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.