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1997 SESSION

973757666
SENATE BILL NO. 1179
Offered January 20, 1997
A BILL to amend and reenact § 58.1-4022 of the Code of Virginia, relating to the State Lottery Fund and the Lottery School Construction Fund.
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Patrons-- Hanger, Bolling, Newman, Schrock and Williams
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Referred to the Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That § 58.1-4022 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-4022. State Lottery Fund; Lottery School Construction Fund.

A. All moneys received from the sale of lottery tickets or shares, less payment for prizes and compensation of agents as authorized by regulation and any other revenues received under this chapter, shall be placed in a special fund known as the "State Lottery Fund." Notwithstanding any other provisions of law, interest earned from moneys in the State Lottery Fund shall accrue to the benefit of such Fund.

B. The total costs for the operation and administration of the lottery shall be funded from the State Lottery Fund and shall be in such amount as provided in the general appropriation act. Appropriations to the Department during any fiscal year beginning on and after July 1, 1989, exclusive of agent compensation, shall at no time exceed ten percent of the total annual estimated gross revenues to be generated from lottery sales. However, should it be anticipated at any time by the Director that such operational and administrative costs for a fiscal year will exceed the limitation provided herein, the Director shall immediately report such information to the Board, the Governor and the Chairmen of Senate Finance and House Appropriations Committees. From the moneys in the Fund, the Comptroller shall establish a special reserve fund in such amount as shall be provided by regulation of the Department for (i) operation of the lottery, (ii) use if the game's pay-out liabilities exceed its cash on hand, or (iii) enhancement of the prize pool with income derived from lending securities held for payment of prize installments, which lending of securities shall be conducted in accordance with lending programs approved by the Department of the Treasury.

C. Any start-up sums appropriated from the general fund of the Commonwealth necessary to commence operation of a state lottery shall be repaid within the first twelve months of initial lottery sales.

D. Appropriation of lottery revenues shall be made only upon actual and audited collections as transferred to the general fund and shall in no event be predicated upon an estimation of such revenues. No later than ten days after receipt of the audit report required by § 58.1-4023, the Comptroller shall transfer to the general fund, less the special reserve fund, the audited balances of the State Lottery Fund. In addition to such other funds as may be appropriated, 100 percent of the lottery revenues transferred to the general fund shall be appropriated entirely and solely for the purpose of public education in the Commonwealth, which purposes shall include, but not be limited to, those programs specified in § 22.1-199.1. Beginning with lottery proceeds collected from lottery sales on July 1, 1998, and continuing thereafter, the following percentages of the lottery revenues transferred to the general fund shall be placed in a special nonreverting fund in the state treasury known as the "Lottery School Construction Fund," which Fund is hereby created: 



Fiscal Year                       Percentage
1998-1999                              10%
1999-2000                              20%
2000-2001                              30%
2001-2002                              40%
2002-2003                              50%
2003-2004                              60%
2004-2005                              70%
2005-2006                              80%
2006-2007                              90%
2007-2008 and thereafter              100%





Notwithstanding any other provision of law, interest earned from moneys in
the Lottery School Construction Fund shall accrue to the benefit of
such Fund.  The Comptroller shall
distribute seventy-five percent of
the moneys in the Fund to counties, cities,
and incorporated towns constituting a separate special school
district, and shall distribute the balance of
the moneys in the Fund only for capital projects at state
institutions of higher education as provided
in the general appropriations act.




The portion of the
seventy-five percent of the moneys in the Lottery School
Construction Fund to be distributed to each
county, city, and
incorporated town constituting a separate
special school district shall be determined by
multiplying (i) the moneys
available for such distribution by
(ii) the percentage of the state funds
appropriated for providing
educational programs meeting the Standards of Quality that was
apportioned to the locality's
school board during the previous
year.  The amounts shall be
distributed within thirty days after the
Comptroller transfers the audited balances of the State Lottery Fund
to the general fund.  The amount distributed to any locality
shall be used only for school construction and renovation, including
the repayment of debt and interest thereon incurred for
school capital outlay projects.




E. As a function of the administration of this chapter, funds may be expended
for the purposes of reasonably informing the public concerning (i) the facts
embraced in the subjects contained in subdivisions 1 through 7 of subsection A
of § 58.1-4007 and (ii) the fact that the net proceeds are paid into the
general fund of the Commonwealth; but no funds shall be expended for the
primary purpose of inducing persons to participate in the lottery.