bill is to distribute net terminal income of racetrack video lottery terminals from reduced distributions to the tourism development fund to be deposited in the development office promotion fund (created herein) and in the higher education policy commission's research challenge fund (created herein). This bill also provides for uses and expenditures of such funds and deleting obsolete language.

§5B-2-3b and §18B-1B-10 are new; therefore, strike-throughs and underscoring have been omitted.

Strike-throughs indicate language that would be stricken from present law. Underlining indicates new language that would be added.

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