ENGROSSED HOUSE
BILL NO. 1612	By:	Banz and Kern of the House

			   and

		Fields of the Senate

( education – amending 3A O.S., Section 713 - Oklahoma Education Lottery Trust Fund – Common Education Lottery Revolving Fund - 		codification )

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     Section 14, Chapter 58, O.S.L. 2003, as last amended by Section 1, Chapter 389, O.S.L. 2008 (3A O.S. Supp. 2010, Section 713), is amended to read as follows:
Section 713.  A.  All gross proceeds shall be the property of the Oklahoma Lottery Commission.  From its gross proceeds, the Commission shall pay the operating expenses of the Commission.  At least forty-five percent (45%) of gross proceeds shall be made available as prize money.  However, the provisions of this subsection shall be deemed not to create any lien, entitlement, cause of action, or other private right, and any rights of holders of tickets or shares shall be determined by the Commission in setting the terms of its lottery or lotteries.  For each fiscal year, net proceeds shall equal at least thirty-five percent (35%) of the gross proceeds.  However, for the purpose of repaying indebtedness issued pursuant to Section 732 of this title, for the first two (2) full fiscal years and any partial first fiscal year of the Commission, net proceeds need only equal at least thirty percent (30%) of the gross proceeds.  All of the net proceeds shall be transferred to the Oklahoma Education Lottery Trust Fund as provided in subsection B of this section.
B.  There is hereby created in the State Treasury a fund to be designated the “Oklahoma Education Lottery Trust Fund”.  Except as otherwise provided in subsections H and I of this section, on or before the fifteenth day of each calendar quarter, the Commission shall transfer to the State Treasurer, for credit to the Oklahoma Education Lottery Trust Fund, the amount of all net proceeds accruing during the preceding calendar quarter.  Expenditures from the fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of the Office of State Finance for approval and payment.
Upon their deposit into the State Treasury, any monies representing a deposit of net proceeds shall then become the unencumbered property of this state, and neither the Commission nor the board of trustees shall have the power to agree or undertake otherwise.  The monies shall be invested by the State Treasurer in accordance with state investment practices.  All earnings attributable to such investments shall likewise be the unencumbered property of the state and shall accrue to the credit of the fund.
C.  Monies in the Oklahoma Education Lottery Trust Fund shall only be appropriated as follows:
1.  Forty-five percent (45%) for the following:
a.	kindergarten through twelfth grade public education, including but not limited to compensation and benefits for public school teachers and support employees, and
b.	early childhood development programs, which shall include but not be limited to costs associated with prekindergarten and full-day kindergarten programs Common Education Lottery Revolving Fund, as created in Section 2 of this act;
2.  Forty-five percent (45%) for the following:
a.	tuition grants, loans and scholarships to citizens of this state to enable such citizens to attend colleges and universities located within this state, regardless of whether such colleges and universities are owned or operated by the Oklahoma State Regents for Higher Education, or to attend institutions operated under the authority of the Oklahoma Department of Career and Technology Education; provided such tuition grants, loans and scholarships shall not be made to a citizen of this state to attend a college or university which is not accredited by the Oklahoma State Regents for Higher Education,
b.	construction of educational facilities for elementary school districts, independent school districts, The Oklahoma State System of Higher Education, and career and technology education,
c.	capital outlay projects for elementary school districts, independent school districts, The Oklahoma State System of Higher Education, and career and technology education,
d.	technology for public elementary school district, independent school district, state higher education, and career and technology education facilities, which shall include but not be limited to costs of providing to teachers at accredited public institutions who teach levels kindergarten through twelfth grade, personnel at technology centers under the authority of the Oklahoma State Department of Career and Technology Education, and professors and instructors within The Oklahoma State System of Higher Education, the necessary training in the use and application of computers and advanced electronic instructional technology to implement interactive learning environments in the classroom and to access the state-wide distance learning network and costs associated with repairing and maintaining advanced electronic instructional technology,
e.	endowed chairs for professors at institutions of higher education operated by The Oklahoma State System of Higher Education, and
f.	programs and personnel of the Oklahoma School for the Deaf and the Oklahoma School for the Blind;
3.  Five percent (5%) to the School Consolidation and Assistance Fund.  When the total amount in the School Consolidation and Assistance Fund from all sources equals Five Million Dollars ($5,000,000.00), all monies appropriated pursuant to this paragraph which would otherwise be deposited in the School Consolidation and Assistance Fund in excess of Five Million Dollars ($5,000,000.00) shall be allocated by the State Department of Education to public schools based on the audited end-of-year average daily membership in grades 8 through 12 during the preceding school year for the purpose of purchasing technology equipment in order to conduct online testing as required by the Achieving Classroom Excellence Act of 2005.  If at any time the total amount in the School Consolidation and Assistance Fund drops below Five Million Dollars ($5,000,000.00), the monies appropriated pursuant to this paragraph shall be deposited in the School Consolidation and Assistance Fund until the Fund again reaches Five Million Dollars ($5,000,000.00); and
4.  Five percent (5%) to the Teachers’ Retirement System Dedicated Revenue Revolving Fund.
D.  The Legislature shall appropriate funds from the Oklahoma Education Lottery Trust Fund only for the purposes specified in subsection C of this section.  Even when funds from the trust fund are used for these purposes, the Legislature shall not use funds from the trust fund to supplant or replace other state funds supporting common education, higher education, or career and technology education.
E.  In order to ensure that the funds from the trust fund are used to enhance and not supplant funding for education, the State Board of Equalization shall examine and investigate appropriations from the trust fund each year.  At the meeting of the State Board of Equalization held within five (5) days after the monthly apportionment in February of each year, the State Board of Equalization shall issue a finding and report which shall state whether appropriations from the trust fund were used to enhance or supplant education funding.  If the State Board of Equalization finds that education funding was supplanted by funds from the trust fund, the Board shall specify the amount by which education funding was supplanted.  In this event, the Legislature shall not make any appropriations for the ensuing fiscal year until an appropriation in that amount is made to replenish the trust fund.
F.  Except as otherwise provided by this subsection, no deficiency in the Oklahoma Education Lottery Trust Fund shall be replenished by reducing any nonlottery funds, including specifically but without limitation, the General Revenue Fund, the Constitutional Reserve Fund or the Education Reform Revolving Fund of the State Department of Education.  No program or project started specifically from lottery proceeds shall be continued from the General Revenue Fund, the Constitutional Reserve Fund or the Education Reform Revolving Fund of the State Department of Education.  Such programs must be adjusted or discontinued according to available lottery proceeds unless the Legislature by general law establishes eligibility requirements and appropriates specific funds therefor.  No surplus in the Oklahoma Education Lottery Trust Fund shall be reduced or transferred to correct any nonlottery deficiencies in sums available for general appropriations.  The provisions of this subsection shall not apply to bonds or other obligations issued pursuant to or to the repayment of bonds or other obligations issued pursuant to the Oklahoma Higher Education Promise of Excellence Act of 2005.
G.  There is hereby created in the State Treasury a revolving fund to be designated the “Oklahoma Education Lottery Revolving Fund”.  The fund shall be a continuing fund, not subject to fiscal year limitations, and shall consist of all monies received by the Commission.  The Commission shall make payments of net proceeds from the fund to the Oklahoma Education Lottery Trust Fund on or before the fifteenth day of each calendar quarter as provided in subsection B of this section.  All monies accruing to the credit of the Oklahoma Education Lottery Revolving Fund are hereby appropriated and may be budgeted and expended for the payment of net proceeds, prizes, commissions to retailers, administrative expenses and all other expenses arising out of the operation of the education lottery, subject to the limitations provided in the Oklahoma Education Lottery Act.  Expenditures from the fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of the Office of State Finance for approval and payment.
The monies in the fund shall be invested by the State Treasurer in accordance with state investment practices.  All earnings attributable to such investments shall likewise accrue to the credit of the fund.
H.  When appropriations from the Oklahoma Education Lottery Trust Fund are made to common education pursuant to the provisions of paragraph 1 of subsection C of this section, the appropriations shall be made available on a monthly basis.  In addition to the provisions of subsection B of this section, the following process shall be used to insure that the appropriations are made available to common education in a timely manner:
1.  Beginning in July of the fiscal year in which appropriations are made to common education from the Oklahoma Education Lottery Trust Fund, the Commission, on or before the ninth day of each month, shall transfer to the State Treasurer, for credit to the Oklahoma Education Lottery Trust Fund, the amount of net proceeds accruing during the preceding month equal to the amount of total monthly collections due to common education as required by paragraph 1 of subsection C of this section;
2.  The Director of the Office of State Finance shall allocate the transfers provided for in paragraph 1 of this subsection to the State Department of Education on a monthly basis, not to exceed one-twelfth (1/12) of the annual apportionment for the fiscal year; and
3.  The total amount of transfers to the Oklahoma Education Lottery Trust Fund of net lottery proceeds made pursuant to this subsection shall not exceed the total appropriations made to common education from the Oklahoma Education Lottery Trust Fund for the specific fiscal year.
I.  When appropriations from the Oklahoma Education Lottery Trust Fund are made to The Oklahoma State System of Higher Education, the appropriations shall be made available to the System on a monthly basis.  In addition to the provisions of subsection B of this section, the following process shall be used to insure that the appropriations are made available to The Oklahoma State System of Higher Education in a timely manner:
1.  Beginning in July of the fiscal year in which appropriations are made to The Oklahoma State System of Higher Education from the Oklahoma Education Lottery Trust Fund, the Commission, on or before the ninth day of each month, shall transfer to the State Treasurer, for credit to the Oklahoma Education Lottery Trust Fund, the amount of net proceeds accruing during the preceding month equal to the amount of total monthly collections due to the Oklahoma State Regents for Higher Education as required by paragraph 2 of subsection C of this section;
2.  The Director of the Office of State Finance shall allocate the transfers provided for in paragraph 1 of this subsection to the Oklahoma State Regents for Higher Education on a monthly basis, not to exceed one-twelfth (1/12) of the annual apportionment for the fiscal year; and
3.  The total amount of transfers to the Oklahoma Education Lottery Trust Fund of net lottery proceeds made pursuant to this subsection shall not exceed the total appropriations made to The Oklahoma State System for Higher Education from the Oklahoma Education Lottery Trust Fund for the specific fiscal year.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 3-181 of Title 70, unless there is created a duplication in numbering, reads as follows:
A.  There is hereby created in the State Treasury a revolving fund for the State Board of Education to be designated the “Common Education Lottery Revolving Fund”.  The fund shall be a continuing fund, not subject to fiscal year limitations, and shall consist of all monies received by the State Board of Education from appropriations made from the Oklahoma Education Lottery Trust Fund pursuant to paragraph 1 of subsection C of Section 713 of Title 3A of the Oklahoma Statutes and any other funds obtained or received for the Common Education Lottery Revolving Fund.  All monies accruing to the credit of the Common Education Lottery Revolving Fund are hereby appropriated and may be budgeted and expended by the State Board of Education as authorized in subsection B of this section.  Expenditures from the Common Education Lottery Revolving Fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of the Office of State Finance for approval and payment.  The monies in the Common Education Lottery Revolving Fund shall be invested by the State Treasurer in accordance with state investment practices.  All earnings attributable to such investments shall likewise accrue to the credit of the Common Education Lottery Revolving Fund.  
B.  On or before August 15, 2011, and on or before the fifteenth day of each calendar month thereafter, all monies accruing to the credit of the Common Education Lottery Revolving Fund shall be distributed by the State Board of Education to all common school districts, based on the audited end-of-year Average Daily Membership (ADM) for the preceding school year.  Monies distributed from the Common Education Lottery Revolving Fund shall only be expended by common school districts for kindergarten through twelfth grade public education, including but not limited to compensation and benefits for public school teachers and support employees and for early childhood development programs, including but not limited to costs associated with prekindergarten and full-day kindergarten programs.
Passed the House of Representatives the 17th day of March, 2011.

	
Presiding Officer of the House of
	Representatives

Passed the Senate the ____ day of __________, 2011.

	
Presiding Officer of the Senate