Senate Bill No. 664

(By Senators Helmick, Sharpe, Chafin, Plymale, Prezioso, Edgell,

Love, Bailey, Bowman, McCabe, Unger, Dempsey, Boley, Minear,

Facemyer, Guills and Sprouse)

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[Originating in the Committee on Finance;

reported March 7, 2003.]

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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-c, all relating to the creation of a capitol renovation and improvement debt service fund; providing for the construction and financing of renovations to and improvement of the existing capitol complex and its appurtenant facilities; authorizing the issuance of bonds by the West Virginia economic development authority to finance the construction of capital improvements and renovations to the existing capitol complex and its appurtenant facilities; requiring department of administration to certify a list of projects to the joint committee on government and finance prior to expenditure from fund.

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-c, all to read as follows:
CHAPTER 29. DIVISION OF CULTURE AND HISTORY.

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 continued a special revenue fund in the state treasury which shall be designated and known as the "state lottery fund". The fund consists 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 provided in this section for the purposes stated in this section 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 may be allocated to and may be disbursed as necessary for fund operation and administration expenses: Provided, That for the period beginning the first day of January, two thousand two, through the thirtieth day of June, two thousand three, not more than seventeen 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. In the event that the percentage allotted for operations and administration generates a surplus, the surplus shall 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 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 education, arts, sciences and tourism debt service fund in subsection (i) of this section to retire the bonds authorized to be issued pursuant to section eleven-a, article six, chapter five of this code, any and all remaining funds in the state lottery fund shall be made available to pay debt service in connection with any revenue bonds issued pursuant to section eighteen-a of this article, if and to the extent needed for such purpose from time to time. The Legislature shall, after satisfying the requirements for funds dedicated to the capitol complex improvement and renovation debt service fund in subsection (j) of this section to retire the bonds authorized to be issued pursuant to section six-c, article fifteen, chapter thirty-one of this code, annually appropriate all of the remaining amounts allocated as net profits in subsection (e) of this section, in such proportions as it considers 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 created in section six, article nine-d, chapter eighteen of this code; (3) the lottery senior citizens fund created in subsection (j) (k) of this section; and (4) the division of natural resources created in section three, article one, chapter twenty of this code and the West Virginia development office as created in section one, article two, chapter five-b of this code, in accordance with subsection (k) (l) of this section. No transfer to any account other than the school building debt service account, the education, arts, sciences and tourism debt service fund, the economic development project fund created under section eighteen-a, article twenty-two, chapter twenty-nine of this code, the capitol complex improvement and renovation debt service fund or any fund from which debt service is paid under subsection (c), section eighteen-a of this article may be made in any period of time in which a default exists in respect to debt service on bonds issued by the school building authority, the state building commission, the economic development authority or which are otherwise secured by lottery proceeds. No additional transfer may be made to any account other than the school building debt service account and the education, arts, sciences and tourism debt service fund 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 state building commission which are secured by net profits.
(g) There is hereby continued a special revenue 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 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 moneys 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 may 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 these educational programs it considers beneficial to the citizens of this state.
(h) On or before the twenty-eighth day of each month, as long as revenue bonds or refunding bonds are outstanding, 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 section six, article nine-d, chapter eighteen of this code. In no event shall the monthly amount allocated exceed one million eight hundred thousand dollars, nor may the total allocation of the 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 or eighteen million dollars. 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 the deficiency. 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 school building authority in favor of the bonds it issues which are secured by the net lottery profits.
When the school improvement bonds, secured by profits from the lottery and deposited in the school debt service fund, mature, the profits shall become available for debt service on additional school improvement bonds as a first priority from the net profits of the lottery or may, at the discretion of the authority, be placed into the school construction fund created pursuant to the provisions of section six, article nine-d, chapter eighteen of this code.
(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, as long as revenue bonds or refunding bonds are outstanding, the lottery director shall allocate to the education, arts, sciences and tourism debt service fund created pursuant to the provisions of section eleven-a, article six, chapter five 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 that section. In no event may the monthly amount allocated exceed one million dollars nor may the total allocation paid into the education, arts, sciences and tourism 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 or ten million dollars. In the event there are insufficient funds available in any month to transfer the amount required pursuant to this subsection to the education, arts, sciences and tourism debt service fund, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency. 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 fifteen million dollars annually, may be granted by the state building commission in favor of the bonds it issues which are secured by the net lottery profits.
When the bonds, secured by profits from the lottery and deposited in the education, arts, sciences and tourism debt service fund, mature, the profits shall become available for debt service on additional bonds as a second priority from the net profits of the lottery.
(j) Beginning on or before the twenty-eighth day of July, two thousand three, and continuing on or before the twenty-eighth day of each succeeding month thereafter, as long as revenue bonds or refunding bonds are outstanding, the lottery director shall allocate to the capitol complex improvement and renovation debt service fund created pursuant to the provisions of section six-c, article fifteen, chapter thirty-one of this code, as a fourth 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, two thousand three, as certified to the lottery director in accordance with the provisions of that section. In no event may the monthly amount allocated exceed two hundred thousand dollars nor may the total allocation paid into the capitol complex improvement and renovation 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 or two million dollars. In the event there are insufficient funds available in any month to transfer the amount required pursuant to this subsection to the capitol complex improvement and renovation debt service fund, the deficiency shall be added to the amount transferred in the next succeeding month in which revenues are available to transfer the deficiency. A fourth-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 and one-half million dollars annually, may be granted by the economic development authority in favor of the bonds it issues which are secured by lottery profits.
When the bonds, secured by profits from the lottery and deposited in the capitol complex improvement and renovation debt service fund mature, the profits shall become available for debt service on additional bonds as a fourth priority from the net profits of the lottery.
(j) (k) There is hereby continued a special revenue 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 distributed in the manner provided below and may 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.
(k) (l) The division of natural resources and the West Virginia development office, as appropriated by the Legislature, may use the amounts allocated to them 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 these terms are defined in section four, article five, chapter twenty of this code, pursuant to the authority granted to it under article five, chapter twenty of this code; (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 division of natural resources under article five, chapter twenty 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.
§31-15-6c. Special power of authority to issue bonds or notes to finance capital improvements and renovations to state capitol complex; creation of capitol complex improvement and renovation debt service fund.

(a) The Legislature finds and declares:
(1) That the capitol complex and facilities appurtenant thereto have deteriorated or are otherwise in need of new capital improvements and renovations for the purpose of promoting efficiency of governmental operations and for the enhancement of tourism in the state;
(2) That construction of capital improvements and renovations to the capitol complex and its appurtenant facilities requires that the cost of such improvements and renovations be financed over time; and that capital improvements and renovations cannot be funded out of the current year appropriations of the Legislature;
(3) That the enacting of new taxes, or the diversion of revenues from other essential departments and functions of government, in order to support the cost of capital improvements and renovations to the capital complex and its appurtenant facilities is not in the interests of the people of the state represented in the Legislature and is specifically rejected by the Legislature in its exercise of its legitimate constitutional powers;
(4) That it is in the best interest of the people of the state that the construction of capital improvements and renovations to the capital complex and its appurtenant facilities be financed through the issuance of bonds by the West Virginia economic development authority and that debt service on such bonds be paid from moneys available in the capitol improvement and renovation fund as provided in this article.
(b) In order to provide for the financing of capital improvements or renovations to the state capitol complex and its appurtenant facilities, bonds of the authority may be issued in accordance with the provisions of this article.
(c) There is hereby created a special revenue fund in the state treasury which is designated the "capitol complex improvement and renovation debt service fund". Moneys deposited into the fund shall be used to make payments of principal, redemption premium, if any, and interest payments for bonds issued for the purposes set forth in this section. Separate accounts may be established within the special revenue fund for the purpose of identification of payment of specific obligations. The fund shall consist of amounts transferred from the state lottery fund in the manner set forth in subsection (j), section eighteen, article twenty-two, chapter twenty-nine of this code. The authority may further provide in the resolution and in the trust agreement for priorities on the revenues paid into the capitol complex improvement and renovation 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 article.
(d) For purposes of this article, "capitol complex" or "state capitol complex" is defined as the facilities and improvements comprising the buildings numbered one through seventeen located at the main capitol campus in the city of Charleston, West Virginia, as the same may be expanded from time to time.
(e) Prior to the expenditure of any funds for capital improvements or renovations to the state capitol complex and its appurtenant facilities, the department of administration shall certify to the joint committee on government and finance a list of the capital improvements and renovations to be funded from the bond proceeds. This certified list may not thereafter be altered or amended other than by legislative enactment. In preparing the list, the department of administration shall study the capital improvement involved in enclosing the exterior walkways to the east and west wings of the capitol building resulting in the creation of additional office space.