Date Requested: February 20, 2015
Time Requested: 02:56 PM
Agency: Lottery Commission
CBD Number: Version: Bill Number: Resolution Number:
3047 Introduced HB2864
CBD Subject: Finance and Administration


FUND(S):

State Excess Lottery Revenue Fund

Sources of Revenue:

Other Fund Lottery Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    This bill repeals the legislative changes enacted by HB 101 in the 2014 legislative session which were implemented in FY 15 [current fiscal year] to ensure debt service is paid before any other appropriation and, in turn, strengthen debt service coverage.
    
    As background, HB 101 dropped certain funds to the Excess Fund for appropriation that had been statutory distributions in prior years,reduced certain statutory transfers, and provided for payment of all other appropriations from the Excess Fund on a pro rata basis after debt service. Because of these changes made in FY 14 debt services coverage increased.
    
    This bill, HB 2864, would reduce Excess Fund dollars available for appropriation by $73,165,126.00 by restoring revenue distributions to the FY13/FY14 rates. More specifically, there would be a decrease of $73,165,126 available for appropriation and debt service coverage would decrease accordingly.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
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 -73,165,126 -73,165,126


Explanation of above estimates (including long-range effect):


    The abovereferenced decrease was calculated as follows:
    
    Reduction of Excess Fund
    From Racetrack Video Lottery- -$52,813,358
    From Table Games- -$17,905,858
    From Historic Resort Hotel- -$2,445,910
    Total Excess Fund Reduction- -$73,165,126
    
    Projected Debt Service Coverage
    Debt Service- $62,000,000
    Excess Revenue projected with this bill: 227,215,932.00
     (less refundable credit)(10,000,000)
     Total Revenue: 217,215,932.00
     Debt Service Coverage: 3.50
    
    Therefore, in addition to a reduction in excess lottery funds available for appropriation, there is an additional impact which would reduce debt service coverage from 4.68 to 3.50 as reflected in the calculations above.



Memorandum


    Again, this bill reduces excess lottery funds available for appropriation and, in turn, negatively impacts debt service coverage.



    Person submitting Fiscal Note: Danielle Boyd
    Email Address: dboyd@wvlottery.com